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Real Estate is better than money in the bank?


By jvolstad   Follow   Sun, 19 Feb 2012, 2:34am PST   2,381 views   16 comments
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I'm here at my local Starbucks, sitting near a Realtor making her pitch to a potential buyer. Real Estate is better than money in the bank she tells her buyer.

My CD may not be making much in interest, but at least I'm not loosing money.

Comments 1-16 of 16     Last »

bubblesitter   Sun, 19 Feb 2012, 4:08am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 1

jvolstad says

My CD may not be making much in interest, but at least I'm not loosing money.

Yep, that is why I keep saying a $ in a bank earning 0% is better then loosing the equity on the DP + borrowed money. Oh well, some people will never get this.

citizen jpp   Sun, 19 Feb 2012, 5:28pm PST   Share   Quote   Permalink   Like   Dislike (2)     Comment 2

I would love to know how to determine the price point for break even for this home as a rental (be sure to scroll down far enough to see the tax history):
http://www.zillow.com/homedetails/6-Irving-Rd-Wallingford-PA-19086/9415433_zpid/

bubblesitter   Sun, 19 Feb 2012, 11:35pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 3

Helloeeze says

If you have money in a CD you are losing money. Inflation will eat that up.

And how does underwater mortgage sounds to you? Good hedge against inflation? Huh?

RentingForHalfTheCost   Mon, 20 Feb 2012, 2:27am PST   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 4

Only if the bank is Lehmans or MF Global. Then it makes sense to me. Owning aging lumber and concrete and expecting it to increase in value just because it has before makes no sense. It ages, gets old, and needs eventually be rebuilt. Land is land, unless you farm it really has little importance. Go out to your overpriced backyard where you hear the steady stream of traffic and ask yourself "why did I pay 200k for this 30x30ft backyard?". Invariably the answer is, "because other people did". Opps

David9   Mon, 20 Feb 2012, 2:53am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 5

I would love to hear the sales pitch for this property:

http://www.redfin.com/CA/Los-Angeles/533-S-St-Andrews-Pl-90020/unit-404/home/7090862

The banks own all the properties and they will release what and when they see fit.

RentingForHalfTheCost   Mon, 20 Feb 2012, 5:40am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 6

The last picture in that add takes the cake. Buy this crappy place and we will throw in your own colored padlock for free. Looks like you are being sent to jail from the picture. Financial jail.

dunnross   Mon, 20 Feb 2012, 5:45am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 7

RentingForHalfTheCost says

The last picture in that add takes the cake. Buy this crappy place and we will throw in your own colored padlock for free. Looks like you are being sent to jail from the picture. Financial jail.

Yes, a jail which can't be found, because it has a 404 error code!

tr9500   Mon, 20 Feb 2012, 6:03am PST   Share   Quote   Permalink   Like   Dislike     Comment 8

That realtor is recommending an investment - a violation of federal securities laws. The only person stupider is the person believing the story - and there are so, so many of those...

FYI - If you can't spell 'losing', you probably shouldn't be investing...

Patrick   Mon, 20 Feb 2012, 6:06am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 9

Helloeeze says

If you have money in a CD you are losing money. Inflation will eat that up.

But we have DE-flation in house prices. So if you're saving your money to buy a house in the future, you're definitely gaining value by waiting, even at 0% interest.

And the percent you can lose on a house is not just the loss divided by the house price. It's the loss divided by your downpayment so the percentage loss of that can be huge. A 2% loss in house value with 20% down means you just lost 10% of your money.

And that's just the start of it. There's also realtor vig, taxes, maintenance, insurance...

APOCALYPSEFUCKisShostikovitch   Mon, 20 Feb 2012, 8:10am PST   Share   Quote   Permalink   Like   Dislike (2)     Comment 10

The RealtorĀ® needs to understand the whole market is fucked for 2-7 generations and if they understood what it means for people that know nothing else but how to lie to everyone that the only hope they have for living in doors is providing them with a commission they'd be biting the barrel and pulling the trigger behind the Starbucks.

Next time, you'll know what to tell them. . . That and to aim straight up while they're sucking.

Hahahahahahahahahahaha!

It's never been a better time to bite!

Hahahahahahahahahahahahahahahahahaha!

David9   Mon, 20 Feb 2012, 8:17am PST   Share   Quote   Permalink   Like   Dislike (3)     Comment 11

Patrick says

So if you're saving your money to buy a house in the future, you're definitely gaining value by waiting, even at 0% interest.

To qualify, no, I'm not interested in a condo that needs that much work and at this time in this market. It's insulting it's being placed on the market in that condition. Besides, there were only two sales (I found) in the last year for that complex and the price per square foot is similiar. The ones that sold had carpet, stove, wardrobe doors, etc., lol. Ironically, I had seen that very same unit when it was new for $110k. It was beautiful then, fresh paint, new berber carpet, and a stunning view of the Los Angeles downtown skyline.

Also, I would like to add, this is one the few top floor units that have been 'released' in over 2 years in the entire 101 corridor of the South San Fernando Valley, Hollywood, and Mid Wilshire areas. What are the chances? No, definitely not time to buy yet.

toothfairy   Tue, 21 Feb 2012, 9:57am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 12

I like to "bank" money in real estate. It may be down now but eventually it will go up. Even the most hardcore bears will admit that.

everything   Tue, 21 Feb 2012, 12:31pm PST   Share   Quote   Permalink   Like   Dislike     Comment 13

As far as the realtor is concerned, the sale is money in the bank.

Katy Perry   Tue, 21 Feb 2012, 12:47pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 14

whats the rush folks chill wait a few years,..... or wait 10 years or longer.

JodyChunder   Tue, 21 Feb 2012, 1:35pm PST   Share   Quote   Permalink   Like   Dislike     Comment 15

toothfairy says

I like to "bank" money in real estate. It may be down now but eventually it will go up. Even the most hardcore bears will admit that.

Nah. Not in your life anyways.

Too many poor people these days. Just can't work.

RentingForHalfTheCost   Tue, 21 Feb 2012, 1:38pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 16

robertoaribas says

When I buy homes paying 12 to 15%, I'm really not too worried if the price drops 10% next year....

Just because someone can afford to take a loss, doesn't mean it is not still a loss. Glad you can weather the storm, but just to be safe you better run a 20% drop into your calculator. I don't have a crystal ball, but I do think we are headed down that path. The bleeding stops when we have run out of band-aids. As we see every month the gov't has a whole first aid kit ready to keep this puppy alive.

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