patrick.net

FortwayeAsFuckJoeBiden says

Eman says

GNL says

What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.

With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.

If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.

Billionaire Tod Spieker just bought/added a 224-...

I’m always a buyer or seller for the right price. With that said, I haven’t bought any apartment since last year as the numbers don’t pencil out. Sellers haven’t capitulated while interest rates are high. Now, I’m looking at adding new units on my oversized lots. If I can be all-in at $200k/unit, and it’s worth $275-$300k/unit, then it’s worth the efforts.

I budget $600/sqft for the building, engineering, permit costs, etc…. If I can get the cost down to $500/sqft. Voila. The reason it should cost less because I don’t have to pay for land.

I’ve never paid all cash for apartment buildings. Even with this new construction, I’ll obtain a construction loan. The lender requires I put in 45% of the equity towards new construction. They’ll lend 55%. The cash flow on the building should be able to cover the debt service of the construction loan so there’s no stress on it. Once done building, refinance it into a permanent loan aka a fixed loan rather than an adjustable construction loan.

https://www.reddit.com/r/realtors/comments/10p8ku8/buyers_want_to_make_a_ridiculously_low_ball_offer/

Buyers want to make a ridiculously low ball offer I don’t feel is justified. How to tell them without offending them? It’s low enough that I don’t think they are serious at all and may just be using me to throw a number at the wall. These people are acquaintances of mine and in our friend group.

zzyzzx says

https://www.reddit.com/r/realtors/comments/10p8ku8/buyers_want_to_make_a_ridiculously_low_ball_offer/

Buyers want to make a ridiculously low ball offer I don’t feel is justified. How to tell them without offending them? It’s low enough that I don’t think they are serious at all and may just be using me to throw a number at the wall. These people are acquaintances of mine and in our friend group.

We made an offer on a place that was 15% below ask. They all got hoes mad and huffed and puffed, saying they already had a much better counter offer. We rescinded, they took the other offer, it fell through probably during inspection, and they eventually sold a few months later just a bit below what we offered. We then proceeded to find a much better place for less a bit more rural. 80% of listings are overpriced by at least 10%-20%

mell says

They all got hoes mad and huffed and puffed, saying they already had a much better counter offer.

Fictitious other offers are always a problem.

I know Patneters are skeptical of “real” offers, but we believe the agents we work with are honest with them.

Recently, there’s a 10-unit building listed for $2.85M. The agent contacted us. We said price is high and in a fringe area, not interested. Seller got an offer for $2.5M shortly after, but declined. We thought the offer was reasonable given the high borrowing cost and its location. We told him to convince the seller to accept it.

No other offers came in for a couple months. The agent reached out to us and begged to write up an offer that we’re comfortable with. We said $2-$2.2M at most. He wrote it up. Next day, a $2.65M offer came in from some agent. The seller accepted it. That’s how it goes sometimes. We trust the agents we work with. We don’t believe in ghost or fake offers

For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.

https://www.reddit.com/r/RealEstate/comments/10qcqxb/would_you_buy_a_house_where_someone_committed/

Would you buy a house where someone committed suicide?

zzyzzx says

Would you buy a house where someone committed suicide?

If it was the real estate agent, it'd be a gimme.

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

zzyzzx says

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

What does that mean?

GNL says

zzyzzx says

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

What does that mean?

Means that people want to get out of real estate, but can't because the fund limits redemptions to avoid a free fall.

zzyzzx says

GNL says

zzyzzx says

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

What does that mean?

Means that people want to get out of real estate, but can't because the fund limits redemptions to avoid a free fall.

"Redemption", meaning they can't sell their stock/interest in the fund once a limited amount of real estate inside the fund has been sold?

Eman says

For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.

I assume you are going, maybe you can give us a brief report?

For every 1% increase in the 30 yr mortgage rate, there is a 10% drop in price.

Peak housing prices were set at around a 3.25% to 3.5% rate. So if the 30 year mortgage rate settles around 5.5%, then housing needs to at least drop 20% to 25% from peak pricing levels.

Also, the home price to household income ratio should be around 4 for a 30 year mortgage rate of 4.5% to 5.5%.

The ratio is 5 for a rate of 3%, based on my own experience securing a VA mortgage in late summer 2016 and what the regional bank mortgage broker stated, in addition to total monthly payments (principal+interest+insurance+taxes+HOA quarterly assessment) not being more than 37% of household income.

The mortgage broker reminded me I was foremost buying monthly payments as the bank owned the home until the loan was paid off.

A $400,000 mortgage would correspond to an annual household income of $100,000 to $133,000. Granted, a buyer may make a 20% down payment for a $400,000 home given they may have proceeds from a previous home sale, stock sale, etc.

Median household income was around $72,000 in 2022.

Median sales price is around $467,000 in last quarter of 2022. It was $329,000 during first quarter of 2020 :-/

I knew I should have bought a home in Kindergarten and not wait until First Grade. I blame the teacher.

cisTits says

zzyzzx says

...and now we get to hear some bullshit Housing Expert story that flies into the face of data.

What about falling prices?

cisTits says

The average 30-year fixed mortgage rate spiked to 6.39% today, according to Mortgage News Daily, having bounced by 40 basis points in two days off the low of 5.99% on Thursday, giving up a month worth of declines in two days.

Good. Mortgages need to go up to 7.5% to 8%.

Eman says

For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.

I did attend his meetings years ago.
I like his academic style presentation with supporting research.
He is a very good motivator.

Home-Buying Companies Stuck With Hundreds of Houses as Demand Slows

https://archive.is/BXokx

The boomers are sick and dying thanks the the vax and being old. Give it a couple years and the mass glut of boomer property on the market will swamp potential buyers with cheap housing.

https://finance.yahoo.com/news/biden-one-size-fits-plan-150000623.html

Looks like Biden is trying to put a lot of smaller landlords out of business. They will sell their housing stock.

https://www.reddit.com/r/RealEstate/comments/10vq9a8/do_hoa_dues_ever_go_down/

Do HOA dues ever go down?

zzyzzx says

https://www.reddit.com/r/RealEstate/comments/10vq9a8/do_hoa_dues_ever_go_down/

Do HOA dues ever go down?

Does Pope shit in the woods?

https://www.reddit.com/r/FirstTimeHomeBuyer/comments/10x4qxg/hold_your_ground_when_the_listing_agent_comes/

Yesterday morning, our offer $13k under asking was accepted. Yesterday afternoon, they “received a full price bid” and were going to be so kind as to let us match the full price if we really wanted the house. We “regretfully declined” to increase our offer at 5:00pm

This morning, at 8:57am, our offer was accepted again.

Rent is going down. This will help as far as government reported inflation (i.e., CPI). Stocks should fare better with a lower inflation report this month. Silver and gold may not fare as well unless dollar index (DXY) significantly retreats.

https://www.msn.com/en-us/money/realestate/us-asking-rent-cools-to-near-one-year-low-in-january-as-demand-wanes-supply-grows/ar-AA17kH1C

,

ad says

This will help as far as government reported inflation (i.e., CPI).

It's the perceptions of those polled regarding owner equivalent rent that is used in the CPI. Don't expect much in terms of accuracy from the sheeple.

Al_Sharpton_for_President says

It's the perceptions of those polled regarding owner equivalent rent that is used in the CPI. Don't expect much in terms of accuracy from the sheeple.

True about "owner equivalent rent", the Bureau of Labor Statistics (BLS) tracks rental prices by sampling about 50,000 rental units nationwide and uses the average rents paid for comparable housing (within the same area or zip code).

So they would have to find a comparable rental for my home (3 bedroom, 2.5 bath, 2 car garage, 2 miles from beach in Florida panhandle); they could query some of the rentals in my HOA which are identical in size and design.

I guess for more unique homes which are not "cookie cookie cutter" like detached 4 bedroom homes in non-HOA neighborhoods, the BLS would have to adjust and extrapolate the best they can to apply the "owner equivalent rent" method.

I understand that is the best way for CPI to aggregate or account for housing related cost for owner occupied homes.

I also read CPI considers housing related cost to be 33% of total CPI.

I recall FHA and VA mortgage allows up to around 35% of income to be for housing costs (mortgage, property tax, property insurance and HOA fee).

.

But I look at the CPI as just a gauge as far as housing trends such as if housing costs are trending down for last 6 months in general.

ad says

Rent is going down. This will help as far as government reported inflation (i.e., CPI). Stocks should fare better with a lower inflation report this month. Silver and gold may not fare as well unless dollar index (DXY) significantly retreats.

https://www.msn.com/en-us/money/realestate/us-asking-rent-cools-to-near-one-year-low-in-january-as-demand-wanes-supply-grows/ar-AA17kH1C

@ad,

Do you see rental softness in your market? It’s down 5.4% from the peak in August, but still up 2.4% YoY. This trend won’t last very long in the next few months, but 5.4% seems insignificant given rent prices have gone through the roof in the last decade.

In my San Jose market, rents are holding steady while rents around SJSU hit record high. I guess more people are going back to school in the current economic environment.

Eman says

Do you see rental softness in your market?

I see more deals being made by apartment owners such as give 1 month rent free for a 13 month lease.
.

https://www.reddit.com/r/REBubble/comments/10z2hf7/did_you_move_away_from_your_place_of_employment/

This happened to my neighbor. She moved out of the city and loved it but then a while ago her business said they had to come back 2 or 3 days a week. She moved a bit closer but the train was still pain so she would do 1-2 days? They laid her off in the first round.

Booger says

https://www.reddit.com/r/REBubble/comments/10z2hf7/did_you_move_away_from_your_place_of_employment/

This happened to my neighbor. She moved out of the city and loved it but then a while ago her business said they had to come back 2 or 3 days a week. She moved a bit closer but the train was still pain so she would do 1-2 days? They laid her off in the first round.

Ouch.

Booger says

This happened to my neighbor.

I suspect employers do this since they have leverage over the employee. What company laid off your neighbor ?

.