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anxvariety
ParticipantDurr, houses are only worth what people will pay for them.. an appraiser might just assign a value, but with 10% interest rates and skittish buyers the price will be determined by supply and demand.
ParticipantI have a positive land story.. I bought some land in Adelanto, CA (Inland Empire / Victorville area) sometime last year or the year before..
My first criteria was that I’d only buy from a private party, not a reseller.. I found a good peice, and I had the land appraised before I bought it (without even asking the land owner). The appraisal cost me $400 bucks.. the appraisal valued the land at 3x the asking price… I bought it cash very quickly.
I built a deal with my realtor so the more it sold for, the higher his comission % would be.. so it was a double positive for him… We had numerous offers and ended up selling it for $46k more than we listed it for.
I think there’s still plenty of land opportunities available, because the people from California are going to have to move somewhere cheap.. I have my eyes set on a few places, and will probably be buying some soon. There’s lots of land that’s undervalued.. most of it is in areas where there aren’t utilities yet or growth, but could possibly be soon..
ParticipantIf he wants to throw money away.. try and at least convince him into a lease option.. that way you can limit your downside. By the time the least term is up, the strike price and market price will probably have seperated enough for the decision to be an easy one, that is.. keep renting.
People will probably freak that I’ve mentioned this.. but sometimes you can’t make the decisions you want, you have to compromise – I’m only suggesting this is compromise I’d consider if I were in your position.
Lease option from Wiki:
A lease purchase contract (also known as Lease Option) is a legal document that combines a basic lease contract with an option-to-purchase contract. The tenant/buyer pays to the landlord/seller a non-refundable option deposit that is applied to the purchase price of the home. The tenant/buyer then pays to the landlord/seller a sum that is typical to the rental amount usually on a monthly basis. A portion of that monthly payment is then applied to the purchase price of the home. During, or at the end of the lease period, the tenant/buyer has exclusive right to buy the home under the terms to which both parties have previously agreed.http://en.wikipedia.org/wiki/Lease_option
Key part is “the tenant/buyer has the exclusive right” but is not required to purchase the home under the terms previously agreed. If you do not purchase the home, you lose your deposit.. so negotiating a reasonable deposit is important to whether this will be a good deal for you.
Regarding the tax part of your question, here’s another Wiki link:
“This type of lease can be structured so that the lessee can take the tax benefits as if he were the home owner.”
ParticipantIs it safe to say that we are entering a new era of economic serfhood?
Looks like the banks are going to spare no one this time around!! Pick up the lower, middle and upper middle classes, turn em upside down and shake shake shake!
Hopefully this whole 10-20 year recession will trim off alot of this stomach turning consumerism we’ve developed most recently… How long will it take for people to live within their means? Lots of dot com kids did it.. reality does’t care much about preserving the past… desperation heals!
ParticipantNice wiki link.. Notice at the bottom they have a link to the wealth elasticity of demand… I think the elasticity concept in economics best describe what the effect and reactions to the housing deflation will be… it’s how people make decisions when they aren’t dictating the pace.. they have to be ‘flexible’, and divide their decisions into needs and wants.
I predict ‘cut your losses’ will be the phrase that replaces ‘i just refied’ phrase of the last 10 years..
ParticipantThis feels like a class warfare on eggshells thread! I see lots of baiting, but I’ve hijacked enough threads to take the bait.. I’ll make a positive contribution.
Who wouldn’t want to pick the “best” thing for their kids.. whether, people will actually take the steps necessary during crunch time?
Price elasticity of demand
From Wikipedia, the free encyclopediaIn economics, the price elasticity of demand (PED) is an elasticity that measures the nature and degree of the relationship between changes in quantity demanded of a good and changes in its price.
An example of a good with a highly inelastic demand curve is salt: people need salt, so for even relatively large changes in the price of salt, the amount demanded will not be significantly altered. Similarly, a product with a highly elastic demand curve is red cars: if the price of red cars went up even a small amount, demand is likely to go down since substitutes are readily available for purchase (cars of other colors).
ParticipantSo damned hot outside the kids have nothign else to do but study!
I determine how good a school is, by how little homework they require!!! 😉
ParticipantThat’s one of the earliest investment lessons I learned.. there is no protection in cashing out, if you end up putting your profits right back into the same overinflated assett… 🙁
I have some issues with my parents real estate choices too… it’s a really hard topic, because as a child it’s sorta hard for some parents to accept you might know more about certain things…
ParticipantSame thing here.. I bought some property in Feb 05 for 20k, then ended up in escrow in November 05 for 96k. I was trying to rush along the escrow process(yeah I even rushed selling within the 1 year; didn’t care about paying income rate tax), hoping it wouldn’t fall through… LA times was publishing a bunch of housing bubble articles and I thought it would be just my luck for it to fall through, but everything went fine.
Congrats on the big win! Do you know how much total dollar you paid in interest? Don’t the interest payments end up equaling purchase price in 30 years @ 7%? I don’t know anyone that’s had one loan for 20 years… did your tax deductions go down over time?
Participantleung_lewis, it’s probably like the people on TV that sell their real estate secrets… at some point it becomes easier to create a cookie cutter pattern and let someone else do all the footwork…
I don’t think Zeal suffers in any way from putting out their strategy, if anything it’s the opposite – just look at Cramer(Mad Money) and his team Cramerica… plus even if Zeal does screw up, or lose their ass on some trades.. they made money providing information well enjoyed.. Sort of a hedge on their strategy.
I trust Adam, even though I’ve never met him I get the feeling from his writing and full disclosure that he’s high integrity.. I do realize trust doesnt’ necessarily mean a successful invesmtment, but I believe Mr Hamilton loves what he does and wants us subscribers to be successful.. I can’t say I believe that someone like Cramer puts his fans first..
ParticipantMost cars expire worthless.. do you keep your car until it breaks down on the freeway? Or will you stay away from the freeway when it’s sputtering out rust?
ParticipantI don’t doubt that figure could be accurate in some situations.. but I thought it was unfair to toss out ‘90% of options expire worthless’ as it was fact.. especially when people who are trying to learn more about options are reading(like myself). Chris, just biatch slap me and I’ll shut up!! 🙂
No way am I holding options even within a month of expiration..
Powayseller, Zeal hasn’t had any expire worthless in 2006.. you can tell which expired worthless in previous years by looking for the -100%. They probably learned their lesson, as you get closer to the option expiration the more you’re playing with fire. I may have found Zeal, only because they are doing well this year? What is the overused saying, a broken clock is right twice a day… Everyone’s happy when they’re winning, looks like Zeals best year is this year – and their focus seems to have been mining companies and energy which has boomed over the last few years.. so I guess we’ll have to wait a couple years to see what happens.
Great reading lueng_lewis!
ParticipantPS, Zeal performance, enjoy:
http://www.zealllc.com/perf/2006.htm
http://www.zealllc.com/perf/2005.htm
http://www.zealllc.com/perf/2004.htm
etc.
They’re getting better…Chris, have any links/references to your 90% of options expire worthless statement?
ParticipantDon’t worry, I know options are risky, I’m certain I didn’t say otherwise. I will though acccept repsonsibility for the interpreation of my communication. I was only saying, that in the context of my strategy, I am more comfortable with the options risk/reward scenario, than the stocks risk/reward. I believe the truth is, almost everytime you invest you’re risking 100% of your investment… even FDIC could go splat.
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