patrick.net

Eman says

Congrats porkchop. That’s the thing about home ownership. You have essentially fixed the cost of your living expenses compared to renting where rent tends to go up almost every year. There will always be exceptions, but in general, annual rent increases due to inflation are real. We’re living in an inflationary economy. This is why the Fed has 2% inflation target. Sometimes, paying some premium for a piece of mind is really worth it. Time and inflation will do the rest of the heavy lifting.

Not quite fixed: even in CA property taxes go up. In other states they
sometimes JUMP. And don't get me started on fucking insurance. So while I do enjoy my 2.03% mortgage, I'm still annoyed by other ownership-related costs going up.

Guest Post by Martin Armstrong

Could this be the catalyst for the next civil war? The federal government warned the Texas National Guard to “cease and desist its efforts to block Border Patrol’s access in and around the Shelby Park area and remove all barriers to access to the U.S.-Mexico border.” Texas said NO and numerous states are sending resources to Texas to stand against the federal government.

Since the Biden Administration has adopted an open border policy, Texas has implemented a state law whereby they will arrest all illegal aliens entering their state. The federal government has done everything to prevent Texas from stopping the surge of migrants and neither side will cave. “The recent actions by the State of Texas have impeded operations of the Border Patrol. Those actions conflict with the authority and duties of Border Patrol under federal law and are preempted under the Supremacy Clause of the Constitution. Texas’s actions also improperly seek to regulate the federal government,” the DHS said in a letter to Texas AG Ken Paxton. Texas responded by saying it will “not surrender to Biden’s destructive open-border policies.”

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A mother and her two children drowned in the river while crossing into Texas. The federal government is solely blaming Texas rather than their failed policies that invited people to cross into the nation in the first place. The Mexican government stepped in to retrieve the family, and US Border Patrol did not show up until after the incident. Forget the millions who have died from the drugs and crime crossing into the US; the MSM will now focus on these three people over the coming weeks.

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Numerous Republican governors in other states, especially the south, are sending resources to Texas immediately. Around 100 migrants are crossing into Texas from this specific area every HOUR. This is one of the dirtiest ploys in recent political history. The year 2023 marked the first time in modern US history that the number of migrants far outpaced the number of births in America. The demographics of America have been permanently altered and people are continuing to pile into the country. The Democrats admitted the open border policy was a deliberate attempt to flood the nation with people who would vote for socialistic policies as the usher in the New World Order, but most were utterly clueless regarding the resources required to carry out their failed scheme. Now, their Sanctuary cities and states are in ruin; they have run out of resources.

American Dream

The far-left told migrants to come to America where the American dream would await them. The American Dream of the 1950s is DEAD. Even hardworking Americans can no longer obtain the lifestyle that was once promised and provided to legal immigrants. These migrants today are unable to work and expect the taxpaying citizens of this nation to pay for their new lives. The future of our nation depends on stopping the deliberate invasion of America.

BUT the most important thing is to discuss muh house and muh RE empire. We may find out soon what the plan is for America. It doesn't look good. Endless inflation, endless free shit army and endless taxes paid by those who have stuff.

GNL says

BUT the most important thing is to discuss muh house and muh RE empire. We may find out soon what the plan is for America. It doesn't look good. Endless inflation, endless free shit army and endless taxes paid by those who have stuff.

Let’s be realistic here. What can you do to change the outcome? In the mean time, whining and bitching do nothing other than put ourselves and our family in the poor house.

Having money will allow us to flee this place if/when SHTF. Relocating to Philippines or Thailand may not be a bad option. Just ask the expats or nomads.

Eman says

GNL says

BUT the most important thing is to discuss muh house and muh RE empire. We may find out soon what the plan is for America. It doesn't look good. Endless inflation, endless free shit army and endless taxes paid by those who have stuff.

Let’s be realistic here. What can you do to change the outcome? In the mean time, whining and bitching do nothing other than put ourselves and our family in the poor house.

Having money will allow us to flee this place if/when SHTF. Relocating to Philippines or Thailand may not be a bad option. Just ask the expats or nomads.

I agree with you except that running is something I loath. One world government means there is NO WHERE to go. I admit I am fearful. Living fearfully is not a great existance but it is a motivator. For me anyway. Some of the greatest people and things came from the attitudes created by the Great Depression.

Eman says

Having money will allow us to flee this place if/when SHTF. Relocating to Philippines or Thailand may not be a bad option.

The commies had a method of preventing people from leaving when SHTF. The Soviet and East German model will be dusted off.

TBH, I don’t know how many more years I have left to live so I just focus on what I can control. Living in fear or stress is like living in hell. I never want to go back to that dark place.

We get to choose to be happy or fearful each day. It's a choice….until it's not. Right now, we still have that choice so I'm not going to let all these negative news affect my daily beautiful life.

Communism happens in phases. In the USA, I don’t think 💩 will hit the fan, and we’ll become commies in my lifetime so why worry about 💩 I have no control and deprive my day to day happiness? WHY?

Eman says

TBH, I don’t know how many more years I have left to live so I just focus on what I can control. Living in fear or stress is like living in hell. I never want to go back to that dark place.

We get to choose to be happy or fearful each day. It's a choice….until it's not. Right now, we still have that choice so I'm not going to let all these negative news affect my daily beautiful life.

Communism happens in phases. In the USA, I don’t think 💩 will hit the fan, and we’ll become commies in my lifetime so why worry about 💩 I have no control and deprive my day to day happiness? WHY?

Do you give a damn about your progeny? If I remember correctly, you are an immigrant. Maybe that's why you think the way you do. You aren't a real American. That isn't a knock on you, I'm just making an observation.

GNL says

If I remembe correctly, you are an immigrant. Maybe that's why you think the way you do.

I think Eman is ethnic Han and an engineer (electrical?). I don't know if he is from Singapore, Thailand, etc. But I think Eman mentioned he is an immigrant.

Eman knows a lot about residential real estate finance and operations (and maintenance?).

Did Eman graduate from a university or college in the USA ?

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I’m an immigrant from Vietnam, which is a communist country. I saw communism first hand. People are clueless when they talk about communism. We were able to get out of a communist country just fine.

I came to this country at the age of 16. Graduated HS and SJSU with honor. Kids made fun of my English in HS. Kids were being kids. Who could blame them.

I love this country. I’m sided with conservatives on most issues and damn proud of them. Did I say I love this country? I LOVE USA

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GNL says

If I remembe correctly, you are an immigrant. Maybe that's why you think the way you do.

I think Eman is ethnic Han and an engineer (electrical?). I don't know if he is from Singapore, Thailand, etc. But I think Eman mentioned he is an immigrant.

Eman knows a lot about residential real estate finance and operations (and maintenance?).

Did Eman graduate from a university or college in the USA ?

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You don't really seem to care what happens. Only about yourself. This is not a knock on you. Self interest is very important. We don't help ourselves without it. However, we must care about society.

I’m being a realist. Let me ask you this. What can we do to change the course of what is going on now other than voting out the politicians? You know this 💩 won’t happen in CA as my vote practically doesn’t count. Trump will likely help to change the course of the country, but that’s about it.

Share with us your solutions.

Eman says

I’m being a realist. Let me ask you this. What can we do to change the course of what is going on now other than voting out the politicians?

THIS is the problem. You think your vote matters. Get involved. Get on the ballot. If you're an immigrant the only ballot you're not going to be mentioned on is for POTUS. There are dozens of local and state positions you can make a difference in.

Your local government is far more important than the federal government. Your vote doesn't matter if it's Trump or Biden. YOU become the vote and actually make a difference in the place you live. Big or small you can change shit and pretty easily. I want to be on the ballot. Not some other ass bag. So you do it.

So, basically no, you're not being a realist. You're being a defeatist. This is why conservatives always lose. They don't think they can do it. It's a bull shit mindset. Pisses me off. You got into real estate by taking a risk. Guess what? If you're not happy with the status quo take a risk and make change. That includes politics. You don't have to be a Senator, but run for your State House Rep position. It pays and is trivial work. But you are the one that has a stake in decision making. A vote for some ass clown that you think believes the same things you do is a complete waste if you want to get what you want.

WookieMan says

Your local government is far more important than the federal government.

Local government is not the worst of the three levels of government. The problems are not in local government. I know little about the issues with the state government. Federal government runs the empire, for good or for not good, it is a job that someone has to do and I prefer we do it and this comes with consequences that we want to change. The so called changes that we want to change have been instituted by us, for our own benefit!

RWSGFY says

Not quite fixed: even in CA property taxes go up. In other states they
sometimes JUMP. And don't get me started on fucking insurance. So while I do enjoy my 2.03% mortgage, I'm still annoyed by other ownership-related costs going up.

The NextDoor website is full of people — presumably long-term owners who locked in their house and taxes in the 1990s or earlier — who complain about skyrocketing utility prices and insurance. I can certainly understand this, as their monthly utilities are larger than their mortgage ever was. We have a spate of insurance cancellations and/or jumps. It seems there are people who were paying $800/year for home insurance just three years ago and are now being hit with $1800/year. That's not a lot for someone paying $8k/month mortgage, but for a person who bought in the 1990s and just finished paying off their $400/month mortgage, it's like getting hit with an all-new mortgage to pay.

On the bright side, it might convince retired folks to flee and open up some housing spots for high-tech workers that need to be close to the high-tech jobs.

Defeatist? 🤪

This is why I don’t invest in San Francisco and Berkeley. They’re BS land. I invest in Santa Clara County where the law is being interpreted for what it is. You don’t pay rent, you get evicted. The process takes 6-8 weeks. It’s the law. I couldn’t speed it up even if I wanted to. Stuff I have no control over.

I value my free time and however I spend my time. I just know how to make money and help the orphans and disabled kids in Vietnam. All the other 💩, I let people who are passionate about those stuff deal with them.

We all have different priorities in life. We get to pick and choose our battles/bets in almost all cases. Mine is not politics, and I don't whine and bitch about these things on Patnet. I get to choose my friends too, and I don’t hangout with downers

Eman says

Defeatist? 🤪

This is why I don’t invest in San Francisco and Berkeley. They’re BS land. I invest in Santa Clara County where the law is being interpreted for what it is. You don’t pay rent, you get evicted. The process takes 6-8 weeks. It’s the law. I couldn’t speed it up even if I wanted to. Stuff I have no control over.

I value my free time and however I spend my time. I just know how to make money and help the orphans and disabled kids in Vietnam. All the other 💩, I let people who are passionate about those stuff deal with them.

We all have different priorities in life. We get to pick and choose our battles/bets in almost all cases. Mine is not politics, and I don't whine and bitch about these things on Patnet. I get to choose my friends too, and I don’t hangout with downers

Oh, I see now. Come to America -> get what you can from whitey -> send it back to Vietnam. Like I said, you are not an American.

Eman says

We all have different priorities in life. We get to pick and choose our battles/bets in almost all cases. Mine is not politics, and I don't whine and bitch about these things on Patnet. I get to choose my friends too, and I don’t hangout with downers

You know real estate. But you are talking like someone that has been to too many real estate seminars. And/or business networking events where they steal your money. The rah rah bull shit where they tell you the sky was blue. If you couldn't figure that out you're a common retard. Real estate is simple math at the end of the day. If you need help with it you didn't put in the work. You literally learn this stuff in 9th grade.

Why does Grant Cardone have to sell books and seminars if he's so rich? He's not. He's a liar and takes people's money because his real estate "empire" is a house of cards that's over leveraged. Guys like this have been around forever. Kiyosaki is another. https://thecollegeinvestor.com/4726/ultimate-hypocrite-robert-kiyosaki-companys-bankruptcy/

And yes, you should hang out with downers. You're missing out on life. Just because they're a downer doesn't mean they're not a good person. I've liked your comments usually but you frankly sound like an ass with this comment. One of my best friends is a fledgling chef that has hit and miss work. If you didn't meet him you wouldn't realize what a blast the guy is to be around.

I tread extremely lightly with real estate. I left my former job because of bull shit artists and bull shit RE agents. The industry is full of slick cons that are broke but extract money from you and are still broke at the end of the day. They sell you a lifestyle and theirs is actually miserable without your money.

Twice a year, I send donations to charities in America. I’m willing to bet I donate more than 99% of Americans in this country.

I’m an immigrant who love America. I’m not American. I’m proud of what I do. No sugarcoating and no jealousy of others. I love my friends and am willing to support them to succeed.

Strangers told me I do more for them than their family. I know I do, and it’s nice to be recognized.

My friend just got into contract on a $3.2M deal. Then kind of get cold feet. I know the deal and said I’ll back it up if needed. Keep marching forward. It’s a great deal. Which friend of yours will do that for you?

Eman says

Keep marching forward.

Eman, at any average time, how many homes you own as a landlord and what is the average market price and average equity ?

I'll just multiply number of homes by average equity to figure the net worth or book value.

Are all your residential properties in California ?

Eman, have you considered opening your own residential REIT ? you would get private investors and pension fund managers interested in this

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Eman, have you considered opening your own residential REIT ? you would get private investors and pension fund managers interested in this

I looked into it about 10 years ago. While you can do it, it's an accounting nightmare if you're not careful. Stupid regulations and a lot of paperwork. Easier to get a group of buddies and just create a company. Add shareholders if you need them.

The benefit of REITs is the tax advantage on dividends. But if you're actively investing with people you already know, it's not worth the hassle to start one up, especially with long term gains.

Fact is you're going to pay the IRS in real estate if you're good at it or kick the tax man down the road with 1031's. At some point paying the tax attorney or accountant $40k/yr (part time) eats away any tax savings. Eman would need 100 people if I recall correctly to fund one. That's a big task for most people and then you have to deal with 100 people questioning acquisitions and profits. I agree with Eman that it's better to have a tight knit group of investors. Pull the trigger when you want and find a good deal. Not have pissed off people that aren't getting "expected" returns.

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Eman, have you considered opening your own residential REIT ? you would get private investors and pension fund managers interested in this

I thought about this 1.5 decades ago. Gave it a try on the first deal with 14 investors. One of them was a nightmare to deal with. We sold the building 1 year 1 day later for 40% gain. In hindsight, it was a blessing in disguise. She’s still a good friend and asks for inputs whenever she needed. She owns a handful of rentals now. One of them is her former house. Smart move that she kept it when she upgraded to her current house.

On the 2nd deal, we cut it down to 5 fantastic investors. They gave us the money, and we never heard from them again. Once we stabilized the asset, we asked if they wanted to list and sell it, or we could buy everyone out less 5% commission. They agreed to the latter.

We still have one deal where we have 7 investors at $200k each. All other buildings are owned by my partner and I 50/50. We’ll be talking to an attorney this year on how to split them up without getting certain taxes triggered. Already got a couple referrals from our agents/lenders.

Call me naive, but my experience has been somewhat different with others on here. We’ve run across “honest” and crooked agents/brokers. We know which ones are crooks so we stopped dealing with them after one transaction. The ones, who we believe, are honest, we have done multiple transactions with them. We give everyone a fair chance until it’s proven otherwise.

GNL says

This is why I don’t invest in San Francisco and Berkeley. They’re BS land. I invest in Santa Clara County where the law is being interpreted for what it is. You don’t pay rent, you get evicted.

Yup. San Fran and Berkeley are financially dangerous places to be landlords. Nothing will set you back like a squatter missing six months of rent, harassing neighbors, and trashing the area. Next up: Somewhere over in the East Bay there's a newly proposed law that prospective landlords aren't allowed to do criminal background checks. Of course, landlords can still be sued for a criminally misbehaving tenant. Go figure.

SunnyvaleCA says

Next up: Somewhere over in the East Bay there's a newly proposed law that prospective landlords aren't allowed to do criminal background checks. Of course, landlords can still be sued for a criminally misbehaving tenant. Go figure.

Is anyone really surprised by this? As income/wealth inequality increases, more of this type of stuff will come about.

Eman says

Twice a year, I send donations to charities in America. I’m willing to bet I donate more than 99% of Americans in this country.

I’m an immigrant who love America. I’m not American. I’m proud of what I do. No sugarcoating and no jealousy of others. I love my friends and am willing to support them to succeed.

Eman, you're a good egg, with lots of useful info.

Appreciate it.

SunnyvaleCA says

GNL says

This is why I don’t invest in San Francisco and Berkeley. They’re BS land. I invest in Santa Clara County where the law is being interpreted for what it is. You don’t pay rent, you get evicted.

Yup. San Fran and Berkeley are financially dangerous places to be landlords. Nothing will set you back like a squatter missing six months of rent, harassing neighbors, and trashing the area. Next up: Somewhere over in the East Bay there's a newly proposed law that prospective landlords aren't allowed to do criminal background checks. Of course, landlords can still be sued for a criminally misbehaving tenant. Go figure.

The catch is these judges don’t follow the law. In Santa Clara County, you don’t pay rent, you get evicted. There’s no such thing as relocation fee and 3 extra months of free rent while the tenant is finding a new place.

Our property manager (PM) just told us a story about his latest eviction. The tenant basically told the judge her place is a 💩 hole with cockroaches, rodents, etc…. The judge replied “if it’s such a 💩 hole, why do you still want to live there?” Then asked if she will pay rent. She said no. The judge gave the writ of possession to the PM. Tenant has 5 calendar days to vacate, or the sheriff will remove her. Next!

AmericanKulak says

Eman says

Twice a year, I send donations to charities in America. I’m willing to bet I donate more than 99% of Americans in this country.

I’m an immigrant who love America. I’m not American. I’m proud of what I do. No sugarcoating and no jealousy of others. I love my friends and am willing to support them to succeed.

Eman, you're a good egg, with lots of useful info.

Appreciate it.

Thanks man. I do what others don’t, and I mean it. Giving back is the greatest gift of all. Seeing folks in my sphere dropping dead in their 40’s and 50’s in the recent years have made me realized that’s tomorrow is not promised. We all can drop dead at anytime.

I have a “death file” on my laptop. I also have a print out. I told my wife if I drop dead, the usernames, passwords, assets, liabilities, life insurance, etc… are all on there. This way, she knows where to pick up the pieces and run with it. It’s been 7 years so I need to update the family trust.

Just helped out a friend this week when he reached out. He promised to pay back by July. One thing I’ve learned is that consider the money is gone if I lend to family or friends. If it comes back, it’s a blessing. Let’s see how it goes.

He’s young in his early 30’s. Mistakes will be made. If he gets out of this pickle, which I believe he will, he’ll be fine riding out this down cycle. Not too shabby for a kid to own 11 rentals in the Bay Area in his 30’s.

This is the lesson I learned from Sam Zell. He was in a pickle in the early 90’s during the S&L Savings Crisis. He needed someone to bail him out. Jay Pritzker gave him $50M. Sam learned a valuable lesson of being over-leveraged. He went on to become a billionaire with plenty of liquidity.

My money is liquid. I let it flow and help family and friends if ever needed. I value relationship more than money.

I helped another kid about a decade ago when he and his wife was living inside a shed behind a mobile home. He’s making so much money now. He made $4M in 2022, and $2M in 2023. He said he owes me his life. 🤷‍♂️

https://nakedemperor.substack.com/p/this-weeks-must-reads-15-21-january

Wow, that is one scary chart. I wonder what 2024 has in store. I've gone on record a couple times now and I'm going to do it again...I believe the homeownership rate will fall for a long time.

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Hopefully the 30 year mortgage rate will settle no higher than 5.5% this year. It would only be about 1.5% higher than the rate when prices peaked in early 2022.

And consider that income has gone up +3.5% annually since early 2022 as far as income catching up with housing costs.

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https://wolfstreet.com/2024/01/21/status-of-the-housing-bust-in-san-francisco-lowest-price-for-any-december-since-2017-2019-silicon-valley-and-the-bay-area/

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Hopefully the 30 year mortgage rate will settle no higher than 5.5% this year. It would only be about 1.5% higher than the rate when prices peaked in early 2022.

And consider that income has gone up +3.5% annually since early 2022 as far as income catching up with housing costs.

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At this point, it looks like a good probability it will happen by end of year. People didn’t think it was possible while you did. Great prediction. 👏

Patrick says

https://nakedemperor.substack.com/p/this-weeks-must-reads-15-21-january

Last cycle peak sales in 2006 before the drop. This cycle peak sales 2021. The difference is that inventory was building up and most people were on ARMs leading up and into it in 2006 cycle vs people are on 30-year fixed mortgages for this cycle coupled with low inventory.

If the current trajectory plays out, there’s some money to be made in the interest rate and cap rate arbitrage between now and 2025-2026. Whoever has the balls to buy investment assets now will get rewarded in the coming years.

Housing Market To Suffer 'Aggregate Price Decline'

The spring selling season may finally bring true price discovery to the market

ADAM TAGGART
JAN 22, 2024

The US real estate market remains frozen.

Transactions are at multi-decade lows, mortgage rates remain painfully high and home prices are at near record-levels of unaffordability.

As we enter 2024, should we expect things to get better for housing, or worse?

For answers, we turn to mortgage lending expert & housing analyst Melody Wright, who has been busy visiting many of America's most popular housing markets to develop a true boots-on-the-ground understanding of where the trends are headed.

Melody expects the spring selling season to finally start unlocking "true price discovery" for the US housing market, and predicts a national aggregate price decline as the year progresses.

https://youtu.be/WL2ZRP84T7Y

Eman says

Patrick says

https://nakedemperor.substack.com/p/this-weeks-must-reads-15-21-january

Last cycle peak sales in 2006 before the drop. This cycle peak sales 2021. The difference is that inventory was building up and most people were on ARMs leading up and into it in 2006 cycle vs people are on 30-year fixed mortgages for this cycle coupled with low inventory.

If the current trajectory plays out, there’s some money to be made in the interest rate and cap rate arbitrage between now and 2025-2026. Whoever has the balls to buy investment assets now will get rewarded in the coming years.

I would like to understand here, do you think interest will go back to 3% in 2025?