Real Estate Crash thread

[Spats]

Waaaaah, waaaaah, waaaaah.

I had to watch and listen to SEVEN F$%^% YEARS of people strutting around like toy soldiers because their house was going up 15-20% a year and their HELOC paid for new granite countertops and an SUV and new furniture and I was such a BIG FAT LOSER for renting a place I could actually afford and not having a new kitchen and a new car, because they were flipping properties every two years and GETTING RICH RICH RICH for doing nothing at all.

Seriously: when it came out that I was renting my house, they'd look at me with amused pity. Like I just admitted I had an extra chromosome and it was cool that I could walk and chew gum and all, but I definitely wasn't a Real Person, because Real People owned property and were all getting rich off it and I was just a poor retard whose sofa and TV didn't each cost as much as a decent used car.

So now they have to listen to renters gloat for a few years because we were smart enough not to pay too much for a house, and to realize that this credit party would eventually result in a big debt hangover.

Cry me a river.

I don't care if you paid 20% down and never missed a payment and now you're laid off. A house is an investment as well as a place to live, and I AM NOT RESPONSIBLE FOR PAYING OFF YOUR BAD INVESTMENT. You don't pay my margin call when I lose money in stocks and have to pay rent, I don't pay your mortgage when your house goes down in value and you can't make that payment because you thought you'd have a two-earner household forever. Take your lumps and rent within your means like the rest of us.

[Benny Profane]

All the wishing in the world won't stop this run away freight train.

Try it man, just have patience, like I did and others. The runaway freight train I witnessed of obscenely priced homes in the NY Metro area and western ski areas has come to a halt. And backing up. It works, the wishing, I mean. Prices will "stabilize", trust me. But not for a while. You and America just have to deal with it. Oh, and I'm not happy the wife got the co-op, because we got it at an incredible price after the last housing crash (that's why I never fell for the "housing ALWAYS goes up, dude" argument. I've seen 2 or three big drops in my lifetime in a few markets). That place will probably never go underwater from the original price I paid, but I heard she's driving around in an Escalade and dressing really well, so I'm pretty sure it's heavily leveraged. Too fucking bad.

Your little story about the hypothetical family out there is a hoot. I could almost hear Timmy on the back porch calling for Lassie to come home. C'mon, you know that odds are very high that any home bought in '05 was bought with a subprime instrument with very little if no money down at all. With minimal paperwork. And, Tim, I like you, but it was in your self interest as a salesman to keep that thing churning, right? Because you got the 6% every time that mortgage got approved, right? Well, party over.

And apartment living ain't that bad. One excellent feature of the life is mobility. Renters aren't tied down to the house, so they're going to get the job across country in the new recession because they can. Home owners are stuck. And don't get me going how much more "Green" multi unit dwellings are in the 21st century. Talk to any New Yorker about that. They don't even need cars. Maybe the rest of the country should take notice. But I doubt that will happen.

[meatdrink9]

grapedrink, I know it's a crime, but I haven't taken "before" pics of anything other than my own homes. The list of tasks to tackle is usually so large The last thing I want to do is add another task. Also, some cities require permits for stuff as simple as hanging a light fixture. I figure I might be incriminating myself as we go pretty all out.


Khaki, thanks for the update. I'd love for it to sell before my cap gains window closes. Fingers crossed.


timvw,

1. The new cabinets were already there. Someone started a remodel and either ran out of steam and or money. The counters were formica. We can buy 18" travertine stone for $2 per square foot. I have all the tools and two other guys who I've taught to handle most any type of job. We laid all of the stone for the bath surround, counter, fireplace, and kitchen floor in under two days. The fridge and stove came to just under 1k delivered. Purchased through Best Buy. Faucet was $100. Cabinet hardware was roughly $40. We ran two new outlets. We closed up a doorway and got rid of plumbing for the washer (in the kitchen, wtf?).

2. You nailed it. Less than $100 worth of stone. Curtains from Target (I get 20% off, wife is a pharmacist there). Curtain rods from Ikea ($15). The cast iron metal stuff was there. The wood work was there (we just restained, urethaned everything). One of my guys did the cut-in sanding with a belt sander, the other used the large drum sander (which we rent, $100 with belts). Roughly $100 for urethane and stain. $20-$30 light fixtures also from Ikea. I do hadn finished walls with a 3 inch paint brush. It turns out pretty cool and I'm crazy fast. I didn't even tape off a single one of those moldings.

3. New stone bath surround (a couple hundred bucks). New shower valve, head etc... around $100. New faucet $30. Towel/TP rods $30 (also Ikea). I'll post a couple of pics of the other stuff.

4. They just needed a sanding/painting, light fixtures, updated closet rods etc... Pretty cheap. I always buy places with wood flooring. I don't have a single rental property with carpet. Carpet always get's ruined. Hardwood is easy to refinish and cheap if it's already there. If it's not there we lay bamboo and in kitchens/baths we lay stone.

5. Some ducts needed to be reattached. A couple of gas lines needed work as did some plumbing. I spent about $250 with a plumber for the gas work. The plumbing and electrical we can handle pretty quickly.

6. I've been hiring out exteriors to contractors for crazy cheap lately. This one had a great roof and the exterior is brick so I lucked out. Other places I have been getting 3-color paint jobs for around $1200. I've been getting full roof tear-offs/and replacements for roughly 3K.

7. The cost of labor (the guys who work with me).

8. The key to my success has been financing. I pay cash for a place (say 50k). I then sink 10K and then pull 70K out. The house appraises for 115K. I end up with 10K more in my pocket then when I started. 45K in equity for a month's work and then I get an $300-$500 a month in cash flow as well. Plus I think I'm in one of the few undervalued areas and see some serious appreciation potential. If the properties I've purchased in this town only ever got to the point that they were worth $100 per sq ft. (can't build for that). I'd have amassed over 1.5 mil in equity in under two years. That doesn't even count the cash flow. I'm just starting to hit stride now. Hopefully financing still works for me. I got my loan officer's license to help with that. Also, If I sell my Denver place I'll get another 200K to go play with. Leveraged that's another mil worth of real estate to go and play this same game with.

I'm working in the little town that Salomon, Atomic, DNA, Suunto, Nidecker, and Goode, all call their North American HQ. There are numerous other ski companies in town that handle smaller portions of their operations from here. I recently just finished a commercial property in town as well. I'm hoping to try and get more design work from some of these guys. We helped one company on that list with a shoe line this year.

This next part isn't directed at anyone in particular just a bit about where I came from and how I ended up here. I'm about to go on a serious tangent.

A lot of the oldtimers on this board remember when I first signed on here. My wife and I shared a beat to shit Chevy Corsica. I built all of my own furniture from broken pallets left behind dumpsters. I was 21 years old and we both had good degrees.

I lost my job after 911 and got a huge wake-up call. I was ontop of my game as a designer at the best agency in town. I found myself out of work. WTF!?! After that I quit counting on employers. When we couldn't sell our home when we relocated to St. Louis we rented it. It was the best thing that ever happened to us. We sold it last year for a profit of 110K. We would've been walking with 10-15K if we'd been able to sell when we left. Investing in real estate has definitely changed our lives. So while the sky may be falling there are certainly opportunities out there. Having the rug pulled out from under me 7 years ago woke me up and got me working towards financial freedom and allows me to ski as much as I want. I'm only 30 years old. My wife only works two days a week now. Hopefully others who'll soon find themselves in the same place I did 7 years ago will get mad/motivated and step up. You've got your own back. No one else.

My wife was a pharmacist and I was an Art director. We shared a Chevy Corsica and lived with recycled pallet furniture from dumpsters (still have the furniture). You don't need all the shit. Save your money and free yourself from the corporate shackles. My money is now my employer if I blow it all on the random shit the TV told me I need I've just fired myself. Most of the Short Sale situations I walk into the people sitting on the couch have nice huge plasma TV's, playstations, rims on the cars, empty pizza boxes in the kitchen, etc...

[P_McPoser]

Yo MD9, got more info on the property you're trying to sell in Dtown?

[Stu Gotz]

Way to hook that house up to the juvenation machine MD9. Very nice.


Hey Benny,

What the hell is the Geneve Corporation?

That place looks like the front for a CIA black ops department. You in on that deal?

[meatdrink9]

Yo MD9, got more info on the property you're trying to sell in Dtown?

Here are photos if you'd like:

www.theconveyer.com/house.zip
www.theconveyer.com/loft.zip

PM me if you want to get into specifics. I'm actually letting it go for what I think is a crazy good deal, but I can do a lot more with the money closer to home and this is the time for me to get out to avoid taxes. Great cost per square foot, two full lots, fully fenced yard, two car garage, two full stainless kitchens, 5 beds, 4 baths etc... I'm dropping the price to 329,900 on November 1st. I only owe 108K. We bought well, worked hard and have owned for 5 years on a 15 year mortgage so even at that price we come out just fine.

[Benny Profane]

I don't have a clue. But they let me walk through the property every lunch hour without releasing the hounds. Nice view.

[timvwcom]

md9, thanks for all the time to fill those blanks in!!!!!! Kind of what I had in mind back in my 20's, but I had planned to start with 4 family properties. But, life (read wife, 4 kids by time I was 30, growing a business) got in the way of my "real estate magnate" plans. Glad to see you are well on your way! (I've not given up BTW, at 45 I still have some good years left in me... and looks like I might have a big change in family status coming up sooner than I expected myself??? So who knows where life leads?)

Your little story about the hypothetical family out there is a hoot. I could almost hear Timmy on the back porch calling for Lassie to come home. C'mon, you know that odds are very high that any home bought in '05 was bought with a subprime instrument with very little if no money down at all. With minimal paperwork. And, Tim, I like you, but it was in your self interest as a salesman to keep that thing churning, right? Because you got the 6% every time that mortgage got approved, right? Well, party over.

On the subprime guess, not so... I sold at least a couple dozen homes each of those years and I had only a couple buyers (as in 2) total who used anything like zero down deals, and 1 of my buyers was a newly graduated Pharmacist with a great new job, so not a typical type zero down buyer. There was one buyer (was my seller), where the numbers were messed with at the closing table to get some credits to be utilized and I do remember walking away thinking the loan officer and agent were just somehow suspicious.

I do have to admit that like 80+ percent of my business is $300K to $850K and generally with buyers who are well employed, Physicians, business owners, corporate executives, and the like. And although I have sales in 47 of the metro Milwaukee municipalities now, most of my business is in the top 1/3rd of the communities/suburbs as described by price/school districts/appeal etc. (And unfortunate as it may be, this is what's killing my business right now. The mid $200's and lower are still seeing some activity, the $300K+ stuff is mostly dead = Tim's not making much money these last couple months. )

I'm sure there are LOTS of agents who did tons of these sub-prime deals here in SE WI in the less expensive areas or um, executive affluent/executive areas of town??? But in the conservative Midwest, I'd guess the percent of "sub prime" loans was WAY below the overall US average of 30% of the market from 2004 to 2006. So your implied contention that most of the people with trouble have sub-prime loans is no longer true, now that the price drop has gone way deep into the double digits nearly across the board.

And apartment living ain't that bad. One excellent feature of the life is mobility. Renters aren't tied down to the house, so they're going to get the job across country in the new recession because they can. Home owners are stuck. And don't get me going how much more "Green" multi unit dwellings are in the 21st century. Talk to any New Yorker about that. They don't even need cars. Maybe the rest of the country should take notice. But I doubt that will happen.

Some very good points! But I'd still want most people to someday buy a place once they've put down some roots and will stay several years. For many Americans their home is about the only retirement planning they end up doing, unfortunately.

[P_McPoser]

Thanks for the info...drop it to around 250 and let me know

Awesome place, but def out of our price range.

Here are photos if you'd like:

www.theconveyer.com/house.zip
www.theconveyer.com/loft.zip

PM me if you want to get into specifics. I'm actually letting it go for what I think is a crazy good deal, but I can do a lot more with the money closer to home and this is the time for me to get out to avoid taxes. Great cost per square foot, two full lots, fully fenced yard, two car garage, two full stainless kitchens, 5 beds, 4 baths etc... I'm dropping the price to 329,900 on November 1st. I only owe 108K. We bought well, worked hard and have owned for 5 years on a 15 year mortgage so even at that price we come out just fine.

[comish]

Obviously not my plan, but I'll argue that side just cuz I like arguing. If this real estate/financial/economic crash gets much worse, and banks have to start marking their loan assets down or off because of foreclosures they will be in deep shit. All these Banks are highly leveraged (ask Spats ) and there is a point at which they are upside down and the Feds step in and close them down. So if it really becomes a Hobson' choice, and is not between a) doing business as they use to and b) becoming landlords -BUT- was between 1) becoming insolvent and being closed/sold/out of a job and 2) participating in a Federal program that allowed them to transfer that loan asset to a rental asset with tax breaks and other methods of keeping them in business... they might have a different take on it?

Reality is its going to be #1. There will be a lot of banks closed/sold/etc in this cycle. Brutal, but reality.

Looking likely I'm SOL next week so I'm getting fucked as well

[Spats]

My wife was a pharmacist and I was an Art director. We shared a Chevy Corsica and lived with recycled pallet furniture from dumpsters (still have the furniture). You don't need all the shit. Save your money and free yourself from the corporate shackles. My money is now my employer if I blow it all on the random shit the TV told me I need I've just fired myself. Most of the Short Sale situations I walk into the people sitting on the couch have nice huge plasma TV's, playstations, rims on the cars, empty pizza boxes in the kitchen, etc...

This needs to be quoted, emphasized, and re-read.

"My money is now my employer...if I blow it all on the random shit the TV told me I need I've just fired myself."

[timvwcom]

Reality is its going to be #1. There will be a lot of banks closed/sold/etc in this cycle. Brutal, but reality.

Looking likely I'm SOL next week so I'm getting fucked as well

Good luck!!! No matter what happens next week we'll be here, and ready to help you bitch about it!!!

[Benny Profane]

For many Americans their home is about the only retirement planning they end up doing, unfortunately.

And I've heard more than once that about 5% of Americans consider playing the lottery retirement planning, too.

[rideit]

Because you got the 6% every time that mortgage got approved, right? .

Only if Tim was the listing agent, buyer's agent, and broker.

[timvwcom]

Every once in a while I am reminded there are sometimes silver linings to even big turds. I say let these bastards lie in the bed they helped make;

Losing Is Tough; Selling May Be Tougher

By Catherine Rampell November 5, 2008, 4:07 pm

Democrats, don’t put away the celebratory booze just yet. One of the world’s greatest opportunities for schadenfreude is about to present itself, as an exiting army of Republican foot soldiers tries to sell its Washington-area homes in the worst housing bust since the Great Depression.

Think about it: Many of today’s exiting Republican-appointed officials in Washington arrived near the height of the housing bubble, particularly those who came after George W. Bush was re-elected in 2004. Then, it must have seemed as if Republicans had a permanent stranglehold on Washington, and thus it must have also seemed like the appropriate time for conservative migrants to the capital to settle down and buy a home.

Many of these Republican officials nested in northern Virginia, a corner of what had long been a reliable red state. And what a time to buy in northern Virginia it was.

Like Miami and Las Vegas, northern Virginia was frantically built up during the housing bubble. Prices of single-family homes and condos skyrocketed. When I first lived in the area a couple of years ago, I remember hearing the curious term “Fairfaxed.” It referred to Fairfax County, Va., an overbuilt Washington suburb. Despite Fairfax’s perpetual gridlock, builders continued to plant residential high-rises around the county and beyond in anticipation that housing prices would climb ever higher. Residents in nearby Loudoun County lamented that their greatest fears were being realized: They were, after at least a decade of warnings, finally being “Fairfaxed.”

Fast-forward to today. Also like Miami and Las Vegas, northern Virginia’s housing market has cratered. The average housing price in the greater northern Virginia area in September declined 32.11 percent from the previous year, according to the Northern Virginia Association of Realtors.

And this is the market that many Republican officials, with few Washington job prospects during an Obama presidency, will have to sell in.

I thank my colleague Gardiner Harris for the pointer.

[Core Shot]

Every once in a while I am reminded there are sometimes silver linings to even big turds. I say let these bastards lie in the bed they helped make;

You still don't get it do you?

1) Obama is coming to the rescue.

2) Obama will fix everything, asap.

3) Obama is going to save them

4) Did you read Obama's plan, everything is going to be okay. Barney Frank is also going to implement the changes he tried to make in 2002 that he was prevented from doing.

5) Did you know Obama is going to turn things around? Have some faith. Change is coming.

PS - I am actually buying an investment property. Are you willing to put your money where youru mouth is? Obama's change will make it worth even more. I thought you were an Obama supporter? Was all that blather from you just empty rhetoric? I thought you believed?

[Bart T]

that article is retarded. the number of repubs who will actually move back somewhere is pretty low. despite all the shit the republicans throw at DC during campaigns, most of them love living there. other than the skiing, it's a great place to live.

most of the political appointees will move on to law firms or lobby shops in DC, maybe a few will leave but not many.

[Toadman]

that article is retarded. the number of repubs who will actually move back somewhere is pretty low. despite all the shit the republicans throw at DC during campaigns, most of them love living there. other than the skiing, it's a great place to live.

most of the political appointees will move on to law firms or lobby shops in DC, maybe a few will leave but not many.

There was an article a few days back in the WSJ that mentioned almost no Bush appointees working in D.C. have jobs lined up. In fact only 2 or 3 of about 3,000 have anything lined up, and they had to take pay cuts, lower level jobs. Most think tanks are short on funds and are not hiring. Mass consoldiation in the finance/banking industry, republican lobbying firms hiring dems instead of repubs to lobby dem senate/house leaves a lot of repubs out in the cold.

[timvwcom]

Link to series of 3 videos from NBC Nightly News about newer Indy Mac Bank program to avoid foreclosures. Sounds like its NOT forgiving any principal, but does drop interest rate and extend term of loan to try and avoid their having to foreclose;

http://www.msnbc.msn.com/id/21134540...51249#27651249

[timvwcom]

Are YOU one of THOSE homeowners who thinks your home's value has risen or stayed level??? Good article on what we real estate agents are still dealing with out there in the market...

http://www.msnbc.msn.com/id/27648884/

[skier666]

Silicon Valley Apartment update - many places are offering move-in bonuses for 1bdr and Studios. As of now, not much of a problem renting the 2bdr. Call volume and walk-ins has been extremely low.

[liv2ski]

Silicon Valley Apartment update - many places are offering move-in bonuses for 1bdr and Studios. As of now, not much of a problem renting the 2bdr. Call volume and walk-ins has been extremely low.

That could be due to the fact that November/December are not the best months to rent property out. I just had a home go vacant in October. After 3 weeks of buffing it out, $8k in improvements/maintenance, and reducing my asking rent from $1,650 to $1,575, I got a 1 year lease at $1,575 I noticed people wouldn't even call on a really nice 2 bdrm, 3 car garage home over $1600 in San Diego.
I thought I read the mortgage mess would create more demand for rentals

[Long duc dong]

Are YOU one of THOSE homeowners who thinks your home's value has risen or stayed level??? Good article on what we real estate agents are still dealing with out there in the market...

http://www.msnbc.msn.com/id/27648884/

Funny article. It is natural to become emotionally attached to the idea that your home is as valuable as it was at the peak. I get numerous flyers on my door from real estate agents. Every once in a while I will bump into one that is dropping something off. They are always eager to tell me about how great the prices are right now. I never talk to them, but I always have the urge to say "no, the prices are not that great right now, they are simply not ridiculously out of line with the income of the country, which they were a couple of years ago." 500,000 is not necessarily a great deal on something that was 750,000. It is more accurate to say that 750k was an unrealistic price in an unsustainable market.

Part of me thinks what is addressed in that article is something the real estate agents deserve. I can't tell you how many times I heard "prices in Orange County will never come down, any economist who tells you they will is wrong" a couple of year ago. People were sold on the idea that prices would not fall, and they had better get in now. It is hard to blame them for holding on to that belief.

[rideit]

God, I love my location.
It's what matters.

[Particle]

God, I love my location.
It's what matters.

I would really like to buy something in your area. Maybe next year.