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.
Real Estate is better than money in the bank?
By jvolstad Follow Sun, 19 Feb 2012, 10:34am 2,159 views 17 comments
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jvolstad says
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.
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Wallingford, PA
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/
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Helloeeze says
And how does underwater mortgage sounds to you? Good hedge against inflation? Huh?
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Pleasanton, CA
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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
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Tarzana, CA
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.
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Pleasanton, CA
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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.
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San Jose, CA
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RentingForHalfTheCost says
Yes, a jail which can't be found, because it has a 404 error code!
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Santa Monica, CA
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...
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Menlo Park, CA
Helloeeze says
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...
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Scottsdale, AZ
robertoaribas's website
When I buy homes paying 12 to 15%, I'm really not too worried if the price drops 10% next year....
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The Realtor® 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!
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Tarzana, CA
Patrick says
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.
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Oakland, CA
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.
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Madison, WI
As far as the realtor is concerned, the sale is money in the bank.
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Murrieta, CA
whats the rush folks chill wait a few years,..... or wait 10 years or longer.
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Victorville, CA
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toothfairy says
Nah. Not in your life anyways.
Too many poor people these days. Just can't work.
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Pleasanton, CA
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robertoaribas says
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.