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Zero Hedge Guest Post: It's Always The Best Time To Buy

By donjumpsuit   2013 Feb 25, 3:54am   2,059 views   9 comments   watch (0)   quote

I found this quote in this article, and thought immediately of Robertoaribas.

"The artificial suppression of home inventory has been working wonders, as 2 million homeowners were freed from negative equity in 2012. If they can only lure enough suckers back into the pool, all will be well. Phoenix must have an inordinate number of chumps with home prices rising by 22.5% in 2012 as investors and flippers poured into the market with cheap debt and big dreams. Of course everything is relative, as prices are still down 44% from the peak and 40% of mortgages remain underwater. I strongly urge everyone without a functioning brain to pour their life savings into the Phoenix housing market. Larry Yun says it’s a can’t miss path to riches."

Interesting read if you have a strong inclination to call all these numbers, and charts, and facts, "Bullshit".


Comments 1-9 of 9     Last »

1   Mobi     2013 Feb 25, 4:34am  ↑ like (2)   ↓ dislike   quote    

robertoaribas says

I bought 3 condos 2 years ago for $26K, $31.5K, and $42K... they are rented
for $825, $775 and $875 respectively. $1500 a month income after taxes,
insurance, vacancy and maintenance.

Good deal, hard to beat. I am jealous you live in pheonix.

2   Graybox   101/103 = 98% civil   2013 Feb 25, 5:25am  ↑ like   ↓ dislike   quote    

robertoaribas says

"How long will this advice you permabears give be wrong before you admit it is wrong? we are passing 2 years now. Will 3 do it? 4?"

I absolutely agree with you Roberto and think even you might be surprised at what the next few yrs. will Maybe not...

I actually thought about posting my thoughts as esoteric as I'm sure they would seem to others. Just a line of reason and study (due diligence) of why there is a very high probability we are set for a perfect storm in the RE market, technically as well as conceptually for the next 42 mo.+/-. The bears seem to be a bit to bias-confirmed to see what the possibilities could be.

Confirmation probably won't be recognized for most for another year or so. I will be looking for the "real market" which RE is a giant to confirm after May 6th sometime. Once the devil is done playing the sequestration takes affect and is absorbed , the financials get their risk shit canned with the new PMI requirements and not to forget S&P500 flipping at 1555+/- games on as will the herd mentality.

Don't get me wrong I'm not loyal to either bias, I just like to stack logical technical and conceptual reasoning and see where it points. Even with the unemployment and lower wages taken into consideration there is more pointing to a nice bubble recovery and with proper due diligence their could be a nice ROI for those who can participate.

I would enjoy some legitimate organic thought and strategy in playing this market instead of the redundant stating of the repeated and obvious that everyone can see.

robertoaribas says

When i actually sell a couple of my homes for over twice the purchase price, will you still be here saying how I'm screwing up????

No Roberto they will be belligerently stating how you were just

3   Graybox   101/103 = 98% civil   2013 Feb 25, 7:56am  ↑ like (1)   ↓ dislike   quote    

You must be doing something right Roberto, perhaps it could be your own due diligence. Very well played considering the facts show the majority of investors don't know when to sell the only way you realize gains. I do know many were just investors in spirit and didn't really have a clue what they were getting into.

Something I found interesting is a study I did on the P/L bloom and doom of approx. 3000 currency traders. I don't remember the exact #'s and my interest were in the top 5% due to the 95% loser rate played out just as I suspected it would. The 96-97% stayed alive and did ok, the 98-99.75% did very well but the .25% blew it out of the water.

These people .25% were not institutions at all, just people with an edge. They had there own strategy and methods they planned and executed, making min. 100% wkly and some much more then that.

Here is a pro who basically adds support (opinion) to what I believe and see concerning interest rates.

A bump up is a positive to the market, a real motive for those interested in buying (missing out). For a small bit of time I'm looking for 30yr. frm to hit 4.25%wkly avg. then it's wait and see. Just a logical line in the sand my method of madness points to test price.

Let me add another prospective to this. The feds 3+trill. bal. does sound like a lot and granted it is, however when compared to the global currency market which trades 4trill. a day it doesn't seem like so much. Also it takes the US equities market approx. 26days to trade the same for 1 day in the currencies.

The fact is fundamentally the US rates highest of the majors based on economic news releases and there effect.

Currency Outlook (right)

It's all about perspective I guess, those that have it and those who don't.

donjumpsuit says

Sell your homes. I would encourage that, and so does the market.

Yes absolutely I agree (supply), just another supporting factor to inventory increases coming to the market.

4   David Losh     2013 Feb 25, 8:14am  ↑ like   ↓ dislike   quote    

Roberto has a rental portfolio. Phoenix, in my opinion was the best place to be at the time if you took advantage.

It's cash flow. You can't argue with cash flow.

If the going gets bad the properties go back to the bank. Chances are however that this cash flow is solid.

5   David Losh     2013 Feb 25, 9:15am  ↑ like   ↓ dislike   quote    

robertoaribas says

I have 8 properties without mortgages

The people who are skeptical of cash flow are the skinny ones who are leveraged up who don't have a concept of owning free, and clear, but that is the goal.

6   Graybox   101/103 = 98% civil   2013 Feb 25, 9:41am  ↑ like   ↓ dislike   quote    

Cash flow is the 1st stage of the cycle which is inherently safer to use then credit and created a base for the market to play out. Hedge funds aren't necessarily using cash however with the discount both in RE values and buying qty. their leverage and margins are extremely manageable. For the others who depend on credit will get it with meeting the min. requirements.

The markets are 2 faced showing it's gloom and doom until the matrix all come together, particularly the PMI requirements then it's going to be all smiles. Prices have tested the bottom over the last 2 years and now price is at the top or breached and holding above the highs of those 2 preceding yrs. in a # of places.

Together the gov. and banksters worked very hard to create this very scenario and "will not" sit idle and let opportunity slip by their hands. Their media dogs will make the most out of what ever employment comes from this or other spin that can be imagined and created.

Roberto your area does look better than most for sure. I will have to run the #'s sometime for some expectation I've never really looked at that area.

I am fairly certain the last bubble top won't be breached in a very long time although I can't say never. When int. rates actually have to be dealt with the second leg will drop. What ever range prices are now will be tested and perhaps even the bottom of the last couple of years.

I do want to make mention my heart is never far from the human factor, devastation and collateral damage done by this last bubble. My take is predominantly void of that emotional element.

7   Graybox   101/103 = 98% civil   2013 Feb 25, 11:10am  ↑ like   ↓ dislike   quote    

Mean is another 18% gains which is a reasonable expectation.
General inflation coupled with the currency war, I see the potential of some nice profits to be made. Then when this trade spins out dollar demand will compound the value of those dollars gained... There is a lot of cause and effect that will come to bare.

I strongly urge everyone without a functioning brain to pour their life savings into the Phoenix housing market.

Now that's just crazy talk.

BTW where are donjumpsuit as well as Call it Crazy from if you don't mind answering. Just curious.

8   David Losh     2013 Feb 25, 2:02pm  ↑ like   ↓ dislike   quote    

robertoaribas says

i didn't buy at the top,

There is a guy who bought a warehouse in Everett at the very top of the market that has paid for itself since 2007.

Cash flow can also be called king, because he's paid off a million dollars in five years.

It depends on the deal, as much as the market timing. He just saw the opportunity that people would need storage. Hey, kind of like how people need places to rent!

9   JodyChunder     2013 Feb 25, 2:40pm  ↑ like   ↓ dislike   quote    

I wonder what the author would say about my little rental empire. I bought some real fucking dogs in and around Hesperia and beautiful Victor Valley in 2009, fixed them up just enough and have done really well. I'm happy and my renters are happy...insane, desperate, and only numerate enough to know how much of the SSI to set aside for ol' Jody -- but happy!

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