patrick.net

quesera,

putative Great word. I had to look that one up to see what kind of adult I was. :-)

Whew! MP *does* make one tired with all the nonsensical talk. I feel like we can relax now. And no (to Nervous), I do not advocate that we pity him. *He* had become very obvious and wasn't worth any more energy. But very hard to ignore when you know you can prove your point to/with him. He's enjoying his "tapas" now with his gf.

Is it time for another topic yet? (picture a Garfield smiley face)

BayQT~

MP,
Tell them you want to raise rents to $3000 / month.

They will obviously complain, but in the process they will try to negotiate and will probably tell you their price point.......

How much increase do you think is enough so that they won’t want to move? I like them as tenants, but i want to maximize my assets.

What do you guys think?

Well, MP, as I have said earlier, it is very important to have good tenants even if it means slightly lower rent.

I would keep the rent, but negotiate to have them chip in for certain value-adding home improvement (perhaps some new kitchen parts, new bath fixtures, etc.). They may have something in mind anyway and it can be a win-win. When they become more attached to the place, they will likely to be good long-term tenants.

To us renters,
When your landlord tries to raise the rents, tell them you have been looking and have found cheaper rents and have been offered free rental periods as a teaser.

They may call your bluff, but hey, doesn't hurt trying because they might even drop the rent.

MP,

Antitroll.. i’d call my tenant’s bluff.. or perhaps instead of raising it by $100.. just by $50 to make them feel that got something.. and then have them sign a one year contract.

MarinaPrime

Problem is , what if they aren't bluffing. You know, petrol is going up, costs more to ... (insert winge here).

Maybe they don't want to live prime anymore.

I agree having better tenants for slightly less rent is better than nightmare tenants at any rent. Call me opportunistic, i guess.

Nightmare tenants are more than nightmares... remember Pacific Heights...

i’d call my tenant’s bluff.. or perhaps instead of raising it by $100.. just by $50 to make them feel that got something.. and then have them sign a one year contract.

Well, a good tenants usually will not resort to bluffing if the raise is justified. On the other hand, do not ever let your tenants know that you are going to "raise just enough so that they will not move". It is understood but it is not something to be advertised.

Jack, are you still up for the party?

Question?

When people sell RE to sit on the side lines, are people renting prime or finding economical rents to save money for the shakeout?

General question for people.

My deadline for selling the place is June, 2008.. when i get sell without paying taxes up to 250K. It’s kinda tricky for me.. cuz if i lock them in long.. .my tax free window may pass.

How about a call option for them to buy in Feb 2008? If the market drops they can walk so they will be fine. You do not think the market is going to move too much anyway so it does not hurt you. Win-win?

Yes, of course.

How about other? Party? How about September? (Not a crash party. Not a party crash.)

Forgot...

(NOT INVESTMENT ADVICE)

That last post didnt make any sense to me.( How about other? Party?)

If you are just saying how about Sept rather than Oct, that would be fine for me.

We can definitely have party in Sep. We do not need to wait for it to crash, do we? We can also have multiple get togethers too! (to accommodate people from different areas) :)

Well, for a call option to work.. we need to agree upon a strike price. I doubt they will agree to a price of $875-$925,000.. which is where i think the condo will go to in the next 2.5 years from around $775-$825K now… i.e. 5%-7% increase per year.

The strike price can also be indexed to some measures (e.g. 110% of SF median price). You can price the options into the rent as well. Of course, it takes a lot of talking... but it is very possible to arrive at something that both parties want.

(Your tenants are probably intelligent people and they are probably aware of the tax window anyway.)

Yes, and different choices of company also.

Let's see who is in the Bay Area "Chapter"...

MarinaPrime
Jack
Peter P
...

:-D

Of course we will have choices of company... don't worry, Jack. ;)

What this Jack vs. MP debate really comes down to is whether there will ever be a judgment day.

In MP's world, there never will be, so why save or worry? Everybody makes or will soon make $180-360k. Although every statistic I've seen (and every issue of the Economist) says that wages have stagnated due to cheap Chinese/Indian labor aribtrage, somehow this is all nay-saying by negative people who don't think with their heart. In MP's world, then it makes sense to stop thinking and love the bubble! Blow money on Porsches, $1M homes and so on because the party will never end, it will just get better. Want proof? Well if people couldn't afford the houses, they wouldn't buy them. Hey, I know ___ rich people. Got to go now, time to have my $500 chef's kitchen dinner. Think positive!

In Jack's (and probably my world) there is an end to the party and we want people to know about it. Our economy has been propped up by cheap money, and 2% of our 3.4% GDP is estimated to be RE-related. Oil prices are starting to cast gloom over everyone save hybrid car salesmen, and it's doubtful they'll come down much given worldwide demand. Greenspan is clearly trying to slow down the party with rate hikes, but (again, read the Economist) China's enormous dollar apetite means that China increasingly controls financial markets. All along our country has been jettisoning every long term capability (engineering, manufacturing, research, education) it can for short term profits it can make by shipping and Wal-Mart'ing wealth other nations create. We basically count on the fact that the rest of the world doesn't want us piggies to get sick because they rely on us to eat their slop. Not exactly a position of strength.

Given the latter, someone explain to me where all these sustainable $180-360k Si Valley jobs are going to come from. I'll give you biotech - but it's as fragile as tech. Explain to me how, EVEN IF rates stay indefinitely low, how even $180k salaried individuals are going to buy houses 5 years from now when 10% price growth doubles them again. How many people are saving up for that day? I just don't see it, and maybe, as Emporer Palpatine said, this is the price I pay for my lack of vision. Course he shortly went down the tubes.

Dont forget to invite Kurt S (I dont know if he wants to go though) I just know that Kurt S lives near me.

Of course--as long as it's at a Primeâ„¢ location, heh. ;)

Of course–as long as it’s at a Prime™ location, heh.

How about MP's house? (Hisplace, not the condo.) Then we could finally see what he's been incessantly bragging about --assuming it really exists, of course :mrgreen: . That'd be worth the 400-mile slog alone!

It’s quite possible, likely even, that there is not a single sentence of useful information amongst all of that verbage.

Huh? :roll:

Btw, Jack --loved the new acronym!
I'm adding it to the Bubble glossary thread, for posterity.

I have one request. When someone (MP at this time) starts to run the thread with a bunch of nonsensical BS couldn't we just ignore the comments? I left for a few hours and noticed that the thread had just exploded with activity, but most of it was directed at the most attention hungry poster I have yet seen. Remember, negative attention is still attention and that's what attention seekers are looking for. Let's disappoint them. Please.

SactoQT-

As I said I will ingore the troll from now on. You have my word on it.

Cool. :cool:

SQT-

I break my zen-like silence waiting for the inevitable 50% correction by next Wednesday to say...

*DING*

ooommmmmmmmmmmm...

Cheers,
prat

Prat

*sniff*

miss you :cry:

As the price goes up the price of modern life goes up. its not just about the gas station.

Just want to note that most of these extra money goes directly overseas, especially fundamentalist countries like Saudi Arabia. It is more like taxation by a foreign entity.

Prat, how is golf?

Are you up for the party?

SactoQt, will you join us?

It is more like taxation by a foreign entity.

Here in Oz, the government gets a fair chunk of the price at the bowser.
Does the FED GOV get excise or anything like that in US?

SactoQt, will you join us?

Depends on the husband/babysitting factor. I can try.

Depends on the husband/babysitting factor. I can try.

Spouses are always welcomed. We will try to accommodate everyone as much as possible. Or... we can have the party at your house... ;)

Just kidding.

Or… we can have the party at your house…
I can barely get people to drive in from downtown Sac. The BA would be a neat trick.

I just looked at my post, and I'm not sure it even makes sense. I guess I'm getting tired.

Here in Oz, the government gets a fair chunk of the price at the bowser. Does the FED GOV get excise or anything like that in US?

It varies, but state + federal taxes comprise about 30% of the price of gas in the U.S. (more in CA due to byzantine regulations & anti-pollution seasonal formula changes): tinyurl.com/387rj

@SactoQT, etc: you're all right, of course.

Too bad, he's a smart guy. As Veritas quoted, people build up foundations of belief that they prefer not to disturb, despite gaping cracks. I'm a bit of a pollyanna (overcorrection for years of being a devout cynic), and I really wish MP would engage the discussion and explain his position, in light of data.

Frames of reference make a big difference. In a two-dimensional world, all spheres appear to be circles. I think this is key. When MP says "housing", he means "housing in SF/the Marina/on my block". Given that, he might even be right -- it's undeniable that the high end hood home prices are more resilient, because the typical owners there can choose to weather downturns. It's also undeniable that someone who makes $500k/yr can afford to spend 90% of their post-tax income on housing, if they want to. Life doesn't cost more just because you make more (obv, most $500k/yr earners don't want to live like $50k/yr earners, but they could, if they wanted to, just with a better view).

But once your scope widens beyond a few popular areas of SF, the world is different. This big world will definitely impinge on those nice hoods at some point, in some way, but perhaps not in the sale prices of properties on the x-hundred block of Sugarplum Lane.

And I promise, that's the last I'll ever say about elective myopia.

so do you agree with the war or not? that statement tells me that you support it. China’s recent move in Petroleum is interesting as well.

I oppose all wars... we should strive to reduce our dependency on oil instead.

New thread: New Bankruptcy law

So you agree with the motives of the war, but not its means. This seems to be the situation. They want the results, but they don’t want to see the ugly side of its execution.

I do not really agree with the motives either... although the motives are perhaps understandable. However, to get more oil, we should probably make friends instead of enemies.

it is certainly possible to reduce oil dependency. im not sure what life would be like without it. life would return to something like the 18th century.

We are dependent on energy. Oil is not an ideal source of energy anyway. It is difficult to switch away from oil quickly because of the large number of machines (namely vehicles) that use it.

Maybe the only way to get more factory jobs in US is to make people broke, so that they will be happy with any job that pays any ammount.

Best way to make people broke is to give them freedom to make POOR choices. Give them as much credit as they want!

I am in the San Francisco chapter as well.

Stanman, what is so bad about people fresh out of college not being able to afford a home?

I think it is a good thing that young people have to save for a few years and learn how to practice financial discipline before buying a home and starting on a family.

Let's say two young people fresh out of college, a nurse and an engineer, start saving at 22. They both make $50k/yr and they are saving 10% of their income. In five years they will each be making about $75k/yr and have $150k saved up. Then they can buy their starter home of $800k with 20% down and comfortably make the PITI of $4.5k ($3k after tax breaks) on their take home pay of $100k or so. Then they can start saving for their retirement. $800k is still a very nice starter home in most of the Bay Area. If you want to live in The City, you are going to have to either sacrifice a bit on size or neighborhood, but you can still live here. You can live well in one of the near in suburbs, like Berkeley or Daly City. You can live very well in an outer suburb like Livermore. And remember this is just your starter home for a couple not even 30 yet!

Sure, this is the cream of the upper middle class here, but if you want to live well in the Bay Area, you have to have two college educated breadwinners.

You can still make it on less, but of course your standard of living will be lower. Two MUNI busdrivers, each making $45k/yr who have saved $90k can afford a tiny starter home in someplace like the Excelsior or something nicer in Oakland or Daly City.

Prices are right at the point where fewer and fewer can afford, especially with a 30 year fixed mortgage. Which is one reason that they cannot keep appreciating at above income rates for much longer.