patrick.net

By the way, I had to share this with you guys. The house across the street from ours has long been a swinging door for and endless sea of mysterious, sort of creepy people. it is a small house sandwiched between overgrown trees and an ugly smallish condo. The house has been in poor condition for the 2 years that we've lived there. Cracked windows, filthy exterior, broken slats on the porch laticework, garbage and old furniture in the yard. me and the neighbors have been referring to it as the "crackhouse".
Anyhow, last weekend, we noticed that very suddenly, everyone moved out. While they were moving out, a fly-by-night spray painting crew showed up. No priming or prep seemed to be done to the house. Just a quick removal of the vines that had wrapped around the garage. The house was painted in less than ONE DAY. The contents of the house was thrown out front. The trees were chopped down, and the rest of the inhabitants moved out with what little posessions they owned.
Yesterday I noticed a young 30-something looking couple that I've never seen before. They were almost running in and out of the house the rest of the afternoon and into the night, with frequent trips to what I assume was the Home Depot. They have the exact same look on their faces that I see so many people around here have. It is the look of " Oh shit!- we gotta' fix this up now and sell it!"
This pisses me off. Maybe I don't have a good reason to be, but I'm starting to get sick and tired of seeing this. Its like the weasley used car salesman putting cigarette ashes in the radiator. Hire a spray crew, slap some paint over the dirt, and sell it. Whats worse is that these people obviously bought this place, filled it with as many people as possible, didn't take care of it. I don't even know if they ever even showed up at the place the entire time we've lived there. Now they're going to sell it to some unsuspecting people that probably have no idea that the thing is likely rotten and full of some major problems.
That paint job done in ONE DAY just totally blows me away. This story is classic for the times we live in where people don't cre about their community, home, or neighbors and simply want to make a quick buck instead.

Ahem,

On the "more cowbell" issue. I have been a BOC fan from their first album on and it makes me ill that for all they have given (and they have given all) to R+R they get totally dissed by FM jocks. Right out of the gate they were totally original and have only done 3 "cover tunes" in over thirty years of recording. Roadhouse Blues, Born to be Wild and a Calvin Carter classic, "Ain't Got You"! They never really were "mainstream" b/c they heavily favored a 7, 9, 11 minute format which meant that FM jocks actually had STFU for longer than they can STAND to STFU!

I saw these guys rattle the plaster off the ceiling at the Aragon Ballroom (Chicago) circa 1974. Their live performances have never really been equaled.

Back to the "sexy" issue of taxation!

SFWoman,

The way that AMT has always been explained to me is that it is a "parallel" tax system. It's always running right along side our existing tax system. YOU, are taxed by whichever is the more punitive. Dating back to it's origins in the 1960's when congress figured out there were about a thousand "ultra" wealthy people that had enough critical mass to live entirely off of the interest paid by tax free municipal bonds. At the time it was "grand standing" for the masses and has since morphed into a very real middle/upper middle class nightmare. As you suspected it has spawned an entirely new sub set within the financial services arena.

Kind of harking upon Joe's comments and NYC, it's interesting to note that people there have a much harder time even being able to afford living there at all. I have friends who have decent jobs, work round' the clock, yet pay most of their wages away in the form of rent. There is a rental bubble there as well. One of my friends lives in a fairly dangerous neighborhood and rents a single room without windows in the basement of a building for over 1k a month. Think about how much it must suck to live somewhere that is not only unaffordable to buy in, but equally unaffordable to rent. I have no idea how NYC is able to keep as many young professionals as they do as anyone with half a brain would surely see that the financial situation there makes no sense. Then again... they seem pretty addicted to the city.

Randy H Says:

> It has always been true that a shrewd, well diversified
> “investor” can save much more over time than an
> equivalent home owner with equity and appreciation.

Due to the bubble in the Bay Area I can't think of any "investor" (even the shrewd and well diversified ones) who have done better than Bay Area real estate investors. In the 70's my Dad was buying homes in Burlingame and San Mateo with $3-$5K downpayments. Due to positive cash flow at the time (even with the seller 2nd TDs) he had his down payment back in a few years and could buy another home. He never sold any of them and they are all worth over a million and have positive cash flow of more than their original cost each year...

Former apt broker,
I think the issue is now versus then. Yes, historically investors have done well in Bubble times. But what about when the times aren't as "bubbly"?Thoe times too just be taken into consideration as an equal part of the equation.
I recall reading a wall street journal article a few weeks back pointing out that startup investment dollars in California business in general is starting to go sour simply becase so much of that startup capital has nothing to do with the business and more to do with the location.

shit_hits_the_fan Says:

> I have no idea how NYC is able to keep as
> many young professionals as they do as anyone
> with half a brain would surely see that the
> financial situation there makes no sense.
> Then again… they seem pretty addicted to the city.

I think that every person who wants to go in to business should spend a few years working in Manhattan between undergrad and business school...

shit_hits_the_fan Says:

> Former apt broker, I think the issue is now versus then.
> Yes, historically investors have done well in Bubble times.
> But what about when the times aren’t as “bubbly”?

An investor that buys now is almost guaranteed to have a tough time…

I was just disagreeing with Randy who said: "It has ALWAYS been true that a shrewd, well diversified “investor” can save much more over time than an equivalent home owner with equity and appreciation. "

There are also very few people (even great investors) who can say no to the wife and kids over the years and actually "invest" the planned amount of cash each month while the guy with the big home payment it "forced" to invest (unless he is real stupid and he pulls the cash back with a HELOC).

T. Howell III

I for one have always found your comments appropriate and tasteful. How ARE things at "Howell Industries"?

FAB Said

There are also very few people (even great investors) who can say no to the wife and kids over the years and actually “invest” the planned amount of cash each month while the guy with the big home payment it “forced” to invest (unless he is real stupid and he pulls the cash back with a HELOC).

That is entirely irrelevant to the discussion we were having. We were not talking about the intangibles of home ownership, nor were we talking about businesses that earn cashflow off of real estate. I'm not sure what your points are.

Mr. Vincent,

Chill the F out dude! We need our Troll Patrol . Hey X honey I was sooo impressed with your tracking his ISP address and info. But I'm not Techie girl. The little pmple face punk ass was bored and looking for something to do.

I vote to keep X

http://www.mlslistings.com/common/properties/propertyDetail.asp?open=0&page=3&mls_number=611266&type=property&name=

The shell of a house in Cupertino has been reduced again.

Now as for topic:

I found LA way out of line with income and cost of living. I didn't even live on the coast and it was outrageous. I 2000 you could get a place for 150k about 1100 sq ft. When I moved from california in Jan 06 it had jumped to 600K. Wages were about the same gas shot way up kaiser health insurance had jumped up about 10% a year since 2002.

It was a hard decision but I took a temporary work assignent in the southeast. Do I like it here compared to So Cal? It has it's moments and it's dirt cheap to live here so I can save alot of money. On the other end of the coin it's boring as hell only 45 thousand pop. Not alot of amemnities like good restruants, shopping, cultural events. If you've lived in a big Metro primarily it won't suffice for the long term.

So I'm just chillin until the next opportunity all the while keeping my eyes on patrick community and the housing and economic markets. I had co-workers and friends tell me not to move because I could never afford to come back. Maybe I will maybe not. I'll keep my options open.

"What was the starting price? I forgot."

I believe it was in the $700k+ range. Anyone out there remember the asking price when this beauty was first listed?

I can't count how many times I was actually prepared to be fed some "woof cookies" and I'm reading and I'm thinking hey, that "might" make sense? But there's something vaguely not right with the "position".

Then BLAM!

X cuts right through to the chase and in my mind anyway is very vigilant about keeping "bad seeds" from taking root. Think of all the posts you've seen that start out more or less on reasonable basis and then very adeptly take us down a dark alley.

If X did not exist, it would be necessary to invent him.

lunarpark,

799K (I do believe).

It was on Mr. Overvalued and truly his finest hour. Anybody heard from him lately? Flippersintrouble is great and all and I just LOVE the coverage they give to stupidity. A few snide remarks would go a long with me (especially as this has morphed from speculation on our part to entertainment) what could it hurt?

I'm starting to wonder with all of the inventory glut why realtors don't have price reductions "built in" to the selling agreement?

O.K Mr. FB, we'll try and list it for 699K but only for the first 30 days. You see we have plenty of homes and we really don't need any more that are priced above where we can sell 'em.

SO: After the first 30 days we "Auto Reduce" (TM) your asking price by 10%. This is SO SLICK! No more having to chase me down on my cell phone in between looking at repo's! AND we do this for our clients at NO CHARGE!

For every 30 day your P.O.S stays on the market we will continue to mark it down until we find a motivated buyer!

Enrollment in our selling agreement includes FREE Credit Coulseling and we'll do our best to help you with finding a place you CAN afford after your short sale!

Mr Vincent Said:

…but Skipper, if the boomers would just hurry up and die, I wouldnt [sic] care about Prop 13 because I can get their house for nothing. Now now Little Buddy, your [sic] just going to have to save while your renting just like the boomers did when they were young and then someday youll [sic] have a down payment.

Thanks Skipper, maybe if I work hard and save hard Ginger will marry me? Don’t get your hopes up Little Buddy, just wait for this housing bubble to burst and all will be jake.

You know what pisses people off about Boomers and causes otherwise reasonable, open minded, considerate people to stereotype?

Unapologetic, hypocritical, hubris. It's one thing to admit your year of birth was a fortunate stroke of luck, and that the system today wasn't built by your generation but is very beneficial to it.

It's another thing altogether to have the audacity so as to think that you somehow earned or deserve this luck. I'm really sorry if you need to justify your own pathetic, vapid self conscious by denying the fact that we are in the midst of the single largest transfer of wealth from young to old ever in US history. But go on living in your Boomer-contrived self inflicted universe of ignorance. It's what you do best.

Sometimes people just are at the right place at the right time. My former boss is a lazy ass. He inherited the family business and has just kept it going marginally since the seventies. He definately wouldn't be living in Laguna if not for prop 13. He and his now deceased mom bought a distressed prop on S. Coast Hwy in the mid seventies. It was a bank foreclosure and then the bank went belly up what are the changes of that kind of luck?

He did nothing with the property for years. He got divorced and almost lost te biz. Eventually he re married a gold digger and had to remodel the place. Bascally they tore it to a shell and rebuilt it for alittle over 200k in 96. That asshole is paying the lowest prop tax in his area. After the rebuild it was worth in the 900K's. Probably close to 2 mil now. If he had to re- buy in that area and pay current taxes he's not be living there.

Sorry typo's three cups of coffee yikes111

Speaking of Prop 13, has anyone seen the inane Phil Angelides adds where he vows to "protect" homeowner rights and keep Prop 13 going? Just for that I will not be voting for him, even if the governer has not much say in the matter. He seems like a tool anyway.

SFWoman,

Sometime back Peter P set me straight. The "1031 Exchange" can be used for everything from aircraft equipment leases to Llamas (livestock). When the RE "rugus" got a hold of it, quickly RE was all that was discussed.

Didn’t they do away with the property roll over exemption?

Short answer "No".

Randy H Says:

> It has always been true that a shrewd, well diversified
> “investor” can save much more over time than an
> equivalent home owner with equity and appreciation.

Then I wrote:

> Due to the bubble in the Bay Area I can’t think of any
> “investor” (even the shrewd and well diversified ones)
> who have done better than Bay Area real estate investors.

Then Randy H. wrote:

> That is entirely irrelevant to the discussion we were having.
> We were not talking about the intangibles of home ownership

Let me revise it to say “investors and homeowners”…

Ten years ago you could buy decent homes in Burlingame or Mill Valley for about $300K and get in for $30K or less. Almost all these homes are worth a million dollars more today. Not many others that “invested” $30K in 1996 can sell their investment for $1.3mm (and get $500K tax free if they are married).

I don’t want to beat up on Randy, but only a statistically insignificant number of “investors” have come even close to the leveraged historic returns from real estate ownership in the Bay Area.

Since “past performance is no guarantee of future results” I think that many older Bay Area homeowners may die before their home is worth more than they paid in 2005…

Maybe the Revolutionary War was a bad idea. What would our tax rates be if England tried to "rule" 3-5000 miles away? I assume much lower. The decline in European/Western populations excluding immigration has been lamented in the Economist, Wall ST J., etc. The AMT actually encourages massive over investment in real estate.

I vote to keep X

No need to vote. I will ban myself before I ban X. :)

Fewlesh,

In the past it's been perfectly accessible for smaller RE investors to convert their apt. bldgs. and strip malls in exchange for public REIT shares. This "good old boy" practice has all but gone away. By having your RE holdings deemed "substantially the same" one could 1031 their "Sleazy Acres Mobile Home Park" for shares that pay out a regular dividend as per the the charter of the REIT.

Now that many smaller MF companies have been bought out this just isn't practical any more. The costs of appraisals etc. and the miniscule size of these portfolio aquisitions on this scale can no longer be justified.

True, you can will them to "fluffy the cat" if you want to, but fluffy would owe taxes on his/her income.

FAB,

Again, we weren't talking specifically about the Bay Area or other bubble areas. If you insist on this comparison then I ask you this:

Are there more historical cases of fragmented RE hyper bubble opportunities

- or -

Are there more historical cases of individual Equity hyper bubble opportunities?

You are comparing apples & oranges. Not everyone who has or does own a home participated in the fortunate regional bubble you keep referring to. Not everyone who owned or does own stock participated in an explosive IPO during a stock market bubble.

On balanced, applied to the average, participation in the market through a well diversified portfolio outperforms average real estate appreciation. Citing anomalies doesn't change that fact. I'm happy you enjoyed such an anomaly. That doesn't mean the average enjoyed similar spoils.

I remind you we were talking about NATIONAL TAX POLICY, not regional real estate markets. When discussing national "one size fits all" policy, it is necessary to average, not segment.

Am I wrong here? I thought the only way any dollars can be placed into ANY kind of a pre tax retirement plan is through "earned income". Not investment income.

If someone owned a TON of property (and could show a long established LLC or other entity) with themselves as an employee they "might" be able to go back and set up some kind of a Defined Benefit Plan or DCP. If you hadn't made adequate preparations going back and re-stating tax files may be more trouble than it's worth?

Even at that, any OTHER people that worked for you over the years may be "eligible" for a chunk of it too! (Provided they meet min. employment requirements). I would tread lightly here. Very lightly.

SFWoman,

Or a Habitat for Hamsters?

Off topic

Has anyone had phone calls saying that a grant has been awarded and they will be mailing it to you? I gave them short thrift, but now I wonder if I should have got more information to try and work out why they had my information and who they were exactly. I tried ringing the number back but it just rang and rang...

Does anyone recognise the area code and or number? 514-227-7955

So I would guess that that would make them a scam?

SQT,

Actually it was a live person that called me, but I've been getting a lot of solicitation calls, so I'm pretty much rude straight off the bat and end the call as quickly as possible. It was only afterwards that I wondered whether I blew somebody off that had either legitimate business, or someone that had been passed my information for a reason, or someone else was trying to apply for grants in my name.....

Surfer-x

No worries...

I'm thinking of masquerading as a troll jus to get you going again :-)

I love having CNBC business channel droning on in the backdrop all day.
But ,it's so damn funny how bullish they are in the face of some real indicative data\number especially about this topic.

When someone does chime in bearish tones especially about hard vs soft landing or Fed actions they get cut off by commercial or next analyst guest. Nobody wants to yell fire in the theater....

Same ol shit deny , deny, deny I guess they all have short memories of dot com, early nineties housing bubble.

I wondered what happened to it. Makes my comment redundant too

X - man no apologies needed. I just thought you were the local patrick neighborhood watch patrol. Humor rules.....

fewlesh,

There'll be a step up in basis when you inherit. So what capital gains?

SQT,

You may want to search for an uncharacteristic remark by "you" and get rid of it too.

That's why I CAN'T STAND CNBC! They totally cater to people that use the House ATM to fund 5K ETrade gambling (damn it, I mean "trading") accounts. Almost all of their on screen "talent" colors the coverage with their subjective opinions it's hardly worth watching at all.

Make the switch over to Bloombergs. NONE of their talking heads believe that THEY are bigger than the event they are being paid to COVER! There are plenty of people I can go to if I want to hear opinions.