You’d have to be an idiot to buy a house

[temeculaguy]

Naw, I’m not buying it, 45% just for repair and vacancies of aprtments. Hope you got a screaming deal on the place if it was in knock down condition. My much smaller sample from my half dozen family owned rentals, runs under 20% and has been under that for 20 years, of which most are sfr’s in three so cal counties. They vary in return, a few have been sold and a few have been recently aquired but none come close to 45% operating, yet all are self managed, so the comparison may be moot. All of which are owned outright so it’s easy to see the operating cost since all of the income is income (unfortunately, they are all part of a trust and I get nothing monthly, hence my desire to build my own empire). If your family is paying 45% of the income in management costs and maintenance, i say you need to hire an auditor, something stinks in denmark.

[danthedart]

[quote=temeculaguy]Naw, I’m not buying it, 45% just for repair and vacancies of aprtments. Hope you got a screaming deal on the place if it was in knock down condition. My much smaller sample from my half dozen family owned rentals, runs under 20% and has been under that for 20 years, of which most are sfr’s in three so cal counties. They vary in return, a few have been sold and a few have been recently aquired but none come close to 45% operating, yet all are self managed, so the comparison may be moot. All of which are owned outright so it’s easy to see the operating cost since all of the income is income (unfortunately, they are all part of a trust and I get nothing monthly, hence my desire to build my own empire). If your family is paying 45% of the income in management costs and maintenance, i say you need to hire an auditor, something stinks in denmark.[/quote]

If you’re managing your own property and don’t charge yourself for the time you’re putting into the property… and if you get lucky and have a few good tenants that stay for awhile… I can see how you’re getting under 45%.

Do you do your own repairs?

If you actually calculate all the hours you (or your family) are putting into managing the property including your office supplies/computers etc… that might have dual uses for home and office, then I think you’ll be headed much closer to the 45%

Are you maintaining a cash reserve for large repairs?

My family actually purchased multi-family zoned homes and constructed small apartment complexes on them. That way, while the risk is much higher and the knowledge level needed is much higher, we could still get positive cash flow on properties.

[danthedart]

[quote=temeculaguy]Naw, I’m not buying it, 45% just for repair and vacancies of aprtments. Hope you got a screaming deal on the place if it was in knock down condition. My much smaller sample from my half dozen family owned rentals, runs under 20% and has been under that for 20 years, of which most are sfr’s in three so cal counties. They vary in return, a few have been sold and a few have been recently aquired but none come close to 45% operating, yet all are self managed, so the comparison may be moot. All of which are owned outright so it’s easy to see the operating cost since all of the income is income (unfortunately, they are all part of a trust and I get nothing monthly, hence my desire to build my own empire). If your family is paying 45% of the income in management costs and maintenance, i say you need to hire an auditor, something stinks in denmark.[/quote]

If you’re managing your own property and don’t charge yourself for the time you’re putting into the property… and if you get lucky and have a few good tenants that stay for awhile… I can see how you’re getting under 45%.

Do you do your own repairs?

If you actually calculate all the hours you (or your family) are putting into managing the property including your office supplies/computers etc… that might have dual uses for home and office, then I think you’ll be headed much closer to the 45%

Are you maintaining a cash reserve for large repairs?

My family actually purchased multi-family zoned homes and constructed small apartment complexes on them. That way, while the risk is much higher and the knowledge level needed is much higher, we could still get positive cash flow on properties.

[danthedart]

[quote=temeculaguy]Naw, I’m not buying it, 45% just for repair and vacancies of aprtments. Hope you got a screaming deal on the place if it was in knock down condition. My much smaller sample from my half dozen family owned rentals, runs under 20% and has been under that for 20 years, of which most are sfr’s in three so cal counties. They vary in return, a few have been sold and a few have been recently aquired but none come close to 45% operating, yet all are self managed, so the comparison may be moot. All of which are owned outright so it’s easy to see the operating cost since all of the income is income (unfortunately, they are all part of a trust and I get nothing monthly, hence my desire to build my own empire). If your family is paying 45% of the income in management costs and maintenance, i say you need to hire an auditor, something stinks in denmark.[/quote]

If you’re managing your own property and don’t charge yourself for the time you’re putting into the property… and if you get lucky and have a few good tenants that stay for awhile… I can see how you’re getting under 45%.

Do you do your own repairs?

If you actually calculate all the hours you (or your family) are putting into managing the property including your office supplies/computers etc… that might have dual uses for home and office, then I think you’ll be headed much closer to the 45%

Are you maintaining a cash reserve for large repairs?

My family actually purchased multi-family zoned homes and constructed small apartment complexes on them. That way, while the risk is much higher and the knowledge level needed is much higher, we could still get positive cash flow on properties.

[danthedart]

[quote=temeculaguy]Naw, I’m not buying it, 45% just for repair and vacancies of aprtments. Hope you got a screaming deal on the place if it was in knock down condition. My much smaller sample from my half dozen family owned rentals, runs under 20% and has been under that for 20 years, of which most are sfr’s in three so cal counties. They vary in return, a few have been sold and a few have been recently aquired but none come close to 45% operating, yet all are self managed, so the comparison may be moot. All of which are owned outright so it’s easy to see the operating cost since all of the income is income (unfortunately, they are all part of a trust and I get nothing monthly, hence my desire to build my own empire). If your family is paying 45% of the income in management costs and maintenance, i say you need to hire an auditor, something stinks in denmark.[/quote]

If you’re managing your own property and don’t charge yourself for the time you’re putting into the property… and if you get lucky and have a few good tenants that stay for awhile… I can see how you’re getting under 45%.

Do you do your own repairs?

If you actually calculate all the hours you (or your family) are putting into managing the property including your office supplies/computers etc… that might have dual uses for home and office, then I think you’ll be headed much closer to the 45%

Are you maintaining a cash reserve for large repairs?

My family actually purchased multi-family zoned homes and constructed small apartment complexes on them. That way, while the risk is much higher and the knowledge level needed is much higher, we could still get positive cash flow on properties.

[danthedart]

[quote=temeculaguy]Naw, I’m not buying it, 45% just for repair and vacancies of aprtments. Hope you got a screaming deal on the place if it was in knock down condition. My much smaller sample from my half dozen family owned rentals, runs under 20% and has been under that for 20 years, of which most are sfr’s in three so cal counties. They vary in return, a few have been sold and a few have been recently aquired but none come close to 45% operating, yet all are self managed, so the comparison may be moot. All of which are owned outright so it’s easy to see the operating cost since all of the income is income (unfortunately, they are all part of a trust and I get nothing monthly, hence my desire to build my own empire). If your family is paying 45% of the income in management costs and maintenance, i say you need to hire an auditor, something stinks in denmark.[/quote]

If you’re managing your own property and don’t charge yourself for the time you’re putting into the property… and if you get lucky and have a few good tenants that stay for awhile… I can see how you’re getting under 45%.

Do you do your own repairs?

If you actually calculate all the hours you (or your family) are putting into managing the property including your office supplies/computers etc… that might have dual uses for home and office, then I think you’ll be headed much closer to the 45%

Are you maintaining a cash reserve for large repairs?

My family actually purchased multi-family zoned homes and constructed small apartment complexes on them. That way, while the risk is much higher and the knowledge level needed is much higher, we could still get positive cash flow on properties.

[ralphfurley]

[quote=SDEngineer]Even if the downside is still significant, there is VERY good reason to believe that prices will rebound back to the trendline relatively quickly (certainly within 5 years I’d say).[/quote]
I’m not trying to be a jerk here, but what reason is that?

This housing downturn seems worse than the one in ’89 (or did it peak there and go down a year or two later?). Anyway, housing didn’t go up much until ’98 or so.

If things are worse this time around, what makes you think the housing market will rebound in five years or so?

[ralphfurley]

[quote=SDEngineer]Even if the downside is still significant, there is VERY good reason to believe that prices will rebound back to the trendline relatively quickly (certainly within 5 years I’d say).[/quote]
I’m not trying to be a jerk here, but what reason is that?

This housing downturn seems worse than the one in ’89 (or did it peak there and go down a year or two later?). Anyway, housing didn’t go up much until ’98 or so.

If things are worse this time around, what makes you think the housing market will rebound in five years or so?

[ralphfurley]

[quote=SDEngineer]Even if the downside is still significant, there is VERY good reason to believe that prices will rebound back to the trendline relatively quickly (certainly within 5 years I’d say).[/quote]
I’m not trying to be a jerk here, but what reason is that?

This housing downturn seems worse than the one in ’89 (or did it peak there and go down a year or two later?). Anyway, housing didn’t go up much until ’98 or so.

If things are worse this time around, what makes you think the housing market will rebound in five years or so?

[ralphfurley]

[quote=SDEngineer]Even if the downside is still significant, there is VERY good reason to believe that prices will rebound back to the trendline relatively quickly (certainly within 5 years I’d say).[/quote]
I’m not trying to be a jerk here, but what reason is that?

This housing downturn seems worse than the one in ’89 (or did it peak there and go down a year or two later?). Anyway, housing didn’t go up much until ’98 or so.

If things are worse this time around, what makes you think the housing market will rebound in five years or so?

[ralphfurley]

[quote=SDEngineer]Even if the downside is still significant, there is VERY good reason to believe that prices will rebound back to the trendline relatively quickly (certainly within 5 years I’d say).[/quote]
I’m not trying to be a jerk here, but what reason is that?

This housing downturn seems worse than the one in ’89 (or did it peak there and go down a year or two later?). Anyway, housing didn’t go up much until ’98 or so.

If things are worse this time around, what makes you think the housing market will rebound in five years or so?

[poorsaver]

Interesting thread, I’d like to add a couple of observations. I was wondering why what I read about the economy is different than what I actually see. I look around me and it looks like business as usual at most places. The shopping centers are still crowded, there’s still hour long waits at restaurants in OC, freeways are more jammed than ever, the Hummers are back out in full force, and the King of Pop sold out all 50 concerts within a couple of hours. So how can we explain this phenomenon in a nasty recession? By what scaredycat originally posted. People are living rent free. If you don’t have any housing costs then it’s easy to keep on consuming like nothing’s wrong.

Scaredy and others, you also indicated that prices could fall much further. In the area you are referring, Temecula-Murietta, I don’t see how it can fall much further. For crying out loud, prices are under $100 per foot. Prices have fallen more than 50% in most cases. Interest rates are at historic lows. Three years ago on this forum I predicted the government would take rates down to 4%. Nobody believed me back then. Now we’re almost there. Some of you think rates won’t stay this low. Think again. Bernanke and Co. are pulling every trick in the book to stimulate the economy. Banks may become nationalized. If the gov. controls the banks, what’s to stop them from keeping rates low? I mean really low, like 2 percent low, if necessary. This is regardless of what inflation is doing. They have the ability to do it. Bond market implosion? I’ve been hearing that for over a year. Hasn’t happened. Just like the talk that our dollar would be worthless. You see how that’s worked out. It’s strengthened.

Bottom line, don’t count on prices in Temecula-Murietta coming down much more. Interest rates will probably stay low or get lower in the foreseeable future. Home prices up in my neck of the woods, LA/OC, will finally come down and play catch up with SD/RIV counties. The world will not end in 2012, and MJ will be doing an awesome moonwalk at 50.

[poorsaver]

Interesting thread, I’d like to add a couple of observations. I was wondering why what I read about the economy is different than what I actually see. I look around me and it looks like business as usual at most places. The shopping centers are still crowded, there’s still hour long waits at restaurants in OC, freeways are more jammed than ever, the Hummers are back out in full force, and the King of Pop sold out all 50 concerts within a couple of hours. So how can we explain this phenomenon in a nasty recession? By what scaredycat originally posted. People are living rent free. If you don’t have any housing costs then it’s easy to keep on consuming like nothing’s wrong.

Scaredy and others, you also indicated that prices could fall much further. In the area you are referring, Temecula-Murietta, I don’t see how it can fall much further. For crying out loud, prices are under $100 per foot. Prices have fallen more than 50% in most cases. Interest rates are at historic lows. Three years ago on this forum I predicted the government would take rates down to 4%. Nobody believed me back then. Now we’re almost there. Some of you think rates won’t stay this low. Think again. Bernanke and Co. are pulling every trick in the book to stimulate the economy. Banks may become nationalized. If the gov. controls the banks, what’s to stop them from keeping rates low? I mean really low, like 2 percent low, if necessary. This is regardless of what inflation is doing. They have the ability to do it. Bond market implosion? I’ve been hearing that for over a year. Hasn’t happened. Just like the talk that our dollar would be worthless. You see how that’s worked out. It’s strengthened.

Bottom line, don’t count on prices in Temecula-Murietta coming down much more. Interest rates will probably stay low or get lower in the foreseeable future. Home prices up in my neck of the woods, LA/OC, will finally come down and play catch up with SD/RIV counties. The world will not end in 2012, and MJ will be doing an awesome moonwalk at 50.

[poorsaver]

Interesting thread, I’d like to add a couple of observations. I was wondering why what I read about the economy is different than what I actually see. I look around me and it looks like business as usual at most places. The shopping centers are still crowded, there’s still hour long waits at restaurants in OC, freeways are more jammed than ever, the Hummers are back out in full force, and the King of Pop sold out all 50 concerts within a couple of hours. So how can we explain this phenomenon in a nasty recession? By what scaredycat originally posted. People are living rent free. If you don’t have any housing costs then it’s easy to keep on consuming like nothing’s wrong.

Scaredy and others, you also indicated that prices could fall much further. In the area you are referring, Temecula-Murietta, I don’t see how it can fall much further. For crying out loud, prices are under $100 per foot. Prices have fallen more than 50% in most cases. Interest rates are at historic lows. Three years ago on this forum I predicted the government would take rates down to 4%. Nobody believed me back then. Now we’re almost there. Some of you think rates won’t stay this low. Think again. Bernanke and Co. are pulling every trick in the book to stimulate the economy. Banks may become nationalized. If the gov. controls the banks, what’s to stop them from keeping rates low? I mean really low, like 2 percent low, if necessary. This is regardless of what inflation is doing. They have the ability to do it. Bond market implosion? I’ve been hearing that for over a year. Hasn’t happened. Just like the talk that our dollar would be worthless. You see how that’s worked out. It’s strengthened.

Bottom line, don’t count on prices in Temecula-Murietta coming down much more. Interest rates will probably stay low or get lower in the foreseeable future. Home prices up in my neck of the woods, LA/OC, will finally come down and play catch up with SD/RIV counties. The world will not end in 2012, and MJ will be doing an awesome moonwalk at 50.

[poorsaver]

Interesting thread, I’d like to add a couple of observations. I was wondering why what I read about the economy is different than what I actually see. I look around me and it looks like business as usual at most places. The shopping centers are still crowded, there’s still hour long waits at restaurants in OC, freeways are more jammed than ever, the Hummers are back out in full force, and the King of Pop sold out all 50 concerts within a couple of hours. So how can we explain this phenomenon in a nasty recession? By what scaredycat originally posted. People are living rent free. If you don’t have any housing costs then it’s easy to keep on consuming like nothing’s wrong.

Scaredy and others, you also indicated that prices could fall much further. In the area you are referring, Temecula-Murietta, I don’t see how it can fall much further. For crying out loud, prices are under $100 per foot. Prices have fallen more than 50% in most cases. Interest rates are at historic lows. Three years ago on this forum I predicted the government would take rates down to 4%. Nobody believed me back then. Now we’re almost there. Some of you think rates won’t stay this low. Think again. Bernanke and Co. are pulling every trick in the book to stimulate the economy. Banks may become nationalized. If the gov. controls the banks, what’s to stop them from keeping rates low? I mean really low, like 2 percent low, if necessary. This is regardless of what inflation is doing. They have the ability to do it. Bond market implosion? I’ve been hearing that for over a year. Hasn’t happened. Just like the talk that our dollar would be worthless. You see how that’s worked out. It’s strengthened.

Bottom line, don’t count on prices in Temecula-Murietta coming down much more. Interest rates will probably stay low or get lower in the foreseeable future. Home prices up in my neck of the woods, LA/OC, will finally come down and play catch up with SD/RIV counties. The world will not end in 2012, and MJ will be doing an awesome moonwalk at 50.

[Author]

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