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  • On 1 Sep 2014 in Treasury prices are on the verge of collapse - Yields getting ready to skyrocket, E-man said:

    I see. More doom and gloom crap from global deflation news dot dumb.

  • On 1 Sep 2014 in Bad news for the Dow! - Cycle degree wave C will devastate mom and pop, E-man said:

    Global deflation news dot com. Guess what they're talking about all day long? Ah I see, doom and gloom.

    Next......

  • On 30 Aug 2014 in Russia to Sell Oil for Rubles and Yuan, E-man said:

    bob2356 says

    What exactly does the US produce that can't be sourced from China, India, or Brazil?

    Our brains.

  • On 29 Aug 2014 in Russia to Sell Oil for Rubles and Yuan, E-man said:

    Who cares. Let the two communists deal with each other. Both of them will get screwed. ASSHOLES!!!

  • On 29 Aug 2014 in My first real estate bear thread (ever), E-man said:

    iwog says

    Bm05211983 says

    Why

    Because the fear of fed overreach is fading and by the time QE is gone and ZIRP ends, people will realize their irrational fears of hyperinflation were never valid.

    I'm a little surprise that gold hasn't dropped to $800-$1000 by now. However, it's still in a downtrend so we'll see when it'll get there.

  • On 28 Aug 2014 in New Mexico REALTOR Admits Paying 13-year-old Girl on Several Occasions, E-man said:

    What the hell is wrong with these people? There are plenty of 18+ year old girls for them to screw. Why do they keep on screwing minors? If I were king, I would chop off their dicks. ASSHOLES!!!

  • On 28 Aug 2014 in Why do the mutts follow this guy like the pied piper? WTF?, E-man said:

    indigenous says

    The stock market is not going to crash and will soon make new highs

    And so far, he has been right. People have the right to change their mind at anytime due to different circumstance. It's quite brave that he made it publicly and willing to get eggs on his face if he's wrong. What have you contributed to this board?

    Not sure who are the mutts. I see quite a few of them on here. Unlike others, I don't like to ignore anyone, and I don't vote dislike on anyone because I believe that's childish. However, you cannot expect a child to behave differently so do what you please.

  • On 28 Aug 2014 in Why do the mutts follow this guy like the pied piper? WTF?, E-man said:

    smaulgld says

    And he mocked me for ASKING the question!

    http://patrick.net/forum/?p=1246601

    First of all, there is a difference between a correction and a collapse. So far, the market is higher so he has the right to mock. When the market collapses, you have to right to mock him. What goes around comes around. However, if he's right with his market correction prediction and the market goes higher after that, well....then he continues to mock you. Don't you think that's fair?

  • On 28 Aug 2014 in My first real estate bear thread (ever), E-man said:

    hanera says

    iwog may be good at RE but his observations about bubble is not accurate. Observing different asset classes during the same period don't make a correct conclusion. Looking at same asset class over different bubble period is better.

    It is well documented that it is impossible to read wave four correctly, Prechter gets himself a permabear title preaching collapse of stock market & RE for many years, yet we are now in ATH !!!!! Have I follow him, I would still be living in a 1200 sqft condo and driving a Ford focus. He claims that we are in similar period as the Great Depression era and even publish books on this forecast.

    Btw, fifth wave is not always parabolic, can also be truncated. Litter in history are many who think they are geniuses and get the market, only to be insolvent when the fifth wave turns out to be truncated, very rare but it happens.

    I disagree. Charting is a good way of figuring out what might likely happen. We human tend to behave the same way over and over again; thus similar patterns. It might look and feel different each time, but the end result is the same.

    Robert Pretcher is a perma-bear. If anyone listens and follows him religiously, they deserve to lose all of their money. The EW cannot be used be itself. The 4th wave tends to be messy and the 5th wave can be truncated as you mentioned above. There are other indicators one has to look at before making a decision.

    With respect to iwog going all cash, that's his decision based on his charting. Whether or not the decision is right, we will have to wait and see. However, I like the odds after charting it myself.

    Let's say he's wrong and the stock market is 5% higher in 3 or 4 months. I'd be more than happy to lose out on a potential 5% gain for a chance to save 20% to 25% on the down side. Just like day trading. People are willing to lose $1 for every $3 to $4 upside potential. In this case, it's the other way around.

  • On 28 Aug 2014 in I'm liquidating all my stocks and going to cash, E-man said:

    iwog says

    E-man says

    Thanks bud.

    Wow, now I really hope I'm right. GL =)

    Nothing is guaranteed. It's a probability game, and I like the odds after looking at it. Just like when the housing market tanked where we could buy and rent them out for twice the mortgage payment.

    Thanks for sharing.

  • On 28 Aug 2014 in I'm liquidating all my stocks and going to cash, E-man said:

    Iwog,

    Thank you for posting this. You made me do some charting myself. I haven't been paying much about my stock portfolio since it's so insignificant compared to my real estate holdings.

    Based on my charting, I agree with you that there's a good probability that we will see a correction very soon. Just in case I'm wrong, I only went 40% cash just now. I might raise a little more cash in the next couple of weeks. Will see. :0)

    Thanks bud.

  • On 28 Aug 2014 in My first real estate bear thread (ever), E-man said:

    Bellingham Bill says

    iwog says

    It's crazy how the same bubble template occurs over and over again

    this is what the EW people are doing, too. Their 5-wave pattern is similar to what you are looking at now.

    If the EW theory holds up, we're in the 3rd wave now. The correction iwog is talking about is the 4th wave, which shouldn't pierce through approximately 1,500 and change in for the S&P. The final run up is the 5th wave. :0)

  • On 26 Aug 2014 in Why your house is a terrible investment, E-man said:

    B.A.C.A.H. says

    It's the reason I haven't "patricked" in months and would like to undo my account, but I cannot figure out how to do so.

    Because the site has become a microcosm of Bay Area Real Estate; it's all about face: keeping face, showing face, in your face.

    Face It, it's time to Face The Facts

    It's not all about FACE. It's about trying to get out of the rat race. You think it's easy to leave a "perceived secure" 6 figure job to go into an unknown world and hope to make it? The fact is..... Most of us would love to get off the rat race, but not all of us are willing to make the short-term sacrifice for the potential long-term gain. There were a lot of what ifs.

    You and Thomaswong would be a perfect example. You guys were here before most of us. Unfortunately, you guys didn't recognize the opportunity in the Silicon Valley, and now feeling bitter about it. Had you made the short-term sacrifice and bought something on the Peninsula, you guys would be sitting pretty now. Had Patrick bought in Menlo Park back in 1998-1999, there would be no patrick.net now.

    Don't hate.

  • On 26 Aug 2014 in My first real estate bear thread (ever), E-man said:

    iwog says

    However I don't think there is going to be anymore double digit appreciation from now on and in 2015 and 2016 the market will most likely remain flat or maybe continue to move upward slightly.

    Why are you stealing my thesis? Just kidding.

    You and I are mostly on the same page when it comes to real estate. However, our difference is the believe in a housing market crash after 2017. That was the reason why we had a gentlemen bet. :-)

    iwog says

    I might start in 2015 and will definitely sell some in 2016 which is something I've planned on already.

    And why are you copying me again? LOL!!! At this point, 2016 looks like a better year to sell.

    iwog says

    A stock market crash will bring a big decline.

    Maybe.... The housing market in the Bay Area basically doubled in value between 1997 to 2000. However, the crash in the stock market, especially the Nasdaq, which wiped out over 75% of the its value, didn't bring down our property value much. We had a minor correction and went up again after that.

    A lot of real estate investors are sitting pretty now. A 30% drop in rent and/or real estate prices will hurt a little bit, but they would still be fine. The late comers/speculators are the ones that will get whacked.

  • On 25 Aug 2014 in Why your house is a terrible investment, E-man said:

    JH says

    I don't see too much similarity in today's market as compared with previous markets. The only exception is that the coastal markets are more expensive than most heartland markets. Demand, space, etc...

    Of course you don't see the similarity. Every cycle, it will look and feel different, but we typically end up with the same result. The last bubble was different. It was a once in a lifetime event. I don't expect to see it again in our lifetime. We're gradually getting back to a normal market, where housing will get frothy in prices, but nothing like the last time. The last time was different.

    JH says

    Today, mortgage rates are low, wages are flat, stocks are very very high. You may still see gains in the short term, but I don't see the fundamentals that will support similar long term gains. But if there is one thing we do know...the market is carefully manipulated and too big to fail.

    Wages will likely heading up soon if not already IMO. The Bay Area has all indicators of a recovery. We already have wage inflation in the last 12-18 months or so. I'm surprised at how much my tenants and applicants are making now. The same cannot be said about the economy in Washington DC and elsewhere.

    Blackstone was also in our market. However, they only bought to flip and that was last year. There's practically no more foreclosures at the courthouse steps. They were buying a lot last year and the later portion of 2012 in several markets where they could achieve a 7% cap rate, but that is no longer the case.

  • On 25 Aug 2014 in Why your house is a terrible investment, E-man said:

    Rin says

    I guess I'll add this to my money/happiness thread.

    http://patrick.net/forum/?p=1238061

    Nice. Who said money doesn't buy happiness? Try to have some first. For us, money really really helps. I have been getting out of bed between 9 and 10am every morning. Now that my daughter is back to school, I have to wake up at 8:15am. Why the long face? :--(

  • On 25 Aug 2014 in Why your house is a terrible investment, E-man said:

    Strategist says

    You could buy more properties and leverage yourself. You could also buy homebuilder stocks. Housing is not gonna reach a peak until home building reaches a peak.

    Well, I have been doing well with apartment buildings until recently. Deals are hard to come by now.

    I ain't gonna gamble on homebuilder stocks. My risk tolerance is quite low.

    Not sure if I would agree with your last statement given that the homebuilders got burned really bad this last round and hopefully have learned their lesson.

  • On 25 Aug 2014 in Why your house is a terrible investment, E-man said:

    Call it Crazy says

    It seems that E-man and a few others want to use THEIR "exceptions" in the market as the "rule". They got lucky with some good timing and were able to capitalize on it. Those are rare situations....

    That's not correct. We told the readers that we were buying, and they should too. Iwog was screaming over and over again that it's your last chance to buy, but bears like you were screaming NOT TO BUY, blah blah blah.

    Call it Crazy says

    If buying a few years ago was the place to be, why doesn't E-man, sface, Iwog and others have hundreds or thousands of properties? Why stop with only a few?

    Limited capital. Like many others, I was an average Joe in the Silicon Valley holding a low 6 figures engineering job.

    Quitting my job to pursue real estate was the best decision ever. Bringing in partners was another good move. Like the old saying..... 50% of something is better than 100% of nothing.

    Now, my job is to take my daughter to pre K and to pick her up 5 days a week. I own my time and don't have to be anyone's bitch. Money solves a lot of problems you know.

  • On 25 Aug 2014 in Why your house is a terrible investment, E-man said:

    JH says

    Investors are already fleeing OC in favor of inland areas. Stockton is starting to see investors now (sound familiar?). There was a short window for investors...it's always a short window for them. Kudos for getting in while you could...keep up the hope that RE will "neutral" to 5-7%. I did those calculations when I bought 10 years ago. Didn't work out that way, and I ate a good chunk of cash.

    Newbie investors are fleeing OC in favor of inland IMO. This is a mistake. This tells you this is the beginning of the market run-up. When the clueless Joe is buying rentals, we're done. That's the top. We're not there yet.

    Since you're in Socal, listen to Bruce Norris. He is considered the oracle of real estate by the real estate investment community. Bruce told his followers to buy real estate in 1997, sell them in the 1st quarter of 2006, an then buy them again in 2011. The 32% HAI is for CA. That number was published in June of this year by Bruce. He didn't do a specific study for the Bay Area.

  • On 25 Aug 2014 in Why your house is a terrible investment, E-man said:

    JH says

    My second career started at 35. I frequently moved before that. My kids are (as of 2 weeks ago) all in school now. Thus our family dynamic radically changed right about now, and we are settled. We could have bought 3 years ago, but FHA made homes expensive, and I didn't believe they had reached a peak of affordability. Over the past 30 years, OC homes have seen great gains (with the usual boom-bust cycles playing a part). However, I did not anticipate the extent of pandering by the government (read bank bailouts and low rates) or manipulation by the banks (restricted distressed inventory) to prevent housing from hitting a bottom. Based on my own calculations of the previous years, affordability, and taking into account that OC is a high demand area, I still believed it was 20% overpriced in 2011.

    Well, if you're not ready, you're not ready. Kind of like you don't know what you don't know.

    So history indicated that OC housing market has outperformed other markets. What's the likelihood that it will continue to outperform other markets again in the future? My guess is that it's likely.

    Regardless of how overpriced you and I believe, it's irrelevant. The market dictates it. By knowing how the market behaved in the past, we can predict the future with some accuracy. No guarantee, but it gives us an edge compared to the average Joe. By being on this site, I expect the readers has better knowledge about the housing market than the average buyer. However, it's unfortunate that some of us missed the bottom of the housing market. This is why I believe the bears or perma-bears owe these people an apology. In fact, an apology may not cut it IMO. The damage has been done.

  • On 25 Aug 2014 in Why your house is a terrible investment, E-man said:

    JH says

    These millions are paper gains until you sell. I would challenge you all to sell at the prices you think the homes/apts are worth...who would you plan to sell to? The next investor? You are grossed out by that guy who flipped the apt from 1.6M to 2.2M. You are not going to play the greater fool...maybe someone else will...who knows. Dividends are real...I'll give you that.

    Actually, I pulled out over $430k tax-free from some of my investment properties earlier this year so some of that gains have been realized. Thanks to massive rent increases in the last 3 years. I will continue to do so, but there's not much opportunity out there to deploy the cash. In fact, I don't intend to sell any of them and pay the taxes. I would rather extract the money tax-free and reinvest it where I see opportunities.

    $2.28M is aggressive. I believe it will end up selling for around $2.1M. If you know what's wrong with the building and why the seller is selling, I bet you can get it for $1.95M. Last year when he bought it, the average rents were $880/unit. He brought them up to $1,230 average, which could be increased again to $1,325 in May next year. So no doubt they are selling the potential. The average rents for a 1-bedroom unit in that area is around $1,450/month. The buyer for this building will be a 1031 Exchange person, who is looking to trade into a better asset class from a lower class area such as Hayward or Gilroy.

    This was another building that we offered and didn't get early this year. It went to a 1031 Exchange buyer who sold his apartment building in Hayward and traded for this. $1.98M all cash and close in 10 days. How do you beat that?

    http://www.redfin.com/CA/Redwood-City/436-Clinton-St-94062/home/2021871

  • On 24 Aug 2014 in Why your house is a terrible investment, E-man said:

    hanera says

    e-man, sface, icloud15, strategist...

    Buy this scenario or think is BS? Pse don't talk about 2009-2012, we're in Aug 2014. Should buy or rent now? Should we be leveraged or not?

    iwog - Isn't 50% decline in 2018 is back to 2009-2011 price? So, logically no need to worry about price decline since I bought mine in 2011 BUT what do you think about the rental situation? Down is not a problem, would there be many defaulters? Those questions refer to SFBA, especially SV mine is in Fortress.

    Rents have been going up a lot in the last 3 years. However, the pace of increase should slow down significantly in the coming years IMO. If you're buying, keep that in mind.

    I'm still cautiously buying apartment buildings in Downtown San Jose. However, I have a lot of advantage over the average Joe. My loans are 5/1 ARM with 10 year balloon amortize over 30 years. Interest rates are between 2.85% - 3.05%. Why 10-year balloon? Because I don't want to get caught refinancing at the top of the market.

    I have been buying buildings with 10 GRM after stabilized. However, it's getting much harder to achieve this now. Between now and early next year will likely be the last opportunity to buy apartment buildings.

    Late last year, I had an opportunity to pick up this apartment building for $1.6M. I was firm on $1.5M and lost it. Now, the new owner is trying to flip it for $2.28M. :0)

    http://www.redfin.com/CA/San-Jose/336-N-5th-St-95112/home/1712220

    I don't see a crash like iwog predicting after 2017 for many reasons. We'll know better in the next year or two. Gotta run.

  • On 24 Aug 2014 in Why your house is a terrible investment, E-man said:

    JH says

    E-man says

    An average investors typically put 25% down. That's 4:1 leverage or 20% ROI.

    Takes money to make money. If you have enough cash to be throwing 25% down all over California, you are already set for life and should just move to Hawaii or Fiji with that cash.

    Not necessarily. You could buy using Homepath with 0% down, or FHA with 3.5% down. A kid that I know bought a 4plex with 3.5% FHA loan. He did great. The fact that you don't know where to look is the issue. You have to change your thinking about it takes money to make money. What happened to the OPM concept?

    Not everyone wants to live in Hawaii or Fiji, just like not everyone cares to live in the Bay Area or SoCal. People have roots. Not everyone is willing to up their roots and move. There is much more to life than money. However, money certainly helps to make a lot of things easier in life.

  • On 24 Aug 2014 in Why your house is a terrible investment, E-man said:

    JH says

    Neutral? You are circle jerking about how housing is such a great an investment and you've made so much money and...

    Yes, neutral and not circle jerking. The big gains has happened in the last 2 years. I was fortunate enough to have helped myself, my siblings, cousins, in-laws and friends made millions during this downturn, and we are still collecting our dividends every month.

    A friend I met on Patnet and I own over $2M worth of real estate in San Jose. It pumps out over $40k a year in net cash-flow on our combined $300k investment, not including principal pay down. Iwog, Patrick and a couple handfuls of others on this site have met him in person. I don't get on here to BS and troll like others. If I could help one person, I am happy.

    With that said, I believe we will see much more flat to moderate 5% - 7% annual appreciation in the coming years until we reach the next market top. History has shown that top number to be 17% HAI as I indicated above. However, I wouldn't be surprised to see we top at at 20% - 22% HAI this time around. Right now, we're at 32%.

    People have a choice to make. Bite the bullet and buy now, or wait until the next correction, which we will likely see a 20% - 25% correction from the peak prices. However, the wait maybe 8-10 years. If you're 40 now, do you want to wait until you're 50 to buy a house?

    Why only 20% - 25%? Remember, real estate dropped an average of 33% during the Great Depression and 34% during the Great Recession. Therefore, I don't foresee a deep correction during a normal recession. One other thing to note is that, home prices in the fortress barely budged during the Great Recession. What make you think they will drop a lot during a normal recession?

    Well, I have offered my opinions. Why don't you tell others why you have been bearish and have been wrong during this downturn? Sh!t will always happen in our lifetime. To live based on "what if" is not a good way to go through life.

  • On 22 Aug 2014 in Why your house is a terrible investment, E-man said:

    hanera says

    Historically,

    RE appreciates 4%-6.5% p.a.

    Stock index 7%-11% p.a.

    Above exclude special situations. For special situations, individual stocks always win out e.g. $40k in TSLA in early 2013 is now worth $260k, $53k in AAPL in Apr 2013 is now worth $100k, a call with expiry date Jan 2015 and a strike price of $60 have appreciated 8 times, ahem.

    Perfect. A typical buyer would likely put 20% down. That's 5:1 leverage. 5% appreciation = 25% ROI. An average investors typically put 25% down. That's 4:1 leverage or 20% ROI.

    Cash buyers typically do a cash-out refinance after purchase and pull out 75% equity. In cases where the investors got a good deal, they would let the property seasoned for 6 or 12 months, get a new appraisal, and pull out most, all, or more equity out from their purchase price. Rinse and repeat.

    With that said, why would a knowledgeable investor invest in the stock market when owning real estate or REITs blow the returns of the stock market out of the water? When it comes to real estate investment, it's all about control and leverage. To ignore these points is disingenuous.

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