Investing in Non Performing Loans (NPNs)

[socrattt]

[quote=Jumby]I got a feeling that you want to debate the semantics of the word ‘investment’, which of course is up for everybody’s individual interpretation, so I’ll go ahead and share mine.

First off I’d like to point out that I don’t consider one’s personal home an investment. Your home is alot of things, your refuge, your escape, your piece of the American dream, your shelter, but it’s not an investment property. Investing in real estate isn’t the same as owning a house.

Alot of people around the country will end up spending more money living in their home than they will when they sell it. Dallas (where I currently reside) is a great example of this as I’m seeing homes sell for the same price as they were 10 years ago. After you factor in the fact that the dollar is worth less, property taxes, insurance, maintenance…alot of people will lose money if they sold now (after buying 10 years ago). This scenario obviously isn’t investing….

Investing is when you use money to make more money. To be considered an investment, real estate must generate actual profits, either immediately in the form of income or long term in the form of appreciation. In either case, the property must cover all it’s own costs and produce a reasonable return on the money you spent to buy it.

It would be foolish for anybody to argue against the Shiller data, but it’s equally as foolish not to consider the fact that real estate investors invest using leverage. So just using the Shiller data as the backbone of your case is flawed.

I of course don’t need to explain such simple concepts to an accountant….and since you are an accountant I’m not going to do the simple math that would prove what I just said…[/quote]

Jumby, not to be rude, but after reading this it looks as though you quoted Wikipedia on the term “investment.” I can’t imagine you would pass on sharing investment sites with all of us. I would assume you utilize those sites for clients, correct? Why wouldn’t you share those with us? I am more than happy to share any information with you, but now I am starting to wonder whether Jumby is Gumby!

On a serious note, I enjoy reading all these posts. Allan, you are well versed on the numbers side and I enjoy reading your posts. I wish I had your knowledge, but as young whipper snapper I didn’t take the time to read, I just focused on the game of buying and selling. Of course now I that I am sitting on a giant portfolio of RE (little debt, which is nice), I have plenty of time to read and study what’s to come.

P.S. Clearfund is paying a content writer to put a post together for a reply to you Allan.

[Jumby]

Wikipedia? You got to be kidding me…

I just jumped on the ‘investment’ page of wiki and it’s not an exact quote, but what if it was? Who cares, lol. Does it take away from my point?

My websites? Irrelevant to the conversation, they don’t make me any more or less qualified to spout my opinion.

Instead of trying to get me to reveal my sites and hanging from Allan’s nuts, why don’t you add some value to the thread?

I’m starting to think Clearfund is the smart one here by exiting the conversation early because so far it’s been worthless.

[Jumby]

Wikipedia? You got to be kidding me…

I just jumped on the ‘investment’ page of wiki and it’s not an exact quote, but what if it was? Who cares, lol. Does it take away from my point?

My websites? Irrelevant to the conversation, they don’t make me any more or less qualified to spout my opinion.

Instead of trying to get me to reveal my sites and hanging from Allan’s nuts, why don’t you add some value to the thread?

I’m starting to think Clearfund is the smart one here by exiting the conversation early because so far it’s been worthless.

[Jumby]

Wikipedia? You got to be kidding me…

I just jumped on the ‘investment’ page of wiki and it’s not an exact quote, but what if it was? Who cares, lol. Does it take away from my point?

My websites? Irrelevant to the conversation, they don’t make me any more or less qualified to spout my opinion.

Instead of trying to get me to reveal my sites and hanging from Allan’s nuts, why don’t you add some value to the thread?

I’m starting to think Clearfund is the smart one here by exiting the conversation early because so far it’s been worthless.

[Jumby]

Wikipedia? You got to be kidding me…

I just jumped on the ‘investment’ page of wiki and it’s not an exact quote, but what if it was? Who cares, lol. Does it take away from my point?

My websites? Irrelevant to the conversation, they don’t make me any more or less qualified to spout my opinion.

Instead of trying to get me to reveal my sites and hanging from Allan’s nuts, why don’t you add some value to the thread?

I’m starting to think Clearfund is the smart one here by exiting the conversation early because so far it’s been worthless.

[Jumby]

Wikipedia? You got to be kidding me…

I just jumped on the ‘investment’ page of wiki and it’s not an exact quote, but what if it was? Who cares, lol. Does it take away from my point?

My websites? Irrelevant to the conversation, they don’t make me any more or less qualified to spout my opinion.

Instead of trying to get me to reveal my sites and hanging from Allan’s nuts, why don’t you add some value to the thread?

I’m starting to think Clearfund is the smart one here by exiting the conversation early because so far it’s been worthless.

[(former)FormerSanDiegan]

Regarding residential real estate as an investment …

The Case-Shiller long-term chart indicated that real estate essentially outpaced inflation over the 116 years or so of the chart.

I would consider outpacing inflation in the long-term as an investment.

Additionally, the case-shiller study indicated price only. It ignores any investment income or maintenance expenses from property. Generally speaking residential rents far exceed monthly costs of maintentance.

So, in the long run it appears that residential real estate outpaced inflation over a 116-year period and provided dividends on top of that.

I do not understand how real estate could not be considered as an investment option. Sure, there are ways to play it speculatively, as there is for stocks, commodities, cash, bonds, etc, but to dismiss it as not being an investment option is absurd.

[(former)FormerSanDiegan]

Regarding residential real estate as an investment …

The Case-Shiller long-term chart indicated that real estate essentially outpaced inflation over the 116 years or so of the chart.

I would consider outpacing inflation in the long-term as an investment.

Additionally, the case-shiller study indicated price only. It ignores any investment income or maintenance expenses from property. Generally speaking residential rents far exceed monthly costs of maintentance.

So, in the long run it appears that residential real estate outpaced inflation over a 116-year period and provided dividends on top of that.

I do not understand how real estate could not be considered as an investment option. Sure, there are ways to play it speculatively, as there is for stocks, commodities, cash, bonds, etc, but to dismiss it as not being an investment option is absurd.

[(former)FormerSanDiegan]

Regarding residential real estate as an investment …

The Case-Shiller long-term chart indicated that real estate essentially outpaced inflation over the 116 years or so of the chart.

I would consider outpacing inflation in the long-term as an investment.

Additionally, the case-shiller study indicated price only. It ignores any investment income or maintenance expenses from property. Generally speaking residential rents far exceed monthly costs of maintentance.

So, in the long run it appears that residential real estate outpaced inflation over a 116-year period and provided dividends on top of that.

I do not understand how real estate could not be considered as an investment option. Sure, there are ways to play it speculatively, as there is for stocks, commodities, cash, bonds, etc, but to dismiss it as not being an investment option is absurd.

[(former)FormerSanDiegan]

Regarding residential real estate as an investment …

The Case-Shiller long-term chart indicated that real estate essentially outpaced inflation over the 116 years or so of the chart.

I would consider outpacing inflation in the long-term as an investment.

Additionally, the case-shiller study indicated price only. It ignores any investment income or maintenance expenses from property. Generally speaking residential rents far exceed monthly costs of maintentance.

So, in the long run it appears that residential real estate outpaced inflation over a 116-year period and provided dividends on top of that.

I do not understand how real estate could not be considered as an investment option. Sure, there are ways to play it speculatively, as there is for stocks, commodities, cash, bonds, etc, but to dismiss it as not being an investment option is absurd.

[(former)FormerSanDiegan]

Regarding residential real estate as an investment …

The Case-Shiller long-term chart indicated that real estate essentially outpaced inflation over the 116 years or so of the chart.

I would consider outpacing inflation in the long-term as an investment.

Additionally, the case-shiller study indicated price only. It ignores any investment income or maintenance expenses from property. Generally speaking residential rents far exceed monthly costs of maintentance.

So, in the long run it appears that residential real estate outpaced inflation over a 116-year period and provided dividends on top of that.

I do not understand how real estate could not be considered as an investment option. Sure, there are ways to play it speculatively, as there is for stocks, commodities, cash, bonds, etc, but to dismiss it as not being an investment option is absurd.

[peterb]

Rich, a little OT, but you caught the Listing price graph (The little one in the right hand margin of the web page) up-trend some months back as a begining on prices bouncing up. Have you noticed its direction lately?

This thing could be a decent indicator as listing prices are usually influenced by what realtors are seeing at almost ‘real-time’….closing prices before they get added to the data pool for public consumption. Just a thought.

[peterb]

Rich, a little OT, but you caught the Listing price graph (The little one in the right hand margin of the web page) up-trend some months back as a begining on prices bouncing up. Have you noticed its direction lately?

This thing could be a decent indicator as listing prices are usually influenced by what realtors are seeing at almost ‘real-time’….closing prices before they get added to the data pool for public consumption. Just a thought.

[peterb]

Rich, a little OT, but you caught the Listing price graph (The little one in the right hand margin of the web page) up-trend some months back as a begining on prices bouncing up. Have you noticed its direction lately?

This thing could be a decent indicator as listing prices are usually influenced by what realtors are seeing at almost ‘real-time’….closing prices before they get added to the data pool for public consumption. Just a thought.

[peterb]

Rich, a little OT, but you caught the Listing price graph (The little one in the right hand margin of the web page) up-trend some months back as a begining on prices bouncing up. Have you noticed its direction lately?

This thing could be a decent indicator as listing prices are usually influenced by what realtors are seeing at almost ‘real-time’….closing prices before they get added to the data pool for public consumption. Just a thought.

[Author]

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