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September 10, 2006 at 8:55 PM #7466September 10, 2006 at 9:00 PM #34917September 10, 2006 at 9:04 PM #34919powaysellerParticipant
Rich’s post on how to make a link
The guys in the article remind me of the people who bought Lucent at $95 a share in 1999. It dropped to $2.50…
September 10, 2006 at 9:20 PM #34918vcguy_10ParticipantSome true gems in this article:
“Sometimes you do things in life and you don’t know why you’re doing it,” said Fahim. “We’re gullible out here, I guess,” said Fred Stearn.
Sure, that’s what many FBs will be saying in the not so distant future. But this next guy clearly sees the mirage for what it is:
“Why would anybody in their right mind build out there now? … It’s almost on the edge of the Earth,” Brady said.
I’m not saying that desert land so far from Barstow is worthless. Once we have high speed trains linking Vegas and Anaheim, some of this area may be developed. But when? In the 24th century perhaps? No wonder Mr Fahim thinks of the future:
Ashraf Fahim insists he is in Newberry Springs for the long haul. Still, he recently tried to sell one of his holdings near where the owners of a failed water park want to build 1,400 senior housing units. Believing he could cash in, Fahim listed his parcel for $4 million — 57 times what he paid less than two years ago. He didn’t get a nibble and pulled it off the market.
Yup. Long haul indeed. Who knows? His great-grand-grand-grand-grand-grand-grandchildren may sell the land for gazillions some day. But in the meantime, there are those pesky holding costs to worry about:
Fahim’s home equity loan is burning a hole in his checkbook, requiring him to work extra hours. But he takes solace knowing he placed each purchase offer on the altar of his church and prayed before buying “to see if there’s something from God or not.”
In other words, the force is with him, like that movie…
September 10, 2006 at 10:03 PM #34927no_such_realityParticipant“to see if there’s something from God or not.”
Apparently his God isn’t in favor of 5700% return in 2 years.
September 11, 2006 at 9:15 AM #34949bubba99ParticipantThis is why real estate tends to go up. It has a real value, the value of the house and the intrinsic value of the land. Land has a real value based on “economic use”, but most of the value is “what someone is willing to pay”.
As long as there are these tremendious optimists who will bid up land, real estate will carry a premium relative to economic value. Talk about a bubble – scorching desert property with no real proximity to viable economic centers. Most of the value is what the optimist sees for the future.
September 11, 2006 at 10:21 AM #34955mydogsarelazyParticipantBetween 1985 and 1995 I purchased five properties in a remote, high desert area. The properties included 40 acre and 10 acre parcels, some smaller parcels with cabins and eventually a small home with a well.
During the years, I sold most of them and made small profits on some, lost a bit on others. All in all it was a break even kind of thing, but I had fun in the desert camping and hanging out.
Then in 2001 I made my last purchase, which was a small house with a well. The real estate boom hit, and after investing a total of about $3k in repairs to the place I sold it in 2005 for six times what I had paid for it.
My point? If I had paid attention to what my friends and family said about the desert I never would have made the best investment of my lifetime.
There are opportunities everywhere, but of course luck, timing and history are going to play their roles…
JS
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