patrick.net

Darrell In Phoenix says

And you're no better my underwater debtor.

other than not being underwater..

Darrell In Phoenix says

You're deep underwater and either don't know it or can't admit it. Don't fear it though. You're one of tens of millions of underwater debtors.

Just refied my loan to an even lower rate. hm...somehow nobody informed me of me being deep underwater. I am calling them now. Outrageous! Can you believe it - they refinance my loan and don't bother to tell me that I am deep underwater?? If it wasn't for you, I wouldn't even know it.

Man, thanks so much. You really know your stuff. No, really. Thanks for letting me know...

(ZOINK)

Darrell In Phoenix says

SubOink says

Just refied my loan to an even lower rate.

And you're still underwater... and sinking.

and you are still dreaming...deeper and deeper

SubOink says

David, are you renting?

No, I kept the family home, and maxed it with debt.

The interesting part is that I expected to be inflated out of the debt, which didn't happen, so I have to increase my income.

My income has been much easier to increase than if I was renting out my properties.

Do the math on what I'm saying. Even the most savvy investors who have portfolios going back to the 1970s are looking at me sideways, but not laughing.

If you really want to go into the depth of Real Estate Investing you now know that to increase your income you have to take on more debt. Saving the cash, at todays pricing would take too long.

The game is rigged.

Darrell In Phoenix says

And your losses grow by the month.

Yes! by the day! by the second!

just had a lightbulb moment - Darrell , are you really in Phoenix?

SubOink says

just had a lightbulb moment - Darrell , are you really in Phoenix?

You're a little bit late to that particular party.

Bigsby says

SubOink says

just had a lightbulb moment - Darrell , are you really in Phoenix?

You're a little bit late to that particular party.

Lol. It was a joke, duh!

It just explains his views...he's got no clue how the LA market is. That's why he thinks a 2500 sqft home rents for $1300/month. That's Phoenix prices. Not LA prices.

SubOink says

Bigsby says

SubOink says

just had a lightbulb moment - Darrell , are you really in Phoenix?

You're a little bit late to that particular party.

Lol. It was a joke, duh!

It just explains his views...he's got no clue how the LA market is. That's why he thinks a 2500 sqft home rents for $1300/month. That's Phoenix prices. Not LA prices.

You've lost me. He says he lives in Phoenix so that he can wind up Roberto. Who knows where he really lives? The empty wasteland of his own mind probably.

Darrell In Phoenix says

We know you're lost... lost in a sea of misrepresentations and lies.

Says Mr. Multiple Trolling Personalities.

Let’s see if I can do this without making a complete hash of things..apologies in advance if I do.

===========

Price: 875k
$ Financed: 700k

============

Meaning your paid $175,000 down, or 20% of the sale price, presumably to avoid mortgage insurance. I think I got that part. And I’m also presuming you incurred zero other expenses upon the purchase. Is that a fair statement? In other words, you either used the bank’s attorney or represented yourself, were able to stick the seller with everything from the cost of your credit report to every filing fee to every fedex delivery to I guess even the home inspection fee, presuming you had one done. Sound about right? Since this is a “real-life” example, I’m assuming all relevant facts were presented. Whereas in a typical house purchase the buyer’s side of the closing costs can run from 1% to (so I’ve been told) 3%. But not for you. I’d like to hear the “real-life” way you scooted around all that, personally.

===============
Loan: 5/1 Interest Only ARM at 2.875 with .25 points (union bank)
Payment: 1677
===============

So here’s my problem with your math: Something in the above is wrong, presuming all you did was put down a 20% down payment and do nothing else. To get to a $1,677 payment you have to ignore the .25 points. Both as part of the downpayment AND as part of the monthly payment.

Monthly: ( 0.02875/12 = 0.002396) * 700,000 = 1,677 (rounded). No .25% points there.

Downpayment: $875,000 * .20 = $175,000, what you said you paid, and what you would have needed to pay to avoid mortgage insurance. No .25% points there, either, else your downpayment would’ve been too small.

So, somewhere along the way 700,000 *.0025 or $1,750 fell of the table. Where’d it go? It is not in what you’re claiming as a monthly payment, and it is not stated as being included in any closing costs, which apparently were zero on your end, other than the 20% downpayment.

=============
Prop tax: 912
total: 2588
(im in 28% effective tax bracket so 2588 * .72 = 1863 'after tax write off payment')
Add fire ins of 129 per month and total pmt after tax write off = $1992
========

And here’s my second problem, not a math one necessarily, more revolving around logic: Are you saying you have no homeowner’s insurance? And that your mortgage was written in such a way to permit this? Or, is what you’re calling “fire insurance” of $129/month actually a homeowner’s policy? In that case, you’re getting the deal of a lifetime, since a property worth $875,000 is only costing you $1,548/yr to insure. I’d guesstimate a number double that, quite frankly, maybe more if you’re required to insure 125% of replacement value. So, neither scenario seems credible in my eyes, but perhaps you can offer an explanation.

And I’m a bit surprised that you included nothing at all for routine repairs and maintenance. No lawn to mow, no air conditioning to break down, etc? Any reason in particular you feel your lawn isn’t going to grow and nothing is going to break down over the next five years? In that case, I’d like to know the brand of grass seed you’re using AND the Uber-builder who has apparently constructed an invulnerable house.

Oh, yeah. Apropos of nothing, is your mortgage considered Jumbo or Conforming? In a sane society it would be Jumbo, of course. But I guess in certain parts of the country you would come in as conforming. And I’m guessing you’re conforming, FWIW, given the interest rate you’ve gotten. But I’d be curious to see if I’ve guessed right.

Thanks in advance.

EPD

Darrell In Phoenix says

We know you're lost... lost in a sea of misrepresentations and lies.

If you own property, sell it, if you want to buy, buy for what you would pay in cash.

Buy what you can afford to pay off within seven years, but don't tell the bank your intention.

The truth is out there, but I don't think you are listening.

The bank is always the enemy, be done with them as quick as you can.

Darrell In Phoenix says

We know you're lost... lost in a sea of misrepresentations and lies.

Will you used house pimps ever be honest with the public?

What happened to your banning? And where's War? Is he going to make an appearance today?

Darrell In Phoenix says

Darrell In Phoenix says

Will you used house pimps ever be honest with the public?

LIEWog/Bigsby..... you need to sign out of your Bigsby username and into David Losh first. You're getting your names all mixed up.

Why do you realtors post here with multiple usernames?

No need to project what you do onto others.

Darrell In Phoenix says

Why do you realtors post here with multiple usernames?

says the guy that spends every minute on the forum trolling with multiple names...haha, funny.

Shoot, I gotta run...my house just lost a few bucks in value...crap..

Just because you repeat some nonsense does not make it a fact...

You know a lot of stuff - like I am underwater, I am a realtor, I have multiple usernames...

I recommend everyone to listen to Darrell...he knows everything and he is not lying. How do I know that? Well, he says so.

Now, I really gotta run as my losses on my house today are increasing...also I gotta hit the real estate office for some listings and in between sign on with 10 different usernames to troll...

HAHA - awesome!

You should write a book. Genre: Fiction - really, you have great fantasy. I give you that.

...

THE DARRELL CODE!!

Now at your bookstore...

Darrell In Phoenix says

The LIAR CODE!!

Established with MLS

there you go! I knew you'd come up with something.

Darrell In Phoenix says

David Losh first.

I'm actually a real guy who has also been banned here in the past, but Patrick let me back in. I only use my real name.

For those of you who think owning is a bad idea, you are signing up to always pay the market rate for monthly housing cost. Your owner/neighbor may own and have fixed their monthly cost for 15 years at 2.75% interest. After 15 years, they won't have a payment other than taxes and insurance. You will still be paying the going rate for rent. While their payment stayed the same, your "payment" was variable and changed with the market.

Yes, you have maintenence with owning, but you also have potential equity growth and certainly have principle paying down. If someone is deciding to be a lifelong renter at 3% interest rates, they are making a rather large error in my humble opinion.

The monthly payment is on sale right now when you decide to own. Saying it's a once in a lifetime event would be accurate. The last time mortgage rates were fixed at 3.25% for 30 years? Never since 1900 anyway. I know that for a fact.

Best of luck!

brucenorris says

The last time mortgage rates were fixed at 3.25% for 30 years?

So then with your logic 2.25% would be even better? How about 1.25%, then 0.25%, then 0%. The low interest rate speaks of a deeper problem. You don't need to look that far to see it. Jobs!

Darrell In Phoenix says

brucenorris says

Saying it's a once in a lifetime event would be accurate.

Hey used house pimp,

When are you liars ever going to stop lying to the public?

When are you going to stop being a dumb ass?

SubOink says

In the meantime, you have spend 4 years of rent and pumped it down the drain.

So in essence, if you add up those 4 years of rent then you know how much you have lost on that deal.

4 years of over 2k/mth in savings. Not a bad deal at all. Add to it that this savings has grown at a rate of 8-10% annually. YMMV

RentingForHalfTheCost says

The low interest rate speaks of a deeper problem. You don't need to look that far to see it. Jobs!

The last word should be Japan!

Japan has had 0% for a decade.

robertoaribas says

how long till I have all of my invested money back?

You have debt. You have to pay the debt, or default. If you end up with less equity than you risked then you lost.

Investing in Real Estate is a job. It can be a good paying job, but it is a job. You are tied to the set of asset you acquire.

robertoaribas says

so lets see: if I can finance homes at LESS THAN HALF OF CURRENT RENT

As rates go down so do rents. I'm renting cheaper now that I ever have been in my life. Incredible, and each month I couldn't be happier. I wish time went faster...

You don't need a math degree to figure this stuff out. Good luck to you.

RentingForHalfTheCost says

As rates go down so do rents

Please explain how apartment complexes in bay area have increased rents 25-30% in the last 2 years with the rates going down.

Your chart starts at 2008. If you use the Tableau chart with Case Schiller you will see the real dynamics of the top, and bottom, as you call them.

Let's see if this works: http://public.tableausoftware.com/views/Case-Shiller-YOY/YOYChange?:embed=y&:loadOrderID=0

You can adjust the chart back to 1987, I think

OK, that worked.

So you can see that the chart is over shooting the bottom rising up to the top, but that is totally inconsistent with the market place in Arizona.

I have always been able to buy a place in Mesa for about $100K, three bedrooms, 1.5 to 1.75 baths, and a pool.

Then it all went sideways.

So I don't see a bottom or a top, what I see is volitility.

Yup says

SubOink says

my hownowners insurance = $1000.-/y

when we rented our renters insurance for the house was $950.- /y

BS that is complete crap, you are full of shit.

Why is it BS? Those are the amounts I pay/paid...

SubOink says

Why is it BS? Those are the amounts I pay/paid...

He seemingly knows more about your bills than you do. An impressive ability.

Bigsby says

SubOink says

Why is it BS? Those are the amounts I pay/paid...

He seemingly knows more about your bills than you do. An impressive ability.

I thought Darrel from Phoenix is the only guy that possesses such abilities...

Yup says

You are correct I apparently do know more about bills than he does.

You don't know more about HIS bills though, do you?

dublin hillz says

RentingForHalfTheCost says

As rates go down so do rents

Please explain how apartment complexes in bay area have increased rents 25-30% in the last 2 years with the rates going down.

Because they haven't overall. Sure, you can find places that fit your description, just like you can find places that are cheaper than 4 years ago. Overall, rents are stressed. There are better opportunities out there now that I have ever seen in the BA. I can rent a McMansion for 4k/mth. That was never true before.

Elwood P Dowd says

And here’s my second problem, not a math one necessarily, more revolving around logic: Are you saying you have no homeowner’s insurance? And that your mortgage was written in such a way to permit this? Or, is what you’re calling “fire insurance” of $129/month actually a homeowner’s policy? In that case, you’re getting the deal of a lifetime, since a property worth $875,000 is only costing you $1,548/yr to insure

Elwood,
I've seen lenders refer to homeowner insurance as "fire insurance", so, it's probably the same thing.

For the cost. In LA or Silicon Valley it's common for the lot to account for more than half of the purchase price. Someone may purchase a rundown house for $1m with the intent to scrape and rebuild. So the lot is $1m. A typical SV Fortress house that sells for $1.5m would be roughly $1m for lot, $500k for structure. The insurance covers the structure, not the lot. The insurance price then is lower than you might think, based on the purchase price. Insurance on a 2k ft $1.5m house could be $1200. It also depends a lot on the deductible and liability limits.

This is a flaw in many rent vs own calculators; they will show the homeowner insurance as a percent of purchase price, but if the lot is expensive, that's misleading.

Same with maintenance. You'll have a lot more maintenance on a $1.5m house in the midwest than in Fortress, just because the $1.5m house in the midwest will be much bigger. 25,000 sq ft if Darrell builds it for $60/sq ft. There will be much more maintenance on a 25k ft house than a 2k ft house in SV, even if they both cost $1.5m.

However, it is true that maintenance is not zero, and the calculation needs to account for that.

RentingForHalfTheCost says

Overall, rents are stressed. There are better opportunities out there now that I have ever seen in the BA. I can rent a McMansion for 4k/mth. That was never true before.

I seriously do not buy that. We rented the same 4 Bedroom house for 8 years for $1,500 a month. We were lucky in that the LL never raised the rent. Back then Landlords couldn't give these away. When we looked at rentals, the immediate area we looked in had pages of houses for rent and the one we settled on was one of the more expensive. Some were for as little as $900.

About a year ago I started looking out of curiosity at what stuff was renting for around us. The same houses were renting for $3,000 a month. What's more, there were few if any to rent. A lot of people who probably would have bought before can't do so now hence the demand for rentals, especially houses. I just looked now. There are a total of five 3+ BR houses to rent total in our east bay city. Five.

Basically what I pay for the mortgage is just slightly more than what we had been paying in rent and about 40% less than what the type of house we bought would rent for in the current market.

If we were talking say- 2002-2003, sure- the rental market was dirt cheap and highly flooded. At least in the immediate BA I can't really say that's the case. Besides- $4,000 a month in rent? You can buy a house for 50% less then that these days.

The cost of sleeping in the car is inflation proof!

edvard2 says

Besides- $4,000 a month in rent? You can buy a house for 50% less then that these days.

It depends on the area, and the property.

If you are renting a million dollar place then $4000 seems reasonable for rent.

Actually a lot of tech people in Seattle pay high rents to be in good areas close to work. The kicker is that they are in some really nice areas. People with really nice houses can afford to rent to the people who will take care of them.

edvard2 says

Besides- $4,000 a month in rent? You can buy a house for 50% less then that these days

The houses that are equivalent to my rental would cost me 7-8K/mth in owning expenses. Sure, you can buy cheaper, but I just got too much crap to house now. ;)