patrick.net

@Nuttboxer,

We recently stayed in Glendale while we took the kids to Universal Studios. Very nice city. I was impressed.

Actually, it's Glendale AZ, not Glendale CA. A bit further from Universal, but I would still say pretty nice(depending on which part of town).

Bitcoiner says

NuttBoxer says

I'm fairly private, so not going to post it, but you should have more than enough info already if you're really interested. Just ask you don't post the address.

I knew it! Here is another question. Instead of posting the address. Just look it up by yourself, send a screenshot of the sqft, pictures and the rental history. Don’t have to disclose the address. Can you do that?

My personal laptop uses Linux, and screenshots are not something I've ever had a need to learn. If you're ok with @Patrick sharing your email, I can send it to you directly.

@NuttBoxer If you tip Bitcoiner one cent, then you can include your email address in a short private message with the tip.

For anyone who isn’t familiar with commercial loans and the prepayment penalty, here are the rates for 5/1, 7/1 and 10/1 ARMs.

For example: if you pay off the loan in the 1st year, you pay 3% penalty of the remaining loan balance. If you pay it off within the 2 years, it’s 2% of the remaining loan balance, and 1% within the first 3 years. After 3 years, no penalty. You can refinance or pay off the loan as you wish. The loan will become adjustable after 5 years if you don’t refinance. You can let it “float” based on the terms of the “Note”. I believe the terms are 2% increase maximum per year and not to exceed 6% for the life of the loan so 7.5% in year 6, 9.5% in year 7 and 11.5% after….and it’s capped at 11.5% for the remaining life of the loan.

Patrick says

NuttBoxer If you tip Bitcoiner one cent, then you can include your email address in a short private message with the tip.

Ok, didn't see it in the comment like I used to, didn't realize we still had it.

NuttBoxer says

Ok, didn't see it in the comment like I used to, didn't realize we still had it.

Good point, I should have the tip link in comments again.

https://notthebee.com/article/dont-look-now-but-it-looks-like-the-housing-bubble-is-beginning-to-pop

Our insane housing bubble is poised to pop as prices tumbled a record amount year-over-year

The median U.S. home sale price fell 4.1% ($17,603) year over year in April to $408,031. That's the biggest drop on record in dollar terms and the largest decline since January 2012 in percentage terms. April marked the third consecutive month of year-over-year declines following roughly a decade of increases.

I'm watching several 2 bed condos and mainland SFHs, all of which were $350-$500k

They've all dropped $5k-$20k in either of the past two months and two have dropped in both April and May.

One of these was the 3 bed/1.5 bath 1200 sq ft 1980s SFH competing with a literally Brand New never occupied Horton home a few streets away (same school, etc.) that was only $30k more expensive but had a bonus room and a full second bath with a few hundred more Sqft (though half the acreage) AND the developer will pay all closing costs. They cut $20k last month to a "reasonable" $320k. Reasonable is more like $250K.

Inventory continues to be an issue. What will change it?

GNL says

Inventory continues to be an issue. What will change it?

A recession.
Investors selling off houses. No reason to be a landlord when T-bills pay the same rate without having to deal with scummy renters.
Deaths (I'm thinking Florida and Arizona here)
More new home and apartments being built (getting there with apartments). New homes are plentiful in some locations.
Inflation and other increased costs (insurance and property taxes in particular) eating away at people's incomes causing them to sell off that vacation house (Florida comes to mind here).
Increases in Condo fees in theory should cause a glut of condos to sell off or turn to rentals.

On one side, there is less inventory. And people have locked in low mortgage rates. On the other side, there are too many things not going in a positive direction. The consequences of this equation hasn't appeared yet but it will/should in the first quarter of 2024 if not earlier.

Bitcoiner says

Don’t confuse investors with landlords. I am an investor and don’t deal with any tenant.

Not every comment made here is about you.

Bitcoiner says

Most importantly, you can leverage your RE assets, often possible due to significant appreciation over time.

I thought you were hoping to lose significant equity so you could buy more RE. Which is weird because don't you need significant equity so you can buy more RE?

You seem to be selectively filtering facts again to meet your narrative. We lived there for a year, owner never raised the rent. They did raise it for the new tenant, but only to $1,650. They would have had to raise it over a hundred a year ever year, and our experience says that didn't happen.

Also, you again ignore the rentals for under $2,000 I linked you to in that area.

NuttBoxer says

You seem to be selectively filtering facts again to meet your narrative. We lived there for a year, owner never raised the rent. They did raise it for the new tenant, but only to $1,650. They would have had to raise it over a hundred a year ever year, and our experience says that didn't happen.

Also, you again ignore the rentals for under $2,000 I linked you to in that area.

I'm pretty sure he's a poser.

https://www.reddit.com/r/RealEstate/comments/13y3tix/anyone_else_spending_over_60_of_net_pay_towards/

Anyone else spending over 60% of Net pay towards mortgage?

NuttBoxer says

You seem to be selectively filtering facts again to meet your narrative. We lived there for a year, owner never raised the rent. They did raise it for the new tenant, but only to $1,650. They would have had to raise it over a hundred a year ever year, and our experience says that didn't happen.

Also, you again ignore the rentals for under $2,000 I linked you to in that area.

Maybe this rent amount was a few years ago, and rent has gone up since? In general, you can get cheaper rents from landlords vs. professionally managed rentals.

I still have a handful of rentals that are $500-$700/month below market rents. These tenants have been with me for a decade or more so I leave them alone and just increase minimal each year. If any rental gets turnover now, I’ll turn them over to my PM and let them deal with new tenants. They charge me 6% flat rate for SFH and condos. 5% flat for apartments. Sweet deal.

Bitcoiner says

Pretty sure NuttBoxer does not agree with anything I send him. I own rentals in the west valley of phoenix but he knows better. If I send him a Zillow screenshot he will come up with a reason why it’s not true. Those rental rates he is referencing are PRE-Covid. House prices nearly doubled in Phoenix over the last 4 years and rents have exploded too. But don’t take my word for it. Do you own research or just believe what you want :)

It’s alright. Let it go. I consider my tenants as partners without shared equity. My cost basis is practically fixed while inflation will allow the rents to rise overtime while the tenants will buy me the assets by paying them off. It’s a great deal.

The rental market has been hot. We listed a 1/1 for $1,995, and it was gone in a day.

https://www.zillow.com/homedetails/550-S-4th-St-APT-B-San-Jose-CA-95112/2101203414_zpid/

The 2/1 was listed for $2,495 and it was gone immediately the moment we showed the unit to the first applicant. Zillow guesstimates $2,250/month rent.

https://www.zillow.com/homedetails/544-S-7th-St-8-San-Jose-CA-95112/2057550055_zpid/

This small house sold for $1.7MM in my neighborhood a few months ago. Crazy - even for Carlsbad IMO.
https://www.zillow.com/homedetails/6432-Cayenne-Ln-Carlsbad-CA-92009/16657407_zpid/

I know the original owner (old widower who has lots of lady friends) who sold for $1MM. I was surprised when flippers bought it last July and spent half a year upgrading it. I figured they were going to lose their shirt in this market but they got over asking!

Until more people list homes for sale, this isn't changing. Interest rates only slow growth. It's not intended to cause a crash. Existing loans are solid and 90% are probably under 5% or paid off.

I swear people want to just bitch out about something. There's no evidence a housing crash is coming. We knew interest rates would stall the market on purpose. Fact is between 2010-2020 people got cheaper homes at bare bones interest rates. They ain't moving. They keep them and rent them or just simply live in them. Investors just keep them as the rents rise, especially now as rates go up. More demand from renters.

This isn't rocket science. It's basic math.

Personally, I believe the "new normal" is perpetually low inventory.

Personally, I believe the "new normal" is perpetually low inventory.

According to the Oracle of California real estate, Bruce Norris, we need distressed sales for prices to crater.

The housing market always has death, divorce and investor sales. What would cause distressed sales? Massive job layoffs where people don’t have a choice but to sell their house or lose it to foreclosure. Housing prices are very sticky with equity sales.

This thread has so many echos of '06. But what's scary is the same people keep lining up to lose half their "equity", like they've been lobotomized. Every boom has a bust, every bubble pops.

You over-charge people, but you don't force them to pay it right? They make the choice. So why feel bad if some charge less, and savvy renters like myself take advantage rather than pay more than we should?

Renters who choose to live in over-priced markets dig their own graves. Our biggest advantage is our mobility, use it, or spend your life working for your house.

GNL says

I have a commercial realtor client and he says commercial real estate is doing very well. He/we are in northern Virginia.

It is also still a strong seller's market in the Williamsburg area, at least for residential real estate. I am pricing homes around cental VA's Smith Moutain Lake, hoping they will come down soon.

Bitcoiner says

You need 70k for a 20% downpayment in phoenix. You get a brand new house and the builder buys down your rate.

Then you're stuck in Phoenix.

Onvacation says

Bitcoiner says

You need 70k for a 20% downpayment in phoenix. You get a brand new house and the builder buys down your rate.

Then you're stuck in Phoenix.

🤣

Onvacation says

Bitcoiner says

You need 70k for a 20% downpayment in phoenix. You get a brand new house and the builder buys down your rate.

Then you're stuck in Phoenix.

And slowly dry out.
Phoenix stops issue building permits due to lack of water.

Just Californicates Metro-Phoenix.

They can't build anymore, but the swarms of illegals need housing. Illegals can go 3-4 families per dwelling/ Even on or below minimum wage, if you cram enough people in, it will raise rental rates,

Those who can't follow suit get the joys of being homeless in 115 degree summers.

NuttBoxer says

Our biggest advantage is our mobility, use it, or spend your life working for your house.

The house I'm living in is the longest I've ever lived in any home. Adult or as a child. It's awesome. I don't know how you can move frequently. I did it and it sucked and wasn't a benefit at all. At minimum you're getting a Uhaul and moving yourself and that is utter misery and still money, gas, dinged up furniture and exhausting. Or you're hiring movers for $$. You have to pack everything up costing you time and potentially income or needing to take vacation or sick days to do it even if you can work remotely. All that has to be factored into the rental cost.

The beauty of owning is that you don't HAVE to sell to move. Become a landlord and rent your old home out. I also have a feeling that's a factor in keeping inventory low as well. With youtube if you watch one real estate guru video you get bombarded with them, so the younger people that buy tend to just keep the property and rent it out and buy something else. My buddy did this for years.

If you owned the rentals you had and moved every 3-4 years, rented them out you could have a solid property collection. Or you could sell 2-3 years after moving out and not pay capital gains while a tenant paid down your principle bit more. Even if a bubble popped you're likely to be up after 6-7 years. Or keep it and get 5-7 houses over your adult life and you've got a nice cash flow machine for retirement as they get paid off.

Basically the mobility point is kind of invalid. It just sounds like you don't like debt. That's fine. I just don't know of any multimillionaires that DIDN'T use debt to get wealthy. Remember this as well, a paid off primary home when you're 60 will be exponentially cheaper than renting during years you'll be thinking of retiring. Unless you have a government job with health benefits after retirement, most people don't realize medical costs/insurance skyrocket. Or you use government health and see how that works out.

Not lecturing and I respect your right to do what you want. Just pointing out that even if you invested all the savings from renting it still won't beat owning. You can invest 100% of the cashflow in my above scenario and you still have the asset in the house or condo.

Off the subject, therefore ignore me at your will.
At my friend's place I was channel surfing and saw a show which sucked me in about seeking a "bargain beach house" on HGV, a strange channel.
I was amazed and a bit apalled at the places and prices; they were a little bit absurd.
One was a young couple from New Jersey relocating to Florida; they were looking around the Fort Meyers area.
They bought a dump for megabucks.
For the reader not familiar, that area of Florida is on the Gulf of Mexico; in the warm months the Gulf is a disgusting soup like the dinosaurs maybe swam in.
The ocean there is gross and watch out for the flesh eating bacteria and random red tides which actually burn your lungs.
The summer weather would be described as the Devil pissing on a hot rock and the steam rising.
Another clueless couple spent megabucks on a beach in Belize in Ambergris Cay.
Never mind it's going to get blown away someday, or that the infrastructure and healthcare in Belize probably suck.
It's all more proof that people like houses and can't resist buying them, it's amazing to see.
The females always hate the kitchen for some reason and another bathroom or fix the old one.
End of rant.

clambo says

"bargain beach house" on HGV

It’s completely staged. It’s bascially promotional videos masquerading as “entertainment.” The sheeple drool and consume.

Bitcoiner says

FortwayeAsFuckJoeBiden says

i got me one rental btw. was really inspired by your story. its sfh. so will leave it for kids after i hit the bucket. cashflow is nice, although today bank interest pays similar or better rate. might get 2 more, all the cash i got left now just collecting about 4.8% should be enough for the 2 rentals.

Congrats fortwayeAsFuckJoeBiden!
Do you mind sharing a bit more about it? How much did you put down and in what city did you buy your rental? What’s the Sqft?
Thanks!

1200 sqft, boise, 325,000. no mortgage, just cash buy.

Al_Sharpton_for_President says

clambo says

"bargain beach house" on HGV

It’s completely staged. It’s bascially promotional videos masquerading as “entertainment.” The sheeple drool and consume.

It is. We did one for one of our listings for HGTV. It's unpaid and it's for the listing and selling broker to get recognition. Any of the Chicago ones from 2007 to 2017, I personally know them or have met them. The "buyers" that looked at our listing didn't buy ours. It's not just 3 listing either for the format of the show.

It's fun to see other houses in other markets, but it's 1,000% not reality.

Bitcoiner says

That’s a bit of Sensationalizing. AZ paused new approvals on subdivision developments in suburban areas like Buckeye, west Maricopa county and high growth areas like queen creek. Those areas rely on groundwater usage and it’s projected there will be a 4% shortfall over the next 100 years. Subdivisions already approved for new developments are not affected. Also not affected by this new law are the city of phoenix itself and more than a dozen of the largest cities in the metropolitan area because they already have the certification of a 100 year water supply.

A New Business of delivering potable water to residents with underground water tanks is worry some.

Al_Sharpton_for_President says

clambo says

"bargain beach house" on HGV

It’s completely staged. It’s bascially promotional videos masquerading as “entertainment.” The sheeple drool and consume.

I watched that show, but always considered it to be for entertainment value.