[beanmaestro]

I’d certainly prefer to buy the place outright, and rent the units directly to our friends, but I’m curious how both options work. Let me know if the “common sense” is correct:

Single Owner: My wife and I would probably need to have X% down, plus 6+ months savings, and income about Y times greater than (annual PMI – Z% of annual rent for units we won’t live in). What are X, Y, and Z likely to be?

Partnership: Together, we have to put A% down with 6+ months savings, and prove income B times greater than PMI. What are A and B? And obviously, we have to be crazy enough to set up such a partnership.

[beanmaestro]

I’d certainly prefer to buy the place outright, and rent the units directly to our friends, but I’m curious how both options work. Let me know if the “common sense” is correct:

Single Owner: My wife and I would probably need to have X% down, plus 6+ months savings, and income about Y times greater than (annual PMI – Z% of annual rent for units we won’t live in). What are X, Y, and Z likely to be?

Partnership: Together, we have to put A% down with 6+ months savings, and prove income B times greater than PMI. What are A and B? And obviously, we have to be crazy enough to set up such a partnership.

[beanmaestro]

I have to think that no matter what happens in the 2008 election, by next winter it’ll be too late to do much of anything. If Congress doesn’t pass a bipartisan bill (or the banks do something similar voluntarily) this year, one of two things will happen:

1. Housing will bottom on its own next winter & spring, before a hypothetical Democratic government could change anything meaningful.

2. 2008 will look a lot like 2007. Houses now or nearly at the NOD stage will foreclose and flood the market, adding another 6 months of inventory; credit availability and demand drops, prices fall 15-20% further, pulling another N million mortgages into foreclosure. Either the banks will work out mortgage reductions on their own, or the inventory on the market will be so large by the time the Democrats take office that nothing short of burning down the excess supply will fix it.

[beanmaestro]

I have to think that no matter what happens in the 2008 election, by next winter it’ll be too late to do much of anything. If Congress doesn’t pass a bipartisan bill (or the banks do something similar voluntarily) this year, one of two things will happen:

1. Housing will bottom on its own next winter & spring, before a hypothetical Democratic government could change anything meaningful.

2. 2008 will look a lot like 2007. Houses now or nearly at the NOD stage will foreclose and flood the market, adding another 6 months of inventory; credit availability and demand drops, prices fall 15-20% further, pulling another N million mortgages into foreclosure. Either the banks will work out mortgage reductions on their own, or the inventory on the market will be so large by the time the Democrats take office that nothing short of burning down the excess supply will fix it.

[beanmaestro]

I have to think that no matter what happens in the 2008 election, by next winter it’ll be too late to do much of anything. If Congress doesn’t pass a bipartisan bill (or the banks do something similar voluntarily) this year, one of two things will happen:

1. Housing will bottom on its own next winter & spring, before a hypothetical Democratic government could change anything meaningful.

2. 2008 will look a lot like 2007. Houses now or nearly at the NOD stage will foreclose and flood the market, adding another 6 months of inventory; credit availability and demand drops, prices fall 15-20% further, pulling another N million mortgages into foreclosure. Either the banks will work out mortgage reductions on their own, or the inventory on the market will be so large by the time the Democrats take office that nothing short of burning down the excess supply will fix it.

[beanmaestro]

I have to think that no matter what happens in the 2008 election, by next winter it’ll be too late to do much of anything. If Congress doesn’t pass a bipartisan bill (or the banks do something similar voluntarily) this year, one of two things will happen:

1. Housing will bottom on its own next winter & spring, before a hypothetical Democratic government could change anything meaningful.

2. 2008 will look a lot like 2007. Houses now or nearly at the NOD stage will foreclose and flood the market, adding another 6 months of inventory; credit availability and demand drops, prices fall 15-20% further, pulling another N million mortgages into foreclosure. Either the banks will work out mortgage reductions on their own, or the inventory on the market will be so large by the time the Democrats take office that nothing short of burning down the excess supply will fix it.

[beanmaestro]

I have to think that no matter what happens in the 2008 election, by next winter it’ll be too late to do much of anything. If Congress doesn’t pass a bipartisan bill (or the banks do something similar voluntarily) this year, one of two things will happen:

1. Housing will bottom on its own next winter & spring, before a hypothetical Democratic government could change anything meaningful.

2. 2008 will look a lot like 2007. Houses now or nearly at the NOD stage will foreclose and flood the market, adding another 6 months of inventory; credit availability and demand drops, prices fall 15-20% further, pulling another N million mortgages into foreclosure. Either the banks will work out mortgage reductions on their own, or the inventory on the market will be so large by the time the Democrats take office that nothing short of burning down the excess supply will fix it.

[beanmaestro]

NR-

I’m in Santa Barbara, so I’m not that familiar with SD’s rental occupancy rate. But near my house (not the most fashionable part of town), there are a bunch of fairly plain apartment complexes that always have a vacancy or three. These complexes can’t afford to turn down fully employed applicants who can afford the full deposit, just because they’re being foreclosed. Or at least, based on people I know who live there, they’re willing to take anyone with a job (or financial aid) and a deposit. And you have to figure that growing number of foreclosures will reduce its stigma.

I just don’t see thousands of foreclosed families walking the streets because apartments they can afford would rather have vacancies than let them in. More likely they just demand an extra $1k in deposit. If there’s a demand, someone will create the supply.

[beanmaestro]

NR-

I’m in Santa Barbara, so I’m not that familiar with SD’s rental occupancy rate. But near my house (not the most fashionable part of town), there are a bunch of fairly plain apartment complexes that always have a vacancy or three. These complexes can’t afford to turn down fully employed applicants who can afford the full deposit, just because they’re being foreclosed. Or at least, based on people I know who live there, they’re willing to take anyone with a job (or financial aid) and a deposit. And you have to figure that growing number of foreclosures will reduce its stigma.

I just don’t see thousands of foreclosed families walking the streets because apartments they can afford would rather have vacancies than let them in. More likely they just demand an extra $1k in deposit. If there’s a demand, someone will create the supply.

[beanmaestro]

NR-

I’m in Santa Barbara, so I’m not that familiar with SD’s rental occupancy rate. But near my house (not the most fashionable part of town), there are a bunch of fairly plain apartment complexes that always have a vacancy or three. These complexes can’t afford to turn down fully employed applicants who can afford the full deposit, just because they’re being foreclosed. Or at least, based on people I know who live there, they’re willing to take anyone with a job (or financial aid) and a deposit. And you have to figure that growing number of foreclosures will reduce its stigma.

I just don’t see thousands of foreclosed families walking the streets because apartments they can afford would rather have vacancies than let them in. More likely they just demand an extra $1k in deposit. If there’s a demand, someone will create the supply.

[beanmaestro]

NR-

I’m in Santa Barbara, so I’m not that familiar with SD’s rental occupancy rate. But near my house (not the most fashionable part of town), there are a bunch of fairly plain apartment complexes that always have a vacancy or three. These complexes can’t afford to turn down fully employed applicants who can afford the full deposit, just because they’re being foreclosed. Or at least, based on people I know who live there, they’re willing to take anyone with a job (or financial aid) and a deposit. And you have to figure that growing number of foreclosures will reduce its stigma.

I just don’t see thousands of foreclosed families walking the streets because apartments they can afford would rather have vacancies than let them in. More likely they just demand an extra $1k in deposit. If there’s a demand, someone will create the supply.

[beanmaestro]

NR-

I’m in Santa Barbara, so I’m not that familiar with SD’s rental occupancy rate. But near my house (not the most fashionable part of town), there are a bunch of fairly plain apartment complexes that always have a vacancy or three. These complexes can’t afford to turn down fully employed applicants who can afford the full deposit, just because they’re being foreclosed. Or at least, based on people I know who live there, they’re willing to take anyone with a job (or financial aid) and a deposit. And you have to figure that growing number of foreclosures will reduce its stigma.

I just don’t see thousands of foreclosed families walking the streets because apartments they can afford would rather have vacancies than let them in. More likely they just demand an extra $1k in deposit. If there’s a demand, someone will create the supply.

[beanmaestro]

Frankly, this is a brilliant idea for the underwater homedebtor.

You’ve been piling up credit card debt to pay the mortgage, and bleeding more each month. So you stop paying now (since it’s a matter of time anyway), pay off your credit cards, and save up a security deposit in the months before eviction. You clear your credit check on your new rental before the foreclosure, and know exactly when you have to move. Seems almost civilized…

[beanmaestro]

Frankly, this is a brilliant idea for the underwater homedebtor.

You’ve been piling up credit card debt to pay the mortgage, and bleeding more each month. So you stop paying now (since it’s a matter of time anyway), pay off your credit cards, and save up a security deposit in the months before eviction. You clear your credit check on your new rental before the foreclosure, and know exactly when you have to move. Seems almost civilized…

[beanmaestro]

Frankly, this is a brilliant idea for the underwater homedebtor.

You’ve been piling up credit card debt to pay the mortgage, and bleeding more each month. So you stop paying now (since it’s a matter of time anyway), pay off your credit cards, and save up a security deposit in the months before eviction. You clear your credit check on your new rental before the foreclosure, and know exactly when you have to move. Seems almost civilized…

[Author]

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