patrick.net

B.A.C.A.H. says

Thank you, Patrick, for the feature.

And I love my new name and symbol! Thanks Patrick :)

What do you guys think about this guys numbers? Are we on the cusp of our next crash, whats going to happen when people start foreclosing buy the millions?

https://youtu.be/ZFXObY99bXg

foreclosing by the millions? all these people that refinanced in the last 7 years have extremely low rates while rents and house prices skyrocketed.
People that own houses have tons of equity and jobs. People who got screwed by covid are low paid workers. They never owned houses in the first place.
Lets say you have had your house for a while, refinanced and lose your job. So what? You can always move back to a friend, mom and dad or downsize and rent out your house at a profit. Or you just live with roommates. You foreclose if you buy a house that you cant afford in the first place and then lose income on top of it. Those times are over. I live in a very nice area and none of these people look like they barely got into those million + homes. Vacations, nice German car's and pools in the backyard, many have dual high incomes. Obviously, your neighbor isnt telling you what they make exactly, but when you hear doctor, pilot, CPA, business owner (weed grower), supply chain leader, tech, etc, you know there is a good chance that all that stuff isnt bought on credit cards.

A bubble bursts after an euphoria phase. Since years we hear housing will crash. You hear nobody say, buy now or be priced out forever. Rates just inched up which puts pressure on house prices (a good thing). multiple years - each year - we hear foreclosure crisis.....I believe it when I see it.

I closed on a new construction (phase 1) as an investment. Surprised it was very much comparable to re-sale in terms of pricing. Minus the front and backyard (its just dirt). But sometimes I rather have dirt than demo all that shit out. Anyways, try to find good contractor, good prices and a quick timeline. Contractors can pick and choose in SoCal right now. Everyone works from home, people have money and get their yards done. concrete, lumber etc went up in price and are in high demand. I am betting on inflation to go up and house prices to keep climbing.

BTW., There is a very interesting area out of state where big corporations are planning sites. An enormous business park and I dont think that has hit the news yet and thats my next investment spot for a rental. So clearly, I am a housing bull for the next few years.

The YouTube is interesting.

Looks like a good strategy is to wait for a while if you want to buy a place.

RC2006 says

What do you guys think about this guys numbers? Are we on the cusp of our next crash, whats going to happen when people start foreclosing buy the millions?

https://youtu.be/ZFXObY99bXg

I agree with bitcoin here. You won't see any significant housing crash until jobs are lost in the millions, and we're talking upper middle-class, high paying jobs. The people working service jobs don't have houses in the first place, they're renters and that's why rents have been crashing. Also banks are really thorough these days and don't lend to people who don't have enough assets to pretty much buy the place for cash. You can still get jumbo and low downpayment loans from other lenders and FHA (but there's mortgage insurance needed there which would pick up the loss). Also the xi-den immigration policy of open borders will put enormous pressure on the low to mid level housing market as well as stabilize rents, central or south American immigrants don't mind packing a starter home with 5-10 people (the people losing out will be lower and middle-class Americans). Plus supply has been non-existent, it will take a lot of foreclosures to increase the supply significantly. That doesn't mean that shacks aren't overpriced. But I don't see a housing crash or even significant downturn until we enter a significant recession with high-paying job losses. Stock market will stay volatile and I don't expect any major gains, sideways and maybe even slight downward pressure.

Another reason there will likely be no housing crash is stagflation. Have you looked at lumber prices lately? Through the roof. Builders will not build many new units as there is no money to be made due to the high costs. The existing shacks will be bid up instead.

mell says

Have you looked at lumber prices lately? Through the roof. Builders will not build many new units as there is no money to be made due to the high costs.

I wonder if that will make steel framing more popular.

Hope you guys bought the dip! Stocks are up "bigly"!

HeadSet says

mell says

Have you looked at lumber prices lately? Through the roof. Builders will not build many new units as there is no money to be made due to the high costs.

I wonder if that will make steel framing more popular.

It's not just lumber its everything.

HunterTits says

mell says

people working service jobs don't have houses in the first place, they're renters and that's why rents have been crashing.

Wife and I make over $200k but rent because we can't afford to buy a house. So much for your logic.

It depends on what you're looking for, you need to go with a starter shack and not more than 2 bedrooms unless. We had to go for 3+ due to kid/family and you need at the absolute 800k to buy a decent place, so $200k combined is not that much. However it's doable, note that you may be more conservative, Americans usually max out everything to afford their dream home, so that's why there are still many buyers for little supply. But there have been many more low income renters who lost their jobs due to the stupid lockdowns and they all moved out of SF/bay area and caused the rents to crash more than the SF house prices.

WookieMan says

Part of my animosity towards CA. That place should be destroyed.

Hey, that's my home you're talking about.

If you want to send in an army to overthrow the regime I will support you, but destroying the state to save it won't work. The democrats have been trying that for decades.

Onvacation says

WookieMan says

Part of my animosity towards CA. That place should be destroyed.

Lol, beautiful weather here in SoCal :) Some people seem very jealous! :)

There's no doubt about the fact that CA, and esp. SV has brought tremendous progress and growth to the US as well as wealth. The decades leading up to Y2K were golden years for many in SV and traditional family values were still abound. The vibe was libertarian. CA lost its way in the new millenium, so the degeneration isn't older than 20 years. OK, Gray Davis / Enron was a big turd, but besides that CA was doing well in the last century. The more rural areas are still beautiful and sport much more common sense.

mell says

The more rural areas are still beautiful and sport much more common sense.

Exactly. People in other states dont even know about these beautiful rural areas in CA. There are some hidden gems.....not for long....unfortunately, people will build more and more here over time.

mell says

There's no doubt about the fact that CA, and esp. SV has brought tremendous progress and growth to the US as well as wealth. The decades leading up to Y2K were golden years for many in SV and traditional family values were still abound. The vibe was libertarian. CA lost its way in the new millenium, so the degeneration isn't older than 20 years. OK, Gray Davis / Enron was a big turd, but besides that CA was doing well in the last century. The more rural areas are still beautiful and sport much more common sense.

You left out the part about the tsunami of H1's

mell says

Americans usually max out everything to afford their dream home

Yes, but not me, and the frustration with all those others is what drove the creation of this site to begin with.

I finally arrived, in a way. I gave notice at work today, will be done with work in two weeks.

I'm able to retire early because I put it all in the stock market and not in the housing market.

Starting after April 16th, I'll be able to put more effort into fixing problems on this site and starting some other projects I've been wanting to work on.

I expect the stock market to implode and an asteroid to hit after that for good measure. Just so I don't expect too much and thereby ruin my good luck.

Patrick says

I finally arrived, in a way. I gave notice at work today, will be done with work in two weeks.

I'm able to retire early because I put it all in the stock market and not in the housing market.

Damn! Congratulations @Patrick!!!

How old are you? in your 40's? 50's?

50's

Patrick says

50's

Awesome! You retired in your 50's and are a life long renter in CA? Many people say renting long term in places like CA is financial suicide. You clearly prove them wrong.

It was always cheaper for me to rent than to own the same house here, from the moment I first rented it until now.

I mean this on a monthly cash flow basis, but also with regard to appreciation. The appreciation in the stock market was almost always better than the appreciation in the housing market, even in California.

Patrick says

mell says

Americans usually max out everything to afford their dream home

Yes, but not me, and the frustration with all those others is what drove the creation of this site to begin with.

I finally arrived, in a way. I gave notice at work today, will be done with work in two weeks.

I'm able to retire early because I put it all in the stock market and not in the housing market.

Starting after April 16th, I'll be able to put more effort into fixing problems on this site and starting some other projects I've been wanting to work on.

I expect the stock market to implode and an asteroid to hit after that for good measure. Just so I don't expect too much and thereby ruin my good luck.

Wow!! Congratulations! Need to make some dough for a few more years, besides I very much enjoy the tech I currently work with as well as trading, but I def see semi-retirement on the horizon in the 50s as well. This needs to be celebrated.

Perfect time to buy some bitcorn Pat!

mell says

I'm able to retire early because I put it all in the stock market and not in the housing market.

Congratulations!

just_passing_through says

Perfect time to buy some bitcorn Pat!

He already owns Bitcoin....0.01 Bitcoin.

Now I'm worried about taxes and how to minimize them.

I found a great site about this:

https://www.gocurrycracker.com/never-pay-taxes-again/

The downside to his strategy is that it hurts your ability to get Obamacare subsidized insurance. But he talks about that as well:

https://www.gocurrycracker.com/obamacare-optimization-early-retirement/

Patrick says

I finally arrived, in a way. I gave notice at work today, will be done with work in two weeks.

I'm able to retire early because I put it all in the stock market and not in the housing market.

Congrats! But do you have enough to live in Caligulan splendor until you get to 90?

Lol, no, not Caligulan splendor. But enough to continue our current lifestyle without working and enough on top of that so we should actually continue to get a bit richer each year in retirement. I think of the extra as a buffer against adverse events.

And if needed, I could go back to work. Wife is also getting her teaching credential after many years of considering it, so it's likely she will be working as a teacher. But we don't need to count on it.

We do plan to do months of traveling each year, probably in the summers if she's teaching the rest of the year.

Patrick says

I mean this on a monthly cash flow basis, but also with regard to appreciation. The appreciation in the stock market was almost always better than the appreciation in the housing market, even in California.

And I know some of you are thinking "But housing is a leveraged bet." And of course I always reply "Leverage works both ways."

We have no debt at all, and I like it that way.

My biggest tax liability in 2017 was Obamacare.
It was $8000.
The year I cancelled it when it was legal to do (thanks to Trump) I was going to owe $924/month x12=$11,088
My Obamacare strategy is:
1. Try to keep income below $55,000 (more or less, the law says “400% of poverty level”)
For married, it’s probably double, $110,000 or about.
I couldn’t do #1 because of dividends and interest.
2. Buy Health Savings Account to decrease the Obamacare premium effect.
3. HSA invest in mutual funds: Fidelity is easy for HSA setup.

The problem in California is that they don’t agree with the federal rules of Obamacare, they still require you have it.

I’m aware of the numbers to stay below for single and keeping overall taxes low; in California it’s about $75,000 I believe. For married it’s likely double that.

If I don’t spend my money, I won’t pay much tax at all, but my net worth will grow and I have never had enough fun.

Patrick says

Wife is also getting her teaching credential after many years of considering it, so it's likely she will be working as a teacher. But we don't need to count on it.

Wait. You are retiring in your 50's and your wife is getting her teaching credentials now? Is she significantly younger? What a nice wife.....honey, you go ahead and retire, I am going to get my teaching credentials.....lucky guy Patrick!

Patrick says

Patrick says

I mean this on a monthly cash flow basis, but also with regard to appreciation. The appreciation in the stock market was almost always better than the appreciation in the housing market, even in California.

And I know some of you are thinking "But housing is a leveraged bet." And of course I always reply "Leverage works both ways."

We have no debt at all, and I like it that way.

The only good house is an affordable house, that doeant make you house poor, and unable to invest. People are buying houses at 50%+ of their income on two person income which is insane. Going to be a lot of bag holders when this shit crashes.

Bitcoin says

Patrick says

Wife is also getting her teaching credential after many years of considering it, so it's likely she will be working as a teacher. But we don't need to count on it.

Wait. You are retiring in your 50's and your wife is getting her teaching credentials now? Is she significantly younger? What a nice wife.....honey, you go ahead and retire, I am going to get my teaching credentials.....lucky guy Patrick!

Or Patrick is a man and didn't pick some slut. There's a difference in chasing women and having them want you. Not luck, it's skill.

clambo says

3. HSA invest in mutual funds

Be aware that CA is taxing on gains from the year 2020. I'd assume invest in growth funds and never sell like I do, might work.

Patrick says

I finally arrived, in a way.

Congratulations Pat on reaching your liberation.

clambo says

1. Try to keep income below $55,000 (more or less, the law says “400% of poverty level”)
For married, it’s probably double

$51,040 for a single person and $68,960 for a couple, for 2021

Patrick says

Lol, no, not Caligulan splendor.

Then what's the point???

Anyway, at least if the wife gets a teaching job you can get on her luxurious, taxpayer funded health insurance plan! (assuming public school).

zzyzzx says

Anyway, at least if the wife gets a teaching job you can get on her luxurious, taxpayer funded health insurance plan! (assuming public school).

lol. So true.

Patrick says

I expect the stock market to implode and an asteroid to hit after that for good measure. Just so I don't expect too much and thereby ruin my good luck.

And now you know the real reason I quit my job. Something really fucked up is about to happen, and I rather not have to be dealing with a fuck job while going through it.

The stock market won’t implode for a long time; people are rapacious consumers and will never stop upgrading their iPhones, their cars, their TVs, putting Pelotons in their garage, going on cruises, etc.

I recently met up with a couple friends whom I had not seen since the 1980s.
Disclosure: they have evidently made good dough.

Guy #1: Has a house in Rhode Island for summer, built another in Vero Beach, FL and lives in Boston.
Guy #2: Has a house in Maine, a condo in the Bahamas and a new house in Quintana Ro Mexico.

The point is they were not big consumers back then, but over time they were sucked into the game and instead of cars they buy fucking houses.

I’m convinced everyone will consume at his own limit and stocks will rise forever.

clambo says

The stock market won’t implode for a long time; people are rapacious consumers and will never stop upgrading their iPhones, their cars, their TVs, putting Pelotons in their garage, going on cruises, etc.

Every dip in stocks (which will be labeled a crash) is a buying opportunity. Same is true for Bitcoin as well btw.