“INVESTORS” who haven’t learned their lessons?

[patientrenter]

[quote=peterb]….Read Bill O’Neils’ books for a careful historical study of how stock investments really pay-off. It has been my experience that his concepts apply to all investing activities.[/quote]

peterb, what is the basic idea in those books that leads you to say that there is no useful distinction between investing and speculating?

[Anonymous]

I love these investors… They are buying on a downward trend into a market that is glutted with inventory.

Even if the market were to stop and hold steady, right here, they’d still be on the hook for property tax and property management, not to mention all the transaction based fees associated with the purchase.

Sure, they can rent the houses out, but I’d be surprised if there’s a single house out there where the rent could keep up with the cost of capital.

So, where will they make money? Through appreciation?

Compared to the money they could make in simpler investments, it just doesn’t add up.

And, all that is assuming a market that is steady now and soon to trend up. HA.

[Anonymous]

I love these investors… They are buying on a downward trend into a market that is glutted with inventory.

Even if the market were to stop and hold steady, right here, they’d still be on the hook for property tax and property management, not to mention all the transaction based fees associated with the purchase.

Sure, they can rent the houses out, but I’d be surprised if there’s a single house out there where the rent could keep up with the cost of capital.

So, where will they make money? Through appreciation?

Compared to the money they could make in simpler investments, it just doesn’t add up.

And, all that is assuming a market that is steady now and soon to trend up. HA.

[Anonymous]

I love these investors… They are buying on a downward trend into a market that is glutted with inventory.

Even if the market were to stop and hold steady, right here, they’d still be on the hook for property tax and property management, not to mention all the transaction based fees associated with the purchase.

Sure, they can rent the houses out, but I’d be surprised if there’s a single house out there where the rent could keep up with the cost of capital.

So, where will they make money? Through appreciation?

Compared to the money they could make in simpler investments, it just doesn’t add up.

And, all that is assuming a market that is steady now and soon to trend up. HA.

[Anonymous]

I love these investors… They are buying on a downward trend into a market that is glutted with inventory.

Even if the market were to stop and hold steady, right here, they’d still be on the hook for property tax and property management, not to mention all the transaction based fees associated with the purchase.

Sure, they can rent the houses out, but I’d be surprised if there’s a single house out there where the rent could keep up with the cost of capital.

So, where will they make money? Through appreciation?

Compared to the money they could make in simpler investments, it just doesn’t add up.

And, all that is assuming a market that is steady now and soon to trend up. HA.

[Anonymous]

I love these investors… They are buying on a downward trend into a market that is glutted with inventory.

Even if the market were to stop and hold steady, right here, they’d still be on the hook for property tax and property management, not to mention all the transaction based fees associated with the purchase.

Sure, they can rent the houses out, but I’d be surprised if there’s a single house out there where the rent could keep up with the cost of capital.

So, where will they make money? Through appreciation?

Compared to the money they could make in simpler investments, it just doesn’t add up.

And, all that is assuming a market that is steady now and soon to trend up. HA.

[peterb]

knumb- I think you’ve nailed it!

O’Neil spends a lot of time, in his first book, actually going over stock prices from way back and the history behind it and what his research revealed about it. Very good research and data. Worth a read for anyone that’s interested in making money investing. It’s not about being a trader. IMO. He shoots down “buy and hold”, “averaging down” as well as some other well ‘sold’ concepts about investing. he backs it up with very solid research and his track record is damned good as well. It will dispell much of what people have been lead to believe by MSM about “investing”.

[peterb]

knumb- I think you’ve nailed it!

O’Neil spends a lot of time, in his first book, actually going over stock prices from way back and the history behind it and what his research revealed about it. Very good research and data. Worth a read for anyone that’s interested in making money investing. It’s not about being a trader. IMO. He shoots down “buy and hold”, “averaging down” as well as some other well ‘sold’ concepts about investing. he backs it up with very solid research and his track record is damned good as well. It will dispell much of what people have been lead to believe by MSM about “investing”.

[peterb]

knumb- I think you’ve nailed it!

O’Neil spends a lot of time, in his first book, actually going over stock prices from way back and the history behind it and what his research revealed about it. Very good research and data. Worth a read for anyone that’s interested in making money investing. It’s not about being a trader. IMO. He shoots down “buy and hold”, “averaging down” as well as some other well ‘sold’ concepts about investing. he backs it up with very solid research and his track record is damned good as well. It will dispell much of what people have been lead to believe by MSM about “investing”.

[peterb]

knumb- I think you’ve nailed it!

O’Neil spends a lot of time, in his first book, actually going over stock prices from way back and the history behind it and what his research revealed about it. Very good research and data. Worth a read for anyone that’s interested in making money investing. It’s not about being a trader. IMO. He shoots down “buy and hold”, “averaging down” as well as some other well ‘sold’ concepts about investing. he backs it up with very solid research and his track record is damned good as well. It will dispell much of what people have been lead to believe by MSM about “investing”.

[peterb]

knumb- I think you’ve nailed it!

O’Neil spends a lot of time, in his first book, actually going over stock prices from way back and the history behind it and what his research revealed about it. Very good research and data. Worth a read for anyone that’s interested in making money investing. It’s not about being a trader. IMO. He shoots down “buy and hold”, “averaging down” as well as some other well ‘sold’ concepts about investing. he backs it up with very solid research and his track record is damned good as well. It will dispell much of what people have been lead to believe by MSM about “investing”.

[temeculaguy]

I guess I have to post links and spell it out, because obviously people don’t like the numbers I’ve thrown around. Let’s look at these apartmentish condos that were designed to be apartments but were sold as condos. Some links may expire as they are pending.

http://www.redfin.com/CA/Temecula/31217-Taylor-Ln-92592/home/6684589

The first is the largest unit, a 1300 sq ft, 3/2, it also has an unattached one car garage (they cost 7k extra when they were new). Orig owner paid 310k, it listed at 109k. almost 2/3 off. Most of the complex is 2/2 and 1/1 like these

http://www.redfin.com/CA/Temecula/31367-David-Ln-92592/home/6680022

right now the 3/2’s are about 110k, the 2/2 90-100k and the 1/1’s are 70’s and 80’s. Some are higher, but deals in the range I’ve quoted can be had.

about 1% tax which is low for the area and $200 hoa (it has a gym, pools, all the regular crap).

current rental listings from a management co is 1295 for a 2/2 with one month free on a year lease (so lets say 1200). Never seen them break below a grand on craigs for a 2/2, 1100 here and there.

Math time: lets say you go with a 2/2 for 100k, just to figure out dollar cost, we will use imaginary 100% financing, P&I is $567 at 5.5%, $100 in taxes, $200 in hoa and $50 in insurance. We’re at $900, you go $1100 for rent, undercutting the management companies a little and you flow $200 during month one. Put that all in reserves and just let it ride. In reality, you will be coming in with money, at least 30% but maybe 100%, so that is what you take out above the reserve each month. At 100% you flow $567 and get to reserve $200 on top of that, so you get 5.67% interest each month and 2.0% backup. You also have a side bet going, a bet that it will one day be worth vs worth less. You are betting rents will stay the same or rise over time, vs. fall. This is where the risk comes in, if you hate risk this isn’t for you. If you like minimal risk, welcome aboard.

What were the other arguments? That they will buy their own and not rent yours at those prices? maybe, but this isn’t the type of housing stock people usualy choose as a long term primary, the transaction costs make it prohibitive for a one or two year thing. Plus, who in their right mind would buy real estate right now? It’s obviously a depreciating asset. It’s gone down to 35 cents on the dollar in the examples I’ve given, then it should go to ten cents on the dollar, right? Those 300k condos that are now 100k condos should be 70k or 50k or 5k, certainly 69k, which is the zip code median household income, because during the depression or whatever theory you are clinging to, housing should be equal to one years pay when unemployment is at 10% because that means nobody has a job, right?

Of course I could be wrong, but I’m kinda riding a winning streak for predictions of late. All my stock picks that I posted in march are on fire and if you read my lakers analogy on page one of this thread, then read the recap of game 5 and 6 of the lakers/nuggets that followed, I think George Karl (nuggets coach) should have read it because it happened exactly as I predicted, especially that part about doubling Kobe and ignoring Ariza, so I feel I am all that and a bag of chips right now. I am Andy Samberg and I’m on a boat, dont you ever forget (I love that video). make sure the kids aren’t around before clicking on it. http://www.nbc.com/Saturday_Night_Live/video/clips/digital-short-im-on-a-boat-uncensored/1105773/?__cid=thefilter

[temeculaguy]

I guess I have to post links and spell it out, because obviously people don’t like the numbers I’ve thrown around. Let’s look at these apartmentish condos that were designed to be apartments but were sold as condos. Some links may expire as they are pending.

http://www.redfin.com/CA/Temecula/31217-Taylor-Ln-92592/home/6684589

The first is the largest unit, a 1300 sq ft, 3/2, it also has an unattached one car garage (they cost 7k extra when they were new). Orig owner paid 310k, it listed at 109k. almost 2/3 off. Most of the complex is 2/2 and 1/1 like these

http://www.redfin.com/CA/Temecula/31367-David-Ln-92592/home/6680022

right now the 3/2’s are about 110k, the 2/2 90-100k and the 1/1’s are 70’s and 80’s. Some are higher, but deals in the range I’ve quoted can be had.

about 1% tax which is low for the area and $200 hoa (it has a gym, pools, all the regular crap).

current rental listings from a management co is 1295 for a 2/2 with one month free on a year lease (so lets say 1200). Never seen them break below a grand on craigs for a 2/2, 1100 here and there.

Math time: lets say you go with a 2/2 for 100k, just to figure out dollar cost, we will use imaginary 100% financing, P&I is $567 at 5.5%, $100 in taxes, $200 in hoa and $50 in insurance. We’re at $900, you go $1100 for rent, undercutting the management companies a little and you flow $200 during month one. Put that all in reserves and just let it ride. In reality, you will be coming in with money, at least 30% but maybe 100%, so that is what you take out above the reserve each month. At 100% you flow $567 and get to reserve $200 on top of that, so you get 5.67% interest each month and 2.0% backup. You also have a side bet going, a bet that it will one day be worth vs worth less. You are betting rents will stay the same or rise over time, vs. fall. This is where the risk comes in, if you hate risk this isn’t for you. If you like minimal risk, welcome aboard.

What were the other arguments? That they will buy their own and not rent yours at those prices? maybe, but this isn’t the type of housing stock people usualy choose as a long term primary, the transaction costs make it prohibitive for a one or two year thing. Plus, who in their right mind would buy real estate right now? It’s obviously a depreciating asset. It’s gone down to 35 cents on the dollar in the examples I’ve given, then it should go to ten cents on the dollar, right? Those 300k condos that are now 100k condos should be 70k or 50k or 5k, certainly 69k, which is the zip code median household income, because during the depression or whatever theory you are clinging to, housing should be equal to one years pay when unemployment is at 10% because that means nobody has a job, right?

Of course I could be wrong, but I’m kinda riding a winning streak for predictions of late. All my stock picks that I posted in march are on fire and if you read my lakers analogy on page one of this thread, then read the recap of game 5 and 6 of the lakers/nuggets that followed, I think George Karl (nuggets coach) should have read it because it happened exactly as I predicted, especially that part about doubling Kobe and ignoring Ariza, so I feel I am all that and a bag of chips right now. I am Andy Samberg and I’m on a boat, dont you ever forget (I love that video). make sure the kids aren’t around before clicking on it. http://www.nbc.com/Saturday_Night_Live/video/clips/digital-short-im-on-a-boat-uncensored/1105773/?__cid=thefilter

[temeculaguy]

I guess I have to post links and spell it out, because obviously people don’t like the numbers I’ve thrown around. Let’s look at these apartmentish condos that were designed to be apartments but were sold as condos. Some links may expire as they are pending.

http://www.redfin.com/CA/Temecula/31217-Taylor-Ln-92592/home/6684589

The first is the largest unit, a 1300 sq ft, 3/2, it also has an unattached one car garage (they cost 7k extra when they were new). Orig owner paid 310k, it listed at 109k. almost 2/3 off. Most of the complex is 2/2 and 1/1 like these

http://www.redfin.com/CA/Temecula/31367-David-Ln-92592/home/6680022

right now the 3/2’s are about 110k, the 2/2 90-100k and the 1/1’s are 70’s and 80’s. Some are higher, but deals in the range I’ve quoted can be had.

about 1% tax which is low for the area and $200 hoa (it has a gym, pools, all the regular crap).

current rental listings from a management co is 1295 for a 2/2 with one month free on a year lease (so lets say 1200). Never seen them break below a grand on craigs for a 2/2, 1100 here and there.

Math time: lets say you go with a 2/2 for 100k, just to figure out dollar cost, we will use imaginary 100% financing, P&I is $567 at 5.5%, $100 in taxes, $200 in hoa and $50 in insurance. We’re at $900, you go $1100 for rent, undercutting the management companies a little and you flow $200 during month one. Put that all in reserves and just let it ride. In reality, you will be coming in with money, at least 30% but maybe 100%, so that is what you take out above the reserve each month. At 100% you flow $567 and get to reserve $200 on top of that, so you get 5.67% interest each month and 2.0% backup. You also have a side bet going, a bet that it will one day be worth vs worth less. You are betting rents will stay the same or rise over time, vs. fall. This is where the risk comes in, if you hate risk this isn’t for you. If you like minimal risk, welcome aboard.

What were the other arguments? That they will buy their own and not rent yours at those prices? maybe, but this isn’t the type of housing stock people usualy choose as a long term primary, the transaction costs make it prohibitive for a one or two year thing. Plus, who in their right mind would buy real estate right now? It’s obviously a depreciating asset. It’s gone down to 35 cents on the dollar in the examples I’ve given, then it should go to ten cents on the dollar, right? Those 300k condos that are now 100k condos should be 70k or 50k or 5k, certainly 69k, which is the zip code median household income, because during the depression or whatever theory you are clinging to, housing should be equal to one years pay when unemployment is at 10% because that means nobody has a job, right?

Of course I could be wrong, but I’m kinda riding a winning streak for predictions of late. All my stock picks that I posted in march are on fire and if you read my lakers analogy on page one of this thread, then read the recap of game 5 and 6 of the lakers/nuggets that followed, I think George Karl (nuggets coach) should have read it because it happened exactly as I predicted, especially that part about doubling Kobe and ignoring Ariza, so I feel I am all that and a bag of chips right now. I am Andy Samberg and I’m on a boat, dont you ever forget (I love that video). make sure the kids aren’t around before clicking on it. http://www.nbc.com/Saturday_Night_Live/video/clips/digital-short-im-on-a-boat-uncensored/1105773/?__cid=thefilter

[temeculaguy]

I guess I have to post links and spell it out, because obviously people don’t like the numbers I’ve thrown around. Let’s look at these apartmentish condos that were designed to be apartments but were sold as condos. Some links may expire as they are pending.

http://www.redfin.com/CA/Temecula/31217-Taylor-Ln-92592/home/6684589

The first is the largest unit, a 1300 sq ft, 3/2, it also has an unattached one car garage (they cost 7k extra when they were new). Orig owner paid 310k, it listed at 109k. almost 2/3 off. Most of the complex is 2/2 and 1/1 like these

http://www.redfin.com/CA/Temecula/31367-David-Ln-92592/home/6680022

right now the 3/2’s are about 110k, the 2/2 90-100k and the 1/1’s are 70’s and 80’s. Some are higher, but deals in the range I’ve quoted can be had.

about 1% tax which is low for the area and $200 hoa (it has a gym, pools, all the regular crap).

current rental listings from a management co is 1295 for a 2/2 with one month free on a year lease (so lets say 1200). Never seen them break below a grand on craigs for a 2/2, 1100 here and there.

Math time: lets say you go with a 2/2 for 100k, just to figure out dollar cost, we will use imaginary 100% financing, P&I is $567 at 5.5%, $100 in taxes, $200 in hoa and $50 in insurance. We’re at $900, you go $1100 for rent, undercutting the management companies a little and you flow $200 during month one. Put that all in reserves and just let it ride. In reality, you will be coming in with money, at least 30% but maybe 100%, so that is what you take out above the reserve each month. At 100% you flow $567 and get to reserve $200 on top of that, so you get 5.67% interest each month and 2.0% backup. You also have a side bet going, a bet that it will one day be worth vs worth less. You are betting rents will stay the same or rise over time, vs. fall. This is where the risk comes in, if you hate risk this isn’t for you. If you like minimal risk, welcome aboard.

What were the other arguments? That they will buy their own and not rent yours at those prices? maybe, but this isn’t the type of housing stock people usualy choose as a long term primary, the transaction costs make it prohibitive for a one or two year thing. Plus, who in their right mind would buy real estate right now? It’s obviously a depreciating asset. It’s gone down to 35 cents on the dollar in the examples I’ve given, then it should go to ten cents on the dollar, right? Those 300k condos that are now 100k condos should be 70k or 50k or 5k, certainly 69k, which is the zip code median household income, because during the depression or whatever theory you are clinging to, housing should be equal to one years pay when unemployment is at 10% because that means nobody has a job, right?

Of course I could be wrong, but I’m kinda riding a winning streak for predictions of late. All my stock picks that I posted in march are on fire and if you read my lakers analogy on page one of this thread, then read the recap of game 5 and 6 of the lakers/nuggets that followed, I think George Karl (nuggets coach) should have read it because it happened exactly as I predicted, especially that part about doubling Kobe and ignoring Ariza, so I feel I am all that and a bag of chips right now. I am Andy Samberg and I’m on a boat, dont you ever forget (I love that video). make sure the kids aren’t around before clicking on it. http://www.nbc.com/Saturday_Night_Live/video/clips/digital-short-im-on-a-boat-uncensored/1105773/?__cid=thefilter

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