Investors Pile Into Housing, This Time as Landlords


By CashWillCrash   Follow   Mon, 25 Mar 2013, 6:32am   2,082 views   58 comments
In Menlo Park CA 94025   Watch (1)   Share   Quote   Permalink   Like   Dislike  

http://finance.yahoo.com/news/investors-pile-housing-time-landlords-030000004.html

Calif.Jeff Pintar had buyer's remorse as he purchased 12 foreclosed homes in five Southern California counties on a single day. His regret: that he didn't buy more homes a year earlier. "Things have turned around faster than anyone anticipated," said Mr. Pintar, who first began buying properties here four years ago and now owns or manages 1,700 homes, which he rents out for between $1,000 and $3,800 a month. Here in Orange County, nearly every home listed for less than $400,000 "is being pursued by institutional investor capital," he said.

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  1. The Professor


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    19   3:27pm Mon 25 Mar 2013   Share   Quote   Permalink   Like (1)   Dislike   Protected  

    iwog says

    Contrary to popular belief, what drives long term interest rates in this country is not the fed. It ONLY the opportunity cost on money that decides what the 10-year bond is going to do. Nothing else.

    If the Fed doesn't control interest rates how do they fulfill their dual mandate?

  2. upisdown


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    20   3:33pm Mon 25 Mar 2013   Share   Quote   Permalink   Like   Dislike (1)  

    iwog says

    Facebooksux
    says



    Mugabe tried to inflate his way out of debt by inflating the money supply.


    No he didn't. Zimbabwe's IMF debt is in US dollars. I have no idea why you
    made this up, however Zimbabwe could have simply printed and paid off any
    internal debt in an hour. Flooding the country in money supply had absolutely
    nothing to do with debt. Zimbabwe's hyperinflation was created by government
    printing combined with a decimation of it's productive capacity. The result was
    nearly infinite demand for nearly non-existent resources.

    Just wait, somebody will soon pull the same old "Weimar Republic" out of their ass, with with an equally assinine corelation as was Zimbabwe, and how the USA is going the same way.

    Except that it can't, because of our currency and the currency which our debts are in.

  3. Facebooksux


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    21   3:36pm Mon 25 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    You sound like Roberta trying to promote his real estate acumen.

    http://www.dallasfed.org/assets/documents/institute/annual/2011/annual11b.pdf

    Your beloved Fed even says that Zimbabwe rapidly printed money. I agree that the government redistributed and destroyed up productive farmland, but read pages 5-7 of the Dallas Fed's reort.

    Also, you never disputed my claim that you're a rich, malevolent slumlord.

  4. iwog


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    22   3:38pm Mon 25 Mar 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    The Professor says

    If the Fed doesn't control interest rates how do they fulfill their dual mandate?

    They don't.

    Everyone who lived through the last two decades knows this for an absolute fact. In 2008, rich people came within a few days of destroying the entire worldwide banking system. It was only through the immediate printing of $1.6 trillion (a tripling of the 2008 base money supply) and outright multi-billion handouts and loan guarantees that held it all together.

    You want to believe that fucking with the discount rate or changing bank reserves would have resulted in a different outcome? The federal reserve is dwarfed by wordwide liquid wealth in the hands of the aristocracy that exceeds $25 trillion and a derivatives market that might by some estimates actually be as high as $1 quadrillion.

    The reason they have taken such radical steps as QE, buying mortgage bonds, and TARP is that they are about as impotent as a central bank can get.

  5. iwog


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    23   3:40pm Mon 25 Mar 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    Facebooksux says

    Your beloved Fed even says that Zimbabwe rapidly printed money.

    That wasn't your assertion. Your assertion was that Zimbabwe devalued their currency to get out of debt which is asinine and ignorant.

    Facebooksux says

    Also, are you never disputed my claim that you're a rich, malevolent slumlord.

    You're disappointed that I didn't respond to your childish trolling? Life sucks don't it.

  6. SoftShell


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    24   3:48pm Mon 25 Mar 2013   Share   Quote   Permalink   Like (1)   Dislike  

    Thank you for that compliment.

    iwog says

    Did you even read the thread I was responding to? I would say my understanding of inflation and economics is the second most complete and extensive of anyone who has ever posted to this website. And that includes illiterates like Mish.

  7. Facebooksux


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    25   3:50pm Mon 25 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    Facebooksux says



    Your beloved Fed even says that Zimbabwe rapidly printed money.


    Life sucks don't it.

    Actually, I can't complain. I'm doing quite well.

    PS, your grammar is pretty shitty, too.

  8. iwog


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    26   3:53pm Mon 25 Mar 2013   Share   Quote   Permalink   Like (1)   Dislike   Protected  

    Facebooksux says

    PS, your grammar is pretty shitty, too.

    I'll keep an insult list for ya!

    Iwog

    - malevolent
    - slum lord
    - shitty grammar
    - poor grasp of inflation

    Anything else before you're done with the temper tantrum?

  9. Facebooksux


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    27   3:54pm Mon 25 Mar 2013   Share   Quote   Permalink   Like (3)   Dislike  

    iwog says

    Facebooksux says



    PS, your grammar is pretty shitty, too.


    I'll keep an insult list for ya!


    Iwog


    - malevolent
    - slum lord
    - shitty grammar
    - poor grasp of inflation


    Anything else before you're done with the temper tantrum?

    Dislikes yams

  10. Facebooksux


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    28   3:54pm Mon 25 Mar 2013   Share   Quote   Permalink   Like (1)   Dislike  

    Anti-gun

  11. JodyChunder


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    29   4:06pm Mon 25 Mar 2013   Share   Quote   Permalink   Like (1)   Dislike  

    dodgerfanjohn says

    Kids, family, etc can wait until your in your 40's.

    There's a lot of good reasons not to start having kids in your 40's. I started on my wolf pack in my early twenties.

  12. The Professor


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    30   6:57pm Mon 25 Mar 2013   Share   Quote   Permalink   Like (4)   Dislike (1)   Protected  

    Facebooksux says

    you're a rich, malevolent slumlord.

    I disagree. Iwog seems more like a wealthy, surly, Keeper of houses. He does seem to make good investment decisions and his analysis is often insightful.

    I imagine he had a sheltered upbringing and I don't think he understands how "common" people actually live. I bet his rentals are nicely maintained and getting market rates.

    I could be wrong and he might just be a rude prick.

  13. Philistine


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    31   10:01pm Mon 25 Mar 2013   Share   Quote   Permalink   Like (2)   Dislike  

    donjumpsuit says

    I am glad they think that. A large percentage of the Gen Y'ers won't be leaving home, because they can get a room for free.

    Another percent will be rooming with each other, perhaps two to a room to keep costs down. This doesn't build demand, it removes it

    My 26 year old brother: 18-21, free room at the parents' house. 22-24, $250/month room at my aunt's house. Last year, at 25, moved in with two friends and splitting a $900/month apartment (so, $300/per?). At this rate, he'll be renting his own place by 40, and a first/only time buyer at 60.

    But hey, by then we'll be working until 85 and living to 100, so . . . perspective, man, perspective. Take your time; do it right.

  14. bmwman91


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    32   10:40pm Mon 25 Mar 2013   Share   Quote   Permalink   Like (2)   Dislike (2)  

    Don't worry, when the hedgies own most of the US housing stock, they will engage in epic price fixing schemes. Who cares if vacancy rates are 20%+, when you have 25 people crammed into a 2/1 you have a lot of income to make rent with! Prepare for the glorious new Amerika!

  15. iwog


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    33   9:12am Tue 26 Mar 2013   Share   Quote   Permalink   Like (5)   Dislike   Protected  

    Facebooksux says

    Anti-gun

    I have lots of guns.

    The Professor says

    I imagine he had a sheltered upbringing and I don't think he understands how "common" people actually live. I bet his rentals are nicely maintained and getting market rates.

    I could be wrong and he might just be a rude prick.

    Nope. I was flat broke from age 18 to 21. Worked at Jack in the Box. In 1988 I found a job with AT&T that paid $237 a week and I jumped on it. 6 years later I had worked my way into management and topped out at around $30,000 a year. I was then unceremoniously laid off.

    In 1994 I encouraged my wife to open her own law firm. It was moderately successful for a few years, but a poor real estate investment combined with a forced move to Sacramento slammed us into bankruptcy in 1996.

    I wont bore everyone with my success afterwards, however I will say that my failures are responsible for learning how the real world works and greatly contributed to my success. I have never received one penny of family money although my wife did inherit some recently.

    I do agree that my rentals are nicely maintained and also that I can be a rude prick.

  16. bubblesitter


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    34   9:27am Tue 26 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    bubblesitter says

    They will be stuck with that property for years to come cuz once interest rates spike the values will head down.

    IF interest rates spike, it means we have high inflation and rents will be going up and investors will be very happy.

    I said,"values will head down". Good scenario for buyers loaded up with CASH. Mortgage takers may or may not be in a good shape.

  17. iwog


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    35   9:34am Tue 26 Mar 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    bubblesitter says

    I said,"values will head down". Good scenario for buyers loaded up with CASH. Mortgage takers may or may not be in a good shape.

    Buyers loaded up with cash are going to get raped in a high interest rate/high inflation environment. That's why housing goes up. Because people demand an inflation hedge.

  18. Tim Aurora


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    36   10:13am Tue 26 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    If inflation goes up, the price of the house may come down but the rents wont. Here is the logic.

    Rise in interest rate means that the monthly mortgage payment goes up, hence less buyers wil cut it. However this also means three things.

    The left out buyer will be renters.
    And the rent becomes cheaper in comparison to mortage hence ( Econ 101), the rents will rise.
    Inflation is up hence the wages wil go up.

  19. bubblesitter


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    37   2:26pm Tue 26 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    bubblesitter says

    I said,"values will head down". Good scenario for buyers loaded up with CASH. Mortgage takers may or may not be in a good shape.

    Buyers loaded up with cash are going to get raped in a high interest rate/high inflation environment. That's why housing goes up. Because people demand an inflation hedge.

    Housing goes up when rates are high? Thanks for the laugh.

  20. iwog


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    38   2:31pm Tue 26 Mar 2013   Share   Quote   Permalink   Like (1)   Dislike   Protected  

    bubblesitter says

    Housing goes up when rates are high? Thanks for the laugh.

    Usually yes. The highest rates in American history were in 1980. Would you like me to explain the chart to you?

  21. New Renter


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    39   5:20pm Tue 26 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    Facebooksux says

    iwog says

    Facebooksux says

    PS, your grammar is pretty shitty, too.

    I'll keep an insult list for ya!

    Iwog

    - malevolent

    - slum lord

    - shitty grammar

    - poor grasp of inflation

    Anything else before you're done with the temper tantrum?

    Dislikes yams

    Flammable

  22. bubblesitter


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    40   3:05pm Wed 27 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    As per your own account and chart,values are going down,unless you see upside down. :)

  23. iwog


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    41   4:36pm Wed 27 Mar 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    bubblesitter says

    iwog says

    As per your own account and chart,values are going down,unless you see upside down. :)

    You mean the chart that ends in 2011?

  24. zzyzzx


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    42   5:59am Thu 28 Mar 2013   Share   Quote   Permalink   Like (1)   Dislike  

    robertoaribas says

    ey likely won't rise until the economy is much stronger, and by then, employment and wages will be much better. f

    Which won't happen anytime soon, or ever, for all we know. Just like in Europe we can languish in high unemployment forever.

  25. lostand confused


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    43   7:22am Thu 28 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    zzyzzx says

    robertoaribas says



    ey likely won't rise until the economy is much stronger, and by then, employment and wages will be much better. f


    Which won't happen anytime soon, or ever, for all we know. Just like in Europe we can languish in high unemployment forever.

    I would be interested to see this quarter's numbers. Last quarter slowed to a crawl and this quarter has the payroll tax increase, tax increase for the wealthy and the govt cuts.

    But having said that, in the new magical Bernake economy, the Dow might just spike and housing might go through the roof when it appears we have officialy entered a recession or contraction again. You never know.

  26. CDon


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    44   7:50am Thu 28 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    bubblesitter says

    iwog says



    As per your own account and chart,values are going down,unless you see upside down. :)

    And per those charts, which way did prices go when interest rates exploded in the early 80s?

  27. country_stroll


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    45   11:38am Thu 28 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    Funniest thing I've read all week:

    Mr. Pintar said he has no plans to slow down. In the past four months, the professional landlord hired 75 new employees. He also looked into buying his own commercial office building for his growing operation, he said. "We figured why pay rent to someone if you don't have to?"

    ...Classic! Strange thing for someone to say who's business depends on renters!

  28. SubOink


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    46   1:25pm Thu 28 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    iwog, other than housing what else would you consider a hedge against inflation?

    We bought our first house now 2 years ago...thank god...because in my neighborhood things aren't looking good. If we had not pulled the trigger, we'd be f-ed. So that's good. Now...there is still some cash laying around...mostly for those rainy days in a freelance world but I am always looking for ways to "do the right thing" (which never feels like the right thing until later)

  29. thomaswong.1986


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    47   2:06pm Thu 28 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    SubOink says

    hedge against inflation?

    the argument that homes are a hedge against inflation, comes in when labor can demand more as was the case during high inflation period of the 70s and mass strikes with unions demanding higher pay. But in todays economic landscape, unions and non-unions, that cannot happen given global competition. Therefore no long true. At best commodities are your best answer.

  30. iwog


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    48   3:33pm Thu 28 Mar 2013   Share   Quote   Permalink   Like (1)   Dislike   Protected  

    thomaswong.1986 says

    the argument that homes are a hedge against inflation, comes in when labor can demand more as was the case during high inflation period of the 70s and mass strikes with unions demanding higher pay. But in todays economic landscape, unions and non-unions, that cannot happen given global competition. Therefore no long true. At best commodities are your best answer.

    By definition, a consumer asset like a house must be an inflation hedge. Unless of course you're going to try and make the argument that home values will rise less than inflation over the next decade or two. Your explanation of unions and global competition has no relevance and makes no sense whatsoever.

    A few years ago I would have said gold, however gold has peaked and production continues to ramp up every year as new mines open to take advantage of the high prices. We're looking at a plateau of $1600 right now, and as the stock market continues to rally, I expect money will be sucked out of the gold market. Once gold crosses $1400, don't be surprised if there's a panic exit driving it down to $1000 or less. Keep in mind that I called the $1900 peak the day after it happened real time on this board and sold off after being a gold bull for an entire decade. I know this market inside and out.

    The stock market is probably the best bet right now. Inflation if it occurs will drive profits, which will increase dividends and will kill the bond market. You can also short the bond market using an ETF however that can be risky if inflation doesn't show up and rates continue to fall as they did in Japan. The recovery will also drive stocks regardless of inflation, and after more than a decade of stagnant market conditions, it's my guess that the NYSE is ready for a multi-year bull run. I'd put money in the Dow 30 which is paying record high dividends right now. I'd also buy anything that Warren Buffett is holding.

    http://finance.yahoo.com/news/dividends-dow-30-reach-highest-122000003.html

  31. SubOink


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    49   8:36am Fri 29 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    Thanks. Makes sense. I have such a hard time getting in here after this crazy run up...

  32. New Renter


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    50   8:51am Fri 29 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    SubOink says

    iwog, other than housing what else would you consider a hedge against inflation?

    We bought our first house now 2 years ago...thank god...because in my neighborhood things aren't looking good. If we had not pulled the trigger, we'd be f-ed. So that's good. Now...there is still some cash laying around...mostly for those rainy days in a freelance world but I am always looking for ways to "do the right thing" (which never feels like the right thing until later)

    Buy another house of course.

  33. HEY YOU


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    51   8:53am Sat 30 Mar 2013   Share   Quote   Permalink   Like (2)   Dislike  

    Where can I invest my $0.04?

    1913 $1.00 = 2012 $0.04, -96% debasement averaging -3.2% per year.

  34. The Professor


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    52   10:11am Sat 30 Mar 2013   Share   Quote   Permalink   Like (1)   Dislike   Protected  

    robertoaribas says

    never trust cash... homes and solid companies are much safer historically.

    Houses, you mean houses, right? You can invest in houses. You live in a home.

  35. iwog


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    53   10:39am Sat 30 Mar 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    The Professor says

    Houses, you mean houses, right? You can invest in houses. You live in a home.

    All houses are homes to someone. I've never really understood this semantics game.

  36. curious2


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    54   1:13pm Sat 30 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    All houses are homes to someone

    ...except the vacant ones. From Ireland's ghost estates to China's ghost cities, to America's zombie banks propped up to keep zombie foreclosures stalking their deadbeat owners, many piles of lumber are not home to anyone.

  37. lostand confused


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    55   2:59pm Sat 30 Mar 2013   Share   Quote   Permalink   Like   Dislike  

    curious2 says

    iwog says



    All houses are homes to someone


    ...except the vacant ones. From Ireland's ghost estates to China's ghost cities, to America's zombie banks propped up to keep zombie foreclosures stalking their deadbeat owners, many piles of lumber are not home to anyone.

    Then there is always Detroit.

  38. Patrick


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    56   10:18pm Sat 30 Mar 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    iwog says

    The Professor says

    Houses, you mean houses, right? You can invest in houses. You live in a home.

    All houses are homes to someone. I've never really understood this semantics game.

    I asked a realtor about it once, and here's what he told me, though I can't remember the quote verbatim:

    A house is a wooden box that sits out in the rain and slowly rots. No one is going to pay half a million dollars for a wooden box. But as soon as you say home then that triggers some irrational part of their brain and they get out their checkbook. We have to use the word "home" or they just won't buy because prices around here are way too high.

  39. Derekj5


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    57   10:20am Sun 31 Mar 2013   Share   Quote   Permalink   Like (1)   Dislike  

    I see the housing porn is back in full production.

    I love these housing articles pumping housing recovery. I have also noticed when they are promoting the housing recovery you can't never leave a comment on these stories. They don't want negative publicity

  40. The Professor


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    58   6:09pm Sun 31 Mar 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    iwog says

    The Professor says

    Houses, you mean houses, right? You can invest in houses. You live in a home.

    All houses are homes to someone. I've never really understood this semantics game.

    Home is a state of mind; House is a place to hold it.

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