New, New Chat Thread

[trularin]

I see the topic is real estate.

May I suggest that a person wait for the market to crash a bit more before buying land and/or a dwelling.

[4RE KLR]

If you play your cards right and get the houses just before foreclosure directly from the owners you can do OK in this market.

Depending on the location and the price ranges where you are I'd say that if you stayed under $125K (buy)right now you could still make some decent cash on a flip(sell at $200K). I know in some markets that does not leave much to be desired but you have to remember the market is changing and a lot of folks are downsizing right now.

Once the market starts to turn be ready with cash to steal the big houses back and ride the wave one more time. I have been in this business now for well over twenty years and I have seen this twice before. It will come back, be ready when it does and one or two deals can set you up really well.

Can you say 1031 exchange

[wtm442]

Steve

125K ??? Not around this neck of the woods. Typical prices for avg house on avg lot is $300K. It might buy you an outhouse around Boston. They sell parking spaces for that money in Boston.

I'll stay with the stock market. Its been a wild ride lately. Over the long haul, property has always been a wise investment. Its just this short term bubble that has everyone worried.

Its 78°F outside and sunny. I'm going for a ride.

[Ron61]

Warren,

Enjoy the ride. I wanted to go today but once again unexpected crap popped up and I had to take care of that. We are having really nice weather for August. It is just in the low 90s and normally it would be around 115/118 now. But we still have a lot of the month left.

Steve,

Right now houses around here aren't moving well at all. Some are taking over a year to sell. All that overrating of the values a year ago has left a lot of people trying to get out from under those big payments. They paid $200K for houses that should have been around $100K at most. A real estate evaluator wanted to do an evaluation on my property and she said it would list at $230K. It isn't worth half of that.

Ron

[392cobra]

For the past several years,up until this past year,there were houses in my neighborhood going up for sell and selling in a month or so.
The average size around me is in the 2.5-3k sq ft area.Prices in the 400-450k range.

After awhile of watching this,I started asked them why and where they were moving to.Also asked if their homes were paid off or not.

Most of the folks are pretty old (Warren's age) and the kids are grown and gone.

The majority were still paying them off AND buying another here in the same area (DFW) AND getting a bigger house with just the man & wife.

This just didn't make any sense to me.
1. Instead of going towards retirement with little or no debt they are adding to it.They aren't really making in headway.Late 50's and a brand new 30 year debt .
2.Staying in the same area,most all the houses have increased in value at the same percentage.The same rising tide.The reason all of them were selling was because of the great increase in their house value.Not one thought about the same thing has happened to the new house they're buying. DUH !!
3.Bigger house will add even more expense:Electric,gas,insurance,property tax,upkeep.
4. Now they are looking at furnishing a bigger house too.
5. 4-5k sq ft house for 2 people ??

None of them really had any Net Worth !!! Most have a negative Net Worth now.
They do have a lot of flash and bling though.

I did recommend to everyone of them that they ought to read "The Millionare Next Door".

[Ibr8k4vetts]

Originally Posted by Ron61

Thanks Mike,

Someday I would like to come down there for a day or so to see some of my old hang outs. I think I miss there more than any of the other places I have ever lived and left. I once climbed Mount Baldy which is in the valley just over the pass.

Ron

Ron,
The only Mount Baldy I know of is in Los Angeles

[trularin]

Wondering if my carb will ever get here.

Warm muggy day, I am pooped.

[4RE KLR]

Warren,
I said in different areas the numbers would be different, or something to that effect. I realize when your on the water general common sense as far as $ is concerned goes out the door.

What I meant was if you buy the reasonable size homes in the lower price ranges of whatever area you are in you will not likely get hurt but could make some. I know it is different everywhere, but a general rule of thumb in trying to flip homes is buy what the majority of the community can afford. That way if the local economy goes up, you sell to the first time home buyers. If it goes down you sell you the down-sizers. It is a great rule of thumb and has served me well for many years.

Where the flippers got into trouble this time is they would go into communities and buy ten homes next door to one another and try to sell them before they were completed. It worked fine for a few years until they told their buddies and they told their buddies and before long developments would sellout on opening day. The problem come to light when the builders (guilty) built these homes for investors. Yes they put up many hundreds of thousands of dollars in earnest money and yes we kept every dime of it. However the reason builders are in trouble now is they have all the inventory and no buyers. Six weeks ago a publically traded national builder had 644 QDH (quick delivery homes) they now have well over 2,200. The houses will not appraise for what they cost to build. Some by as much a 50% less.

If you want a great deal on a new home go visit a new home development. Tell them you want a home someone else could not close on. Tell them you want the retained deposit money credited to the asking price. I have seen some builders ask as much as $250,000.00 less than a home cost to build.

The market is in a very precarious spot right now. I have seen some investors jump back in and buy a home then sell it for less than the builder can sell the other homes for in the same development. Builders wised up quickly and now most have no investor clauses in their contracts.

[wtm442]

Tru - was muggy here too in the AM with thick fog, but the wind changed and a nice cool sea breeze dropped the temp down from 83°F to about 70°F about 3 PM .... so I had to go for a ride. It was fantastic driving weather. Rode around for 3 hours. Nice use of that excessive amount of gas in my tank.

I know you don't like the home and garden photos, so I took a picture outside the entrance to Curry College.

Edited because I deleted many pics from my gallery.

Ron, Fred and Kristen
I was driving thru Milton (one of the top 10 places to live per Money magazine) and noticed a house that you "might" be able to afford.



The only problem is that the abutting houses on either side make the McMansion from yesterdays posting look like an outhouse. One of the houses was on a manicured lawn like a golf green that must have been 2 acres ... and if I was to guess the price, it would have to exceed $4M.

Fred - what do you mean "pretty old". I hate it when somebody calls me pretty. Time flies when you're having fun. I'm amazed that its almost 5 years since I retired early at 55 years young. So I'm only 60 years young now.

Steve - no thanks. I'll stay with the stock market. Just sit back and watch it grow (hopefully). Flipping houses is WORK and that is a four letter word.

[4RE KLR]

yea but some of us young fellers got to do it ya know... LOL

[hey,littlecobra]

hmmm Warren. I have no limit.

that rustic home looks lovely. Looks sorta like my home now....

[4RE KLR]

Kristen,
Who are you trying to Kid? I've seen your home and it's nice!

I guess you could fix up the old place in Warren's picture though.

[Ron61]

Mike,

The kids just called that mountain Mt. Baldy. It sort of sets out on the other side of then river from Paradise Camp. I am not sure if it even has a name, but it did take us all day to get to the top and back. And my Mother was really ticked.

Warren,

Great pictures as usual and I like that rustic old house. Unlike Kristen, I have severe limits on my finances. I applied for a loan yesterday to buy toilet paper.

Tru,

Your carb will get here. They are probably still trying to make the yellow nice and smooth. Post pictures when you get it. Wonder what gas will do if you get any on it.

Ron

[Ron61]

Just saw this on the news update, and as it concerns the housing market thought I would post the link.

http://news.yahoo.com/s/nm/20070808/...yEqX2rgapkM3wV

Ron

[trularin]

I think it is baked on, so hopefully nothing to the finish.

I'm okay with the better homes and garden pictures.

If it isn't here today, I am going to call, they already charged the CC, so one would have thought.

I hope HLC is surviving the heat along with Fred.

[4RE KLR]

Ron,
This is not surprising coming from Bob Toll.

Warren,
If you have any TBI (toll) now would be a great time to dump it. Even though they are down hard, I think the bottom is far lower than today's par value. Executive management has taken roughly $6B in cash out of the company in the last 18 months, sound familiar?

The housing market is only bad for those morons who don't know when to stop building QDH's (quick delivery homes) by the hundreds, or in Toll's case by the thousands.

Listen everyone knows you will get a better built home from a smaller builder. You just have to do your homework and make sure the guy has the experience. I have never understood why people go to volume builders and just buy what is on the shelf, so to speak. Folks with a custom builder you can get what you want, where you want it and for less money. If you think that your getting a better built home by going to the big boys your sadly mistaken. The hiring practices for large builders dictates that they hire people that are new to the industry as their construction managers. I know of an employee within Toll Brothers right now that is a senior project manager running one of the largest communities they have that has never built a single home. They guy is a blooming idiot, he just kissed the right ass and got the job.

Is that who you want building your home?

[wtm442]

Tru - I second your thoughts about the heat. Watching the news this morning ... the weather forecast for just about every section of the country was 90 to 105°F.

Except here, where its 81°F right now, but a rain storm just passed and the temp is supposed to go over 90°F this afternoon. Streets are almost dry, so maybe its time for a ride before the heat wave arrives.

Steve - I only deal in mutual funds. I gave up on individual stocks about 10 years ago. Too much trouble. I did have about 3 different REIT funds for the last few years, and they did excellent. Thankfully I dumped them last year.

Ron - a loan for tiolet paper?

Kristen - that was NOT a rustic house. It was an old barn, with an old garage just behind the Cobra (out of the picture). It's just sitting there not even being used. Really rough shape. I'm sure it really pisses off the rich neighbors!

[Ron61]

Warren,

I just got home from a drive in the 69. Went down South of Redding to see how Bill was coming with the GTs. Supposed to be around 92 here this afternoon but it is kind of muggy, but not as bad as we have had it by far. Darn, it hard to believe that I can get 30 miles per gallon in the 69 Cobra.

Ron

[4RE KLR]

Less than 200 more

Anyone know what I am talking about?

Yep Warren, I took my meds this morning.

[Ron61]

Steve,

You wouldn't be referring to your P.C. would you? No one will catch Warren in number of rides.

As I went to Redding this morning on my drive I see they have started stripping every overpass on I-5 between here and there and are going to put on a new top coat. First time for years they have even looked as a road around here.

Ron