1
0

Home prices still 50% too low in Bay Area - rent STILL cost twice the mortgage.


 invite response                
2013 Mar 28, 3:45am   51,881 views  157 comments

by PockyClipsNow   ➕follow (0)   💰tip   ignore  

So my friend is moving up there with his tech job. (they moved the factory workers to china, moved R&D/management to bay area. nice huh!).

I ran the numbers and if you buy a 1m home you live there for under 2000 a month.

A similar rental home costs upwards of 4000 a month.

Heres two examples:
average 3 bedroom home in redwood city asking 4000 for rent:
http://sfbay.craigslist.org/pen/apa/3690240753.html

average 3 bd home in same city which SOLD for 1m.
http://www.redfin.com/CA/Redwood-City/923-Emerald-Hill-Rd-94061/home/1700223

Now this type of loan is not for the NINJAs (no 20% dp), nor for scardey cats who worry about interest rate increases and great depression #4 coming. (I guess those people are called renters.)

Purchase Price: 1,000,000
Loan Amount: 729,000
Down Payment: 271,000

3 year IO ARM from unionbank.com is 2.75% right now.

Int pmt = 1670 a month
prop tax = 1041 a month (slightly off im using LA county tax rate at 1.25%)
Principal Pmt = 0 (feel free to pay off early or make double pmts but not required)

Assuming you are in the tax bracket of 28% effective then after taxes your payment is:

1952 a month. (half the rent)

(yes we know there are repairs and the wife will want to remodel this is called home ownership, mostly people sell for more than they bought that is why they pour$ into it. Also it beats buying a bunch of old BMW's to pour $ into for most people.)

This is why you see a frenzy of buying- and it wont stop anytime soon. If rates spike in the future that does not change the fact that RIGHT NOW this is how the numbers add up. Who the hell knows what will happen in the future?! It comes down to this: Pick a payment 2k or 4k a month and live with the consequences. Obviously renting was the wrong choice from 09 to 2012 - and it looks to be a poor choice now if you have a large down payment and are not a genius stock picker.

#housing

« First        Comments 75 - 114 of 157       Last »     Search these comments

75   Bigsby   2013 Apr 2, 12:57am  

David Losh says

Bigsby says

Actually, why don't you just explain what the hell that is supposed to mean?

I don't know anyone in today's retail market who could sell in 2 years, and come out with a profit.

Flippers might, if they were scrambling for a deal, but I don't know any homies, who are in multiple offers, no inspection, and now no appraisal, escalator clause offers who are doing well.

Most people who buy to live in the property themselves aren't going to sell in 2 years, but the point was you claimed they are all in over their heads. That is just blathering nonsense on your part and is completely unsupported by the actual facts. I bought 18 months ago and am more than happy with both the purchase and the price. I'm not in over my head, so you are wrong.

76   Bigsby   2013 Apr 2, 12:58am  

David Losh says

Bigsby says

Actually, why don't you just explain what the hell that is supposed to mean?

Actually why don't you explain it to me, because so far you have said nothing other than demand proof from me, about my statements, which I have readily supplied you.

If you already know this Real Estate market place is heavily manipulated then why play?

It seems exceedingly risky to me.

How am I supposed to explain something to you when I'm asking you to explain what you mean by your comments. Again, what on earth does 'make whole' mean?

77   RentingForHalfTheCost   2013 Apr 2, 1:12am  

KarlRoveIsScum says

If you can afford to rent a home worth $1M there is something wrong with you if you don't buy!

Haha, this is so wrong. I can afford, actually can afford to pay cash. This is only because I didn't buy into the SFBA. Silly rabbit, ageing wood and nails is for kids tree houses. A proper family home should be made of durable materials.

78   RentingForHalfTheCost   2013 Apr 2, 1:15am  

KarlRoveIsScum says

David Losh says

I see plenty of people who are in over their heads in properties.

Trillions have been wiped out.

And so will trillions more. Sit back and watch the continued fireworks. The show is just starting, not ending. I've funnelled most of my wealth out of this country (legally btw) and sleep well at night now. Good luck to everyone.

79   Tenpoundbass   2013 Apr 2, 1:39am  

What insurance if Free in Lala land?

80   David Losh   2013 Apr 2, 1:40am  

robertoaribas says

I'm going to sell it...

Then do that, good for you, but you are an investor right? In a Phoenix market place, right? Arizona is the highest set of price hikes behind the Bay Area, right?

So how are you making a universal statement for every one who bought?

Especially for the home owners who have been mercilessly hosed.

81   David Losh   2013 Apr 2, 1:45am  

robertoaribas says

So, there will be the best proof of david's idiocy ever!

Now, if you ever wanted to bring anything other than anecdotal information about your investments to the table, with some reasoned response with data, other than your own personal anecdotal sales data, I would maybe listen to you.

However, your reliance on insults takes anything you might have to say, and makes it laughable.

I'm always amused by you, but you bring nothing to the discussion here.

82   Bigsby   2013 Apr 2, 1:49am  

David Losh says

So how are you making a universal statement for every one who bought?

He's not. You are though.

83   skeptic   2013 Apr 2, 2:00am  

robertoaribas says

nd has seen the home value go up 10 to 30% depending on where has done fine.

You keep saying that and you are completely wrong. The value of the home has gone nowhere until the person sells! So that 10 to %30 up in value is totally in your head until you sell. Why can't you get this?

84   RentingForHalfTheCost   2013 Apr 2, 2:42am  

robertoaribas says

RentingForHalfTheCost says

And so will trillions more. Sit back and watch the continued fireworks.

let's see: you said the same thing last year and were butt ass wrong.

you said the same thing 2 years ago and were butt ass wrong...

you state no facts, no explanations for how your prior predictions sucked so bad, and yet keep predicting the same thing....

does thinking hurt you or something?

85 Billion/month to prop up a dead market is enough facts you need. Ahh, lets just forget about that, it is nothing at all. Nothing you say. Just wait... Your facts are all forgetting about what is causing them. You are one level above the root, if you dig down you will scare even yourself.

85   RentingForHalfTheCost   2013 Apr 2, 2:45am  

robertoaribas says

A home has a value. PERIOD. it isn't worth zero just because you don't sell it on that particular day.

Its value could actually go negative. Upkeep on a home you can't sell is negative. You need income to keep supporting the dead animal.

86   RentingForHalfTheCost   2013 Apr 2, 2:47am  

Any landlord ever wake up and get a note from their tenant that they will pay you more in rent? I don't think so. You have to be the enforcer and risk that they leave you without your rental income just to squeeze more juice form the orange. I'd rather the former. Just saying...

http://finance.yahoo.com/news/cisco-increases-quarterly-cash-dividend-231500984.html

87   MisdemeanorRebel   2013 Apr 2, 2:48am  

Reality says

Austrians are quite explicitly against equilibrium theories. The Keynesians OTOH are quite fond of equilibria.

Some Austrians, like Mises, are critical to the point where you can say they reject general equilibrium. Others aren't. von Weiser spent a lifetime, and Hayek half his lifetime, working on their versions of Equilibrium. Hayek's version came to become Market Equilibrium, but it is heavily influenced by the classic concept of equilibrium.

88   David Losh   2013 Apr 2, 11:44am  

robertoaribas says

as usual, you lack of intellectual ability interferes with the discussion.

YOU mad a universal statement: that everybody who bought was over their heads.

Bigsby says

He's not. You are though.

You made the statement about the past two years. I refuted it, and you came back with another anecdote about your property.

Let's see what happens when you sell.

Best of Luck.

What is interesting is that you are all in for Real Estate.

Let me see, I sold in 2005, 2006, and 2007, and again that prize of a property in Atlanta that I suppose you think we should have held onto.

The fact is that we had a global Real Estate market crash in 2007, I had my cash out, but I would have been an absolute moron to jump into a market I had already gotten out of.

I spent more time on my business which has done much better than you have with your portfolio.

and Bigby, if you have something to contribute, anything to say, then make some statements.

The discussion was about properties bought in the past two years. One of declines, the other of that great double digit price hikes we hear so much about.

If it's true, then we should all sell, and get into something much more profitable.

89   Bigsby   2013 Apr 2, 12:08pm  

David Losh says

You made the statement about the past two years. I refuted it, and you came back with another anecdote about your property.

Let's see what happens when you sell.

Best of Luck.

Try re-reading the thread. You might be able to get your facts straight then.

David Losh says

The fact is that we had a global Real Estate market crash in 2007, I had my cash out, but I would have been an absolute moron to jump into a market I had already gotten out of.

What you do with your cash is your decision. Would you have been an absolute moron to do what Roberto did if you had been living in Phoenix? Come on, give an honest answer rather than trying to maintain your present narrative.

David Losh says

I spent more time on my business which has done much better than you have with your portfolio.

Another rather pointless and unproven statement. You seem to like doing that.

David Losh says

and Bigby, if you have something to contribute, anything to say, then make some statements.

And what are you doing except posting extraordinarily confused comments that seem to have a habit of contradicting themselves? Am I now not allowed to point out the problems with what you are saying?

David Losh says

The discussion was about properties bought in the past two years. One of declines, the other of that great double digit price hikes we hear so much about.

If it's true, then we should all sell, and get into something much more profitable.

Why? I'm not a landlord. I like my house. Why would I sell even if my house had seen substantial rises (which Monterey has not)? And that's not even beginning to touch on all the other factors that determine whether or not to sell.

90   David Losh   2013 Apr 2, 1:19pm  

Bigsby says

Would you have been an absolute moron to do what Roberto did if you had been living in Phoenix?

Yes, I would have been a moron to jump back into an investment that had just crashed, and is now poised to crash, again.

I don't believe in a crash, but I do think we will find an equilibrium that finds prices in Phoenix excessive.

I think $50K, or $26K for a condo in Phoenix is a fair price, as we saw in Atlanta.

The other thing is about rents. We had ten years of building that ignored apartment construction. We had a glut of construction Nationally, but now we have apartment development.

I never saw why people paid high rents. You can always move twenty minutes away, and pay less.

You don't like these broad statements because they contradict the other broad statements like Real Estate always goes up, it doesn't, rents don't always go up either.

We are in a whole new economy.

Now about this thread and the 50% low in Bay Area housing. That may be, but the premise is that some one is paying $4K per month in rent, and the house payment is $1952.

Now why is that? How is that happening? Seven hundred fifty thousand dollars in debt, plus the bank gets $250K of my hard earned money, and I save $24K per year on rent. Does that mean it takes me ten years to recoup my down payment?

So you think that some how, by magic, in those ten years we will have Real Estate appreciation of 2%, or will we be at those great double digit price hikes forever?

At 2% it's $20K so we get our down payment back in five years, or there abouts.

The actual return on investment is low, unless you have that rental income.

I personally don't think you have thought any of this through.

So I own my family home, and as soon as I can, I'll sell it, and move onto other things, but I'd be an absolute moron to buy into the Real Estate market place.

91   Reality   2013 Apr 2, 1:20pm  

thunderlips11 says

Reality says

Austrians are quite explicitly against equilibrium theories. The Keynesians OTOH are quite fond of equilibria.

Some Austrians, like Mises, are critical to the point where you can say they reject general equilibrium. Others aren't. von Weiser spent a lifetime, and Hayek half his lifetime, working on their versions of Equilibrium. Hayek's version came to become Market Equilibrium, but it is heavily influenced by the classic concept of equilibrium.

So why did you single out Austrians for affinity for fanciful equilibrium when they are about the farthest removed from advocating equilibrium compared to almost all other schools of economic thoughts.

92   Bigsby   2013 Apr 2, 2:13pm  

David Losh says

Yes, I would have been a moron to jump back into an investment that had just crashed, and is now poised to crash, again.

I don't believe in a crash, but I do think we will find an equilibrium that finds prices in Phoenix excessive.

You just can't make it up. What did I just say about you constantly contradicting yourself?

David Losh says

I think $50K, or $26K for a condo in Phoenix is a fair price, as we saw in Atlanta.

You think it's fair? Based on what? Seriously, how on earth can you make a comment like that?

David Losh says

You don't like these broad statements because they contradict the other broad statements like Real Estate always goes up, it doesn't, rents don't always go up either.

Complete nonsense. Who on here says RE always goes up? I don't like your broad statements because they aren't based on any kind of rational analysis of the situation. They are just you painting your imaginary picture.

David Losh says

Now why is that? How is that happening? Seven hundred fifty thousand dollars in debt, plus the bank gets $250K of my hard earned money, and I save $24K per year on rent. Does that mean it takes me ten years to recoup my down payment?

I wouldn't do what the original poster did, but that's me. I, however, can see what he's arguing and I can also see the pitfalls. If prices shoot up and he cashes out (as I think he said he was going to do), then he'll come out ahead and his 250k down and 24k savings a year would represent a pretty good use of money. And no, it doesn't mean it'll take 10 years to recoup his down payment. What are you talking about?
Investments are risky. Would you want to drop 250k in the stock market as it is now? Would you put it in RE? Buy gold..? Leave it in the bank? Each to their own.

David Losh says

So you think that some how, by magic, in those ten years we will have Real Estate appreciation of 2%, or will we be at those great double digit price hikes forever?

At 2% it's $20K so we get our down payment back in five years, or there abouts.

The actual return on investment is low, unless you have that rental income.

I personally don't think you have thought any of this through.

He's trying to take advantage of the current market. Of course the current double digit increases in certain house prices won't last forever. Who the hell is saying they will? But some areas are having them now and that's what certain people are trying to benefit from.
And what is low about Roberto's return on investment, for example? Any idiot can make up a figure and say 'look at this low return.' If the original poster's purchase goes up 2% a year and interest rates stay about the same, then in 10 years, he'll have saved the rental difference, pocketed 200k or so, and basically have done alright for himself. If circumstances change... And what about the actual returns of Roberto's investments, the ones you constantly attack? If he sold right now, which he clearly could easily do, he would make a fantastic return on his investment in just 2 years, or are you really arguing otherwise?

93   David Losh   2013 Apr 3, 12:44am  

Bigsby says

And what about the actual returns of Roberto's investments, the ones you constantly attack?

Let me stop you there, because Roberto attacks every one who disagrees with him. He folows many of the threads to interfer with discussions that are contrary to his Real Estate investment strategy.

You should follow all of the threads that Roberto has commented on.

Roberto insults any one who brings real data to the table with his own anecdotes about his personal residential housing investments.

I personaly applaud Robertos accomplishments, and he is starting to come around to the idea of cashing out, because I think, according to what I read, that 2014 will be about the end of the government propping up the housing market.

As an example the article yesterday about Fannie Mae turning a profit: http://www.cnbc.com/id/100610000

Roberto doesn't like the fact that my wife, and I own a cleaning company, and that is where I chose to put my money.

Most of my buddies, and family made fun of me for my choice, because we did pretty well buying, and selling properties. I recovered my lost income within a year, and have built larger profits every year since. Last year we had 30% growth, and project the same this year.

Yesterday I hired back one of my regular laborers because the demand for preparing properties for sale is growing. We have two trucks that we haven't used in three years, because our income from cleaning has been high.

You see, Roberto doesn't like that because it's contrary to his investment strategy, or lack of strategy. Roberto says he didn't see the rapid price increases coming.

As far as your analysis of the above presented buy in to save on rent, you don't pocket $200K, you recover your down payment. It was your money to begin with.

94   Bigsby   2013 Apr 3, 12:57am  

David Losh says

Let me stop you there, because Roberto attacks every one who disagrees with him. He folows many of the threads to interfer with discussions that are contrary to his Real Estate investment strategy.

I know he does, but that wasn't what I was discussing.

David Losh says

I personaly applaud Robertos accomplishments, and he is starting to come around to the idea of cashing out, because I think, according to what I read, that 2014 will be about the end of the government propping up the housing market.

This is another example of how you contradict yourself. I've seen you post this kind of comment before, and then in the same breath state how the bottom will drop out of the market and he'll be screwed. Make up your mind.

David Losh says

Roberto doesn't like the fact that my wife, and I own a cleaning company, and that is where I chose to put my money.

Most of my buddies, and family made fun of me for my choice, because we did pretty well buying, and selling properties. I recovered my lost income within a year, and have built larger profits every year since. Last year we had 30% growth, and project the same this year.

You don't have to prove yourself to me. Your job is your job. All jobs are important to someone otherwise they wouldn't exist. Roberto's belittling of what you do simply reflects badly on him, so why concern yourself about it?

David Losh says

Yesterday I hired back one of my regular laborers because the demand for preparing properties for sale is growing. We have two trucks that we haven't used in three years, because our income from cleaning has been high.

You see, Roberto doesn't like that because it's contrary to his investment strategy, or lack of strategy. Roberto says he didn't see the rapid price increases coming.

Your market place isn't of much relevance to someone not living there. If more houses are going on the market where you live, how exactly is that contrary to his investment strategy? He's already said he's finished buying. And last I heard, he wasn't buying where you lived anyway.
And who did see such rapid price increases coming? He believed there would be increases of some kind, invested accordingly and has done very well. You seem to accept that in some of your posts and then say the exact opposite in others.

David Losh says

As far as your analysis of the above presented buy in to save on rent, you don't pocket $200K, you recover your down payment. It was your money to begin with.

What are you talking about? If prices rise 10% a year for two years, he'll walk away with that increase minus expenses AND his down payment.

95   RentingForHalfTheCost   2013 Apr 3, 2:59am  

Bigsby says

What are you talking about? If prices rise 10% a year for two years, he'll walk away with that increase minus expenses AND his down payment.

Expenses can be a pig! Maintanence, Insurance, Property tax, easements (if you are a condo), interest on the over-inflated price, necessary renovation that don't increase the house value at all, lawyer fees when your financial distress leads to a divorce, huge university costs because your kids see their parents indebted for life and they want something better, etc. etc.

Rent= problems are just a phone call to the landlord saying "Fix it"! ;)

96   Bigsby   2013 Apr 3, 3:00am  

RentingForHalfTheCost says

Expenses can be a pig! Maintanence, Insurance, Property tax, easements (if you are a condo), interest on the over-inflated price, necessary renovation that don't increase the house value at all, lawyer fees when your financial distress leads to a divorce, huge university costs because your kids see their parents indebted for life and they want something better, etc. etc.

Rent= problems are just a phone call to the landlord saying "Fix it"! ;)

And how much of that is relevant to the original poster, who is looking at a relatively quick turn around? if the price rises continue for another year or two, then he can sell and will be well ahead. That's the risk he's taking. And total expenses, including property tax etc... would still come out less than if he was paying 4k rent. That was one of the main points of his original post, was it not?

97   Philistine   2013 Apr 3, 3:50am  

Part of total expenses is closing costs from the initial purchase plus later the selling commissions. A lot of money--especially on a $1mill purchase--flushed down the crapper for only a couple years' tenancy.

Makes you wonder why you need a $1mill house if you know you are only living in it for that short of a term.

98   Bigsby   2013 Apr 3, 3:54am  

Philistine says

Part of total expenses is closing costs from the initial purchase plus later the selling commissions. A lot of money--especially on a $1mill purchase--flushed down the crapper for only a couple years' tenancy.

Makes you wonder why you need a $1mill house if you know you are only living in it for that short of a term.

Hardly flushed down the crapper if his purchase sees a substantial short-term increase in value. That's what he's hoping for, and he may well be in luck.

99   RentingForHalfTheCost   2013 Apr 3, 3:56am  

Bigsby says

And how much of that is relevant to the original poster, who is looking at a relatively quick turn around? if the price rises continue for another year or two, then he can sell and will be well ahead. That's the risk he's taking. And total expenses, including property tax etc... would still come out less than if he was paying 4k rent. That was one of the main points of his original post, was it not?

No way it comes out less than the cost of a 1M dollar home. 4K a month is a steal for such a home. The OP is not doing the math properly. He is ignoring the opportunity cost on the downpayment, under-estimating maintance, insurance, realtor fees, closing costs, etc. The real math looks pretty ugly. Don't fall into the hype of this market, it can bite you in the ass. It really is a game of musical chairs. Don't believe me, then look at the prices of homes in Tahoe at this time. You can pick up a 3/2 right at the ski hill for 200K. First time I can ever remember that this can be done. People are broke. Credit is all they have, and relying on that for your income is more than just being risky. It is downright foolish IMHO.

100   RentingForHalfTheCost   2013 Apr 3, 4:03am  

Bigsby says

That's what he's hoping for, and he may well be in luck.

Hope doesn't pay the bills. It is a good way to bankruptcy. Work pays the bills.

101   Bigsby   2013 Apr 3, 4:10am  

RentingForHalfTheCost says

Bigsby says

That's what he's hoping for, and he may well be in luck.

Hope doesn't pay the bills. It is a good way to bankruptcy. Work pays the bills.

It sounds like he's perfectly capable of paying his bills, so what is your point?

102   Bigsby   2013 Apr 3, 4:19am  

RentingForHalfTheCost says

No way it comes out less than the cost of a 1M dollar home. 4K a month is a steal for such a home.

?

RentingForHalfTheCost says

The OP is not doing the math properly. He is ignoring the opportunity cost on the downpayment, under-estimating maintance, insurance, realtor fees, closing costs, etc. The real math looks pretty ugly. Don't fall into the hype of this market, it can bite you in the ass. It really is a game of musical chairs. Don't believe me, then look at the prices of homes in Tahoe at this time. You can pick up a 3/2 right at the ski hill for 200K. First time I can ever remember that this can be done. People are broke. Credit is all they have, and relying on that for your income is more than just being risky. It is downright foolish IMHO.

It's not something I would do, but then I don't invest in RE. But anyway, I rather doubt he has ignored all the additional costs, and I suspect that as long as the house was in a decent enough state when purchased, that maintenance costs could well be pretty minimal in the short-term, which is, after all, what he is looking at. It's his risk, and like I said, it doesn't look too bad for him so far.
And some people are broke, but broke people don't tend to buy $1m homes.

103   PockyClipsNow   2013 Apr 3, 4:22am  

I was perfectly happy renting an apartment when house prices went down yearly from 06 to 2009 or 10.

If you are renting and watching prices rise in the double digits for years on end that will make you crazy and poorer than if you rode the home equity train up the hill.

Its all risky. Ben is inflating both stocks and RE with all this printing/mbs buying so I guess both are good bets at the moment. I fuking hate stocks and all publicly traded companies with their overpaid CEO's and mega bonuses - so I choose to live in a big house as my speculative investment instead. If prices tank I'm ok, if they go up im more than OK.

Buying a house is a pretty good move to keep up with inflation mostly.(and by inflation i mean house price inflation!)

104   Mobi   2013 Apr 3, 5:03am  

PockyClipsNow says

Its all risky. Ben is inflating both stocks and RE with all this printing/mbs
buying so I guess both are good bets at the moment. I fuking hate stocks and all
publicly traded companies with their overpaid CEO's and mega bonuses - so I
choose to live in a big house as my speculative investment instead. If prices
tank I'm ok, if they go up im more than OK.


Buying a house is a pretty good move to keep up with inflation mostly.(and by
inflation i mean house price inflation!)

I think your strategy is alright. I don't hate stock but pretty sure I am not good at trading it.

I would definitely do it similarly if I were in CA except less down payment.

105   David Losh   2013 Apr 3, 8:50am  

David Losh says

This is another example of how you contradict yourself. I've seen you post this kind of comment before, and then in the same breath state how the bottom will drop out of the market and he'll be screwed.

You seem like a nice person, and thank you for taking the time to engage me in this way.

I'm an old time investor in Real Estate. I did see prices climbing after the tax credit, and continued to think they would until interest rates dropped by 1% in one year. That was a red flag that things won't last.

My thinking about holding Real Estate, or even short term investment, which I have done, changed over time.

I don't predict a crash of Real Estate pricing, but I think it can decline substantially.

The example Roberto keeps throwing at me is that we, a trust, sold a condo in Atlanta that was purchased in 1986 for $60K. We were only able to get $30K when we sold it in 2011?

I have never seen anything like that before. Purchased in 1986, and sold 25 years later for half the price?

The point of that is that the Real Estate market place is volatile right now, but I think it will equalize. I think prices of property will go down.

I think we will see deflation.

OK, the term deflation was never on my radar before I started reading blogs like this. However I met a guy who made a compelling argument for deflation, and it sure looks like he is right.

I come here to learn. What bothers me is having this one note noise about a specific Real Estate system. It interferes with what I consider constructive discussion.

106   David9   2013 Apr 3, 9:04am  

David Losh says

I come here to learn. What bothers me is having this one note noise about a
specific Real Estate system. It interferes with what I consider constructive
discussion.

I do too and have learned a lot !

Call my paranoid if you want, I think there is the possibility of paid internet shills infilterating this site, using persuasive techniques to try and alter viewpoints. I don't think the NAR is broke, other monied interests would be happy to pay some dumb shill to post comments.

Adding to this, think about how off the wall some of the comments are, like a 4 page fact filled acticle from the New York Times and a response comes up: "100 Percent Wrong"

Golly, if the New York Times is 100% wrong, I don't even know what to say.

107   PockyClipsNow   2013 Apr 3, 9:21am  

If anyone wants to pay me to post please PM me! lol

I have a degree in Dumbshillery with an emphasis on Oververbosity.

108   thomaswong.1986   2013 Apr 3, 9:48am  

David Losh says

The point of that is that the Real Estate market place is volatile right now, but I think it will equalize. I think prices of property will go down.

I think we will see deflation.

If it didnt go down, it would be the first time in recent history going back a couple decades which diverged beyond inflation and incomes. We had not had that happen since 1945, and there is no comparison to then vs now. Especially in SFBA. A further correction downwards is necessary.

109   RentingForHalfTheCost   2013 Apr 3, 9:53am  

Bigsby says

RentingForHalfTheCost says

Bigsby says

That's what he's hoping for, and he may well be in luck.

Hope doesn't pay the bills. It is a good way to bankruptcy. Work pays the bills.

It sounds like he's perfectly capable of paying his bills, so what is your point?

Point is that RE investing in the SFBA right now is more than risky. You could lose all your investment and then have to listen to thousands of people in mainstream media say they saw it coming. If people have the money to lose, then good for them. I am more of a capital preservationist I guess.

110   RentingForHalfTheCost   2013 Apr 3, 9:58am  

Bigsby says


No way it comes out less than the cost of a 1M dollar home. 4K a month is a steal for such a home.

?

4K/mth is way cheaper than owning a 1million dollar home in the SFBA. No confusion needed. Run the math. 11K just in property taxes, these goes 3 months rent right there. Oh, and then the interest on 1Million. Let me write it out so you see what that value is 1,000,000. Even at 3% that runs you 30K/yr. There is another 8 months. We haven't even factored in the good stuff like the realtor thievery, closing costs, upkeep, insurance, etc. etc. Not even close.

111   PockyClipsNow   2013 Apr 3, 10:06am  

It only makes sense to own when prices are going up, the 300k I expect to make is giving me koolaid eyes (red punch flavor the best one!).

No one can refute the fact that if prices are going up double digit, you want to be sitting on that asset.

112   bmwman91   2013 Apr 3, 10:41am  

PockyClipsNow says

It only makes sense to own when prices are going up, the 300k I expect to make is giving me koolaid eyes (red punch flavor the best one!).

No one can refute the fact that if prices are going up double digit, you want to be sitting on that asset.

You also want to make sure to unload said "asset" before it turns into a liability. What are your triggers for deciding to sell?

113   PockyClipsNow   2013 Apr 3, 10:50am  

Well I got two triggers:
#1 fat profit = sell
#2 fat profit + tax free sale after owning it 2 years = sell

I've been lucky with this 'sell when you get a fat profit' strategy. I learned it watching many many people get burned on stock options during the dot com bubble who had a few mill, then not so much a year later....

114   PockyClipsNow   2013 Apr 3, 11:39am  

coastal cali is easily 60 to 90% land value. the value sure isnt in the 1962 crap shack.

« First        Comments 75 - 114 of 157       Last »     Search these comments

Please register to comment:

api   best comments   contact   latest images   memes   one year ago   random   suggestions   gaiste