patrick.net

Roberto used to take apart the permabull realtwhore drones who infested this place 6-7 years ago. That he was both an economics professor and a licensed realtor himself was a credibility that the bubble-faithful then fully welcomed (well..except that LIB/allah whack-a-mole).

I find it terribly amusing that now Roberto, myself, Peter P. and others are denounced simply because we did exactly what we said we were going to do, when we said we were going to do it. We all recognized the bubble, made tough life choices in order to avoid calamity, and then went on to profit from stupidity.

I have no apologies, nor should Roberto. If others want to make bubblesitting into a religion at this point, then that is their prerogative.

I think there is lots of anger here now that the 'bottom is in' and 09/10/11 (depending on region) appear to be the bottom in RE prices. (we might revist those bottoms, but probably not, the government hand in RE is now gigantic and that never shrinks - only gets larger)

I know in LA prices are up 100k from last year in the 'entry level SFR' category.

Thats a lot of money. More than anyone with a regular job could 'save' in 20 years without living like the unabomber.

I sold my homes in 05/06 after agonizing on the 'bubble blogs' and made bank, but I missed the bottom to buy back in which was last year. (current plan is try to buy in sept/oct during election uncertainty - we'll see how it goes)

Let me be the 472nd to join the lowly hoi polloi and denounce Randy H and by proxy Roberto as well. Yes, I am terribly jealous of your success. You are clearly a master of your universe and a force to be reckoned with, a man among mice, a philosopher among the dolts.

I greatly admire your refusal to buckle and apologize for your bold actions that simply drip with a foresight that is rare and worldly.

I denounce you. Be not terribly amused! Damn your calamity avoidance!

Alas, I know it is only my own self loathing that makes me jealous.

Either that or you sound like a fuckin' douche bag. Seriously, do you read your own shit?

Biff

PockyClipsNow says

I missed the bottom

I'm not so sure. I cannot forget not being able to sell my condo in the LA area for 10 years, neighbors did the jingle mail, etc and this was pre bubble.

Personally, I don't regret not buying any of the crap I have seen online or the few I went to see.

Jealous Bitter Renters are back in style. Next year if prices are up again we can expect more gloating owners/realtors here.

PockyClipsNow says

Thats a lot of money. More than anyone with a regular job could 'save' in 20 years without living like the unabomber.

Or like an "immigrant" lol

Roberto, thanks for the info, and congrats. The raw data is greatly appreciated. About 2% higher ROI than I can score up here in Portland, but I'd evaporate in that heat. I won't even go on a roof here if its over 80 degrees :)

Did you have to outbid or just got lucky? It's crazy up here these days, anything over 10% has multiple offers in on the first day.

Investor property tax rate is?

There is a lot of jealousy or something. It would be more annoying if not for the wonders of 'ignore'.

None of us claim to have timed the perfect bottom. I know with hindsight we should have held out selling in 2005 a year longer and that we could have found even better deals when we bought back in 2009 if we'd waited until summer of the following year.

The point is we had the conviction to do what we said we were going to try to do and it mostly worked out. The only "douche bags" that I see around here are armchair cowards hiding behind a shroud of anonymity while they jerk themselves to fantasies of future calamity in which they emerge from the ruins like an army of blind, post-apocalyptic economic warriors.

dunross,

I don't know why you have this axe to grind against OP ?

I have followed OP over zillow - and I think he has been pretty objective overall.

In his market (Phoenix area, AZ), he feels the bottom has been hit - and all signs point to that being true - only time can tell, if that is indeed true - but chances are, he is correct.

It is possible that the bottom has not been hit in other areas (I hope SF Bay area is one of those areas where the bottom is yet to be hit) - I have been sitting on the sidelines for last 4 year hoping for reasonable P/E ratios in the SF Bay area.

Anyways - I am keeping an open mind - not going to put blinders on - just because I desire the house prices to come down to reasonable levels. If there are greater fools in enough numbers, with sufficient purchasing power - there is not a goddam thing I can do about the inflated prices.

What is your special grout trick? Also, what is included in the property management? Is it feasible for someone who lives across the country to invest in cheap rental properties like you and just pay a management company or would you advise against that?

Are taxes really just 1 % of purchase price ? I thought that was owner occupied rate?

mbSFBay says

I don't know why you have this axe to grind against OP ?

I simply don't like roberto because he is a bigot and a hypocrite. He really is a sore thumb on this forum, bragging about his little achievements and insulting everyone who doesn't agree with him. Just look at the title of this post which should already tell you what a boisterous gloat he is. But why I really don't like him, is because he is here with an agenda, to brainwash you and to sway you into making the worst decision of your lifetime.

Randy H says

The only "douche bags" that I see around here are armchair cowards hiding behind a shroud of anonymity while they jerk themselves to fantasies of future calamity in which they emerge from the ruins like an army of blind, post-apocalyptic economic warriors.

No it's just we have a little more patience than most people like you, and we are willing to wait until prices reach fundamental valuations. We understand that no amount of propping up by the gov't can really work, and, eventually, prices will come down and be as ridiculously cheap as they were ridiculously expensive at the peak. In any bubble, there are not too many like us, and since we are the most patient, and the few, we should, naturally, be rewarded.

permanent_marker says

I thought you were a professor. When do you get time to do scout, invest, upgrade properties?

maybe you will find out on http://www.ratemyprofessors.com/

dunnross says

In any bubble, there are not too many like us, and since we are the most patient, and the few, we should, naturally, be rewarded.

dunross,

You're absolutely correct that there are not too many people like you. You sold your house in 2006, and you used the proceed to buy gold. With both right moves, paying $3,000/month in rent is not a big deal to you. Since you believe the housing market will continue to crash, give me something to invest in should I liquidate all of my RE holdings now.

So dunross, tell us where should we invest our money in right now. I admire your success and would love to follow your footsteps. Now tell me, where should I invest my money now? :0)

E-man says

dunnross says

In any bubble, there are not too many like us, and since we are the most patient, and the few, we should, naturally, be rewarded.

dunross,

You're absolutely correct that there are not too many people like you. You sold your house in 2006, and you used the proceed to buy gold. With both right moves, paying $3,000/month in rent is not a big deal to you. Since you believe the housing market will continue to crash, give me something to invest in should I liquidate all of my RE holdings now.

So dunross, tell us where should we invest our money in right now. I admire your success and would love to follow your footsteps. Now tell me, where should I invest my money now? :0)

Learn from your victory. Prosper from your failure.

Silver.

You only have one home. The home means that is where you live. The rest are houses, apartments, condos, or also called properties.
Why are the big fans of real estate such illiterates?
RE: Where to invest money NOW?
To answer the question one must know the situation of the person asking.
A good bet in my opinion is AAPL, other stock mutual funds, and Vanguard High Yield Corporate bond fund.
Lately I took the price of a median house in that hell hole called Phoenix and bought more shares of AAPL. The dividend will be paid after August 16 at $2.65/share.
Of course if you had the balls you would also be advised to buy in the money call LEAPS for AAPL.

robertoaribas: "If anyone needs a good rental in that area, contact me through my profile, $1100 a month."

LOL no no no, roberto is just here to help us with his housing wisdom.

The salesman in this one runs deep.

Leave the guy alone, you all would be doing the same if your city crashed just as much as Phoenix did. Phoenix is one of the few cities that did hit the bottom.

robertoaribas says

They have 3 dogs like I do, but the flooring on this home is impervious to anything, so I'm not worried, and they paid a hefty pet deposit. They may stay for years from what they are saying.

Roberto,

Thanks for being one of those landlords that accepts pets! That is one of the biggest problems with renting, landlords who have a things against pets.

I have been to way too many shelters and rescue groups overloaded with pets that had to be surrendered thanks to people losing their homes and forced to rent places with a no pet policy.

Randy H says

The point is we had the conviction to do what we said we were going to try to do and it mostly worked out.

You had the conviction to buy a house or sell a house? Seriously? Slightly grandiose don't you think? You bought a freakin' house. You didn't stand up to some great army, against all odds, based on some lofty moral grounds. You bought a house. Maybe you bought several houses. Jeez, talk about jerkin’ off.

Randy H says

The only "douche bags" that I see around here are armchair cowards hiding behind a shroud of anonymity while they jerk themselves to fantasies of future calamity in which they emerge from the ruins like an army of blind, post-apocalyptic economic warriors.

Just to be clear, my "douche bag" commentary was directed at Randy H, not Roberto. Randy H you sound ridiculous. Did you write that with a feather quill? Did you graduate from the school of Badly Stringing Together Horrible Cliches (“armchair cowards”, “shroud of anonymity”, “fantasies of future calamity”, etc.)? I love your use of the word “calamity”. Please don’t stop using that word. You must have suffered several wedgies in school. I hereby decree that from this day forward, you shall be known as Sir WanksTooMuch. Now bang yourself on the head with a sword.

robertoaribas says

there are something near 4 million people in the valley of the sun. Are you really sure you couldn't find anyone you liked out of 4 million?

Roberto, I mean, Professor Roberto, If you read carefully, you will see that I didn’t have any problem with the people of Arizona, just the shithole that is Arizona.

robertoaribas says

total Bullshit. the weather is SPECTACULAR nine months out of the year here!

Have fun trying to sell that to anyone under 65. I do understand that Phoenix is very popular with the minimal blood circulation set.

robertoaribas says

I'll tape a videocam to my helmet

Oh please do. And send pictures. And be sure to wear earplugs to drown out the people screaming "spaz!".

robertoaribas says

Sedona and Payson have terrific hiking

Good hiking is so hard to find.

robertoaribas says

I can drive to Vegas in 4.5 hours

Las Vegas is another complete shithole. It's like you live in Detroit and you are singing the praises of Oakland. Yes, I know, lots of trailer trash love Las Vegas. “Look Marge, it’s the Eifel Tower!”

robertoaribas says

and rocky point is a 100 times better beach vacation than anything cali has to offer!

Yes. You got me there. Rocky Point is far, far better than anything California has to offer. That’s what everybody says. Everybody.

Biff

P.S. – I have never suggested that anyone buy or not buy a house. I can’t imagine why I would care. If I ever made any commentary on the subject is was just to point out the blinding brilliance of a particular person’s statements.

New renter says

Thanks for being one of those landlords that accepts pets!

Hey, we accept pets too, and we don't charge a rent premium or a pet deposit. Where is our thanks. :)

E-man says

New renter says

Thanks for being one of those landlords that accepts pets!

Hey, we accept pets too, and we don't charge a rent premium or a pet deposit. Where is our thanks. :)

Learn from your victory. Prosper from your failure.

Right here my friend! Thanks!

robertoaribas says

I'm not paying SF prices just over that! Actually, I think about moving back to south Florida someday.

The numbers you're getting in Arizona won't work here in South Florida so far. The taxes and insurance will eat you alive for starters.

BTW my friend (a Realtor of 25 years) just went back to Phoenix. She came back here hoping to make it because she hated Phoenix. She forgot how much she hated it here. She said she saw more blacks here in one day than she did in seven years in Phoenix. She lasted four months here. Here she was able to sell six rentals and one small house. In Phoenix she didn't make any money in seven years. But that's her.

Good job Robert. This is twice in a lifetime opportunity (the 80 S&L was another). PHX is not California - which is where most of these negative comments come from. We are at the bottom and rental returns are great.

I think prices will soften a bit as foreclosures ramp up again - but no crash. There are still a lot of homes underwater / not paying. Many opportunities to buy more!

I sold off a few as I couldn't resist the price spike.

Californians out there:

Sorry that your state's housing situation still sucks. But that doesn't mean other areas are in the same boat. AZ crashed hard and is now cheap (if you want to live in the desert. That's another story).

I know many happy Californians living in AZ. Why? They can afford to live - not just 'get by'. All of them own their homes free and clear (real home s- not some shit box). All of them take long vacations to escape the summer heat. None of them have an ounce of worry about money.

I also had the choice between CA and AZ when returning to the USA. I had the choice of going to Cali and buy one decent house in a decent neighborhood with cash (culturally we fit in Cali well). Or, I could buy a good home in a low-crime neighborhood in the suburbs of Phoenix (a bit boring I ill admit). AND buy another 7 or 8 rental properties with a net income of over $5K a month (even after paying a prop manager as I am too lazy to manage them). And we have a summer home in the north as well.

Of course we chose the AZ option. We have enough cash to travel anytime we want to 'get away'. Most of our neighbors are pretty cool. Few are actually from AZ. Biggest complaint is lack of a good organic coop - so we have to shop at Sprouts. COL is very low. Food cheap. Restaurants cheap. Gas cheap. Roads are great. Sales tax a bit high.

The summers: I was fine until temps got over 100. There are two months or so of very uncomfortable weather. We travel during this period - Thailand, Spain, etc (we have an extra 48K after taxes a year to spend!).

If Cali deflates another 25% we might consider moving to S Cal.

AZ has good areas and bad areas. Cali has good areas and bad areas. Cali also has a few great areas - but less than 1% live in these areas. The vast majority live in crapy areas with high crime and low standards of living. Most Californians brag about the good areas but live in the crappy ones.

Google Proposition 30 in CA. This is appreciation curve bender. Might get some more residents in OR, and AZ.

Big thumbs up for Roberto. I am doing the same thing in Mohave County, north of Lake Havasu and south of Las Vegas, NV. Slow and methodical with lots of hard work pays off.

I bought my first ounce of gold at $380 an ounce because it was obvious that gold had to go up. I read an article about how gold mines were going out of business because it cost about $400 an ounce just to extract it from the ground. Fast forward to today. Gold is over $1,700 an ounce.

We see the similar situation with real estate. The price became so ridiculously low that you could not possibly build the house for the asking price. If the sale price is $60 per s.f. and the construction cost is $100 per s.f., it is truly a no brainer. (Your markets may be different).

Also, there are other costs- buying the land, water meter, building permit fees, etc. that need to be figured in.

People that think the market will be driven even lower, I guess anything is possible in the short term but when you can borrow money for ZERO net (i.e. equal to inflation) and you can buy an asset for less than the intrinsic value (i.e. construction cost), buying a house today is just like buying gold at $380.

And guess what, gold had traded at one point below $300 an ounce but who cares in the short term, prices will normalize over time at some point significantly above where they are now in real estate just like they did with gold.

I knowing I am sort of rantinng on a tangent here but also think of "quantitative easing" which means the government is going to town with the currency printing presses and this will make dollars worth so much less over time. So I truly believe that trading dollars for almost any real investment is good idea right now; I don't care if it is land, houses, gold, silver, fine art, or anything else that has a decent track record of investment value over hundreds of years.

Oh yeah, and both sports cars and girlfriends are liabilities, not investments. Finding a girl that is not a liability, that is sort of a dream of mine but for now I will stick with what I know... real estate.

civilsid says

girlfriends are liabilities, not investments.

Sid,

You're dating the wrong girls. Find one that's an asset & marry her. They're out there. No reason to waste time with the liability ones.

My wife helped me run and grow my business when we were dating in our early twenties. Every time I had a solid RE deal and needed a short-term loan, wife would go to the bank of in-laws & get it. 1%/month interest for the borrowed money. Cheap.

When we had our first baby, wife told me to stay home to take care of the baby. I took advantage of it & stayed home for a year & a half. She only stayed home for 6 months. :)

Asset spouses are out there. No reason to settle for a liability one. Keep looking.

Have fun finding. :)

Good luck.

E-man says

You're dating the wrong girls. Find one that's an asset & marry her. They're out there. No reason to waste time with the liability ones.

That is the smartest goddamn thing you've ever said on here.

Rich chicks are my favorite.

E-man says

No reason to settle for a liability one.

The liability ones are hotter in bed and stay that way. Depends what stage of life you're in.

Is this it? http://www.redfin.com/AZ/Mesa/1415-W-Garden-St-85201/home/27543546

rufita11 says

Is this it? http://www.redfin.com/AZ/Mesa/1415-W-Garden-St-85201/home/27543546

So this house was sold at the courthouse steps for $57k in 08/11. No one bought it. One year later, it was sold for $85k. Where were you last year Roberto?

JodyChunder says

E-man says

You're dating the wrong girls. Find one that's an asset & marry her. They're out there. No reason to waste time with the liability ones.

That is the smartest goddamn thing you've ever said on here.

Rich chicks are my favorite.

Wife isn't rich, but she's creative, hard working and very supportive of her spouse. How often do you find a soul mate that's so compatible to you to the point that you two don't even argue? All I can say is I'm a lucky man. Therefore, don't bet against me. :)

ELC says

E-man says

No reason to settle for a liability one.

The liability ones are hotter in bed and stay that way. Depends what stage of life you're in.

Not necessarily. You don't know what you don't know I guess.

@globalroamer I have a friend wanting to move to phx. She is looking to rent in a safe neighborhood near the VA. Can you suggest anything? She will likely rent for a year before trying to buy. Good schools would be a plus.

Biff Baxter says

Let me be the 472nd to join the lowly hoi polloi and denounce Randy H and by proxy Roberto as well. Yes, I am terribly jealous of your success. You are clearly a master of your universe and a force to be reckoned with, a man among mice, a philosopher among the dolts.

I greatly admire your refusal to buckle and apologize for your bold actions that simply drip with a foresight that is rare and worldly.

I denounce you. Be not terribly amused! Damn your calamity avoidance!

Alas, I know it is only my own self loathing that makes me jealous.

Either that or you sound like a fuckin' douche bag. Seriously, do you read your own shit?

Biff

I read his shite but I have high boots on and carry a barf bag.

Guess what? I just put more money into my 401k!

I don't really see the issues with Roberto's postings.

You all really have to recognize that theres a world of difference between what Roberto is attempting to accomplish, and what most of the rest of us seek to accomplish.

Simply put, Roberto is a landlord of properties in a desert city. Nothing is as easy as someone like Armando Montelongo makes it out to be, and Roberto puts a realistic face on the landlord/investor. Note that Roberto is in is mid to late 40's and while he may soon have a life of luxury, he had to put in a lot of years and a lot of work to get there. He still has a day job. In otherwords, theres no easy street, instant riches. For reference, my parents got to the place Roberto wants to be by their late 50's simply through 401K investment and smart living. They now live in a dream home a block from the beach in coastal AC, in a home that would qualify as a "McMansion". They spend what they want, when they want, enjoy their grandkids, and blah blah blah. In other words, theres more than one way to accumulate wealth. Real estate is not the be all end all. It is simply one way to get to the gold pot at the end of the road, and has dangers that I notice most of the investors on sites like this tend to gloss over.

Most of the rest of us are gainfully employeed, looking for a home we can afford, in a neighborhood we are happy in, reasonably close to our work places, in big city coastal CA. We have no intention to become investors in property. Investors are a concern as they can set a temporary or permanent bottom in housing. So its useful to learn what investors are doing. But the information gleaned from Roberto's posting is of limited value due to proximity and VERY differing markets.

edvard2 says

Guess what? I just put more money into my 401k!

Are you bragging or complaining?