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Are We Headed Into Another Real Estate Collapse?
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2022 Mar 15, 2:47am 6,760 views 120 comments
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118
Eman
2022 Mar 20, 11:45am
Eman
2022 Mar 20, 11:45am
The formula for the Bay Area is pretty good. Once you got it figured out, you no longer wanted to go out of state and chase the faux cash flow.
We’re grossing $1.7M on our apartments. An average 3% annual rent increase = $51k/year. Let’s say $15k goes to pay for the increase in expenses, we net $36k/year. $3k/mo can service $600k. We also get $250k/year in principal pay down. This is how we have been able to extract $500-$800k/year in cash out refinance (tax-free) and use the proceeds however we see fit. Then rinse and repeat.
We’re grossing $1.7M on our apartments. An average 3% annual rent increase = $51k/year. Let’s say $15k goes to pay for the increase in expenses, we net $36k/year. $3k/mo can service $600k. We also get $250k/year in principal pay down. This is how we have been able to extract $500-$800k/year in cash out refinance (tax-free) and use the proceeds however we see fit. Then rinse and repeat.
119
fdhfoiehfeoi
2022 Mar 20, 12:37pm
fdhfoiehfeoi
2022 Mar 20, 12:37pm
Onvacation says
That second part is made up by government. There was not direct tax on income for over half our countries existence.
Onvacation says
You are aware the world used Silver until the late 1800's, and gold until the early 1900's to back it currencies. With some small regulation between banks extending to the 70's. So the current system has existed for less than 100 years. Feel free to look back in history for any 100% unbacked fiat system that's lasted longer.
The arrogance or ignorance in assuming things have always been as they are in our time is the biggest reason people are caught in catastrophe. Not intending to insult anyone, but this is fact, something we must always be on guard against.
We're all going to die and all have to pay taxes.
That second part is made up by government. There was not direct tax on income for over half our countries existence.
Onvacation says
Without making any definite predictions I don't think it can last more than a couple more centuries.
You are aware the world used Silver until the late 1800's, and gold until the early 1900's to back it currencies. With some small regulation between banks extending to the 70's. So the current system has existed for less than 100 years. Feel free to look back in history for any 100% unbacked fiat system that's lasted longer.
The arrogance or ignorance in assuming things have always been as they are in our time is the biggest reason people are caught in catastrophe. Not intending to insult anyone, but this is fact, something we must always be on guard against.
120
Eman
2022 Mar 20, 12:57pm
Eman
2022 Mar 20, 12:57pm
CA is driving me out of the flipping biz. It’s always someone else’s fault, not theirs. What a loser mindset.
https://www.cbs8.com/article/news/local/new-ca-bill-would-impose-25-gain-tax-house-flippers-sell-within-3-years/509-557ac4de-8125-422e-beb3-8162972ef5e0?source=patrick.net
https://www.cbs8.com/article/news/local/new-ca-bill-would-impose-25-gain-tax-house-flippers-sell-within-3-years/509-557ac4de-8125-422e-beb3-8162972ef5e0?source=patrick.net
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I see most people here now post about politics and the Wuhan Flu. I'm in agreement with most here: I'm a former liberal who voted for Bill Clinton but I voted for Donald J. Trump in 2016 and in 2020.
Today the world is in crisis and real estate prices in the US are crazy high.
I have friends who have just put their homes on the market. And others, who should know better, who are awaiting real estate lotto to be 'able to purchase' homes in communities in Arizona and Florida. I don't think I've heard people speak about waiting in line to buy up a tract house in a gated community since 2006. What gives?
https://www.realtor.com/news/trends/how-record-high-gas-prices-soaring-inflation-will-affect-homebuyers-and-owners/?source=patrick.net