patrick.net

Bitcoiner says

What type of business do you own GNL?

Specialized blue collar.

GNL says

HeadSet says

Eman says

Taking a dilapidated 2/1 house, made it into a 3/2 and sold for the highest price in the neighborhood is not adding value.

How so? An uninhabitable house was converted to a livable asset.

I'm pretty sure he's being sarcastic. I have a brother who is a "mortgage guy". I do not think he adds anything to the economy. I see lawyers the same way.

You haven’t been sued or slandered obviously.

1337irr says

GNL says

HeadSet says

Eman says

Taking a dilapidated 2/1 house, made it into a 3/2 and sold for the highest price in the neighborhood is not adding value.

How so? An uninhabitable house was converted to a livable asset.

I'm pretty sure he's being sarcastic. I have a brother who is a "mortgage guy". I do not think he adds anything to the economy. I see lawyers the same way.

You haven’t been sued or slandered obviously.

I've had to hire a lawyer before. Does that count for anything? Oh, and I try to keep a low profile.

Eman says

It’s much easier to make excuses.

Excuses for what?

Eric Holder says

The idea of unearned income was big in CCCP before 1991. As in if you shovel shit at the government-owned farm or make ak-47s at governmen-owned factory - your income is earned and you're good person, but if, God forbid, you grow some flowers and sell them at the corner or sublet one room in your apartment to a student - your income is unearned and you're all kinds of horrible. But the worse kind of offence was selling something for more than you bought it for. That was "speculation". Sometimes it feels like half of p.net are closet Soviets, lol.

There’s a difference between speculators and investors. Investors buy based on numbers aka ROI (return on investment). Speculators buy based on market euphoria with no fundamental evaluation. Investors always get a bad rep when SHTF.

As I’ve shared over and over again, We buy properties at cheap prices. Investors want to buy “cheap”. Buyers are the ones who drive prices up, and then blame it on investors when SHTF. Speculators help to fuel the prices to the stratosphere. Fortunately, speculators don’t get to play in the housing market this time around unlike during the housing boom in 2000’s.

HeadSet says

Eman says

Taking a dilapidated 2/1 house, made it into a 3/2 and sold for the highest price in the neighborhood is not adding value.

How so? An uninhabitable house was converted to a livable asset.

My point is that “adding value” is relative. We believe we “add value” while others believe we are skimmers and speculators. If it were easy, why didn’t they do it? Rather than settling for a W2 and be someone else’s bitch, we grab life by the horn and control our own destiny.

GNL says

HeadSet says

Eman says

Taking a dilapidated 2/1 house, made it into a 3/2 and sold for the highest price in the neighborhood is not adding value.

How so? An uninhabitable house was converted to a livable asset.

I'm pretty sure he's being sarcastic. I have a brother who is a "mortgage guy". I do not think he adds anything to the economy. I see lawyers the same way.

Our attorney bills us at $550/hour. When we saw him in action, that was when we felt he was worth every penny.

Our CPA bills us at $250/hour plus $150 for software fee. If she were to bill me $500/hour, I would still pay her. That’s how much value I see in her while other believes she doesn’t add much value.

Value is relative. For me, I want to be financially free and get to spend my time however I want. I don’t want to exchange my “finite” time on this earth for money. Haven’t had a W2 since 36 and it’s been a wonderful life. I want to be able to provide my loved ones with the same experience. Real estate just happens to be a means to an end.

Bitcoiner says

Eman says

I love real estate for a simple reason. It’s like planting trees. One time effort while we get to reap the rewards for decades to come. All we have to do is watering it and adding fertilizer as needed.

Watching local billionaires such as John Sobrato, George Marcus, Todd and Ned Spiekers, who built their real estate empire and got to where they are today, there’s no reason to feel ashamed of what we do. Real estate is there for the taking. Anyone can do it, but not everyone will. It’s much easier to make excuses.

Couldn’t agree more. Exactly my plan. Buy more RE, retire early from my corporate job and manage rentals.

Have you seen a real estate billionaire retired or any billionaire for that reason? I’ve had a chance to talk to a couple. It seems the word retirement is for people who don’t like their job. When you love what you do, you’ll work until the day you die. Google billionaire John Arrillaga who resided here in the Bay Area, he basically worked until the day he died. He was a real estate billionaire. His son is following his footsteps. We almost bought a 40-unit building from his son a couple months ago. The price is $4M higher than what we wanted to pay. 😂

GNL says

Eman says

It’s much easier to make excuses.

Excuses for what?

If you hang out or go to BiggerPockets, you’ll know what I mean. The same with going to real estate meetups. All sort of reasons why it couldn’t be done.

Even in my circle of friends, who I met on BP first, then in person at local meetups. They were full of excuses how it wasn’t possible to invest in the Bay Area. Now, one of them owns 17 units in the Bay, and one syndicated 27 units in the last 18 months. Now, they’re very confident they can repeat it. Real estate is a puzzle. They were just missing a couple of pieces.

A few things I’ve learned from billionaires, and I think they’re relevant when it comes to investing be it real estate or other assets.

1) buy with a margin of safety. Price is what we pay. Value is what we get. - Warren Buffett.

2) Rather pay a fair price for a great asset than a great price for a fair asset. - Warren Buffett. I would interpret this as buying prime real estate assets over cheap ones.

3) liquidity = value. Sam Zell. He learned it first hand during the S&L crisis, and I’ve witnessed myself.

These are some of the things to keep in mind in addition to putting the puzzle together to succeed in real estate.

Very interesting data set. New home price dropped 22% during the GFC. This time, it has dropped 15% so far since last October.



https://twitter.com/charliebilello/status/1661013393569095680?t=5lEEPaezr6Ic-W4Z6huZ5Q&ref_src=patrick.net

The S&L crisis hit CRE the hardest in the early 1990’s. This is a known fact. However, I didn’t expect the delinquency rate to be almost 9% during the GFC. 🤔



https://twitter.com/charliebilello/status/1661008096200892419?t=5lEEPaezr6Ic-W4Z6huZ5Q&ref_src=patrick.net

WookieMan says

It's okay for big companies to fail financially but you can't as a person? You are a business and it's the same thing.

Each person should act just like businesses do. If its okay for companies to default on debt, why is it not okay for individuals to default on debt (specially in non recourse states)?

B.A.C.A.H. says

WookieMan says

I've known people that have committed suicide over debt.

How many?

Without sharing others' personal informations, what were the circumstances?

Not personal friends, though a few family and other secondary people we knew and weren't family have done it as well (not debt related).. It was a couple clients 2006-2010 roughly. I believe 3. I'd go on listing appointments with the brokers to take photos the same day they signed the listing agreement for a short sale. Some of those were pretty emotional scenes.

Reality is some of those listings we couldn't sell. They were in shit areas and no one was buying. So they foreclosed, bank took it and mentally they thought their life was over. It sucked hearing about it because it really isn't a big deal. I've had to short sell a property. You learn. I'm out of RE now, but I'm wealthy for my age. I was poor as hell in 2006-2010. 2010 is when we had our first kid.

It's kind of why I probably come across as cocky sometimes. I can sympathize with peoples hardships, but I don't like bitching and moaning about debt and money. A lot of other worse things going on that can happen.

WookieMan says

It's kind of why I probably come across as cocky sometimes. I can sympathize with peoples hardships, but I don't like bitching and moaning about debt and money. A lot of other worse things going on that can happen

Thank you for sharing.

WookieMan says

So they foreclosed, bank took it and mentally they thought their life was over. It sucked hearing about it because it really isn't a big deal.

People have been miseducated into thinking that it is a big deal. How many people know that banks generate money out of thin air? If they did, their reaction would be different. Without a proper understanding/education/guidance, when something like this happens, people suffer.

gabbar says

People have been miseducated into thinking that it is a big deal.

THIS. Too lazy to look it up, but it's a common theme of failure. Restaurants. Something like half of them fail. No debt there.... said no one.

Debt is a tool. Call it a hammer. Sometimes you fail and break a finger. Bones grow and you can hammer away again later.

If you're afraid of debt, you miss the nail and break a finger you think you're dying. You give up, the pain is just so bad. I'm not trying to make fun of anyone, but you either have balls or you cry about a broken finger. Pick up the damn hammer and get after it and figure it out.

I can promise this. Without inheritance, you will NOT be wealthy without debt. Again it's a tool. You need to learn how to use it just like a drill or saw, which most men don't even know how to use.....

WookieMan says

Without inheritance, you will NOT be wealthy without debt. Again it's a tool. You need to learn how to use it just like a drill or saw, which most men don't even know how to use.....

I agree and the inheritance has to be fairly substantial too.

How does one learn how to use debt? I will admit that I stayed away from debt because of cultural tradition.

GNL says

I'm pretty sure he's being sarcastic.

Ah, yes. Obvious now.

gabbar says

How does one learn how to use debt? I will admit that I stayed away from debt because of cultural tradition.

Consumer debt is what to avoid. Business debt to buy assets like a business or rentals where the generated income can pay of the debt and generate income is prudent.

gabbar says

WookieMan says

It's okay for big companies to fail financially but you can't as a person? You are a business and it's the same thing.

Each person should act just like businesses do. If its okay for companies to default on debt, why is it not okay for individuals to default on debt (specially in non recourse states)?

Up until sometime in the late 90s, you could still write off student loans in bankruptcy. I wish I had known at the time. Also, if the IRS hasn't caught your back taxes (after 7 years I think), they can't collect. I'm not sure if that's still true though.

WookieMan says

I can promise this. Without inheritance, you will NOT be wealthy without debt.

Not true.

Debt helps you gain wealth in real estate (or net worth).
However, you can get almost wealthy just buying stock mutual funds.
$20/day can easily become a million bucks but it takes decades; most people lack patience.
A side job can easily raise the $600/month to $1000/month for investment.
Of course most people should inherit something from their parents.
My richest classmates inherited businesses from their parents.
But, they went home after college and never left.
I consider this a negative aspect of their good fortune.

Bitcoiner says

Nuttboxer, since you don’t like loans and banks…..wouldn’t you need a million in cash first to buy the land, equipment, etc to be self-sufficient? Or are you thinking of renting the land and the equipment?

Why are you being sarcastic Logan? Don't like me poking holes in your religion?

You don't need much land, depending on how many people will live on it. At least five acres I'd say, and a good water source. Obviously out in the country, and that can be had for way under a hundred thousand, even at the top of the market. Seeds are ridiculously cheap, and doesn't cost much to start with some chickens and a goat. Add some solar, propane, get a trailer for for free and dump it out there. Composting toilet, minimalist lifestyle that requires little electricity or water. Wood burning stove, or coal. Selling your extra crop, eggs, milk. Trading labor, gold, silver.

You can always find excuses to stay enslaved. Being free, that takes work.

NuttBoxer says

Why are you being sarcastic Logan? Don't like me poking holes in your religion?

Not Logan. Logan had awful grammar. Just typed and went with it. I did mostly agree with him. But Bitcoiner is not Logan. There'd be no point on a random forum. Not that I care, but Logan has(had) an ego, he wants to be known for being Logan.

I also agree with you that you should have land or at minimum move to a rural town. Community does matter. Where I'm at we have pigs, cows, corn, soybeans, wheat, etc. in abundance. Guns too. I will never mention my town, but good luck fucking with us is all I'll say. Have water and can feed ourselves forever. Chicago, San Fransisco, NYC, etc. doesn't have what I have. I don't need 80 restaurants to choose from. Give me 2 solid ones, hell even average. I like cooking so I don't go out much anyway.

clambo says

Of course most people should inherit something from their parents.

No. If you think "most people" inherent meaningful money from parents you may be living in a bubble.

NuttBoxer says

At least five acres I'd say, and a good water source. Obviously out in the country, and that can be had for way under a hundred thousand, even at the top of the market.

Actually, for a lot less than that (pun not intended):



Lots big enough for a trailer and a garden located near a small town can be had for less than $10k. This can be afforded by one who works at the local Dollar Store.

Prices of New Houses Drop Further, Builders Stimulate Sales with Price Cuts, Pulling Demand from Previously Owned Homes
by Wolf Richter • May 23, 2023 • 96 Comments

That arbitrage is now happening among homebuyers. But regular homeowners wanting to sell haven’t figured it out yet.

Homebuilders, unlike homeowners that want to sell a house, are not emotionally attached to prices. Their business is to build homes and sell them, no matter what interest rates are doing, and they cannot sit there and wait, praying, “and this too shall pass.”

So, unlike many homeowners that are thinking about selling, homebuilders started cutting prices in the fall of 2022, and they used mortgage-rate buydowns and other incentives to stimulate demand for their unsold inventory that had been piling up. And it worked. Cutting prices enough always works.

The median price of new single-family houses sold in April fell to $420,800, down by 8.2% from a year ago, and down by 15% from the peak in October, according to data from the Census Bureau today. This does not include the mortgage-rate buydowns. A different measure, the average price of new single-family houses dropped by 11% year-over-year to $501,000.

https://wolfstreet.com/2023/05/23/prices-of-new-houses-drop-further-as-builders-stimulate-sales-with-price-cuts-incentives-pulling-demand-from-previously-owned-homes/

Yep, seeing this in Florida. The stubborn Homeloaners with their 1979 3 bed, 2 bath, carport on 0.20 Acres with the 30 year old roof and Whacka-wah-wah wood panelling and raggedy treeless backyard with a cracked unshaded open concrete slab patio think they're going to get $420k when the Horton brand new 4 bed, 2.5 bath on 0.15 Acres with a garage, brand new roof, HVAC, all new appliances, screened in patio, USB ports in the walls and three times the electric outlets with all new flooring is going for $380k

HeadSet says

Lots big enough for a trailer and a garden located near a small town can be had for less than $10k. This can be afforded by one who works at the local Dollar Store.

As somebody who likes land, two things: Zoning Rules (no RVs, no Mobiles, must be 1000+ sq ft? Where is power lines? Rules for Sewer installation? Water?) and Enviro Rules ("30% wetlands must be mitigated")

Whacka wah wah wood panelling is when you walk into a room and instantly hear the background music:

https://www.youtube.com/watch?v=BAH0eqtDyMM

https://www.youtube.com/watch?v=uX8qTrwquVY

AmericanKulak says

As somebody who likes land, two things: Zoning Rules (no RVs, no Mobiles, must be 1000+ sq ft? Where is power lines? Rules for Sewer installation?

Rural areas like that are not zoned or if zoned residential, do not prohibit mobile homes. Power is available at the street in front and instead of sewer and city water, they use septic system and well. The land you like must be all in cities and developed suburbs.

Here are two with city water and sewer:

HeadSet says

AmericanKulak says

As somebody who likes land, two things: Zoning Rules (no RVs, no Mobiles, must be 1000+ sq ft? Where is power lines? Rules for Sewer installation?

Rural areas like that are not zoned or if zoned residential, do not prohibit mobile homes. Power is available at the street in front and instead of sewer and city water, they use septic system and well. The land you like must be all in cities and developed suburbs.

Here are two with city water and sewer:

That's a great find there.

No, the land I'm looking at is rural and unincorporated.

However, until I knew the Zoning and other Codes explicitly ("General", "Residential Agricultural", "Agricultural"), I would not buy that land. I've seen RA with "No RVs, No Mobile Homes, must be 1000+ sq ft, no camping short or long term." Lots of those in Volusia and St. Johns (although several do allow camping less than 30 days).

I can't imagine Virginia being easier than Florida for the most part, in most places.

Not being a pill or reflexively naysaying, just advising full caution and thorough research.

Eman says

There’s a difference between speculators and investors.

Not for the Soviets. Before 1991 if you're not shoveling government-owned shit with your two hands or sitting all day in the government-owned office - you're speculator and a criminal. That was a truly bizzarre civilization full of weirdest ideas but some of them somehow are surfacing now in the US of A.

AmericanKulak says

That's a great find there.

Actually, pretty typical. You may find this "Red Neck Riviera" interesting:



South Central Virginia has two very huge lakes. The above lot is in a waterfront neighborhood on Lake Gaston. These neighborhoods typically have a few waterfront parcels and the inland parcels have a deeded boat slip on a shared peer. One neighborhood I looked at on Kerr Lake has a golf course as well as a waterfront common with playground and clubhouse. The lot prices for the non-waterfront lots fell from $20k to around $5-6K. The lots here allow trailers but use wells and septic. I just need to find out why the lots fell in price.

Bitcoiner says

Are you including grading the land, amending and fertilizing the soil

Not gonna quote more than this, already shows your lack of knowledge about the subject. I don't think too many self-sufficient people consider themselves farmers, agorists is probably a more accurate term. You don't know about watering using clay pots, tapping into ground water, growing crops native to the area, not tilling up the ground and destroying the topsoil. Building things up little by little. Apparently you only make changes all at once, which means you never change, as that's impractical for most.

Logan's pretended to be other people before, and you're account just went active in the last month... Just say who you really are, or admit you've been caught by me again.

If I wasn't married and having to consider my wife, that would be my life by now, would've left civilization at least eight years ago. And it will be me someday, because we won't have another choice. But for me will be a welcome change.

NuttBoxer says

Logan's pretended to be other people before, and you're account just went active in the last month... Just say who you really are, or admit you've been caught by me again.

It's not Logan dude. 100%. You can't change writing styles that dramatically. Bitcoiner used to be bitcoin. I probably burned 200 comments on his threads. Also wasn't Logan in LA or further north?

@Patrick - this is why you shouldn't allow username changes. All it does is muddy the waters. I'll never change mine or ask you to delete my account. I don't get why people need to do it besides they had a bad take or argument and can't own up to it.

HeadSet says

AmericanKulak says

That's a great find there.

Actually, pretty typical. You may find this "Red Neck Riviera" interesting:

Unimproved land in flyover country is cheap. Kind of surprised in VA it being that low, though I haven't been since I was a kid. There's some nice spots in my opinion getting further away from DC.

If you can fit in, rural redneck country is where you're going to want to be in the next 2 decades or the rest of your life for the demo here. Cities are dying. Have been for a while and the pace is gonna pick up even faster. It won't be Detroit level, but more like Chicago.

Bitcoiner says

Wookie,

“ Cities are dying”
I’d hate living in the city, I live outside of SD (feels rural). I drive to SD quite frequently - mainly for padres games at Petco park or meeting friends.
It’s freakin busy in SD. Anytime you go there. I’d love to see less traffic and RE prices to come down. I don’t see that town dying. Even worse with LA. I try to avoid LA like cancer, traffic is horrible.
SF, lots of commercial RE vacancies. But people who moved away because they could work remotely are now slowly moving back because companies changed the policy and want people back in the office for a few days a week. I don’t think rents have come down significantly in SD, LA and SF. So while some cities are dying, it doesn’t seem like the west coast cities near the ocean are. When you come soon you probably see what I mean.

Can't speak for SD and LA much, but SD is certainly busy. SF however is not coming back, not even by a mile. On a positive note it may restore the city to a calmer, slower pace, with less gridlock and traffic, once they can clean it up, and make it more livable again. It has a a lot of natural beauty and greens, parks etc, doesn't have to be a "tech" or financial city, that ship has sailed long ago anyways. Downtown SF is completely gone and will not come back with the current rents and problems, taxes, the leftoid marxist retards have completed destroyed any business incentives. They should turn it into a nice residential neighborhood by the bay as offices will stay vacant. It's much more romantic without tech and biz anyways. The hard SF party times were good, but they ain't coming back, and overall I preferred the foggy mornings in scarcely populated coffee shops without hipsters, hobos and thugs and trannies. They should also tear down that stupid baseball stadium, maybe make it another aquatic center or a nice huge park, or a practice rooms for musicians, bands etc. Revive bay area thrash lol

@Bitcoiner

What's your "math" for deciding if a property is a good investment? I assume you have different math for flips vs rentals.

I'm good with SD. There's the advantage of the Mexico border to the south, the Pacific and mountains/less hospitable terrain to the East. North is already developed till LA. I see SD as a stable place to be as far as CA goes. Outside of business we'll visit my dad's cousins out there. She has a place in Carlsbad. Another has a place outside LA (not sure area) but he will come south to meet up in the middle.

I like SOCAL. LA to SF ehh. We did 1 the whole way down the state and started in Portland, OR as a kid and ended in LA. I like Northern CA. You can't beat redwoods. Besides the redwoods, SOCAL is the best part of the state in my opinion. Beach, mountains, unique terrain (Joshua Tree), Palm Springs (golf and MCM architecture), desert, ski/snowboard 2 hours away(ish) from what I recall, minimal for CA shit and needles on the street.

I have zero intention of going to LA or SF in my life again unless the kids really want to go or it's to get a rental car and go somewhere else in CA. Same with Chicago and I'm 60 miles from State and Madison (geographical counterpoint of Chicago).

I've only been twice. LA just doesn't feel like a city. It's urban sprawl. If Chicago did it the same way LA did as far as population it would be the 2nd largest city by a long shot, even losing population. We have the Chicagoland metro area which is like 11M people. I believe it's smaller than LA land mass wise. We just have it broken down into large suburbs that LA counts as LA. It's not a top 3 city population wise, they just expanded the boundaries. Call the state of Texas a city and it would be one of the largest in the world. That's what LA has set up.

Bitcoiner says

Maybe I can find some of those old discussions between the two in an old thread. I am getting a bit curious.

Logan has the record for ignores. Because of that he's changed his account, and opened dup accounts. You are doing the same thing. Created a new account to try and pretend to be someone else, because apparently your old account has so many bias's associated with it, it's become unusable.

Real world and history have blown away your biased sources numerous times in this thread, but you keep doubling down like 2008 never happened. You can manipulate stats to support any viewpoint, source is everything when it comes to stats, something you ignore. Real world, not so easy to lie about...