patrick.net

HeadSet says

WookieMan says

I worked with a guy in Chicago that had 2k units. Lost them ALL during the crash.

Sounds like someone (or several people) got a great buying opportunity from an overleveraged landlord.

If you knew of the loan underwriting then, you would understand why it happened. It would take more than 2008 housing crash to see the same level of default. Loan underwriting is no longer the same. We set reserves on all our buildings to withstand a 25% vacancy. If push comes to shove, handle all property management and save another 5-6 percent.

Eman says

If push comes to shove, handle all property management and save another 5-6 percent.

That sounds like suicide to me. Of course, I don't know how many properties you have.

Shaman says

Anyone still wanting to buy a house near Nashville? My acquaintance is selling his in Greenbrier. 5 bed, 5k sqf. New construction with a lot of extras.

https://www.zillow.com/homedetails/139-Empson-Dr-Greenbrier-TN-37073/80375447_zpid/

So he bought the house 7 years ago for $375, did nothing to it, and now he’s asking $1 million. And will probably get it.

Watch out everyone! Housing crash incoming! This guy is certainly going to look foolish after the 40% correction and he only gets 600K for his house.

Again, not saying that house prices won’t stabilize or go down a little. But anyone who is expecting 2008 again is going to be disappointed.

FedEx stock went down more than 20%. It confirmed that economy is cooling. One can expect some bargains both in stocks and RE.

https://www.redfin.com/city/13415/TN/Nashville/housing-market

GNL says

Eman says

If push comes to shove, handle all property management and save another 5-6 percent.

That sounds like suicide to me. Of course, I don't know how many properties you have.

100 units. If that’s what it takes to survive through a 30% rent drop or vacancy, one has to do what one has to do. However, history is on my side so I’m not sweating it.

During the dotcom crash, rent dropped as much as 28%. Rent hardly budged during the Great Recession. Rent dropped a little, 5-10%, during the pandemic. It has since recovered and at record high now.

We have reserves set aside to carry us for 5 years of 25% vacancy. I think we’ll be ok. If the Bay Area becomes the next Detroit, I think we’ll have much bigger issues to worry about.

Eman says

GNL says

Eman says

If push comes to shove, handle all property management and save another 5-6 percent.

That sounds like suicide to me. Of course, I don't know how many properties you have.

100 units. If that’s what it takes to survive through a 30% rent drop or vacancy, one has to do what one has to do. However, history is on my side so I’m not sweating it.

During the dotcom crash, rent dropped as much as 28%. Rent hardly budged during the Great Recession. Rent dropped a little, 5-10%, during the pandemic. It has since recovered and at record high now.

We have reserves set aside to carry us for 5 years of 25% vacancy. I think we’ll be ok. If the Bay Area becomes the next Detroit, I think we’ll have much bigger issues to worry about.

It's 40% actually. My rent dropped 40% during dot.bomb.

RWSGFY says

Eman says

GNL says

Eman says

If push comes to shove, handle all property management and save another 5-6 percent.

That sounds like suicide to me. Of course, I don't know how many properties you have.

100 units. If that’s what it takes to survive through a 30% rent drop or vacancy, one has to do what one has to do. However, history is on my side so I’m not sweating it.

During the dotcom crash, rent dropped as much as 28%. Rent hardly budged during the Great Recession. Rent dropped a little, 5-10%, during the pandemic. It has since recovered and at record high now.

We have reserves set aside to carry us for 5 years of 25% vacancy. I think we’ll be ok. If the Bay Area be...

Was this in the Bay Area, specifically San Jose or elsewhere? If San Jose, do you mind sharing the address of the building? I always love to learn from history.

I know the Bay Area got crazy rent hikes during the dotcom and got whacked hard with the drop. Not sure about other areas.

Eman says - However, history is on my side so I’m not sweating it.

@Eman - "No one could have seen it coming". Oh really? Michael Burry did.

Don't get me wrong, I do not wish you any harm but, in the big scheme of things, ask yourself...do you really add anything to the economy? There has been much ink spent on Patrick.net about the rent seekers. It is what it is.

How do you feel about the big Wall Street attempt to takeover housing? Is it real? Is it good or bad for society? America used to put the health of society just a little higher on the ladder of importance.

GNL says

RWSGFY says

However, history is on my side so I’m not sweating it.

"No one could have seen it coming". Oh really? Michael Burry did.

Don't get me wrong, I do not wish you any harm but, in the big scheme of things, ask yourself...do you really add anything to the economy? There has been much ink spent on Patrick.net about the rent seekers. It is what it is.

How do you feel about the big Wall Street attempt to takeover housing? Is it real? Is it good or bad for society? America used to put the health of society just a little higher on the ladder of importance.

Something is fucked up with quoting.

RWSGFY says

GNL says

RWSGFY says

However, history is on my side so I’m not sweating it.

"No one could have seen it coming". Oh really? Michael Burry did.

Don't get me wrong, I do not wish you any harm but, in the big scheme of things, ask yourself...do you really add anything to the economy? There has been much ink spent on Patrick.net about the rent seekers. It is what it is.

How do you feel about the big Wall Street attempt to takeover housing? Is it real? Is it good or bad for society? America used to put the health of society just a little higher on the ladder of importance.

Something is fucked up with quoting.

Yeah, you're right. Let me try again.

GNL says

Eman says - However, history is on my side so I’m not sweating it.

@Eman - "No one could have seen it coming". Oh really? Michael Burry did.

Don't get me wrong, I do not wish you any harm but, in the big scheme of things, ask yourself...do you really add anything to the economy? There has been much ink spent on Patrick.net about the rent seekers. It is what it is.

How do you feel about the big Wall Street attempt to takeover housing? Is it real? Is it good or bad for society? America used to put the health of society just a little higher on the ladder of importance.

With respect to the “no one could have seen it coming.” Some people always see it coming. The question is how many actually act on it and become financially free from the day to day W2 grind that some people actually hate? They do it because they have to, not because they want to.

With respect to being a rent seeker, I don’t share the same viewpoint with Patnetters. I’m a little fish in a huge pond. The big boys are the ones who drive the rental market. We just ride on their coattail and provide class B and C rentals at more affordable prices.

I love what I do much more than being a W2 engineer. I get satisfaction out of improving my buildings…again much more than designing stuff at my former W2. I don’t see the difference between the 2 jobs. The biggest difference is that I’m building my own dreams and my family’s while W2 folks are building other people’s dreams. I used to be there too although I was always looking for a way out. I took the risk and got rewarded while the majority is still beholden to their W2 paychecks, the most addictive drug. “Perceived” security comes at a price. Some people are only 1 paycheck from being in trouble. That’s NOT how I want to live my life. I want to control my destiny, and not someone else’s.

If WallStreet is taking over housing, it is what it is. It’s beyond my control. I’ve learned to do what I can control and focus my energy and efforts on it. In fact, REITs are a form of WallStreet owning real estate assets.

To me, money never sleeps. It always looks for a home/yield. Given so much liquidity in the market while CD’s and bonds didn’t pay 💩, it spilled into more real estate investments. WallStreet’s job is to find a home/yield with acceptable risk to their clients and make their fees aka paychecks. Who do we blame for what they do, or this “crisis”?

https://wolfstreet.com/2022/09/16/california-housing-market-dismal-sales-prices-sag-in-san-francisco-20-fr-peak-silicon-valley-san-diego-orange-county/

California Housing Market: Dismal Sales, Prices Sag in San Francisco (-20% fr. peak), Silicon Valley, San Diego, Orange County…
by Wolf Richter • Sep 16, 2022

Median Price, single-family houses: $1.635 million, lowest price for any August since 2019 ($1.60 million): -3.8% from July, fifth month in a row of declines, -20.6% from peak in March, -11.6% year-over-year.

Eman says

I took the risk and got rewarded while the majority is still beholden to their W2 paychecks, the most addictive drug. “Perceived” security comes at a price.

I do admire risk takers...win or lose. I have a very strong dislike (I don't like to use the word hate usually) for those who coast on the efforts/money of others like government employees, welfare and even trust funders. These people tend to be vapid and offer nearly ZERO value.

Fiat, debt and government are going to kill this country. I feel like I've been having a vision for the past 5-10 years.

gabbar says

Unless other careers see the same issues, it could be FedEx alone. In either case slow down is inevitable. That means great deals are on way for buyers. Watch out for the crazy inflation. Never fall for gov fake numbers.

Booger says

2010 was the magic number.

Patrick says

California Housing Market: Dismal Sales

I wonder if the Work From Home (WFH) workforce is being called back to work in Silicon Valley, and if that means they have to return from rentals in Idaho, Nevada, etc.

That should mean the influx of former WFH workers should at least help the residential rental markets in Silicon Valley. Investors could rent out their homes which they purchased in last two years at inflated prices.

,

GNL says

Fiat, debt and government are going to kill this country. I feel like I've been having a vision for the past 5-10 years.

The Federal Reserve is at least selling assets on its balance sheet as part of quantitative tightening (QT).

One silver lining is that we are inflating out of a debt crisis as the Debt to GDP ratio has been trending down since it peaked around early 2020. I hope it can return within the range of 100 to 110% within the next 4 years.

This means working, middle and fixed income seeing annual income growth that is about 2.5% less than CPI, or government-reported annual inflation. I just hope this is for no more than two consecutive years.

We need more innovation to realize greater productivity. I'm reading more about how Californian strawberries are harvested by robots.
.

.

ad says

I'm reading more about how Californian strawberries are harvested by robots.

Blue says

gabbar says

Unless other careers see the same issues, it could be FedEx alone. In either case slow down is inevitable. That means great deals are on way for buyers. Watch out for the crazy inflation. Never fall for gov fake numbers.

It could just be Amazon in sourcing.

This isn't rocket science. Inventory levels in 2005 - 2008 were at the highest levels recorded in the last 25 years. Todays levels are at the lowest.

https://tradingeconomics.com/united-states/total-housing-inventory

stfu says

This isn't rocket science. Inventory levels in 2005 - 2008 were at the highest levels recorded in the last 25 years. Todays levels are at the lowest.

Inventory is the FIRST metric you look at with real estate. Everything else is noise. Interest rates will stall it for sure and not crash unless they hit double digits. People still need a place to live and will still buy. Then employment. If you cannot find a job right now you're a retard.

Inflation in goods is the biggest factor right now. Huge grocery bills, huge fill ups of gas, etc. Less disposable income to save and/or purchase a home. With no one wanting to work, wages are rising, at least here in IL. I dislike Biden with a passion, but from an RE perspective I'm not seeing much of a change in flyover country. High end coastal cities as people leave because covid changed their life (mask and vaccines), dip shit taxes/policies, and you can work from home are bringing more inventory to the market in urban centers.

WookieMan says

If you cannot find a job right now you're a retard

Or UnVaxxed, Or both?

Would make a great place for a few refugees to live while they get their footing to start a life of labor.

stfu says

WookieMan says

If you cannot find a job right now you're a retard

Or UnVaxxed, Or both?

Not possible to be both. The unvaxxed are the smart ones, and the proof is being published every day now.

.

As far as what Booger posted a few posts ago on the condo in Salem, MA

https://www.zillow.com/homedetails/225-Derby-St-UNIT-503-Salem-MA-01970/68008640_zpid/

Last sale prices were $549,000 in Mar 2005 and $415,000 in Nov 2011.

The current asking price is around $600,000. Based on 4% appreciation annually from 2011 to 2022, the estimated market value of this condo would be around $640,000.

My guess it will sell for around $550,000.

.

https://www.cnbc.com/2022/09/19/more-homebuilders-lower-prices-sentiment-falls-for-ninth-straight-month.html

More homebuilders lower prices as sentiment falls for ninth straight month

zzyzzx says

Ouch, how much did you put down? Walk away sucker. Actually, how do we know this is a true situation?

GNL says

Ouch, how much did you put down? Walk away sucker. Actually, how do we know this is a true situation?

may not be true or bought a shack with not enough stock options. Happened to met few so far who works for that co. everyone owns multiple houses of mm$ each. The stock has been on raise all along.

zzyzzx says

If they start growing marijuana and renting out rooms by the hour the payment should be no problemo.

Holy Freaking Cow.

I use short duration treasuries to manage the cash. (Not I-bonds, Hipsters, as there's a low limit for the purchase amount).

The brokerage notices of execution came in at annualized rate of 3.895%. I looked back one year, seen I picked up some in July of 2021 at 8 basis points.

I've reckoned for a long time that the 3 month and 6 month treasuries are reasonable proxies for interest costs that businesses including small businesses like farms pay for revolving credit to fund operations.

If my arithmetic is right, the borrowing cost for those folks has increased by a factor of about 48x from 14 months ago. Much of that increased cost will have to come out of margins for many businesses as folks will only be able to pay the higher prices for stuff like food at home, rent, utilities and medical.

B.A.C.A.H. says

use short duration treasuries to manage the cash.

How are you doing this?

zzyzzx says

use short duration treasuries to manage the cash.

How are you doing this?

Fidelity, Vanguard, ETrade brokerage accounts broker these at no cost to the customer. No commissions, no premiums.

I get the same rates at auction at the brokerages as in my Treasury Direct account. Treasury Direct is a bit of a hassle to use as we must link it to a retail bank account. I have a few longer duration treasuries plus the ibonds there, but mostly use the accounts at the brokerages, which have a check-writing feature, for treasuries.

I don't know how the companies make money on it. Maybe they don't.

zzyzzx says

Let me understand this. This person bought it early this year. He was fine with everything till now. He probably got the cheapest mortgage rate too.

This is more like buyer’s remorse. Feels like he’s afraid of losing his job. Then his down payment and remodeling money will be down the toilet with a foreclosure. This is what happens when other determines his faith (his employer).