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- Mack McCoy
- Contributions:1118
Hamp, any hint at all that you suspect there might not be a continued drastic drop in real estate prices will have you branded as a NAR-loving, bubble-denying, smoke-blowing, cheerleader dedicated to the principles of government intervention to keep housing prices out of the hands of renters.
- Hamp Yonce, "Zilluminati"
- Contributions:3463
I wonder if it would be fair to postulate that inflation, or hyperinflation for that matter, that coincides with a preceding gold run-up and a housing beat-down, could indicate that housing may be the best place for your money, if the timing was right (now). In the 80's, there wasn't a beat-down. And, gold wasn't bubbling. It could be interesting. In 1983, I was in the middle of building a 250 unit multifamily complex. We didn't reduce prices. It drug out about twice what we expected. Investor syndicates did most of the buying. It was better than holding the dollars, to people with dollars. Anyway, real life vs theory.
- Mack McCoy
- Contributions:1118
I don't know, Dan, Hamp just threw three pretty darned hard sliders on the corner atcha . . .
- Mack McCoy
- Contributions:1118
Really, Dan? Hyperinflation would push house prices LOW? You sure about that?
- Hamp Yonce, "Zilluminati"
- Contributions:3463
http://observationsandnotes.blogspot.com/2011/03/100-years-of-inflation-history.html
- Hamp Yonce, "Zilluminati"
- Contributions:3463
http://www.dailywealth.com/1615/The-Best-Time-in-History-to-Buy-a-House
- Hamp Yonce, "Zilluminati"
- Contributions:3463
http://www.crestmontresearch.com/docs/i-rate-relationship.pdf
- Dan, "the_country_hick"
- Contributions:4700
Mack, if they had to resell as the average person is supposed to it could devastate them financially. Hyperinflation could push house prices exceptionally low even by historical standards. Just normal inflation will hurt people trying to resell in a 8% mortgage environment unless wages increase dramatically. I do not see that possible in this financial reality.
- Mack McCoy
- Contributions:1118
So, Dan, tell me . . . if there's going to be hyper-inflation, how would this affect people with mortgages?
- Dan, "the_country_hick"
- Contributions:4700
The coming inflation has everything to do with fiscal policy. To date fiscal policy is to have the government spend more than is affordable. Then be sure to go into far to much debt like Greece did. To make sure you can afford this have the federal reserve print more money. When you have a problem selling government debt have the fed buy the debt with freshly printed money. We can monetize the debt by having the fed just create more dollar bills from thin air. Once those start to circulate inflation will hit. Dollars are not that different from oil in a sense. When there is a lot available the value is seen as low. When they are rare and hard to get they are valued much higher. If another 1 million barrels of oil was added to the pipeline each day the value of oil would drop because it is less rare. If another $1 trillion is printed with nothing more behind it the dollar becomes less valuable because it is now less rare. If the dollar became pegged to the value of gold then inflation would not even be a potential issue.
- Sandy Weed, Jr, "Sandy Weed Jr"
- Contributions:10
Here in Southern NJ I can buy a HUD/REO for $25k, put $10k in repairs and sell w/ seller financing for upwards of $75k. Get anywhere from 5 to 10% down and 8% interest on the note. You can earn anywhere from 20-25% ROI every year until the house is paid off. You have to obviously screen your buyers well and settle on one that has a nice downpayment and the possibility of refiancing in the next few years. I would do three of those types of deals with $100k and be the bank. After a while, you can either sell off the note (once seasoned) or hold it for passive cashflow.
- Mack McCoy
- Contributions:1118
You know, back in the 1980s, some of us had the idea that we'd share in the losses our clients took if we could share in the gains. Wonder why that didn't have much traction.
- Caveat Emptor
- Contributions:500
never gonna happen... the REAs come and come like an army marching foreward to spread the gospel of "the bottom is here, the bottom is here." if only there was an online database that tracked Realtors and forced them to be accountable 24 months later... maybe you can put your 5,000 into developing that? it would sure cut down on my need to correct bad economic forecasts.
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:2737
since I can't give a TU , I will instead say, (in a good naturedly fashion) : LOL
(I am sure Dan is laughing, too)
Actually, I will throw $5000 into the pot for all future economic forecasts.......from anyone!
:)
(I am sure Dan is laughing, too)
Actually, I will throw $5000 into the pot for all future economic forecasts.......from anyone!
:)
- Hamp Yonce, "Zilluminati"
- Contributions:3463
Disclaimer
The following post is a joke.
If I had $100K, I'd give Dan somewhere between $10 and $15K, to cease and desist, from making economic forecasts, anywhere on the internet. The exact figure would depend on the effects of inflation between now and our settlement.
The following post is a joke.
If I had $100K, I'd give Dan somewhere between $10 and $15K, to cease and desist, from making economic forecasts, anywhere on the internet. The exact figure would depend on the effects of inflation between now and our settlement.
- Caveat Emptor
- Contributions:500
so, what I'm hearing is that you think that the inflation you just predicted will have absolutely nothing to do with American monetary/fiscal policy and will instead be driven by global inflation brought on by competition with the east for scarce resources like oil and lithium?
well, thats possible. definately. hard to predict though. can't base your decisions on what might be ten years from now.
well, thats possible. definately. hard to predict though. can't base your decisions on what might be ten years from now.
- Dan, "the_country_hick"
- Contributions:4700
"can you explain why a monetary system that shrank by a quarter, with unemployment, savings, consumer confidence and spending where they are, is going to have MORE money chasing the same number of goods"
People spend less, government spends more. Look at the money creation the fed has been doing lately. The bank vaults are filled with excess liquidity.
The serious danger point is when the economy starts to recover. Then people borrow more and spend more. Even now we see commodities increasing in price. Finished goods are not that far behind. How can the government spend an extra $1 trillion and year and not affect things? How can the federal reserve print and digitally create so much money and not have it affect everything?
When inflation hits food, fuel, and commodities are the first things that show inflation. It does not take a genius to realize when a manufacturer and retailer has to pay more for their commodities it will not be long before they have to increase prices to keep in good financial shape. A business can only shave their profit margins so far before they must charge the customer higher prices. Then inflation hits.
People spend less, government spends more. Look at the money creation the fed has been doing lately. The bank vaults are filled with excess liquidity.
The serious danger point is when the economy starts to recover. Then people borrow more and spend more. Even now we see commodities increasing in price. Finished goods are not that far behind. How can the government spend an extra $1 trillion and year and not affect things? How can the federal reserve print and digitally create so much money and not have it affect everything?
When inflation hits food, fuel, and commodities are the first things that show inflation. It does not take a genius to realize when a manufacturer and retailer has to pay more for their commodities it will not be long before they have to increase prices to keep in good financial shape. A business can only shave their profit margins so far before they must charge the customer higher prices. Then inflation hits.
- Justin Lindsey, "Justin_Lindsey"
- Contributions:107
Figure out how to get into the Cuban market and secure my purchase after the Castro family opens up to American businesses.
- Joseph Baylis "New Jersey", "jbaylis"
- Contributions:12
For 100,000 you could get 3 houses in Trenton. In my opinion it is one of the best places in the Country in invest and with out a doubt the best place in New Jersey to invest your money. There are some nice sections of the City. It`s all about location, location, location.. A typical Trenton home would sell for 30,000-40,000 and rent out for 950-1000/per month. Property taxes average 250/month and insurance is 50/month. Let`s assume 950/month rent roll and 300/month in expenses (tenants pay all utilities). That calculates to 650/month ROI or 7800/year ROI. That is at least a 22% return and does not include future appreciation. Another way to look at it, every 4 1/2 years you could purchase another house with your initial investment 7800 x 4.5= 35,100. So the bottom line is with 100,000 you could get 2000/month or 24000 per year return on investment. NOT BAD !! Over the past 10 years I average 100 transactions a year in Trenton. It`s a great market to make money.
- Caveat Emptor
- Contributions:500
can you explain why that is? can you explain why a monetary system that shrank by a quarter, with unemployment, savings, consumer confidence and spending where they are, is going to have MORE money chasing the same number of goods relative to 2006? what sector is going to be inflating(besides gold and treasuries?)
I admit there will be some inflation, but 2 years is a short time and real, worrisome inflation is easy to spot coming down the pipe.
I admit there will be some inflation, but 2 years is a short time and real, worrisome inflation is easy to spot coming down the pipe.
- Dan, "the_country_hick"
- Contributions:4700
All of the low (or is that no?) rates and money printing will cause problems only inflation can cure.
Should have been "will cause problems only higher interest rates" can cure. Inflation will require higher interest rates.
Should have been "will cause problems only higher interest rates" can cure. Inflation will require higher interest rates.
- Caveat Emptor
- Contributions:500
I do not think they will really be able to hold rates down that long. There will be to much pressure building to increase rates. All of the low (or is that no?) rates and money printing will cause problems only inflation can cure.
all evidence to the contrary, eh?
all evidence to the contrary, eh?
- Dan, "the_country_hick"
- Contributions:4700
"Also, the fed has now pledged to keep interest rates stupidly low till 2014 AT LEAST, which in my mind means one of 2 things... either A "until the music stops" or B "until they feel that the mortgage crisis can be contained" which could be a decade in all honesty."
I do not think they will really be able to hold rates down that long. There will be to much pressure building to increase rates. All of the low (or is that no?) rates and money printing will cause problems only inflation can cure.
I am going to look at putting my money in other countries. Why keep it here? If a lot of people do that lending will not be possible until reasonable rates arrive. For some time I went with the flow. Now I wonder if it is time for my money to go elsewhere.
Maybe I should buy a house in another country and get rid of the entire problem the fed is causing.
I do not think they will really be able to hold rates down that long. There will be to much pressure building to increase rates. All of the low (or is that no?) rates and money printing will cause problems only inflation can cure.
I am going to look at putting my money in other countries. Why keep it here? If a lot of people do that lending will not be possible until reasonable rates arrive. For some time I went with the flow. Now I wonder if it is time for my money to go elsewhere.
Maybe I should buy a house in another country and get rid of the entire problem the fed is causing.
- ConnieK_Oklahoma
- Contributions:2900
I'd buy the run down property next to our farm and some little house far away to relocate the seller then head over there with a dozer and then i would have double the value what I just spent
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:2737
add a zero to that number, and then I could have some fun and options......but, unfotunately, $100,000 in my area won't go very far.......not sure what it could buy elsewhere - so I would have to do some due dilligence first....
however.....
possibly a condo on Florida's west coast, that should be doable with 100,000........or a small, cozy bungalow somewhere in the Berkshires.....maybe not as "doable"
however.....
possibly a condo on Florida's west coast, that should be doable with 100,000........or a small, cozy bungalow somewhere in the Berkshires.....maybe not as "doable"
- Caveat Emptor
- Contributions:500
you make it sound so easy steph
"I would buy 3 homes in NYC morgaging the difference and collect 1100/month per pop"
I would really love to meet your mortgage broker.
"I would buy 3 homes in NYC morgaging the difference and collect 1100/month per pop"
I would really love to meet your mortgage broker.
- Stephania Denis, "Stephania Denis"
- Contributions:5
I live in New York and here on Long Island there are plenty of homes that you can buy outright for $100,000 or less but I would use that money to purchase about 2-3 homes and obtain a mortgage for the balance.
you can purchase these homes and use the buy and hold strategy for now. I would rent them out until the market changes or you can also remodel the home and sell it for a quick profit.
some of these homes do need repairs.
a small 3 bedroom ranch can be rented for $1,900 to $2,100 a month and you do not have to include any utilities. The tenant would be responsible for all the utilities so if your mortgage is $1,000 for example you would make an extra $1,100 per month and not be responsible for anything.
you can purchase these homes and use the buy and hold strategy for now. I would rent them out until the market changes or you can also remodel the home and sell it for a quick profit.
some of these homes do need repairs.
a small 3 bedroom ranch can be rented for $1,900 to $2,100 a month and you do not have to include any utilities. The tenant would be responsible for all the utilities so if your mortgage is $1,000 for example you would make an extra $1,100 per month and not be responsible for anything.
- Mack McCoy
- Contributions:1118
You are, still.
You know the difference between real and nominal, so there's one right there. But the exercise I recommend is making a spreadsheet with interest rate information and house price information - readily available from government sources - going back to 1953, and then report back to us.
Trust, but verify.
You know the difference between real and nominal, so there's one right there. But the exercise I recommend is making a spreadsheet with interest rate information and house price information - readily available from government sources - going back to 1953, and then report back to us.
Trust, but verify.
- Dan, "the_country_hick"
- Contributions:4700
Mack, take a look at this.
Correlation of Mortgage Rates With Real Housing Prices
WHy the 1970's saw higher house prices and why that will not repeat once interest rates rise now.
History of 30 year fixed rate mortgages. Why low interest rates cause house price drops..
I may not be as wrong as you think.
Correlation of Mortgage Rates With Real Housing Prices
WHy the 1970's saw higher house prices and why that will not repeat once interest rates rise now.
History of 30 year fixed rate mortgages. Why low interest rates cause house price drops..
I may not be as wrong as you think.
- Mack McCoy
- Contributions:1118
I wanna be a billionaire so freaking bad . . .
Dorothy Parker wrote a story titled, The Cost of Living. I know I'm like the third wheel in that story, in that I'm not really playing the game correctly. Still . . .
$100,000 isn't really a lot of money when you're talking real estate. There are places that you can buy outright and get 6%, 7%, maybe even 10% return. And there are places where $100,000 just gets you into a jumbo loan without PMI.
If you think $100,000 is a lot of money, then you probably wouldn't want to put it all in a basket and make $500 a month from it.
It is widely said that today's low interest rate isn't "real," and if you subscribe to that feeling, then consider that breaking off just a piece of that candy bar and financing the rest would leave you with a nice wad of cash that you could tap from time to time, if need be, to make the payments.
Dan's wrong, by the way; we've been through this before. House prices do not go down when interest rates go up, even though they "should."
Dorothy Parker wrote a story titled, The Cost of Living. I know I'm like the third wheel in that story, in that I'm not really playing the game correctly. Still . . .
$100,000 isn't really a lot of money when you're talking real estate. There are places that you can buy outright and get 6%, 7%, maybe even 10% return. And there are places where $100,000 just gets you into a jumbo loan without PMI.
If you think $100,000 is a lot of money, then you probably wouldn't want to put it all in a basket and make $500 a month from it.
It is widely said that today's low interest rate isn't "real," and if you subscribe to that feeling, then consider that breaking off just a piece of that candy bar and financing the rest would leave you with a nice wad of cash that you could tap from time to time, if need be, to make the payments.
Dan's wrong, by the way; we've been through this before. House prices do not go down when interest rates go up, even though they "should."
if you had $100K cash....
....what would you do?
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