[quote=Jumby]Socratt, what you are saying is common sense…this isn’t 2005 though, it’s 2010, when you are buying homes (through non performing notes) for HALF OF REPLACEMENT COSTS you are getting a great deal. These are the kind of deals that are out there right now for diligent investors. Times like these is when big money is made….
You can sit back and philosophize all you want or you can get in the game and see if there is anything worth your time and money….[/quote]
Jumby, I wanted to give you my feedback on this statement in regards to replacement costs. I don’t necessarily think replacement costs are set in stone especially since we are in limbo with both inflation and deflation. As I mentioned earlier, today the investment could pencil out like a steal and tomorrow that steal could be just a deal.
As Allan stated, the Wall St. models are flawed and I don’t personally look at any investment in this market being safe, unless you are talking about buying single families for $10K, which I am currently doing in other parts of the country.
California numbers are down in respect to population and my bet is that will continue as taxes rise and jobs become more scarce. If you think this won’t affect values along with the factors previously mentioned, I suggest you take some time to research the numbers.
You can call it what you wish, but investing in these markets comes with extreme risk. The current risk factors are 100% controlled by the FED and our government. If you think the FED buying mortgage back securities makes for a fair playing field then I suggest you keep on buying. But if you are like me, you look at the “what ifs” in this speculative market and you compare charts to times of stability and quickly your realize that this market is far from predictable.
Jumby, just for the record I own hundreds of properties throughout the US and my strategy has changed dramatically. I’ve never been a high risk investor, but I consider everything in my portfolio high risk at this point. Keep your eyes peeled on the bond markets in the near future along with the FEDs move in regards to their purchasing of mortgage back securities to keep the rates down. Things will change soon, trust me!
