7796 Hemphill Dr in Mira Mesa, Hopeless Listing

[HLS]

HLS, you stated earlier that you multiply the monthly rent a place would rent for by 125 and that is the real value of the property. What is the rational behind that? 

If you multiply the current rents in this area, you get a number that is WAY lower than anything in this area. Like 50% reduction from todays prices.

DWC, it's just a common sense generalization. I'm not saying that values will drop 50% further, but they could.

If looking for a reasonable investment that will pencil out, without needing appreciation to have it make sense, it's just a rough number.

There are plenty of places in the country where you can buy for closer to 100X monthly rent, esp multi units.

If I buy as an investment, I would like to see a return on my investment, not something that I need to support every month with additional cash.

It's also a generalization that if monthly rent is less than the price of the property divided by 150, you are better off renting, financially speaking.

To me, the reasonable rent in an area determines the true value of the property; the price of the property doesn't determine the reasonable rent.

There is a big difference between price and value.

[DWCAP]

Thanks guys for your input. Just trying to wrap my brain around this market like everyone else. To put things in perspective, about the time of the last RE downturn in socal, I was realizing that girls arnt as bad as I use to think they were. I dont have the benifit of past experience, so I am gonna try to borrow some of yours. I hate buying anything I dont understand, I about drove my GF up a wall researching a computer last summer, and she likes electronics! (BTW not buying, but gotta learn sometime cause I will eventually)
HLS, I just needed to know how those numbers stacked up. I didnt believe there was formula for that kinda evaluation. Too easy if it was true. Thanks for the input though, puts a lot of the past pricing into picture. Plus I see no reason -50% isnt possible. We slip into even a small recession and ALOT of people will be hurting. Persons around my age have never known true financial pain.
As for the general tone of the market that I see posted on so many other threads with a sine wave of what people are feeling about real estate, I have to say that I think the article yesterday in the UT changed alot of people from denial to fear. I mostly know potential buyers, but even some fire victoms I know kinda opened up their eyes last night and realized that maybe it is better to rent for a while. The UT had another artical today for all those who missed it yesterday, or wrote it off as “just bad press”. Itll be interesting to watch how people react.

[DWCAP]

Thanks guys for your input. Just trying to wrap my brain around this market like everyone else. To put things in perspective, about the time of the last RE downturn in socal, I was realizing that girls arnt as bad as I use to think they were. I dont have the benifit of past experience, so I am gonna try to borrow some of yours. I hate buying anything I dont understand, I about drove my GF up a wall researching a computer last summer, and she likes electronics! (BTW not buying, but gotta learn sometime cause I will eventually)
HLS, I just needed to know how those numbers stacked up. I didnt believe there was formula for that kinda evaluation. Too easy if it was true. Thanks for the input though, puts a lot of the past pricing into picture. Plus I see no reason -50% isnt possible. We slip into even a small recession and ALOT of people will be hurting. Persons around my age have never known true financial pain.
As for the general tone of the market that I see posted on so many other threads with a sine wave of what people are feeling about real estate, I have to say that I think the article yesterday in the UT changed alot of people from denial to fear. I mostly know potential buyers, but even some fire victoms I know kinda opened up their eyes last night and realized that maybe it is better to rent for a while. The UT had another artical today for all those who missed it yesterday, or wrote it off as “just bad press”. Itll be interesting to watch how people react.

[DWCAP]

Thanks guys for your input. Just trying to wrap my brain around this market like everyone else. To put things in perspective, about the time of the last RE downturn in socal, I was realizing that girls arnt as bad as I use to think they were. I dont have the benifit of past experience, so I am gonna try to borrow some of yours. I hate buying anything I dont understand, I about drove my GF up a wall researching a computer last summer, and she likes electronics! (BTW not buying, but gotta learn sometime cause I will eventually)
HLS, I just needed to know how those numbers stacked up. I didnt believe there was formula for that kinda evaluation. Too easy if it was true. Thanks for the input though, puts a lot of the past pricing into picture. Plus I see no reason -50% isnt possible. We slip into even a small recession and ALOT of people will be hurting. Persons around my age have never known true financial pain.
As for the general tone of the market that I see posted on so many other threads with a sine wave of what people are feeling about real estate, I have to say that I think the article yesterday in the UT changed alot of people from denial to fear. I mostly know potential buyers, but even some fire victoms I know kinda opened up their eyes last night and realized that maybe it is better to rent for a while. The UT had another artical today for all those who missed it yesterday, or wrote it off as “just bad press”. Itll be interesting to watch how people react.

[DWCAP]

Thanks guys for your input. Just trying to wrap my brain around this market like everyone else. To put things in perspective, about the time of the last RE downturn in socal, I was realizing that girls arnt as bad as I use to think they were. I dont have the benifit of past experience, so I am gonna try to borrow some of yours. I hate buying anything I dont understand, I about drove my GF up a wall researching a computer last summer, and she likes electronics! (BTW not buying, but gotta learn sometime cause I will eventually)
HLS, I just needed to know how those numbers stacked up. I didnt believe there was formula for that kinda evaluation. Too easy if it was true. Thanks for the input though, puts a lot of the past pricing into picture. Plus I see no reason -50% isnt possible. We slip into even a small recession and ALOT of people will be hurting. Persons around my age have never known true financial pain.
As for the general tone of the market that I see posted on so many other threads with a sine wave of what people are feeling about real estate, I have to say that I think the article yesterday in the UT changed alot of people from denial to fear. I mostly know potential buyers, but even some fire victoms I know kinda opened up their eyes last night and realized that maybe it is better to rent for a while. The UT had another artical today for all those who missed it yesterday, or wrote it off as “just bad press”. Itll be interesting to watch how people react.

[DWCAP]

Thanks guys for your input. Just trying to wrap my brain around this market like everyone else. To put things in perspective, about the time of the last RE downturn in socal, I was realizing that girls arnt as bad as I use to think they were. I dont have the benifit of past experience, so I am gonna try to borrow some of yours. I hate buying anything I dont understand, I about drove my GF up a wall researching a computer last summer, and she likes electronics! (BTW not buying, but gotta learn sometime cause I will eventually)
HLS, I just needed to know how those numbers stacked up. I didnt believe there was formula for that kinda evaluation. Too easy if it was true. Thanks for the input though, puts a lot of the past pricing into picture. Plus I see no reason -50% isnt possible. We slip into even a small recession and ALOT of people will be hurting. Persons around my age have never known true financial pain.
As for the general tone of the market that I see posted on so many other threads with a sine wave of what people are feeling about real estate, I have to say that I think the article yesterday in the UT changed alot of people from denial to fear. I mostly know potential buyers, but even some fire victoms I know kinda opened up their eyes last night and realized that maybe it is better to rent for a while. The UT had another artical today for all those who missed it yesterday, or wrote it off as “just bad press”. Itll be interesting to watch how people react.

[patientlywaiting]

To add to HLS’ comments, the rent multiplier would be even lower in Downtown San Diego where HOA is $500/month (or areas with mello roos).

I know someone who is renting a studio downtown that has carrying costs of $800/mo (HOA + property taxes only). The rent is $1,300. That leaves the condo owner only $500 to make the mortgage payment on $280,000. Interest only on that amount is $1400/mo. So the montly loss is $900/mo, not including vacancy.

My example is only a studio. Think of the more expensive properties. The losses are staggering and owners will have no choice but to give up unless the market recovers as they are praying for in 2008. Fat chance that will happen!!

[patientlywaiting]

To add to HLS’ comments, the rent multiplier would be even lower in Downtown San Diego where HOA is $500/month (or areas with mello roos).

I know someone who is renting a studio downtown that has carrying costs of $800/mo (HOA + property taxes only). The rent is $1,300. That leaves the condo owner only $500 to make the mortgage payment on $280,000. Interest only on that amount is $1400/mo. So the montly loss is $900/mo, not including vacancy.

My example is only a studio. Think of the more expensive properties. The losses are staggering and owners will have no choice but to give up unless the market recovers as they are praying for in 2008. Fat chance that will happen!!

[patientlywaiting]

To add to HLS’ comments, the rent multiplier would be even lower in Downtown San Diego where HOA is $500/month (or areas with mello roos).

I know someone who is renting a studio downtown that has carrying costs of $800/mo (HOA + property taxes only). The rent is $1,300. That leaves the condo owner only $500 to make the mortgage payment on $280,000. Interest only on that amount is $1400/mo. So the montly loss is $900/mo, not including vacancy.

My example is only a studio. Think of the more expensive properties. The losses are staggering and owners will have no choice but to give up unless the market recovers as they are praying for in 2008. Fat chance that will happen!!

[patientlywaiting]

To add to HLS’ comments, the rent multiplier would be even lower in Downtown San Diego where HOA is $500/month (or areas with mello roos).

I know someone who is renting a studio downtown that has carrying costs of $800/mo (HOA + property taxes only). The rent is $1,300. That leaves the condo owner only $500 to make the mortgage payment on $280,000. Interest only on that amount is $1400/mo. So the montly loss is $900/mo, not including vacancy.

My example is only a studio. Think of the more expensive properties. The losses are staggering and owners will have no choice but to give up unless the market recovers as they are praying for in 2008. Fat chance that will happen!!

[patientlywaiting]

To add to HLS’ comments, the rent multiplier would be even lower in Downtown San Diego where HOA is $500/month (or areas with mello roos).

I know someone who is renting a studio downtown that has carrying costs of $800/mo (HOA + property taxes only). The rent is $1,300. That leaves the condo owner only $500 to make the mortgage payment on $280,000. Interest only on that amount is $1400/mo. So the montly loss is $900/mo, not including vacancy.

My example is only a studio. Think of the more expensive properties. The losses are staggering and owners will have no choice but to give up unless the market recovers as they are praying for in 2008. Fat chance that will happen!!

[HLS]

DWC,
Plenty of people have bought real estate (and stocks) without really understanding the fundamentals, and have STILL made money.

Was it luck, skill, intelligence or stupidity ? (I’ll let you decide) You can make money by making “stupid” decisions.

Houses that I used to buy for $90K-$125K are $350K-$400K+ today. It’s insane. The value ISN’T there.(The price is)

Even if I only think that they are worth $200K today, and never buy another one, that’s OK with me. If someone else wants to pay $201 or 225 or 250, I don’t care.

There are plenty of others that think like me. We aren’t going to fight over these stucco boxes or get into bidding wars.

If enough people step up to the plate sooner rather than later, maybe prices won’t drop as far as I think that they should.

Buying a rental in So Cal today is a gamble. Most are not going to pencil out for a long time. If someone wants to speculate, that’s not investing IMO.

A boat is a hole in the water that you throw money into, an “investment” house shouldn’t be one too.

Prices aren’t cheap today, they are only cheaper than they were 2 years ago.

Most people have a false sense of security of what their home is worth today. In reality, it’s virtually unsaleable at more than 80%-90% of what they think.

over 90% of what is currently listed in SD isn’t selling, and thousands more have listings that have expired, and would still love to sell, but they can’t.

[HLS]

DWC,
Plenty of people have bought real estate (and stocks) without really understanding the fundamentals, and have STILL made money.

Was it luck, skill, intelligence or stupidity ? (I’ll let you decide) You can make money by making “stupid” decisions.

Houses that I used to buy for $90K-$125K are $350K-$400K+ today. It’s insane. The value ISN’T there.(The price is)

Even if I only think that they are worth $200K today, and never buy another one, that’s OK with me. If someone else wants to pay $201 or 225 or 250, I don’t care.

There are plenty of others that think like me. We aren’t going to fight over these stucco boxes or get into bidding wars.

If enough people step up to the plate sooner rather than later, maybe prices won’t drop as far as I think that they should.

Buying a rental in So Cal today is a gamble. Most are not going to pencil out for a long time. If someone wants to speculate, that’s not investing IMO.

A boat is a hole in the water that you throw money into, an “investment” house shouldn’t be one too.

Prices aren’t cheap today, they are only cheaper than they were 2 years ago.

Most people have a false sense of security of what their home is worth today. In reality, it’s virtually unsaleable at more than 80%-90% of what they think.

over 90% of what is currently listed in SD isn’t selling, and thousands more have listings that have expired, and would still love to sell, but they can’t.

[HLS]

DWC,
Plenty of people have bought real estate (and stocks) without really understanding the fundamentals, and have STILL made money.

Was it luck, skill, intelligence or stupidity ? (I’ll let you decide) You can make money by making “stupid” decisions.

Houses that I used to buy for $90K-$125K are $350K-$400K+ today. It’s insane. The value ISN’T there.(The price is)

Even if I only think that they are worth $200K today, and never buy another one, that’s OK with me. If someone else wants to pay $201 or 225 or 250, I don’t care.

There are plenty of others that think like me. We aren’t going to fight over these stucco boxes or get into bidding wars.

If enough people step up to the plate sooner rather than later, maybe prices won’t drop as far as I think that they should.

Buying a rental in So Cal today is a gamble. Most are not going to pencil out for a long time. If someone wants to speculate, that’s not investing IMO.

A boat is a hole in the water that you throw money into, an “investment” house shouldn’t be one too.

Prices aren’t cheap today, they are only cheaper than they were 2 years ago.

Most people have a false sense of security of what their home is worth today. In reality, it’s virtually unsaleable at more than 80%-90% of what they think.

over 90% of what is currently listed in SD isn’t selling, and thousands more have listings that have expired, and would still love to sell, but they can’t.

[HLS]

DWC,
Plenty of people have bought real estate (and stocks) without really understanding the fundamentals, and have STILL made money.

Was it luck, skill, intelligence or stupidity ? (I’ll let you decide) You can make money by making “stupid” decisions.

Houses that I used to buy for $90K-$125K are $350K-$400K+ today. It’s insane. The value ISN’T there.(The price is)

Even if I only think that they are worth $200K today, and never buy another one, that’s OK with me. If someone else wants to pay $201 or 225 or 250, I don’t care.

There are plenty of others that think like me. We aren’t going to fight over these stucco boxes or get into bidding wars.

If enough people step up to the plate sooner rather than later, maybe prices won’t drop as far as I think that they should.

Buying a rental in So Cal today is a gamble. Most are not going to pencil out for a long time. If someone wants to speculate, that’s not investing IMO.

A boat is a hole in the water that you throw money into, an “investment” house shouldn’t be one too.

Prices aren’t cheap today, they are only cheaper than they were 2 years ago.

Most people have a false sense of security of what their home is worth today. In reality, it’s virtually unsaleable at more than 80%-90% of what they think.

over 90% of what is currently listed in SD isn’t selling, and thousands more have listings that have expired, and would still love to sell, but they can’t.

[Author]

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