patrick.net

Apparently DAQU is unable to navigate greathomes.org.

Just pick Marin, limit it to whatever you consider "prime", and search in say the $1.5-$2.1m range. About a quarter of those will openly advertise *reduced*. Since I've been actually going to see these places for the past 2 years, I can tell you that more like 60-70% of them are reduced, even though the agents have relisted them over and over to hide that fact.

Some MLS numbers for you, sweetheart:

20714378 -- On the market less than a month, 3.5BA, 4BR + Au Pair. I liked this home, despite the hillside precariousness. Uh oh! Price REDUCED! He started closer to $1.8m

20707317 -- Listed $1.595m. Well, this is near enough to me that I know the people who sold it and the other neighbors. Wha? They didn't get $1.595???? Say it ain' so. Word on the street is they accepted closer to $1.3m. Well, shit.

20703659 -- On the market forever, despite relisting after relisting.

20703925 -- Wow. I thought that sold twice already this year. lol. Guess no one can get it to appraise. Here we go again. I can't find my notes on it from last year, but I'm pretty sure it started around $1.95m. Now a "new" listing at $1.699m, and showing yet another sale. Let's hope this one sticks.

20716108 -- One of my favorites. $1.995m. You'd better budget in an extra $100K to refit all the double-pane with quadruple-pane because of highway noise. It has a nice legal rental pulling $2500/mo, but the main house looks like something Dr. Suess woulda designed while on depression meds. Oh, this started $300K higher. It is marked SOLD too. LMAO. Someone oughtta tell the realtor and owner that.

20701561 -- Was cloesr to $2.5m last summer.

And that's just Mill Valley. A VC friend of mine in Strawberry's neighbor just went kaboom and sold his 4ksqft McMansion for nearly a half-million below asking, $2.9m from $3.4m.

Jeez, all this mayhem and even with excellet school districts, prime neighborhoods, coveted locations, rich neighbors, and lots of attitude. I sure hate to think what's happening in subprime areas like the Marina.

DAQU,

I just checked in with Casey & Nigel: the offer to cuddle is still open. Better act quick, they're not making any more Uzbekistani-jerkwad manwiches.

Quick off topic question, because I figure some of you probably know - I did try some of the other forums, but it doesn't look like they are fequented very often -

Here is an example - you have 100,000 shares in a start up, the company wants to do a 5 - 1 reverse split before they go IPO - they argue that the shares will go on at a higher price - even though you have less shares - so you don't loose out at all.

Does anyone have any experience, opinions on this? I think we are more likely to end up with less with the reverse split.

Cote' hits the big time

tinyurl.com/yozqm7

I don't really care about DAQU - houses going up, blah blah, still can't afford them without a kamikaze loan which will screw us royally for the rest of our lives, so I'll pass, thanks very much!

Why yes Claire, now that you mention it, that is a "little" OT?

Randy is much more familiar with start-ups than most of us here but basically that is accurate. Even the mighty AT&T had to do a reverse split. Depending on the share price this may be done to put the shares within range of being "marginable" in the hopes of attracting institutional interest down the road.

Ever since 9 of the NASDQ 100 became penny stocks people have been a little sensitive of being in the non-marginable security bargin bin.

Try Ben's Blog - they really think house prices are on the up and up - not!

I don’t really care about DAQU - houses going up, blah blah, still can’t afford them without a kamikaze loan which will screw us royally for the rest of our lives, so I’ll pass, thanks very much!

Soon you'll need to take a kamikaze loan to get groceries as well:

http://www.burbed.com/2007/05/22/how-to-save-17-on-your-bbq-groceries-this-memorial-day/

Groceries in the Bay Area for a Memorial Day BBQ will be 17% more expensive than in Seattle, and about 11% more expensive than Washington DC.

Of course, Seattle and Washington DC aren't as special, nor do they have good schools or jobs.

Gosh, that's funny b/c at the OC foreclosed auction people seemed to be placing an emphasis on PRICE, PRICE, PRICE!

Or P X 3 we like to say!

eburbed - tell me about it! I keep telling my hubby to ask for another pay rise, but he won't do it - he's too English!

Then there's the gas prices - everyone reporting a couple of months ago about how gas is above $3 a gallon - hello? We've been way over that for ages in the BA!

I just had another thought. Do you guys realize why this board has not grown, and is still populated by the same 20 posters? It’s b/c the topics are so biased, and out of touch with reality, that nobody new can take this place seriously.

Actually, the traffic here is a bit heavier than 20 (see graph on bottom of main page: http://patrick.net/housing/crash.html), although we are a relatively small forum vs. Ben Jones' thehousingbubbleblog.com. With the MSM now accepting as fact what we had been arguing for ~2 years, I can see how interest might eventually wane.

Perhaps we should change the blog name to "Rich Renters Investment Forum and Preparing to Bottom Feed in 2011-2015", or some such.

Even if it always or continue to appreciate crowd is correct, I seriously doubt that would it would change anyone's buy vs rent or stocks vs real estate. Even if property values will continue to appreciate, most don't make the $300-400k annually that it takes to carry a mortgage on a $1.5m house. I'm really not interested in the crap sells for $800k and that would be still to big a mortgage for me to carry. Negative amortization loans are outside my risk tolerance.

On the investment front, it's a pretty wild claim that San Francisco Bay Area is the best or even a good market in the US to buy investment property in. At minimum, I'm sure there are markets where a purchases today will have far less negative cash flow. For investment property REITs or better yet a fund that invests in REIT and equities in the real estate oreinted companies (like Fidelities) is more diversified and more liquid than owning properties oneself so it is less risky. If I buy a fund that invests in real estate, I get professional management and have zero work to do myself.

Your risk tolerance and preferences might be different. However, there are not enough of these mythical investors where Bay Area real estate is an attractive investment to create a decent rental stock.

MiC

"still populated by the same 20 posters"

So I guess Patrick being interviewed by no less than the WALL STREET JOURNAL still qualifies us a "radical fringe group"? They certainly seem to be taking groups like this seriously. Collectively we called the subprime meltdown to the "t"! Why would anyone here feel compelled to respond at all?

This is pointless.

Here's a great simple saying - "You can go into foreclosure if you can't pay your mortgage and as a bonus you could end up bankrupt."

I knew a renter who rented for 5 years at $2,000/yr. He spent $120,000 on after tax money on rent, and guess what his return is? Negative 100%, while property prices went up 20%.

Ooh, ooh, I can top that!: I know a renter who went to a bunch of Kiosaki/Reddick/Allen RE get-rich-quick seminars and convinced himself he was a miniature-Donald Trump. He bought 9 properties with all kinds of neg-am/IO crazy loans and racked up $2.2 million in debt. He lost 5 of the homes to foreclosure and barely broke even on the other 4. He's now up to his eyeballs in hock, and possibly facing divorce & living in his car. Great story, check it out!: http://iamfacingforeclosure.com/

Yeah, the house were buying sure made the previous "owners" a ton of money. Hmmm lets see, lost 140K in 3 years. Not including carrying costs.

But they more than made it up on the tax savings. oh my thats funny.

But then again troll, you are absolutely correct, if you filter out all the areas where prices have gone down, and focus only on the 7 houses in Malibu and the 3 in Pac heights that have sold. It's threw the roof.

Partay I say, it's a real estate boom.

Really now, I say just delete the troll, like they do when this particular troll posts on craigslist.

Hey DinOR - is it a good time to enquire about your daughter's soon to be in-laws "great" housing idea?

Can we talk about sushi or knives? What's the difference between good sushi/knives and great sushi/knives?

DAQU / MP / FR / TOS,

Please come to SCAL Blog Party III over at Mr. X's on July 7th. Mr. X and I have something 'special' we'd like to give you.

So your hypothetical renter never had a rent increase? Riiight.

Just for the sake of argument... how do you think his 120k rental expenses stacked up against the short sellers? Of which there are many, and all of whom were paying more than 2k a month in interest.

Just how much money did buyers lose on their underwater foreclosed homes? More than 100%! Sweet deal!

Buy now and be priced in forever!

Claire,

Thanks. Oh and I'm sure when Randall H. esq. has time to weigh in on your reverse split question he'll add much more. It's just been my experience that people tend to freak out if it's a split or rev. split. I tend to freak out when they have rights to issue more shares (which can dilute shareholder value).

The, ahem... in-laws have toned their "proposal" way down. Evidently seeing the folly of their ways. It's been decided that the only way "it" can work is for the kids to rent out their house and in turn provide a built-in renter (not loan-owner) of the in-laws un-sellable monstrosity. This way (presumably to create the max leverage) they will fill the hole on both ends where rents are cash flow negative. To which I said fine.

Like Joe Walsh says: You bought it, YOU name it! :)

"Deny all you guys want"

O.K... I give up. What IS.... the difference between good and great sushi knives!?

DAQU

Marin is over a bridge, and the toll is $5 bucks. Boondocks.

And here I thought it was the most expensive real estate market in the country. Must be a media conspiracy, right?

Claire,

Quick off topic question, because I figure some of you probably know - I did try some of the other forums, but it doesn’t look like they are fequented very often -

The answer depends on a lot. It can go either way for you. It's all about dilution. If you wish, feel free to email me and I'll see if I can offer any useful advise.

As a general rule of thumb, all such actions are intended to minimize dilution of the founders & investors. There's also a big difference in whether your shares are in options or founders equity.

Anybody see this over at cnn?

http://tinyurl.com/2dcu8y

Talk about a bad way to start 'retirement'!

Yeah, the house were buying sure made the previous “owners” a ton of money. Hmmm lets see, lost 140K in 3 years. Not including carrying costs.

Would've gone down further if you waited?

"and the toll is $5 bucks"

Yeah, you're willing to throw 2-3 mil. at a house but a "fin" a day is going to break you? What can you do w/ five bucks?

More "neg/am logic".

DinOR - I believe they have already diluted the shares (without issuing any extra to those that held some already), but it kept the company afloat - I told hubby that there's no point rocking the boat, because the major investors are the ones who are going to call the shots anyway.

Hope the in-laws "plan" works ....... for happy families sake.

O.K… I give up. What IS…. the difference between good and great sushi knives!?

The edge. No not the guitarist from U2. The way the edge is ground. That and the steel. Folded many many times to form a discontinuous carbide network, low carbon center with a high carbon martensite edge. You are looking for a single bevel edge not a double bevel, think right triangle.

So now you know, and knowin is half the battle*

*GI Joe

DinOR

I tend to freak out when they have rights to issue more shares (which can dilute shareholder value).

They always have those rights. No VC will invest otherwise. The early round investors will often reserve the right to participate in later rounds, sometimes with various restrictions or clauses. But they pretty much always have a way to protect dilution. The founders many times do not. The option pool is never protected from dilution, but instead is sometimes expanded if deemed necessary. Many times expansion of the option pool comes at the expense of the founders, depending upon the strength of the founders versus investors.

Randy H - thanks, I may email you. Hubby has some founders stock and some options, but as a lesser worker bee, he is excluded from selling his shares until 6 months after IPO - at which point it won't matter what the offering price is, it will be decided by the market!

DAiryQUeen Says:

> I knew a renter who rented for 5 years at $2,000/yr. He
> spent $120,000 on after tax money on rent, and guess
> what his return is? Negative 100%, while property prices
> went up 20%.
> There’s a great, simple saying “You can’t get rich renting.”

A man on a business trip back in 1966 who was about to rent a Shelby GT350H from Hertz for $17 a day but then he remembered “You can’t get rich renting” so he bought the car for $3,700 and just sold it at auction for $150K…

http://tinyurl.com/2xpatx

P.S. Things must be REAL slow at the open houses these days since we are getting a lot of posts from DQ/MP/CR (who forgot that DQ was a new name when she mentioned knowing that the same people have been posting over the years)…

Randy H,

Thanks for clearing that up. I haven't often been involved in that so it's nice to get up to speed a little.

DAQU says to FAB,

You can’t get rich renting.

Oh so true. DAQU, you are the font of knowledge.

By the way, FAB, was that you I saw driving your Aston Martin DB9 down Bay St. a couple weeks ago?

SFBB,

Now that "Steve" finds himself back looking for a job (the worst part of working) it hardly qualifies as "retirement" at least not in my book.

These people are the poster children for "Never Saw it Coming" (Karen Cerulo) which I couldn't find btw. Even though their retirement accounts are being depleted to the tune of 15K a month feeding gators down in FL they are still RE believers! In-f@cking-credible.

As their story unfolds you could see several junctions where they could've gotten off (or at least gotten reasonable) but NO.....!!! They were going to be FL RE MOGULS! 3,700 s/f for two people? Totally reasonable.

Surfer X,

I know all about discontinuous carbide networks and low carbon centers and martensite and all that! I mean.... doesn't everybody? :(

"DAQU says to FAB,
You can’t get rich renting."

There's no faster way to poverty than buying wrong.

Randy H Says:

> By the way, FAB, was that you I saw driving your
> Aston Martin DB9 down Bay St. a couple weeks ago?

I’ve only driven a DB9 once (and it wasn’t on Bay Street). With the money I’ve been saving renting in SF I could be driving a Vanquish S (the Big brother of the DB9). I’m not going to rush out and buy a new one but you may see me in one of the new little Vantage Volantes in a few years as depreciation works its magic…

http://tinyurl.com/3yoj5e

DinOR,

Yah, that's why I put quotes around retirement. They managed to leverage their retirement 'nest egg' quite a bit, but at least they could sell all the houses except their primary and still have money in the bank, so they're not as hard up as, say, Casey.