Watchhttp://www.zerohedge.com/news/2013-02-25/guest-post-its-always-best-time-buy
I found this quote in this article, and thought immediately of Robertoaribas.
"The artificial suppression of home inventory has been working wonders, as 2 million homeowners were freed from negative equity in 2012. If they can only lure enough suckers back into the pool, all will be well. Phoenix must have an inordinate number of chumps with home prices rising by 22.5% in 2012 as investors and flippers poured into the market with cheap debt and big dreams. Of course everything is relative, as prices are still down 44% from the peak and 40% of mortgages remain underwater. I strongly urge everyone without a functioning brain to pour their life savings into the Phoenix housing market. Larry Yun says it’s a can’t miss path to riches."
Interesting read if you have a strong inclination to call all these numbers, and charts, and facts, "Bullshit".
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donjumpsuit says
yeah. make fun of me all day on here, dipstick.
I bought 3 condos 2 years ago for $26K, $31.5K, and $42K... they are rented for $825, $775 and $875 respectively. $1500 a month income after taxes, insurance, vacancy and maintenance.
2 years have passed, more than $30,000 income on that initial $115K investment counting rehab...
Today, every single one of those properties would sell for over twice what I paid. Don't believe me? you find 3 bedroom 2 bath places cheaper than twice my purchase price in 85281, 85201...
So, yeah, if those investments make me a sucker, than I'm a sucker...
I can go on: 4bedroom 2.5 bath home with 1 car garage in 85042, purchased for $46K. spent $13K remodelling it, I've made $10K profit on rent so far... Today that home is worth $100K and climbing... go ahead, lookem up!
donjumpsuit says
both you and the author are dense as rocks...
"it is artificial, it is going to fall.. .that tsunami of foreclosure, whatnot... meanwhile, in reality, we have foreclosure filings at roughly half of last years rate, 17300 homes for sale and 6700 sold in the past 30 days. 2.6 months inventory. Listing prices keep rising, case-shiller keeps rising... How long will this advice you permabears give be wrong before you admit it is wrong? we are passing 2 years now. Will 3 do it? 4?
When i actually sell a couple of my homes for over twice the purchase price, will you still be here saying how I'm screwing up????
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robertoaribas says
Good deal, hard to beat. I am jealous you live in pheonix.
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I am familiar with your tag lines, and didn't pen the original article. That's why it's in quotes. So when you say that "I said" certain things, you are dead wrong. I am passing along an opinion that was published on a well traveled blog.
Sell your homes. I would encourage that, and so does the market.
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robertoaribas says
"How long will this advice you permabears give be wrong before you admit it is wrong? we are passing 2 years now. Will 3 do it? 4?"
I absolutely agree with you Roberto and think even you might be surprised at what the next few yrs. will bring...lol Maybe not...
I actually thought about posting my thoughts as esoteric as I'm sure they would seem to others. Just a line of reason and study (due diligence) of why there is a very high probability we are set for a perfect storm in the RE market, technically as well as conceptually for the next 42 mo.+/-. The bears seem to be a bit to bias-confirmed to see what the possibilities could be.
Confirmation probably won't be recognized for most for another year or so. I will be looking for the "real market" which RE is a giant to confirm after May 6th sometime. Once the devil is done playing the sequestration takes affect and is absorbed , the financials get their risk shit canned with the new PMI requirements and not to forget S&P500 flipping at 1555+/- games on as will the herd mentality.
Don't get me wrong I'm not loyal to either bias, I just like to stack logical technical and conceptual reasoning and see where it points. Even with the unemployment and lower wages taken into consideration there is more pointing to a nice bubble recovery and with proper due diligence their could be a nice ROI for those who can participate.
I would enjoy some legitimate organic thought and strategy in playing this market instead of the redundant stating of the repeated and obvious that everyone can see.
robertoaribas says
When i actually sell a couple of my homes for over twice the purchase price, will you still be here saying how I'm screwing up????
No Roberto they will be belligerently stating how you were just lucky.....lol
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donjumpsuit says
Sell my homes when all data points to them going up 10% more in say the next 4 months? no way!!
As a point of fact, when I started buying, I never thought the market would go up very much for years, maybe decades. I was completely prepared to keep them for the rest of my life. Therefore say the bears end up right, and the market at some point drops by 50% or more... well, I'll be right back to where I started, which is where I wanted to be anyways: collecting a lot of rent!
the only thing that would upset me, is a rental collapse.
A. Prices go up? I win, I see tons of appreciation.
B. Prices go down? I win anyways. by the time that came to fruition, say 2 years or more from now for a total reversal, i'd have money to buy more homes.
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Graybox says
And oddly, when I started selling my investment properties in 2004, 2005, because I could see the collapse coming, everyone said the same thing later: "you were just lucky to get out"... "You robbed the buyers of your homes, they were victims"... "you didn't deserve the money". Each post I wrote on zillow about the impending disaster of a collapse went 100 to 1 against me...
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You must be doing something right Roberto, perhaps it could be your own due diligence. Very well played considering the facts show the majority of investors don't know when to sell the only way you realize gains. I do know many were just investors in spirit and didn't really have a clue what they were getting into.
Something I found interesting is a study I did on the P/L bloom and doom of approx. 3000 currency traders. I don't remember the exact #'s and my interest were in the top 5% due to the 95% loser rate played out just as I suspected it would. The 96-97% stayed alive and did ok, the 98-99.75% did very well but the .25% blew it out of the water.
These people .25% were not institutions at all, just people with an edge. They had there own strategy and methods they planned and executed, making min. 100% wkly and some much more then that.
Here is a pro who basically adds support (opinion) to what I believe and see concerning interest rates.
http://www.businessinsider.com/financial-advisor-insights-february-25-2013-2
A bump up is a positive to the market, a real motive for those interested in buying (missing out). For a small bit of time I'm looking for 30yr. frm to hit 4.25%wkly avg. then it's wait and see. Just a logical line in the sand my method of madness points to test price.
Let me add another prospective to this. The feds 3+trill. bal. does sound like a lot and granted it is, however when compared to the global currency market which trades 4trill. a day it doesn't seem like so much. Also it takes the US equities market approx. 26days to trade the same for 1 day in the currencies.
The fact is fundamentally the US rates highest of the majors based on economic news releases and there effect.
Currency Outlook (right)
http://www.currencynewstrading.com/45718/forex-fundamental-analysis-made-easy/
It's all about perspective I guess, those that have it and those who don't.
donjumpsuit says
Yes absolutely I agree (supply), just another supporting factor to inventory increases coming to the market.
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Roberto has a rental portfolio. Phoenix, in my opinion was the best place to be at the time if you took advantage.
It's cash flow. You can't argue with cash flow.
If the going gets bad the properties go back to the bank. Chances are however that this cash flow is solid.
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David Losh says
I have 8 properties without mortgages... and 6 with mortgages. I never planned to sell when i bought them, I planned to collect rent for the rest of my life. My original goal was to net 2000 a month, a nice addition to eventual state retirement. Then it was 3000, then I was too busy buying and remodelling to have goals... as it sits today, it is just shy of $6000 net a month, inclusive of all mortgages hoa, taxes, insurance, 1000 per unit maintenance a year, and 1 months vacancy. And, 1000 of mortgage debt evaporates each month.
IF we bubble up to crazy levels again, I will sell a couple. If not, I'll sit pat; If we crash again, I'll buy more.
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robertoaribas says
The people who are skeptical of cash flow are the skinny ones who are leveraged up who don't have a concept of owning free, and clear, but that is the goal.
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Cash flow is the 1st stage of the cycle which is inherently safer to use then credit and created a base for the market to play out. Hedge funds aren't necessarily using cash however with the discount both in RE values and buying qty. their leverage and margins are extremely manageable. For the others who depend on credit will get it with meeting the min. requirements.
The markets are 2 faced showing it's gloom and doom until the matrix all come together, particularly the PMI requirements then it's going to be all smiles. Prices have tested the bottom over the last 2 years and now price is at the top or breached and holding above the highs of those 2 preceding yrs. in a # of places.
Together the gov. and banksters worked very hard to create this very scenario and "will not" sit idle and let opportunity slip by their hands. Their media dogs will make the most out of what ever employment comes from this or other spin that can be imagined and created.
Roberto your area does look better than most for sure. I will have to run the #'s sometime for some expectation I've never really looked at that area.
http://www.deptofnumbers.com/asking-prices/arizona/phoenix/
http://www.deptofnumbers.com/asking-prices/california/san-diego/
I am fairly certain the last bubble top won't be breached in a very long time although I can't say never. When int. rates actually have to be dealt with the second leg will drop. What ever range prices are now will be tested and perhaps even the bottom of the last couple of years.
I do want to make mention my heart is never far from the human factor, devastation and collateral damage done by this last bubble. My take is predominantly void of that emotional element.
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donjumpsuit says
Ha Ha Ha... I read that article earlier and when I read that paragraph, Roberto was the first thing that popped into my head too!!!
donjumpsuit says
...and that's exactly what Roberto has done... following Larry Yun's advise perfectly!!
robertoaribas says
As predicted, this was what I expected as a response from him....
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Mean is another 18% gains which is a reasonable expectation.
General inflation coupled with the currency war, I see the potential of some nice profits to be made. Then when this trade spins out dollar demand will compound the value of those dollars gained... There is a lot of cause and effect that will come to bare.
Now that's just crazy talk.
BTW where are donjumpsuit as well as Call it Crazy from if you don't mind answering. Just curious.
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Call it Crazy says
i didn't buy at the top, nitwit, I bought damn near the perfect bottom... Many of my properties are already up 100% in 2 years, due to my buying distressed homes, at the bottom, and fixing them. I gave multiple details of properties I own above, show that I'm wrong!
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robertoaribas says
There is a guy who bought a warehouse in Everett at the very top of the market that has paid for itself since 2007.
Cash flow can also be called king, because he's paid off a million dollars in five years.
It depends on the deal, as much as the market timing. He just saw the opportunity that people would need storage. Hey, kind of like how people need places to rent!
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I wonder what the author would say about my little rental empire. I bought some real fucking dogs in and around Hesperia and beautiful Victor Valley in 2009, fixed them up just enough and have done really well. I'm happy and my renters are happy...insane, desperate, and only numerate enough to know how much of the SSI to set aside for ol' Jody -- but happy!