1,500 homes off the market?

[housepoor]

http://online.wsj.com/article_email/SB121798283797115363-lMyQjAxMDI4MTA3NjkwODYyWj.html

This would seem to slow the downturn a touch… at least near the Starbucks.

[sdduuuude]

Pretty interesting.

He is looking at houses that peaked under $600K and are now down 50%, within a 5-minute drive of a Starbucks, with no “free-range” pit bulls.

He may be a little early, but not too much although I wish him luck in finding 1500 houses that meet his criteria in 12 months.

He’d be wise to spread those purchases out over several years to limit exposure to further declines.

This guy definitely won’t have much affect on Carmel Valley but it may affect Chulajuana and Temecula.

[sdduuuude]

Pretty interesting.

He is looking at houses that peaked under $600K and are now down 50%, within a 5-minute drive of a Starbucks, with no “free-range” pit bulls.

He may be a little early, but not too much although I wish him luck in finding 1500 houses that meet his criteria in 12 months.

He’d be wise to spread those purchases out over several years to limit exposure to further declines.

This guy definitely won’t have much affect on Carmel Valley but it may affect Chulajuana and Temecula.

[sdduuuude]

Pretty interesting.

He is looking at houses that peaked under $600K and are now down 50%, within a 5-minute drive of a Starbucks, with no “free-range” pit bulls.

He may be a little early, but not too much although I wish him luck in finding 1500 houses that meet his criteria in 12 months.

He’d be wise to spread those purchases out over several years to limit exposure to further declines.

This guy definitely won’t have much affect on Carmel Valley but it may affect Chulajuana and Temecula.

[sdduuuude]

Pretty interesting.

He is looking at houses that peaked under $600K and are now down 50%, within a 5-minute drive of a Starbucks, with no “free-range” pit bulls.

He may be a little early, but not too much although I wish him luck in finding 1500 houses that meet his criteria in 12 months.

He’d be wise to spread those purchases out over several years to limit exposure to further declines.

This guy definitely won’t have much affect on Carmel Valley but it may affect Chulajuana and Temecula.

[sdduuuude]

Pretty interesting.

He is looking at houses that peaked under $600K and are now down 50%, within a 5-minute drive of a Starbucks, with no “free-range” pit bulls.

He may be a little early, but not too much although I wish him luck in finding 1500 houses that meet his criteria in 12 months.

He’d be wise to spread those purchases out over several years to limit exposure to further declines.

This guy definitely won’t have much affect on Carmel Valley but it may affect Chulajuana and Temecula.

[ucodegen]

So how much of a gain is he looking for?? Our peak was 2x or greater of what it was. If he is going to hold for 5 years, appreciation rates look as the following.

14.9%/year = back to bubblicious in 5 years (2x)
11.8%/year = 75% increase over purchase price.
08.4%/year = 50% increase over purchase price.
04.6%/yesr = 25% increase over purchase price.

These ignore carrying costs. I suspect they are using their own cash w/o using bank funding. This allows them to at least earn the ‘interest’ that would have been paid to the lender. This is the only way it has a chance of working out right now. Assume 6% effective lending rate adds 6% to each of the above as return. (again ignoring carry costs and assume that the rentor can cover the full monthly mortgage requirement.)

If you have a 6% mortgage but renting carries only 66% of monthly mortgage nut, you have to take away 2% from above yields – this is why it might work if they are using cash financing but not if they finance it.

[ucodegen]

So how much of a gain is he looking for?? Our peak was 2x or greater of what it was. If he is going to hold for 5 years, appreciation rates look as the following.

14.9%/year = back to bubblicious in 5 years (2x)
11.8%/year = 75% increase over purchase price.
08.4%/year = 50% increase over purchase price.
04.6%/yesr = 25% increase over purchase price.

These ignore carrying costs. I suspect they are using their own cash w/o using bank funding. This allows them to at least earn the ‘interest’ that would have been paid to the lender. This is the only way it has a chance of working out right now. Assume 6% effective lending rate adds 6% to each of the above as return. (again ignoring carry costs and assume that the rentor can cover the full monthly mortgage requirement.)

If you have a 6% mortgage but renting carries only 66% of monthly mortgage nut, you have to take away 2% from above yields – this is why it might work if they are using cash financing but not if they finance it.

[ucodegen]

So how much of a gain is he looking for?? Our peak was 2x or greater of what it was. If he is going to hold for 5 years, appreciation rates look as the following.

14.9%/year = back to bubblicious in 5 years (2x)
11.8%/year = 75% increase over purchase price.
08.4%/year = 50% increase over purchase price.
04.6%/yesr = 25% increase over purchase price.

These ignore carrying costs. I suspect they are using their own cash w/o using bank funding. This allows them to at least earn the ‘interest’ that would have been paid to the lender. This is the only way it has a chance of working out right now. Assume 6% effective lending rate adds 6% to each of the above as return. (again ignoring carry costs and assume that the rentor can cover the full monthly mortgage requirement.)

If you have a 6% mortgage but renting carries only 66% of monthly mortgage nut, you have to take away 2% from above yields – this is why it might work if they are using cash financing but not if they finance it.

[ucodegen]

So how much of a gain is he looking for?? Our peak was 2x or greater of what it was. If he is going to hold for 5 years, appreciation rates look as the following.

14.9%/year = back to bubblicious in 5 years (2x)
11.8%/year = 75% increase over purchase price.
08.4%/year = 50% increase over purchase price.
04.6%/yesr = 25% increase over purchase price.

These ignore carrying costs. I suspect they are using their own cash w/o using bank funding. This allows them to at least earn the ‘interest’ that would have been paid to the lender. This is the only way it has a chance of working out right now. Assume 6% effective lending rate adds 6% to each of the above as return. (again ignoring carry costs and assume that the rentor can cover the full monthly mortgage requirement.)

If you have a 6% mortgage but renting carries only 66% of monthly mortgage nut, you have to take away 2% from above yields – this is why it might work if they are using cash financing but not if they finance it.

[ucodegen]

So how much of a gain is he looking for?? Our peak was 2x or greater of what it was. If he is going to hold for 5 years, appreciation rates look as the following.

14.9%/year = back to bubblicious in 5 years (2x)
11.8%/year = 75% increase over purchase price.
08.4%/year = 50% increase over purchase price.
04.6%/yesr = 25% increase over purchase price.

These ignore carrying costs. I suspect they are using their own cash w/o using bank funding. This allows them to at least earn the ‘interest’ that would have been paid to the lender. This is the only way it has a chance of working out right now. Assume 6% effective lending rate adds 6% to each of the above as return. (again ignoring carry costs and assume that the rentor can cover the full monthly mortgage requirement.)

If you have a 6% mortgage but renting carries only 66% of monthly mortgage nut, you have to take away 2% from above yields – this is why it might work if they are using cash financing but not if they finance it.

[peterb]

This guy is about to catch the biggest knife in SD County. What if a Starbucks closes down near one of his places? 600 due to be closed this year.
What if prices drop another 20% when Alt-A and other debts take a hit in the next 12 months? Oh yeah, how about unemployment going up to 7% or 8%? I’m glad to see that there’s still tons o money out there looking for a home, though.

[peterb]

This guy is about to catch the biggest knife in SD County. What if a Starbucks closes down near one of his places? 600 due to be closed this year.
What if prices drop another 20% when Alt-A and other debts take a hit in the next 12 months? Oh yeah, how about unemployment going up to 7% or 8%? I’m glad to see that there’s still tons o money out there looking for a home, though.

[peterb]

This guy is about to catch the biggest knife in SD County. What if a Starbucks closes down near one of his places? 600 due to be closed this year.
What if prices drop another 20% when Alt-A and other debts take a hit in the next 12 months? Oh yeah, how about unemployment going up to 7% or 8%? I’m glad to see that there’s still tons o money out there looking for a home, though.

[peterb]

This guy is about to catch the biggest knife in SD County. What if a Starbucks closes down near one of his places? 600 due to be closed this year.
What if prices drop another 20% when Alt-A and other debts take a hit in the next 12 months? Oh yeah, how about unemployment going up to 7% or 8%? I’m glad to see that there’s still tons o money out there looking for a home, though.

[Author]

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