Zillow Advice: Home Buying - (EX) DOOMERS ARE BUYING!

I have used the line too, ...

Fri, 20 Jun 2008 00:01:00 GMT

I have used the line too, and I agree that it is brilliant.

Good on ya Buy=Rent. 8)

k101: thanks for remembering ...

Thu, 19 Jun 2008 23:54:00 GMT

k101: thanks for remembering it was buy who said that "borrowing buyers from the future line"

buy = rent: i've been using that line a lot in discussions, and am glad i now know who to cite. it's brilliant, and i haven't heard it anywhere else. cheers!

Pteimann, SOunds like ...

Thu, 19 Jun 2008 23:27:00 GMT

Pteimann,

SOunds like you're active in SLC, better market than most I think. MOre and more duplex's and other rentals priced at cash flow positive to start. (just found one last week!) THink that will continue and get better over the next 6 months.

I just bought at 4x, BUT ...

Thu, 19 Jun 2008 22:54:00 GMT

I just bought at 4x, BUT rent is 4x anyway. I've been typically running about 50% net to rent successfully for 6 years now. How? I have NO debt. No cc debt, no car pmts, no boat pmts. Nada. Nothing. I would absolutely NOT recommend it. It's not for the weak of heart. Also, absolutely do NOT do it on 2 incomes. Must be on one income. Every once in a while I have to pull a p/t job in order to wait for hubby's pay to catch up to inflation. If I can't get a job, then car insurance, etc., GOES! It's down to cabbage stew for the family and walking for me! lol

Is this conservative? Yes, and NO. lol

forgot to mention, I'm quite ...

Thu, 19 Jun 2008 07:24:00 GMT

forgot to mention, I'm quite conservative. Purchase price has to be max 3x _available_ income. When buying rentals, my idea is that I need to be able to make payments with 100% vacancy. That's kind of my worst case scenario. All rental properties vacant, plus some repairs, but mortgages want to be paid. Looks like the worse case is as likely as snow in July in Southern California. But I like to be prepared.

The other criteria is, if I stop to work, can I sustain payments for a year? Otherwise, no purchase.

-Peter

re: the comments if I'm balanced ...

Thu, 19 Jun 2008 07:18:00 GMT

re: the comments if I'm balanced or middle of the road or a cheerleader. I'm far from being a cheerleader. I've expected prices to crash as early as 2004 or 2005, I don't remember. Possibly before zillow.com was registered. Certainly before I found out about Zillow. (Hint: I spend a LOT of time on the computer.)

I continue to think that RE is a good investment vehicle, if bought at the right price, with rents in the right range, and quality people in the area.

It's just once in a while when I read those hardcore doomer posts, that I post something as in my last one. And it's the truth.

What waitingforever said is also true. I do have skin in the game.

If you bought for $150k, property value went to $250k and drops to $200k, did you win or lose $50k. Or if you bought for $300k, paper value went beyond $700k, then drops to $580k. Did you lose $120k?

I don't have enough of a financial background to give the right answers. I don't know what a NP value is. A few months ago a tenant wanted to buy a property for 235k that I had bought for 185k or similar. Is it worth it? $50k appreciation in 12 months. To be taxed, realtor commissioned etc. Loan is balance is $130k. I did the spreadsheet. I decided not to sell.

As I said, I am far from a cheerleader. Those people are the ones who look for appreciation and a quick profit.

So if I offended some folks, I'm sorry. Really.

By the way, I'm currently writing low-ball offers on REOs. 80% of what the bank took it back for, assuming that is below comps. I'm looking at a SFR that was ~ $800k at peak, bank took it back for $600k, is on MLS for $700k. Comps tell me current value is $630k. I will offer $520k. Rent is $2800-$3000/mo. In the heart of Silicon Valley. Move-in condition. It will probably get rejected.

-Peter

Amerisave - If you can ...

Thu, 19 Jun 2008 06:55:00 GMT

Amerisave -

If you can get me 16% interest, I'll borrow some at 0% interest to loan to you to you as long as you garentee that the payments will be made!

But then, with the type of risk you Loan officers have been taking on behalf of the lenders, I would be better lending the money at a "payday loan" place where they charge 200% interest!

16% interest rates would ...

Thu, 19 Jun 2008 05:04:00 GMT

16% interest rates would drop housing prices 50% even if there was no bubble. The whole "buy now so you'll own it in 30 years" argument is also one of your favorite red herrings, Ameri, but it just doesn't fly. Why not buy in two years at 25% off and own it in 32 years? Not like anybody stays in a house 30 years anymore anyway. That's a relic from the times of lifetime employment. We are a far more mobile nation today.

lolololollololol Randy and ...

Thu, 19 Jun 2008 04:56:00 GMT

lolololollololol Randy and SoCal you two are good !! quick witted I'm slow and old lolololololol.

fear and dis-trust. They ...

Thu, 19 Jun 2008 04:47:00 GMT

fear and dis-trust. They are buying though. Its not like there are no sales just less of them at lower price points.