patrick.net

DAiryQUeen Says:

> Malcolm - Tell that (“You can’t get rich renting”) to
> anybody buying over the past 30 years! And tell
> that to any renter renting over the past 30 years!
> lol Ouch.

Didn’t Casey buy within the past 30 years?

I bet the 46,760 CA homedebtors that got NODs in the first quarter (a 148% increase from 2006) of this year were just trying to get even richer by not paying the bank…

http://www.dqnews.com/RRFor0407.shtm

SFBB,

Additionally... at the rate Mr. and Mrs. PUTZ are raiding the IRA (all) of that will be added as regular income creating TAX HELL! I don't believe the article mentioned that?

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…

With any luck, thanks to money saved renting in Marin and the magic of successful startup liquidity, around the same time I'll be able to finally afford the Alpina Z8 I always wanted.

"I can't quit my job, I am unemployed..."

You uh... still finding that "funny" do ya? Jeff?

Oh and check the date. August 2005. That's going to be on a lot of tombstones.

Jeff Putz

12 April 1966- 10 August 2005

(Officially died from severe complications of negative cash flow 3 January 2008 but had been on "life support" since 8/10/2005)

Surfer-x:

Whilst the folding of the steel allows the creation of a very pretty grain, I would think it's only necessary from a practical standpoint if you were using the traditional tamahagane instead of modern alloys.

requiem, I used steel to avoid lengthy explanations to the heathen round eyes.

Person,

......... (hmmm).....?

Yeah SURE! WTF? Can you imagine being that couples "financial advisor"? I mean it looks like by the time they sought ANY kind of outside opinion they were so b@lls deep in it what can be done but damage control?

The truth is, firms HATE these kind of "clients". They are nothing but a liability. Frantic and constantly behind the eight ball, generating ZIP revenue yet constantly demanding things yesterday! They said every thing they had is now in a money mkt. (apparently to have it liquid and ready to further feed gators) so they've missed out on some decent upside there. Which equals... MORE liability.

From what I've read on the extensive coverage of the FL market these people are toast. If Muggy were here he would say "All your flip for profit beach properties are belong to Muggy" (I'm sure).

DAiryQUeen,

It's quite possible to do a DCF (discounted cash flow analysis) on renting vs buying which is much more informative than talking about returns on investments made decades ago. I've done them for myself. Considering it would cost me at around $1500/month (after tax) extra to own there's significant opportunity cost.

$1500/month, in 30 years at 10% a year compounded monthly (low end of historical stock market returns) is $3,380,000.

How am I not getting rich renting?

MiC

DAiryIdiot,

What you're missing is that everybody on this board is saying "Don't buy a crashing housing asset" and not "Don't buy housing."

When renting and buying are roughly equivilant in pricing, and you plan on not moving for at least 5 years, it's a gimmie.

When buying is over twice as expensive, especially after a retarded run up like we've seen, buying now vs. buying in 5 years makes a lot more sense.

Buy now at 1.2 million, or spend 120,000 on rent and buy in 5 years at 800,000.

Who comes out on top in that scenario? (Hint, it's not the buyer.)

If you don't believe there's going to be a decline in prices, fine, go buy a shitload of houses and rent them out until you cash in on that sweet, sweet equity. And please, start a blog about how it goes.

SP - I think you hit the nail on the head about the trade off between salary and shares. Up until now, the hubby has been sticking it out in the expectation of a nice reward from the shares, now it seems that isn't going to happen and his salary sucks for what he does! So he is pissed off, with not a lot he can do about it.

Also, mathematically, although initially it seems the same amount of money with the reverse split, if you make some assumptions (guesses) it seems to me he would be better off with a lower share price, i.e $4, because if they go up from $4 to $8, then selling 100,000 shares grosses $800,000, whereas if they go on the market for $20, go up $4, but you only have 20,000 shares then you only gross $480,000 - the shares would have to go up to $40 a share to get the same return - realistically, which would be easier to do -to go up $4 a share or to go up $20 a share? As we all know that share price is not entirely connected to the fundamentals anymore.

Although I guess that works both ways, if the shares go down in value by the same amount then you make more with the reverse split option - I just don't know this kind of stuff too well.

Claire:

The percentage increase is the same in both cases.

(Deliberately not answering, because I don't know if there's a traditional correlation between share price and volatility outside of the penny-stock range. I doubt it would be significant though.)

Saw that couple in the Money magazine, I guess they must have gone to some get quick rich seminar and lost their heads.

SFBB,

It was worth a shot. WTH?

Oh btw Person* credited the "Mr. and Mrs. Stanley Johnson X 5" link to me incorrectly, I simply bumped it.

The article is actually a fast forward to what Stanley Johnson's retirement will look like! 20 years later and he's STILL living way beyond his means and barely able to pay his finance charges! Somebody help me.... :(

You guys and your dream cars. So silly. That’s why you guys are still renting, and not building wealth. You don’t focus on building assets first, just splurging.

I have a couple cars, just a tad cheaper than the Vanquish… and both were paid in cash by some huge profits i had in other properties.

DAQU,

Nice example of internal contradiction/hypocrisy. You start by dissing Randy and FAB for liking expensive cars, then you boast about your "couple cars, just a tad cheaper than the Vanquish..."

Every post you make only further erodes any shred of credibility you ever had. Go back to your Realtor (TM) work - and stop blogging during those open house showings!

Claire

The price the shares go out at is set at market by the underwriters. They have a very strong incentive to get the pricing right as that's how they earn their money. So the actual $ put to the float is generally pretty accurate.

The problem is you're locked up for 6 months, so your price is automatically t+6, by which point the stock has usually been thoroughly bought-up, talked-down and arbitraged.

But a solid company will hold its true market value, relative to market.

Your only real concern is how much dilution there will be in your husband's founders equity before the IPO. Dilution is a direct taxing away of implied value. It affects a $4 stock the same as a $400 stock.

See... actual business opportunities don't get talked up like this. Trying to get the herd to invest in a commodity, homes/stocks/futures/junk bonds/etc because the value is skyrocketing is entirely a ponzi scheme. Business deals are based on fundamentals. Unfortunately, business decisions get turned into manias pretty easily. So tech booms, housing booms, tulip bulb booms, etc happen. So people saying "Whoa, with low mortgage rates, I can buy a decent amount of property w/o getting eaten alive by mortgage costs, and cover the nut with the income from the properties" quickly turns into Jeff of SCDIA's "I should buy as much property as possible, regardless of whether or not I can cover the nuts."

And if you can't cover your nuts... you get hit right in said nuts.

This is obviously the tail end of a mania. It's happened before in housing, it's happened in the BA before in housing, it's happened in SF before in housing, it's happened in the Marina before in SF. It's happening again.

Now is the wrong time to buy. If you do need to buy now for non business choices, now is the time to lowball like crazy so you don't get burned too much.

DQ - Say it with me, PRICE, PRICE, PRICE.

(Isn't that what the 2 qualified buyers out there are saying?)

Half the reason I'm more hacked off than ever is b/c the "seller's realtor" (getting a stipend for handling an unadvertised in house deal) calls me yesterday saying that the gal that bought the unit below us (yes also a realtor) really wanted the top (our) unit AND paid the "full asking price" of 220K ALREADY has her appraisal done! Well whoop-de-f@cking do! She works in your RE office, remember? I don't have appraise-whores eating out of my hand for fear of being black balled, remember?

Additionally the realtor that bought the lower unit is "allowing" the nice older couple below to stay on and rent for another 6 months. (Wish "I" could've gotten that deal). Isn't that "generousity" another way of saying I'll need at least 6 months to sell my existing home? And she's buying a condo. How bullish of a statement is that?

SFBB,

Also note the couple in the FL article had almost all of their specuvestment activity occur from 2005 on! That's shocking to me b/c FL was really the first mkt. to show cracks in the seams, yet their daughter (Suzzanne) researched this?

Jonestown meets All in the Family.

Did you folks see the news about the big accident on 101?

http://tinyurl.com/35pr24

Of course, some are already saying that it's no mere big rig accident, but rather a coordinated missile attack:

http://www.429truth.com/

DinOR - sounds like the realtor is making sure you don't back out - someone's after your unit - quick finalize that deal!

The price the shares go out at is set at market by the underwriters. They have a very strong incentive to get the pricing right as that’s how they earn their money. So the actual $ put to the float is generally pretty accurate.

And then there was Vonage. :)

Woof! Woof!

Claire,

Thanks. What additionally hacks me off is that earlier in the year I told my wife we had best be ready to move or take some sort of drastic action. I just got the sense the seller would get tired of his paltry (if any) return and sure enough within 2 weeks of getting his taxes back, BAM! Bombshell, I'm selling!

Do they even know that the median has gone up 666.666 % since last Friday?

Wow - the number of the beast on BOTH sides of the decimal! Now I know for sure that this bubble is the work of the devil...

Guys,

you've gotta play with propertyshark more, too bad that they only let me get 15 free reports a day, this thing is so addictive that I am playing my Second Life on propertyshark. Propertyshark also has far more detailed transaction records dating further back than Zillow. Sorry that I almost sound like a salesperson for propertyshark. This is just so much fun, it is like playing SIMS for the first time.

Now I have ventured into the habit of randomly clicking highly priced properties in zillow and figuring out the stories behind them on propertyshark. I have encountered at least 7 properties that were bought for $350-800K more in 2000 than their transaction price in 2005-2006, they were all in the price range of $2-3M. And then you cross check the owner names with the internet searches, and the foreclosure reports, voila, Real Life is more exciting than the Second Life. Somebody should design a game around this.

eburbed,
Did you look at the pics from your 101 crash story? What the heck was that truck transporting? Looks like very large pieces of cardboard to me. Maybe it was on its way to the latest McMansion development to be used for making walls????

OMG, a missle attack? I'm pretty sure that website is a 'put on' and not for real. I mean, it HAS to be.

One really cool feature I think propertyshark should add is, when you check a property, it will automatically show the transaction price of comparable properties in the neighborhood for all the previous years, if available. That gives you a much better idea of how much the SAME HOUSE sold for throughout history, that will be the ultimate Robert Shiller index for a particular neighborhood.

Since propertyshark even has lot information, now I have a much better idea of how much the owners paid for the land, when and how much debt he took on (at least initially). When the market slows, I have a far better yardstick to use in my own negotiation.

SFBB,

Also note the couple in the FL article had almost all of their specuvestment activity occur from 2005 on!

Oh, jeeesh.... and they refuse to sell the Outer Banks vacation home. Well, these folks will definitely continue to bleed for awhile. What is scary is that when all is said and done they are probably better off than 99% of the retirees out there. Their net worth still will be north of $1 million (don't cry for me Argentina).

I do enjoy everyone's reports from the field, but a lot of numbers being thrown around here are a ways from the median (nose bleed territory that I have a hard time even comprehending). Aren't houses around the tails of the distribuionalso inherently more volatile anyway?

DAQU,

the sfgate article says that the 6% gain is driven by upscale market, but the transaction number is down 20%. When the market has fewer transactions, and most of the transactions are dominated by you upper class queen bees, it becomes hardly relevant for the majority of us living in or aspiring for a worker bee comb cubicle.

Most of us worker bees cannot afford a $3.85M mansion, and even if I had $5M to spare, I wouldn't put $3.85M into my primary residence. I wonder how much does that $3.85M mansion rent for?

Collapsing sales + falling prices can still equal rising median as the bottom rung gets kicked out first. Learn some math, please. Failing that, learn to hold your breath, cause that's a skill you'll need with your head stuck where it is.

(I mean the sand, you dirty minded sickos!)

DAQU,

No, I will not buy your house until AFTER the foreclosure.

Love, SFBubbleBuyer.

P.S. please stop sending nudie pics.

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

OK, this quote is many posts up. I have to counter this though.

Oakland is the ONLY place in the country where I've lived for 5 consecutive years in the same building for the entire 5 years WITHOUT a rent increase. I mean it. My apartment isn't rent controlled, while Oakland has rent increase caps that apply. My landlord doesn't even raise my rent according to the caps. My experience isn't unique. Most of my friends who live in Oakland have not had any rent increases in years.

I lived in the same apartment in Chicago for seven years from 1994-2000. Every year in that apartment I had a rent increase. Every year the landlord wanted a 10% increase in rent! For the first four years I was able to talk him down to a 5% increase every year. The last three years were 10% increases due to a change in management (they were jerks!). I ALWAYS have paid my rent on time no matter where I've lived. In Chicago rent increases are customary and expected. That's why most renters move every couple of years there. (I just hate moving and really, it costs more to move than to pay the increase in rent most of the time).

Even in Davenport, Iowa I had a rent increase for the two years I lived there. It was about 5%.

From what I've learned from people who have lived here longer than me in Oakland is that so long as you pay your rent on time, most likely the landlord won't raise your rent because they appreciate good tenants here. That has been my experience. I know I'm not unique.

In my experience, the Bay Area is one of the more renter-friendly areas I've lived in.

Actually, having moved out about 5 years ago, and then moved back, I'm pay LESS rent for a better place now than when I left. So, yah, it's possible you have no rent change for 5 years. Or even a decrease. I was just pointing out that she was constructing an obvious strawman argument.

BTW, what do you think that $850,000 property will be worth in 3 years? Well over $3.5 million, that’s for sure.

If go with an annual 2% real price increase and 3% inflation, I get 3.6M which I think is generous since I think the $850,000 properties are about $200,00 overpriced. If I give it the 200,000 hair cut now and then apply 5% I get 2.8M.

You may scoff at 2% real but there was a study done about Amsterdam and over 400 years real appreciation was 0.4% annually.

I also can do better by margining my equities. Personally I don't like the risk of margin loans but then again I don't like the risk of huge mortgage on overpriced property either. I would say that unmargined equities are less risk over 30 years than one house since I would be completely diversified in equities. Any house I buy could be destroyed by an earthquake. I could buy earthquake insurance but it's expensive and would tilt calculation further in terms of equities. There are no end catastrophes that can befall one concentrated investment. Even an event like the Enron meltdown is non-issue in a fully diversified equity portfolio.

You may still prefer real estate. I really don't care. What annoys me are people who claim real estate has some magically high risk return ratio that can not be matched by other investments. Such a claim is completely false and misleading. My buyers are on the road to foreclosure because they bought into such non-sense.

DAQU

When are we gonna get to see those pix of yourself you promised a couple threads ago? Quit teasing us. At least point us to your realtor mugshot (but most here are expecting something that shows leg).

Thanks DAQU!!!

New Thread everyone!