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Best Answer
- Kelly Lacey, "kellylacey"
- Contributions:797
Then explain the LLPA's and additional underwriting conditions (6 months PITI, low DTI, etc.) If banks are as you put it "anxious" to lend on investment properties they would offer better terms than primary residences, wouldn't they? Are they lending sure, but you better have perfect credit, at least 25% down and a lot of extra money in your bank account afterwards.
You asked a question...do we think it's a good time to invest in real estate? Personally, no. Jobs are still iffy and home prices/values are still dropping. Having a 3% interest rate doesn't help if you don't have a tenant with a job to make the rent payment...
@Pasa - you have captured my belief correct. on its own merit there are excellent individual opportunities in the market. after I complete this post i am writing an offer for myself on just such an opportunity. it is in no way a guarantee, but it passes my criteria, and still a year or two from now it has the opportunity to be a horrible investment. that is real estate. heck that is investing. risk/return tolerance.
@erin residential at this time is a tough nut on investment. the main reason is that as real estate goes, it is the lowest barrier to entry for any Tom, Dick or Harry, ease of access to capital and large number of less sophisticated investors, usually this will force average returns on the product down. I am not saying that there isn't opportunity in residential, but it involves a lot more risk and less return than most agents think (than other r.e. product).
@erin residential at this time is a tough nut on investment. the main reason is that as real estate goes, it is the lowest barrier to entry for any Tom, Dick or Harry, ease of access to capital and large number of less sophisticated investors, usually this will force average returns on the product down. I am not saying that there isn't opportunity in residential, but it involves a lot more risk and less return than most agents think (than other r.e. product).
- Pasadenan
- Contributions:21466
Everyone is saying the same thing except Erwin. Wait until after the bottom, especially as the market will remain very flat. Well, except Chutta, who states that there are methods to evaluate whether a specific investment will provide a decent return or not, but that still doesn't make Real Estate investment in general "safe".
- Erin Herman, "erin_OzarksDreamTeam"
- Contributions:9
@SoCal_Engr, a foreclosure almost always represents a substantial loss for the bank. A short sale helps make that process a little more of a win/win by having the homeowner and bank work together. The recent government HAFA program is a further attempt to provide incentives to the bank to avoid foreclosure, but it is still a substantial loss for the bank. Hence the statement, "banks are more willing than ever to accept substantial losses". And yes this post was taken directly from my website, in retrospect I would have taken that "no-brainer" line out.
And yes, in the interest of full disclosure, I do hope to get leads from Zillow and I do honestly think now is a great time to invest.
And finally, I have officially spent way too much time on this, but I do appreciate all the input.
And yes, in the interest of full disclosure, I do hope to get leads from Zillow and I do honestly think now is a great time to invest.
And finally, I have officially spent way too much time on this, but I do appreciate all the input.
- dacolan
- Contributions:1073
There is no need to time any RE purchase to coincide with the bottom. Those who bought houses 7 months following the bottom of the housing market following The Great Depression were vastly better off than those who bought just three months prior to the bottom.
Far better to miss the bottom via hindsight in a stable and sustainable market on it's way back up to healthy rates of appreciation based on positive economic fundamentals, than miss the bottom buying too early hoping the market stabilizes to recoup lost equity.
Far better to miss the bottom via hindsight in a stable and sustainable market on it's way back up to healthy rates of appreciation based on positive economic fundamentals, than miss the bottom buying too early hoping the market stabilizes to recoup lost equity.
- sunnyview
- Contributions:25139
"I never buy at the bottom and I always sell too soon."
-Baron Rothschild
So true. That's why you have to seek value in your market.
-Baron Rothschild
So true. That's why you have to seek value in your market.
- Erin Herman, "erin_OzarksDreamTeam"
- Contributions:9
rephrase, "potential return is positively correlated with risk"
- SoCal_Engr
- Contributions:5666
@ Erin - Amongst other things, one of my main issues is that you are not attempting to engage "investors", you are trying to sway consumers into thinking of a primary residence in terms of an "investment", and then encouraging them to jump back into the RE market.
"...make it almost a no-brainer NOW IS THE TIME TO BUY INVESTMENT PROPERTY!"
C'mon now, that's marketing hype - pure and simple, even the ALL CAPS and EXCLAMATION MARK. Do you have anything tangible to support claims like "banks are more willing than ever to accept substantial losses"? From what I've seen on these boards, that's not the the case. As for the rest of your points, I'll let others continue to pick them apart.
I'd respect you more if you just said "I need more leads and clients, does any of this help convince you?"
"...make it almost a no-brainer NOW IS THE TIME TO BUY INVESTMENT PROPERTY!"
C'mon now, that's marketing hype - pure and simple, even the ALL CAPS and EXCLAMATION MARK. Do you have anything tangible to support claims like "banks are more willing than ever to accept substantial losses"? From what I've seen on these boards, that's not the the case. As for the rest of your points, I'll let others continue to pick them apart.
I'd respect you more if you just said "I need more leads and clients, does any of this help convince you?"
- Erin Herman, "erin_OzarksDreamTeam"
- Contributions:9
Good responses. I completely agree that timing a "market bottom"* Is very difficult. Even for a legendary investor like Warren Buffet who invested $5Billion in Goldman Sachs in Sep. 2008 only to see his investment cut into nearly half over the next few months. People were questioning whether the master had lost his edge (and perhaps his sanity). Of course now he looks like the genius he is and that one deal paid handsomely for Berkshire. It reminds me of a quote I heard that has been attributed to various wealthy people regarding how they got wealthy, "I never bought at the bottom and always sold too early"*
Any kind of investing is never guaranteed; return is positively correlated with risk.
*(pasadenan will provide a citation for the first use of these terms and phrases)
Any kind of investing is never guaranteed; return is positively correlated with risk.
*(pasadenan will provide a citation for the first use of these terms and phrases)
- Pasadenan
- Contributions:21466
Comparing the graph provided by Rex to the Case-Shiller graph referenced by Oceaniax, they are the same, and the data is only through March 2010.
And the link provided by Oceaniax also makes it clear that Case-Shiller data is calculated and owned by Fiserv Inc, and that S&P licenses a subset of data from Fiserv Inc.
Thus either Fiserv Inc or S&P could sue for copyright infringement, especially when the source is not properly referenced.
And the link provided by Oceaniax also makes it clear that Case-Shiller data is calculated and owned by Fiserv Inc, and that S&P licenses a subset of data from Fiserv Inc.
Thus either Fiserv Inc or S&P could sue for copyright infringement, especially when the source is not properly referenced.
- Kelly Lacey, "kellylacey"
- Contributions:797
Thanks, you get a thumbs up for that :-)
Welcome to Zillow!
Welcome to Zillow!
- Erin Herman, "erin_OzarksDreamTeam"
- Contributions:9
@Kelly, that is a valid response, and a good point.
- Pasadenan
- Contributions:21466
As for copyright infringement (which is not under the authority of the UPSTO), yes, even 4 words copied can be copyright infringement. Even 3 words can be copyright infringement.
Fortunately, colloquial expressions such as "have a good day", or "see you later" cannot be protected by copyright, and copyright protection only lasts until 80 years after the originator's death in the United States. Thus quotes from the Bible or Shakespeare are not copyright infringement; but still it is proper to reference one's sources.
And yes, I hope you do have that discussion with both your brothers.
Fortunately, colloquial expressions such as "have a good day", or "see you later" cannot be protected by copyright, and copyright protection only lasts until 80 years after the originator's death in the United States. Thus quotes from the Bible or Shakespeare are not copyright infringement; but still it is proper to reference one's sources.
And yes, I hope you do have that discussion with both your brothers.
- dacolan
- Contributions:1073
What metrics are you using to conclude that RE may be a great long-term investment; P/R ratios, positive cash flow, etc.?
Does your RE investing business model account for the opportunity cost of the return your down payment would be earning otherwise? The cost of borrowed money? Property management? Taxes? Advertising/marketing? Credit checks? Auto/truck expenses (for hauling away junk, trips to the hardware store, etc.)? Cleaning and maintenance? Insurance? Repairs? Utilities? Fees and licenses? Vacancies?
How thoroughly have you researched the local rental markets' metrics? If you expect vacancies to rise due to record number of foreclosures, will that put additional downward pressure of rents? Or the credit worthiness of prospective tenants?
Are you looking at how unemployment and wage/income trends will impact the local market moving forward?
Does your RE investing business model account for the opportunity cost of the return your down payment would be earning otherwise? The cost of borrowed money? Property management? Taxes? Advertising/marketing? Credit checks? Auto/truck expenses (for hauling away junk, trips to the hardware store, etc.)? Cleaning and maintenance? Insurance? Repairs? Utilities? Fees and licenses? Vacancies?
How thoroughly have you researched the local rental markets' metrics? If you expect vacancies to rise due to record number of foreclosures, will that put additional downward pressure of rents? Or the credit worthiness of prospective tenants?
Are you looking at how unemployment and wage/income trends will impact the local market moving forward?
- Oceaniax
- Contributions:4
Erin,
I've actually seen that very same graph before, it's tossed around here and there. Rather than go into some lengthy discussion i'll just link some dissenting opinions/graphs.
http://housingdoom.com/2010/04/06/data-from-the-past-120-years-indicates-another-22-price-drop/http://money.usnews.com/money/personal-finance/real-estate/articles/2010/05/25/home-prices-have-further-to-fall-heres-why.html
http://www.businessinsider.com/the-housing-chart-thats-worth-1000-words-2009-2
Standard & Poors 2010 Assessment
- Pasadenan
- Contributions:21466
"I have two brothers who are Patent and Trademark attorneys" -
Then you should know all about properly referencing your sources..., and so should everyone else in your office.
Sure, Rex won't sue you, and likely neither Case nor Shiller will sue you either. But to claim other people's work as your own is misleading at best.
Or are you licensed under pseudonyms in your state?
Then you should know all about properly referencing your sources..., and so should everyone else in your office.
Sure, Rex won't sue you, and likely neither Case nor Shiller will sue you either. But to claim other people's work as your own is misleading at best.
Or are you licensed under pseudonyms in your state?
- Erin Herman, "erin_OzarksDreamTeam"
- Contributions:9
@Pasadenan, I provided sources in my previous post. And yes, my husband and I do think alike on occasion. :)
- Pasadenan
- Contributions:21466
The opinion article was written by Rex Petersen in Erin's office on 7/8/10. The chart is on Erin's web-page, but is not legible; it is obviously not the original. There is a PDF file of the op-ed linked on Erin's page that also indicates it is by Rex Petersen, written 7/8/10, and it also has the chart, but still not legible. No source indicated, so it appears to be produced by Rex Petersen in Excel, and the image is a JPG he created from a screen image.
It does not state where he got his "US Housing Prices" from, but it likely is Case Shiller.
It does not state where he got his "US Housing Prices" from, but it likely is Case Shiller.
- Erin Herman, "erin_OzarksDreamTeam"
- Contributions:9
@Pasadenan, Are you making the assertion that anyone who uses an English phrase is copying the first person who used it? Are you making the assertion that the original speaker owns that phrase? Are you suggesting I copied the text of my post about investment property from the writer of the 2005 WSJ article?
Yep, you caught me...all of my post was actually just cobbled together words that I assembled from various WSJ articles. :)
I have two brothers who are Patent and Trademark attorneys...would you like to start a debate on whether the use of a phrase such as "confluence of factors" constitutes plagiarism from a 2005 WSJ article about minor league baseball?
Yep, you caught me...all of my post was actually just cobbled together words that I assembled from various WSJ articles. :)
I have two brothers who are Patent and Trademark attorneys...would you like to start a debate on whether the use of a phrase such as "confluence of factors" constitutes plagiarism from a 2005 WSJ article about minor league baseball?
- JoEllen Ufner - ABR,GRI,SFR, "jufner"
- Contributions:397
Ok it is never guaranteed to be safe to invest at any time.....however depending on where you live or want to buy there are opportunities to buy at very low prices. I would suggest finding an experienced real estate agent. Have them provide you with market data to the area you are looking to invest and then ask them for other areas they may suggest and why...do lots of research befor eyou move forward. Lenders do require 20-30% down payments on investment properties and the guidelines are much tigher...Best of Luck!
- Erin Herman, "erin_OzarksDreamTeam"
- Contributions:9
"I will apologize for posting a link to my site, if someone could point me at how to modify the post I will remove that. Other than that, I have not violated any rules. @Kelly, banks in my area want to loan money, notice I said "for those with good credit". @Steve, what do you mean by "this type of blogging?" This is an honest thought I have about the current state of the RE market and I have a legitimate question in that I want to know what other people think. If it is including a link to the website that you feel is out of line, then again, I apologize for that, but that seems to be standard practice with any blogging I have seen (on Active Rain for example).
@Caleb, precisely the point, there will be more available units for sale and probably at a discount to what they will be in a few years when the economy (hopefully) recovers...people still need a place to live, that part won't change. It is a matter of who owns the property and at what cost they purchase it. My point was that the cost of ownership is being reduced and sellers become renters. And no, I would never recommend closing your eyes and investing.
@Pasadenan, the text is completely mine the graph that apparently didn't copy can be viewed here: http://mysite.verizon.net/vzeqrguz/housingbubble/. I downloaded the stats from the named sources but ultimately chose to use his chart. Note the bottom of his page where he says, "Housing charts and spreadsheets are in the public domain. You are free to copy and modify them."
The text and conclusions are mine based on the local market conditions and input from my friends in the banking business. I'm surprised at the opposition to this thought, but I welcome the opportunity to defend this point of view.
Again, the question is a valid one as I truly want to know what the consensus is.
@Caleb, precisely the point, there will be more available units for sale and probably at a discount to what they will be in a few years when the economy (hopefully) recovers...people still need a place to live, that part won't change. It is a matter of who owns the property and at what cost they purchase it. My point was that the cost of ownership is being reduced and sellers become renters. And no, I would never recommend closing your eyes and investing.
@Pasadenan, the text is completely mine the graph that apparently didn't copy can be viewed here: http://mysite.verizon.net/vzeqrguz/housingbubble/. I downloaded the stats from the named sources but ultimately chose to use his chart. Note the bottom of his page where he says, "Housing charts and spreadsheets are in the public domain. You are free to copy and modify them."
The text and conclusions are mine based on the local market conditions and input from my friends in the banking business. I'm surprised at the opposition to this thought, but I welcome the opportunity to defend this point of view.
Again, the question is a valid one as I truly want to know what the consensus is.
- Rachel Rosen, "RachelRosen"
- Contributions:1493
whoopsies.. thanks Pasadean!
- Pasadenan
- Contributions:21466
Rachel; you didn't delete the link; you just edited the link name...
- Pasadenan
- Contributions:21466
The phrase "perfect confluence of factors" was coined at least as early as 2005... Wall Street Journal; Now at Bat: Financiers
I'm sure that most people have absolutely no idea what it means in any context.
But the probability of putting those words together in that order based on word usage frequency?
= 1/20.5k * 1/1000k * 1/35 * 1/18.7k
= 1/13.4 quadrillion.
In other words, it doesn't "randomly happen", and two people didn't make up the same phrase, but people just repeat it because it sounds nice.
I'm sure that most people have absolutely no idea what it means in any context.
But the probability of putting those words together in that order based on word usage frequency?
= 1/20.5k * 1/1000k * 1/35 * 1/18.7k
= 1/13.4 quadrillion.
In other words, it doesn't "randomly happen", and two people didn't make up the same phrase, but people just repeat it because it sounds nice.
- Rachel Rosen, "RachelRosen"
- Contributions:1493
Hi Folks,
We have two places in the tools-- Ask a Question, and Start a discussion.
This belongs in start a discussion.
We have two places in the tools-- Ask a Question, and Start a discussion.
This belongs in start a discussion.
- Pasadenan
- Contributions:21466
"she didn't include contact info" -
She did post a link to her website, which should be flagged and deleted; but that is no reason to delete the entire thread.
She did post a link to her website, which should be flagged and deleted; but that is no reason to delete the entire thread.
- workabee
- Contributions:1030
Yeah what he said.
- Kelly Lacey, "kellylacey"
- Contributions:797
By the way, banks aren't "anxious" to lend on investment properties...why do you think there are so many loan-level pricing adjustments and extra underwriting conditions on them?
- SoCal_Engr
- Contributions:5666
You've convinced me, where do I sign up?
While you're on a roll, can you also tell me...
...what next week's Lotto numbers are?
...where should I park my 401K?
And, as long as I've decided to abdicate my life decisions to your irresistable marketing skills...
...what should I eat for breakfast?
...should I tell my boss off, or ask for that raise?
...is now the right time to have more kids?
p.s.
@ Steve - Nice attempted save. Unfortunately, only Zillow can pull a post down, so it's there - in all it's glory - until Zillow decides to tear it down. The funny thing is, she really didn't violate any Zillow policy (i.e., she's not directly soliciting business, she didn't include contact info, etc.). She just succumbed to the "be positive and your business will follow" mantra.
While you're on a roll, can you also tell me...
...what next week's Lotto numbers are?
...where should I park my 401K?
And, as long as I've decided to abdicate my life decisions to your irresistable marketing skills...
...what should I eat for breakfast?
...should I tell my boss off, or ask for that raise?
...is now the right time to have more kids?
p.s.
@ Steve - Nice attempted save. Unfortunately, only Zillow can pull a post down, so it's there - in all it's glory - until Zillow decides to tear it down. The funny thing is, she really didn't violate any Zillow policy (i.e., she's not directly soliciting business, she didn't include contact info, etc.). She just succumbed to the "be positive and your business will follow" mantra.
- Kelly Lacey, "kellylacey"
- Contributions:797
I wonder how many flags will be flown here before the post is deleted...
Is it safe to invest in Real Estate right now?
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- 0.0/5.0
- (no reviews)
Contributions:9There is a perfect confluence of factors occurring which make right now the perfect time to re-think of Real Estate as a great long term investment. Consider these factors:
The real estate pricing bubble of the last decade has officially burst and real estate prices have returned to their 40 year trend line. See the graph below.
While there are risks, the risks have been dramatically lowered over the past few years and the other factors noted above make it almost a no-brainer NOW IS THE TIME TO BUY INVESTMENT PROPERTY!
For example, take a look at the DELETED by Moderator.Tell me what you think? Do you think now is a good time to invest?
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