patrick.net

swilliamscc says

When rates return to fair and are market driven, home prices will collapse again. It's coming.

And the stock market will crash around that time too... People think low rates are just helping the housing market... Low rates are the only reason the stock market is back close to peak levels too!

Ok people the 'when rates rise' question is a joke. They wont and cant raise rates. Interest on national debt would destroy the empire.

I predict rates will be super low like this the rest of our lives. Like Japan.

The FED will raise THEN lower the rates just enough to churn the loanowners into one refi after another to extract the maximum in banking fees from the debt sheep (see last 30 years of rates see sawing up and down but always down even more).

Roberto is gonna do very, very well because he knows his farm and manages them himself.

Los Angeles Owner says

The problem is the stock market can fall harder and faster than the real estate market..

I sold my stocks,now try selling your house. :)

Wow, cheap taxes, and lots of home for the money, hard to find in my area, having some larger rentals is not bad at all, if you price em just right your always going to have tenants.

I have 3 houses rented out in Gilbert that I bought between 2002 to 2004. Each one started out as my primary residence and when I bought the next one I rented out the old one. The market in AZ started going crazy in 2004 so I stayed put in the 3rd house until two months ago when I moved into my 4th and started renting out the 3rd. The rentals are all about 10% underwater now, but for each one the rent covers the total mortgage,insurance,tax,HOA & prop manager so I'm not worried about them being underwater. Each rental is 3bed/2bath ~1700sf in nice residential areas and I get between $1200-$1400 rent. Each time a tenant has moved out I've found another within a week or two.

In hindsight I should have sold them near the peak, but hindsight is 20/20. I agree with Roberto that at today's prices, you can't go too wrong when the mortgage is $600 and the house rents for twice that.

What a coincidence. When I was new to the game. I liked to exaggerate. Saying I bought so many houses. When in fact it was not true. Trying to inflate the market. I thought it was a good idea of course. However buying 10 over the course of time (the good times). Might have Ment at the present time. I really bought one and had one under contract. Hard cash dosen't always mean its a good deal of course they loose out to. Yet to be bent over the closing table. (its the HARD part in HARD cash.). Inflated markets just not going to happen of course. Keeps going south day after day.

I watch as Zillow and Trulia try to inflate the market every once and a while. Investors are fast fish sometimes learning by osmosis. I know some really smart ones. Then again I've seen some really transparent ones.

One more time rates are bullshit. Its the amortization.

Real Esate is an interesting game. All the boys I know. Some well known big boys. They aren't doing as much as one would think. Anything a investor hates is equity loss. Especially on a turn, making payments. They payments cause jitters. Mostly the experinced don't care and wait for the landing.

ArtimusMaxtor - MasterPP your hometown investor rapper.

One more point. If you aren't paying cash, you are renting from the bank. Stop saying I own. You don't own a thing until the bank can't take it from you for missing one payment.

$500 a month in expenses and nothing put aside for repairs. Only makes money because you are doing the work yourself. Sounds like a bad investment to me.

EightBall says

Austinhousingbubble says

Investments to date: my wife's career; artwork; rare auto parts; rare hi-fi/recording components/parts; running shoes.

But why buy bacon by the month when you can buy the whole hog cheaper?

You should try the bacon of the month club for your parents.

http://www.thepignextdoor.com/bacon/traditional.html

Excellent investment as well for that old maid aunt.

Around here, most landlords keep the rent and neglect to pay property taxes, insurance and mortgage payments, but yet they will try to evict any tenant who is late with the rent! Many of these landlord-investor types are also Real-tards. It should be a federal offense to collect rents from people who actually work and not pay the mortgage payments, so you can keep the rent and buy more insider deals for 10 cents on the dollar, refi and not pay that mortgage. SLIMEBALLS ! I guess we all must take a weekend RE course so that we can be Real tards too?

MARICOPA AZMA Median Price Sales Volume
Community Zip Code 3Q2011 % Chg* $/SqFt 3Q2011 % Chg*
All homes $125,000 -7.4% $69 24,171 22.1%

according to dataquick real estate news home prices were down 7.4% in the 3rd qrt. in Phoenix yoy and still dropping.

$600/year for insurance and $1000 /ear property taxes on a rental sounds very low to me.

Robert - Well done. The nay-sayers are just jealous. I don't understand why people get pissed when they discover I made a few hundred thousand flipping houses but think it is OK I made the same on Apple stock? At least I took some vacant property and made it into a home for someone.

I fully agree with Robert as I also have properties in the Phoenix area. Auction inventory has been low for at least six months - a good indicator. People are bidding auction properties up to retail value - another indicator.

There are a LOT of buy and hold investors in Phoenix now. Rental returns are still fantastic. Sure, rents will go down over the long run - but returns will still be good if you paid next to nothing for the property.

I actually am leaving the Phoenix market as there are few flipping opportunities left (it was great for a few years though). I do have some rentals but don't want my cash tied up as flipping requires a lot of cash (financing is too costly for flips).

I'm searching for new markets that have flipping opportunities. Wahoooooo!

Yes, prices are falling in many (probably most) markets. I do know Phoenix is on the rise - especially in the low end. And the part about lying and realtors need not be repeated - it is a given. That is part of the game and you need to always keep it in mind but don't let it get in the way of making deals.

Imagine if we avoided all liars? Forget lawyers. Don't sign up for any services in the USA as all are scams - cable TV, Internet, cell phones. And banks, too. Health insurance would have to go. Heck, the whole medical system is a big fat lie.

The way I look at it Realtors kind of are normal.

Hold on there Horse Face. OK, you can still call realtors liars - fair enough.

But you have an issue with attacking people who probably know a lot more about the subject than you do.

I know you are pissed as you lost a lot on your home and you blame realtors for it. But don't vent your anger at others.

These discussions are not Binary. There is no right or wrong answer. Some of us are actually on the ground and know what is really happening.

I actually wish prices were still falling - I made MUCH more money when prices were falling. Why? Fewer buyers meant great prices at auction - with enough margin to flip. I have cash so I can buy. My only regret was not entering the market back in 2009 when investors were making 40K a flip.

Now San Jose - that is another story. Definitely still on the downslope.

I'd respond. But I don't feel like laughing.

zzyzzx says

$600/year for insurance and $1000 /ear property taxes on a rental sounds very low to me.

If the homeowner isn't insulted by your offer...you didn't bid low enough!!!

In escrow on a rental in Vegas (Henderson). Those numbers are right on.

robertoaribas says

"18,000 foreclosures coming..." save your lol, 1.5 years ago, Phoenix had over 50,000 foreclosures in the pipeline! Thus, you actually just quoted one of the factors encouraging me to buy now, rather than wait.

As to the government to rent rather than sell foreclosures objection:

who cares? Most of the foreclosures are going to investors anyways... And I view the government as probably the least capable competitor for me. Will their hired managers advertise on craigslist? Show properties on a moments notice? Upgrade them the way I do? Sure!

I wasn't trying to discourage you.

Also, you are not competing with the government. You are competing with firms that bought homes from the government at a value that was probably one third to one half of what you paid. I hope I'm wrong on that value.

bgamall4 says

swilliamscc says

ccording to dataquick real estate news home prices were down 7.4% in the 3rd qrt. in Phoenix yoy and still dropping.

But bottom feeders are scooping up the lower valued homes. Some say it is an Asian invasion but I don't know for sure. Homes valued over 200k are probably getting killed.

Gary Anderson strategicdefaultbooks.com

Are you saying Phoenix or Las Vegas?

edvard2 says

I just invested more money into my mutual funds and my 401k. I will add more this year.

Yup, just invested in some new tires. Should last 2 years and by that time the original poster will have lost a few brand new cars of equity by then. All I will have is a pair of worn out tires. Good times for renters

http://www.wat.tv/video/prince-little-red-corvette-382ut_3aghd_.html

robertoaribas says

bgamall4 says

Yup, just invested in some new tires. Should last 2 years and by that time the original poster will have lost a few brand new cars of equity by then. All I will have is a pair of worn out tires. Good times for renters

Why would I care if prices drop more? Hell let them drop! I'll buy more homes! Rent dropping would be more problematic, but I'm going to stress the numbers again:

Mortgage with EVERYTHING less than $500 a month, rent over $1100 If that is a 'good time for renters.. than... ok'...

As long as you don't get stabbed or shot when you go do some maintenance on the house. ;) You are correct though, if you are willing to pick up and deal with properties in the somewhat rundown areas then the numbers for landlords are great. I have thought of going down your path a few times. My comment was more in the affluent areas, where most of the BA potential buyers that check out this site are interested.

I'm out of here.

It is not that hard to believe his story. I currently have mortgages on 7 rentals and my primary in Solano county (Bay Area outskirts). All are positive between $400-$900 per month. I do some work myself, but over the years found two handymen that can do pretty much everything for $20-$25/hour.

My 8th rental has a verbal bank acceptance.

Bubbles naturally over-correct. 17 years ago my first house I purchased in this county (city of Fairfield) for $91,500 - it was a HUD house, and needed everything. That same house in the same condition and same area, you are lucky to get $91,500 right now.

The problem I have now is banks able to lend to me or refinance me at all. Even with 25% down, Fannie Mae/Freddie Mac regulations that most banks follow kick you to the curb after 4 mortgages.

Walter says

zzyzzx says

$600/year for insurance and $1000 /ear property taxes on a rental sounds very low to me.

If the homeowner isn't insulted by your offer...you didn't bid low enough!!!

In escrow on a rental in Vegas (Henderson). Those numbers are right on.

My yearly insurance on rentals runs $375-$595 depending on size, build, etc. of house. Taxes vary, but for a $96K house in CA they start at ~$1,200.

thomasdt12 says

The problem I have now is banks able to lend to me or refinance me at all. Even with 25% down, Fannie Mae/Freddie Mac regulations that most banks follow kick you to the curb after 4 mortgages.

That does sound like a problem.

Clearly the inventory is way down, that's clear from my mls searches. I'm moving back to Phoenix in August and have been keeping my eye on things. But WOW, the data on http://www.deptofnumbers.com/asking-prices/ for Phoenix are way out of line with the Case Shiller data. I mean they are showing 30% increase YOY in median price. I get there is a difference between median asking and actual sales prices, and in the areas I track I don't notice a huge difference in prices. So what gives? Are the median data being pulled up by higher prices homes going into foreclosure now which aren't being picked up by the low end investors looking to buy in the

True some new home building has picked up. I won't pretend I'm impartial - I want things to stay cratered until I get back in August. I see fewer low end sales and very little building to keep up pace. I can envision 04-06 happening all over again, perhaps not to those levels, but still with so few new homes going up there may be a sudden, sharp contraction in supply, builders coming back to the market in droves, contracts written that appreciate some ungodly % before the house closes, auctions for lots, etc. My saving grace are the investors hoping to check out and dumping most of this inventory back on the market. But if rents are steady or rising and values rising why would any investor check out now.

GlobalRoamer says

Robert - Well done. The nay-sayers are just jealous. I don't understand why people get pissed when they discover I made a few hundred thousand flipping houses but think it is OK I made the same on Apple stock? At least I took some vacant property and made it into a home for someone.

Simple - you used "cheap money" and good credit to buy a property on leverage, put in some work, marked it up at an annualized rate worse than most loan sharks, and then sold it. We the people and We the sheeple pay for these low rates through the massive inflation, middle men like you and the bankers take hard working people to the woodshed for a year or two of savings. You did nothing but buy on leverage with other people's money.

This is not productivity. And for what its worth, most of what gets done on an iPhone or iPad isnt very productive.

When a regular guy with a FAMILY and personal responsibilities cant take stupid risks. We just you and robert Kiyosaki and the bankers and the speculators wouldn't need a badly inflating dollar to play your games with other people money. Meanwhile, people who try to squirrel away for the future, for the winter, we are punished for saving and not for risk taking.

This system sucks. And forever people successful with this, there are plenty of Casey Serin types who destroy lives and families trying to pretend we can all be Gordon Gecko.

The system is fried. Inflation is required to support this ponzi scheme. And it sucks.

It would be nice if they could somehow gauge housing interest in local markets. For example supply is clearly down, rents up, prices flat or maybe up a little. The buyers aren't gone but I suspect on the sidelines letting their credit heal. So as the supply declines there should be a second curve of people in the market, and by this I mean true owners that will occupy the property. But from a landlord's perspective when do you all cash out?

Not trying to be a smart allick...
I live just west of Philadelphia, Pennsylvania (property tax is approaching 3% of the current value of the homes).
I usually vacation in Santa Ynez, Ca., Charleston, SC., Tennessee.
Santa Fe, NM is quite nice, but was surprised when snowed upon one April. Albuquerque is quite nice also.
I'll need to find a place to retire one day (also I grew up in Florida on the east coast).
Question: Is there any reason I would want to consider Phoenix?

I was just listening to a podcast with some guy from phoenix who was bragging about how he sold off a bunch of investment properties to a bunch of dumb investors from California who thought they were getting a good deal.

That's not you is it?

There are 3 groups here...

group 1: Prices will crash to 1975 levels, anarchy and chaos will arise

group 2: bulls

group 3: there are good deals out there, even if prices drop, you have to live somewhere so if rent = mortgage (or slightly less) why not do it, we have somewhat stabilized here and may go flat for years

What surprises me is that the negative group that foresee's the worst, never thinks of yet another version of chaos. Not the chaos of 1975 prices but the chaos where the 1% turn into the 0.5% that own everything!

Most of us will be the 99.5% that mostly rent/slave-fee's to the 0.5%.

Apocalypse is gun-ready, potatoe bags in the basement but when the landlord comes with a tank and threatens to wipe him and his potatoes out in one shot, he'll cough up the monthly rent/slave-fee.

Ownership will be much harder to achieve than ever before because we are in the process right now of investors coming in and picking up the scrap left and right.

Nobody needs stocks but everybody needs a place to live.

I am not a doomsday guy but if you are going to be that negative...consider this version of negativity as well.

SubOink says

monthly rent/slave-fee

I don't equate rent to a slave-fee. That I reserve for the poor bastard that is paying an incredible sum to the banks for that balloon mortgage he was forced to take out to buy a 1000sqft 2/2 in a crappy neighborhood, where after people part their cars on the street you basically have one lane left for people to use. This is the slave-fee, not paying rent to someone who is trying to make an honest living.

I have never rented from an organization, so maybe would have a different opinion then. I have always rented from someone I have met and liked and have actually became friends with most.

RentingForHalfTheCost says

I don't equate rent to a slave-fee. That I reserve for the poor bastard that is paying an incredible sum to the banks for that balloon mortgage he was forced to take out to buy a 1000sqft 2/2 in a crappy neighborhood

The example of balloon mortgage is also a slave fee...you are right. But make no mistake about it...rent is exactly that. You pay as long as you live in a rental and never built equity, have nothing to show for. Somebody else, gets their house paid off with YOUR money.

At this point those types of mortgages are not really the norm at all. 20% down, 15 or 30 year fixed is. At these low rates it's stupid not to lock it in.

I say slave -fee only to go along with apocalypse's and followers lingo.

SubOink says

You pay as long as you live in a rental and never built equity, have nothing to show

Not true is some cases. I have rented for 14 years and have enough now to basically not need a mortgage if I desired. Instead of taking my savings and putting it into equity and interest, I put it into good old dividend paying stocks. My practice looked horrible when houses appreciated in 2000-2007, but now it turns out to be at least as good or better in the long run. To me, a house is something I buy when I have been successful in my savings and investing. Not something I use to create wealth for me.

I have also had the good fortune of testing out each city in the BA and finding which areas and ones I like. I now know exactly where I would like to live, not just guessing like many.

Luckily my parents lost their house to the crazy interest rates of the 80's back in Canada. Unlike here, you cannot lock in a fixed rate for 30 years, or at least you couldn't back then. You get a 30 year mortgage that is refinanced every 5 years. You can easily see how people can lose their home in an increasing interest rate environment then, as my parents did.

Glad I lived through it, and was the wiser for it when I moved down here.

RentingForHalfTheCost says

I have rented for 14 years and have enough now to basically not need a mortgage if I desired

If you had the same payment as your rent every month - what would stop you from doing all that anyways?

At this point, 14 years later you either would have paid the house off (if you put the extra money in the principal) and would live rent free OR you would have all your dividend stocks AND a house that is at least 50% paid off = equity.

Yeah, I agree about the moving around and checking out areas, we did the same thing.

SubOink says

If you had the same payment as your rent every month - what would stop you from doing all that anyways?

Yes, if that was ever true around here, but for me it hasn't and continues not to be. I have always rented under the home ownership costs. The difference was basically what I invested and basically paid off a house in 14 years (100% equity). If I had tried to do it with owning I would only have about 40% of the house paid off. That is a huge difference.

If I had been lucky enough to move here in 1992 or earlier then it would have been different, but I wasn't. Take what you are given I guess.

Thanks Bgama and Tony, Phoenix is off the list, especially when there a 1000 small towns that:
Offer nice homes for less than 100k
Have their property tax under 1k/yr (have control of expenses and pensions)
Have reasonable weather

I thought I had heard "everything" when I first moved to PA and was told stories of people needing to move because of high property tax (which only go up -- a lot) in this part of the state -- big problem. Last year I was in the credit union getting a fantastic rate 2% cd and spoke to a manager to find out whether homes for sale were being priced anywhere near appraisal and the tax issue came up. She said some the loans they were making were for people needing to pay their property tax. The "savers" can never save enough in this current environment...