patrick.net

The difference is that Patrick is trying to sell a product. Still have tons of respect for him for starting this site so many years ago but always be skeptical when someone is making money off of their own advice.

I'm just curious as to why anyone would use Patrick's service to find an investment property when he has never owned real estate before. That would be like me giving computer programming advice even though I don't know the difference between a megabite and a gegabite.

If housing remains fairly stagnant and/or drops over the next couple of years, rental properties will be a decent purchase, if the rent vs purchase ratio is in your favor.

From what I've seen, and one big reason for buying, that no one ever seems to mention, is that rentals are almost always the worst properties in a neighborhood! Often by a huge margin! His tool makes it easier to find these worn down homes, not necessarily easier to find a value based property that an owner would want to live in. A rental will often appreciate based on what it can bring in for rent, which is derived on how much other homes around there are worth, not necessarily the value of the actual home.

If a realtor was selling this information, I would be skeptical. I would assume any bargains they found would be passed along to their prime customers and/or purchased by friends, or themselves and the rest of the "deals" passed along to the people willing to pay for the left over information.

I don't think his stance behind own/rent ratio analysis is changed.
What's changed is the market situation and he is financially distressed too. He can use little money from letting landlord know what's going on by using his data.

I think this one article at front page sums things up pretty well.

http://www.latimes.com/business/la-fi-cover-apartment7-2010mar07,0,1791487.story?source=patrick.net

The guy is sticking with a certain properties in certain area, which is far from what toothfairy want. I guess what the guy is aiming for is the best rent income vs purchasing cost ratio. It is safe to say that the guy is not beliving in homes in nicer area as investment at least as of now. Maybe he is waiting for price drop in nicer area while he is collecting rent at less regulated properties.

E-man,

The overall message is not contradictory. It's just that you don't gidtit, what the message really is. I gidtit, and I think thomaswong86 probably does too.

I suspect Patrick just needs to see some dividends from all of his time and energy. He isn't Robin Hood.

While it's a terrible time to buy a house for yourself in the better neighborhoods, it's not a bad time for landlords to be acquiring rental property in other neighborhoods, because prices have crashed very unevenly.

Where is the contradiction? The bubble was uneven. So is the crash.

This has come up on several threads. The ratio of prices in "prime" areas to the prices in other areas is out of whack with historical norms. If I could short San Francisco and buy Contra Costa, I would. It would be a no-brainier arbitrage.

Just wondering if there’s any evidence supporting the expectation that housing prices in nicer area will drop to the point where they can be purchased as investment properties.

Here is the real question: If they are too expensive to buy as investment properties, then why does anybody hold them now as investment properties instead of just selling them, since they are such bad investments?

All of Patricks messages have been "housing is out of wack, don't buy unless a house meets some minimum criteria" Now he's got a product that helps people find that minimum. He's not contradictory. He said there was a bubble, he said housing was too expensive when viewed as an investment, and he gave his methods of calculating our an investment.

Bad investments are held for lots of reasons. Banks do it, just like people. It might be a bad investment, but dumping it might make it a worse investment. Dumping a house and shorting it might be worse than keeping it. For a bank, turning a paper loss into a real loss can really hurt their books. Some properties might be under water, but once you calculate in the time they're going to be on the market empty + selling fees + more buying fees when things get corrected + covering losses, an investment might be better to keep.

Search south Florida Single family homes then search for Duplex and Triplex.

You'll find multi family homes are half as much as single family homes.

E-man,

Looks like Mark and pkennedy get it, too.

So does Elizabeth Warren, an "Okie", a Harvard Law Professor, and author of "The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke", published in 2003.

The message is not contradictory, it is not nuanced; it is plainly stated and it is totally consistent.

From front page of today's San Jose Mercury News,

"For East Side, budget ax cuts deeper than ever":

"...While East Side's proposed cuts are dramatic, the district has plenty of company.....
... Evergreen Elementary sent out preliminary layoff notices to 216 teachers - about one-third of its teaching force - according to its union."

Tenouncetrout says

Search south Florida Single family homes then search for Duplex and Triplex.
You’ll find multi family homes are half as much as single family homes.

LOL! In case a chinese investor wants that anymore clearier to understand..
here is the translation... also bring lots of sunscreen!

搜索南佛罗里达单户住宅然后双层和三层搜索。

你会发现多户住宅的一半，单户住宅。

sybrib says

E-man,
The overall message is not contradictory. It’s just that you don’t gidtit, what the message really is. I gidtit, and I think thomaswong86 probably does too.

Yeah..I dont know whats contradictory as well. I am looking for a nice house in 94087, but the prices are still way out of whack, whereas in some places of south sj(for ex. Evergreen), there are some properties where you would get +ve cashflow. I think he realized that and trying to sell that as a service, now whats wrong with it?

E-man says

but I think Patrick should try to sell his Landlord Bargain’s Finder on another website. Posting it on this website sure is contradictory. Just my opinion.

Actually, IMO, it makes the site more credible. He clearly says the difference between nice areas and no so nice areas are out of historical norms that you might not buy a house to reside, but you can buy an investment property, which I am debating myself to do so.

sybrib says

So does Elizabeth Warren, an “Okie”, a Harvard Law Professor, and author of “The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke”, published in 2003.

The message is not contradictory, it is not nuanced; it is plainly stated and it is totally consistent.

Very nicely said. She was there in Jon Stewart's show sometime back. She has great points and after that Jon gives his own classic comment:

http://www.thedailyshow.com/watch/tue-january-26-2010/elizabeth-warren

I'm not against Patrick trying to make some money on the side. I think it's a good idea. It's the left panel that I have a problem with.

just wondering if the hardcore Patrickers here expect to wake up one day and the front page says

"Now is a great time to buy a house
Cash flow is excellent on beautiful high end house in your favorite neighborhood!"

I'm just sayin that's actually probably NEVER been the case. I'd love to see some hard evidence to be proven wrong.

toothfairy says

I’m not against Patrick trying to make some money on the side.

On the side? How many of you have donated?