[earlyretirement]

[quote=EconProf]Wise words from EarlyRetirement, a guy who has the experience to pass on his wisdom to us.
I agree that for the wealthy family with kids, parts of South America, including Mexico, have big problems with kidnapping, which is why many of them chose to vamoose to the U.S. In fact, many of the wealthy of Tijuana have homes in and around Coronado because of the fear of kidnapping.
But the original thread was regarding retiring in Mexico, presumably for the very non-wealthy American. Just as we can learn from ER’s experience with rich expatriates, we could learn from one of the many American retirees who do not regret their choice. Too bad one of them has not yet chimed in.[/quote]

Oh absolutely EconProf. That’s why I took the time to explain the background of what happened to my friend.

As you mentioned, I know MANY people that have retired to many places in Latin America including Mexico and they enjoy it. Typically the more low profile of a lifestyle you live the better.

However, I know several retirees that are NOT affluent or wealthy and had problems. Even if you are totally fluent in Spanish, most foreigners are still “marked” as “Yankees” and to an extent marked. There are many many many people that successfully retire in places like Mexico and happy with it.

A follow up comment I’d make is that typically life is never as glamorous as you might think. Or the cost of living isn’t nearly the same as what a “local” would spend. People throw out terms like “median” incomes in the area and try to compare themselves to that. However, the Americans are just totally accustomed to another lifestyle.

As well, healthcare isn’t nearly as good or cheap as what some try to portray. Even in countries where they provide “free” healthcare to all, including foreigners….if you really encounter an emergency or need an excellent facility or doctor you’re still going to pay. For example, although I had residency in several countries I was living with or owned homes, I still had private medical insurance that was quite pricey because sure you could get free medical care in a dingy public hospital where it was disgusting and maybe have to wait in line for hours.

So it’s good to think about that side of it as well. Other countries have huge currency risk swings or horrible inflation. So one year when you move it might be cheap, but then a few years of 30% inflation per YEAR it gets expensive rather quickly.

I agree certain parts of Mexico probably would be ideal but even some relatively safer destinations have been known to have problems with drug lords and even some innocent people have gotten swept up in the violence.

I do think if the government can get a handle on the crime it would be a GREAT place to retire. But I think we are a ways from that happening.

I’m not saying there are only negatives about retiring in Mexico or other countries. There are LOTS of benefits as well. Especially if you are older in age and need help.

For example, maids in most of these countries are dirt cheap. So you can have a full time maid or even a live in maid if you wanted. They will clean daily, cook ALL your meals, do ALL your laundry, iron all your shirts, go to the grocery store to get your groceries, take care of paying your bills, etc.

Heck, when I lived down South I not only had a full time maid but I had a chef as well that came in daily and made breakfast, lunch and dinner. That kind of thing even if you are fairly wealthy, you won’t see too much of here in the USA. Although we have maids that come to our house here in SD every week, we wouldn’t dream of having a maid come in every day to clean. It would cost a fortune! Or a chef, etc.

As well I talk about the corruption but sometimes it works to your advantage. For example, get a speeding ticket or run a red light…? NEVER get a ticket… you can always buy your way out of a ticket. I’m not saying I advocate that but it’s just common down south.

As well, I can’t tell you how many 60 or 70 year old friends I have down in Latin America with 20 something year old girlfriends. LOL. So there is that aspect as well that these guys will NEVER find here. And don’t think it’s just “dirty old men”. I’ve seen many older women too with younger “novios” too. LOL. I’ve seen it all down there!

There are good sides and there are negative sides but it’s good to keep both sides in mind.

[earlyretirement]

There are some good posts from both sides. EconProof makes some valid points but so do the other posters about the violence and crime.

I speak from experience. I have extensive experience working and living in Latin America. I own several corporations in Latin America as well as owning real estate in 4 different countries in South America.

Are there investment opportunities in Mexico and other countries? Absolutely. But there is a LOT of crime, violence, corruption, red tape, bureaucracy, inefficiency, and tons of other problems.

I’ve done business in many countries and I can tell you that in many of these countries the judicial system really doesn’t work in the event of some dispute. Or even in countries where it does, judges can get bought/bribed, etc.

The police in many of these countries are totally corrupt and in cahoots with the bad guys.

People can say what they want about the USA but for the most part everything is totally efficient here. The banking system is excellent and works. The legal system is excellent and works. We have remedies like Small claims courts that mostly work. Judges here can’t easily get bought/bribed and it’s NOT common. Police officers for the most part are totally clean and not corrupt.

Even countries that are considered relatively safe and stable have lots of shady things going on. And FORGET about it if you come from an affluent or wealthy family.

Let me give you one example. I’m working in my office one day and my wife’s friend’s husband calls me panicked. This guy is worth millions. He keeps a VERY low profile but his family owns several businesses. Well, he calls me late afternoon and asks me if he can borrow the equivalent of $50,000 US in cash.

I immediately know something is wrong because this guy is worth tens of millions of dollars and I personally know he isn’t having any financial problems. And I can hear he is panicked and almost crying. So I tell him he can confide in me.

Well he tells me that his daughter has just been kidnapped. We’re talking about a 12 year old girl. She was walking to her friend’s house. (They live in a VERY affluent area). A black van pulled up to them. They left her poor friend and only took her. They call him and tell him if he doesn’t give $50,000 in cash and drop it off in a trash can on the street corner they designated, they would cut off all of her fingers one by one.

So, he wants to talk to her. Well, these guys are pros and they tell him that if he calls the police they will kill his daughter. And they claim the police is in on it with them so if he calls them they will kill her.

So they ask him if he wants to talk to her. So all of a sudden he hears “Daddy, I”m bleeding..they are cutting off my fingers”. Imagine this as a parent!

The banks had already closed as they close early in Latin America. And he didn’t want to get too many people involved. I owned a financial firm and we always had cash so he knew I could help. Absolutely I helped him and he paid the ransom and they let his daughter go.

The positive thing is they didn’t cut her finger off or harm her besides a small cut. The girl was so panicked she was yelling so they knew exactly what they were doing. But she just had a breakdown and he immediately moved his family to the USA. And needless to say, shortly after that I also moved back to the USA as I couldn’t imagine going through that with my family.

So when people talk to you about all the opportunities, or lower cost of living, or booming economy, yadda yadda yadda in other countries. Remember this true story.

Allen from Fallbrook said it best, “Personal safety always trumps economic opportunity”. That is SO true. Trust me on that.

Am I saying this kind of thing is a common event with retirees? Nope. Not at all. But you have to keep in mind in many of these countries, the levels of poverty are very high. And in many cities like Rio de Janeiro, you have really wealthy and expensive neighborhoods like Ipanema right next to slums.

These low lives feel it’s worth the risk for this type of crime.

Does this stop me from visiting these places or even continuing to invest in them? No. Would I want to raise a family in some of these cities again? Absolutely not.

[earlyretirement]

[quote=HLS]Nothing unusual about wanting a walk thru prior to closing.
Closings/settlement are handled differently in the western US.

Escrow companies are normally used in the western half of the US. A escrow & title company (instead of a lawyer) holds the money, signed deed, and handles the transfer and recording with the county.

It makes it easier for the seller to release ownership of the property, and the buyer submits funds to escrow, neither party needs to be present or ever meet. Escrow is a neutral third party that needs signed instructions from both sides.
They are highly regulated
*************************************
In the middle & Eastern US, closings are also called ‘settlement’… They are arranged on a specific date & specific time and buyer & seller meet along with an attorney as ‘settlement agent’, a title company rep may attend also.

The settlement agent accounts for all funds listed on the settlement/closing statement and the property exchange takes place, and the deed is then recorded with the county.
*********************************
Same end result. I think it is better to deal with an escrow company but the option may not be available in many areas.[/quote]

Yep. I agree HLS. I think it is perfectly fine to use the Escrow company. In fact, it’s a more efficient process. It was always a pain to have to actually go to the closing or sign a Power of Attorney for my lawyer to go for me.

The system out here actually works really well.

[earlyretirement]

[quote=spdrun]Make a dozen offers and hope one sticks? Sort of the real-estate equivalent of spam. Eventually, you’ll find SOMEONE interested in teh c1aLi5 and v1a6ra that you’re peddling.

Other than that, ain’t over till it’s over. Everything seems to be moving at a glacial pace — fortunately, the bank’s deadline for closing is two months out. (Though I hope to do much sooner.)

California’s system of doing most things by mail is also very different from NJ/NY, where you have a closing day involving a bunch of dudes and attorneys sitting around a table, signing shite, and where they give you the HOA docs FOR FREE upon offer acceptance, rather than having to pay the management $300 to wait 5 days, then make a few clicks and e-mail them.[/quote]

LOL. Funny spdrun. So true about California’s system being different. The first time I bought here was 2011 and I was surprised as well on several things. For example, it seems like the buyer can back out for almost ANY reason for a certain # of days even after signing a contract to buy.

As well, I remember being out of town when the closing date came. And I insisted to fly back here to do a final walk through the day before or the day of closing. And they kind of acted like I was being a pest about it. LOL.

Everything is done via Docusign and just wiring out to the Escrow agent with no one even meeting. That is different vs. many places I’ve bought before.

[earlyretirement]

[quote=SD Realtor]Get an attorney. Don’t take advice from an internet blog when it comes to legal matters. You screwed up, you did discriminate. Consider it a lesson learned. Whenever you review lease applications you never EVER make any statements that discriminate in any manner. You never need to give anyone any reasons for your decisions other then, “I am considering other applicants, and if you are accepted I will let you know.”

Finally if you are renting out a 4 bedroom home 2 kids can do as much damage as 7. Adding significant upgrades to a rental property is not a good idea.[/quote]

I totally agree.

NEVER make any statements at all. SD Realtor gives excellent advice. Lots of new landlords don’t have any experience and they say and do all the wrong things which can be very treacherous.

If this person hasn’t filed any complaint against you yet, I wouldn’t waste time worrying about it or spend money consulting lawyers. I’d wait until you know it’s a problem and they definitely filed a complaint but definitely learn from this.

[earlyretirement]

I noticed this weekend just driving around in my neighborhood there are more for sale signs going up that weren’t there a few weeks ago. Looks like more people are starting to list their houses now that prices and demand have risen.

[earlyretirement]

Yep. I replaced all the lights in all 5 of our bathrooms. Several of the bathrooms had those ugly round bulb lights in the bathroom.

I replaced all of them with some really nice looking lights from Restoration Hardware. The lighting that I picked out wasn’t cheap. But they look beautiful. It made a big difference.

As far as the lighting, some of them aren’t as bright as the old lighting but it’s more than bright enough. Just pay attention to the wattage of the bulbs. Some are much better than others.

I had a professional electrician come out and change all of the lighting. The one thing that sucked is in 3 of the bathrooms, it wasn’t painted under the frame of the lighting so I had to also repaint the bathrooms. I was crossing my fingers hoping that it was painted underneath but no such luck. The previous owner was the original owner and didn’t change out much of anything so it’s been a busy time of upgrading all the lighting in the house and installing ceiling lights.

I was surprised moving out to San Diego that many of the houses that we saw (even on million dollar houses) didn’t have ceiling lights in the bedroom. Lots of lamps. I saw more of that in San Diego vs. most cities I’ve been to. So we had to get ceiling lights installed in all of the upstairs bedrooms.

But it was a worthwhile investment as it really changed the look of the bathroom. We have since gotten the countertops all upgraded to marble and it looks so great we decided to change out all the flooring to the same Carrera marble on all the flooring. Looks incredible.

[earlyretirement]

Congrats spdrun! From reading your posts you have a LOT of patience. I never had the time or patience to deal with short sales but I really admire those that have the patience to wait it out like you did.

Kudos to you and congrats!

[earlyretirement]

[quote=SD Realtor]I see more people overjoyed that the bank will loan hundreds of thousands of dollars at 3 or 3.5% as opposed to the write off.[/quote]

Oh no doubt SD Realtor. For savers like me it’s HORRIBLY painful seeing rates so low but definitely for the masses it’s true BLISS seeing rates this low.

Unfortunately for savers/retirees we’re probably stuck in this low interest rate environment for several more years to come.

[earlyretirement]

[quote=SK in CV][quote=CA renter]
I would argue that they are taking out a mortgage in order to preserve cash because they think they can earn more on that money than what they are paying in interest.

Contrary to the realtor rhetoric about the “benefits” of MID, it never makes sense to spend a dollar in order to save 30-40 cents (and that’s if you’re earning a pretty significant income) on taxes.[/quote]

I agree entirely. The argument that an interest deduction is “needed” for taxes is stupid. It was stupid back when the top tax rate was 70%. Using the leverage to increase overall return might make sense for some people.[/quote]

I totally agree CAR and SK in CV! I’ve never seen so many people in the USA overjoyed at paying interest payments to the bank so they can take the tax “benefit”. I get overjoyed RECEIVING interest but I do NOT get overjoyed PAYING it out to someone else over multiple years/decades.

[earlyretirement]

[quote=SK in CV][quote=bearishgurl]
I suppose there are people who DO pay them off in a timely manner but I don’t know any. Everyone I ever knew who has them have taken one or more deferrals and is paying only the minimum monthly payments on them.

[/quote]

Obviously, you don’t know everyone, only the deadbeats. The Cal State system universities mostly have default rates between 5 and 10%, with only one as high as 10%, and a couple, like SDSU, below 5%. The UC’s are better. Only one has a default rate of 5%, the rest are lower.[/quote]

Yeah. I was going to say… Wow have things really gotten THAT bad on the student loan front if you don’t know anyone that isn’t defaulting on their student loans? To be honest, I’m certainly NO expert on student loan default rates but I figure it can’t be as bad as portrayed but I do think it could be a ticking time bomb for many people. But again, since it’s dischargeable I think the vast #’s out there are going to keep paying them on time. Many foregoing buying houses or other things as they are forced to pay on them.

Granted, I’m not hanging out with too many 20 something year olds these days but I do have hundreds of clients and friends and many of them did not pay for their kids college tuition and it was financed through student loans. Also, MANY of my friends have younger sisters or brothers that have gotten student loans. And I haven’t heard of a single one that has defaulted or late. All my friends do complain their sisters/brothers are burdened by them and complain but they are still paying on time. After all, what else can they do???

But to be honest, if they were I guess they probably wouldn’t be telling me but their parents seem to say they are paying them on time. I’m sure some probably got deferrals but as SK in CV mentioned… I don’t think the statistics point to THAT many people that have defaulted or late on their payments.

I don’t know if there are statistics out there on what % of them are deferring payments but I’d be really curious if anyone has that kind of information.

Flyer, I TOTALLY agree with you about the job market here. We talk about it all the time and I’m still amazed when people try to argue with me that San Diego is NOT the best place to climb the corporate ladder with the sunshine tax and lack of breadth in industries compared to other major cities.

I post on some other forums where people try arguing that San Diego is a fine job market. I always point out that besides certain industries like certain engineers, some biotech and a few handful of other professions….this isn’t anything to write home about.

In fact, I’ve never lived in a major city where I met so many people or friends of friends that either still live with their parents in their late 20’s or even 30’s or have roommates. I see it all the time in various settings. The girl that cuts my hair is in her mid 30’s and was living at home up until this year. And now she is on her own but renting a room in a 2 bedroom apartment with a complete stranger….

Living in San Diego is great but NOT at all costs….

[earlyretirement]

So many great posts.

BG,

Maybe I misconstrued your words when you said, “DON’T BORROW FOR COLLEGE”.
I assumed you meant it in absolute terms, which as mentioned I don’t agree with.

Yes, I was responsible but so are millions of other students over the past few decades. So it wouldn’t be fair to lump everyone in the same category as it pertains to student loans.

To me, it’s akin to telling someone they should never get a mortgage just because many were using them irresponsibly.

The truth is, any type of credit needs to be used responsibly. Whether it’s a mortgage, credit card debt, car loans, personal loans, home equity loan, student loans, etc.

Student loans are so vital and necessary for many people out there. And it is important to note that many are using them perfectly responsibly. Many people are very conscious about their field of study, etc. Sure, many aren’t but I don’t think it would be safe to lump everyone in the same category.

I always like to use real life examples and also see people that I personally know and their situations. Most of my very close friends in life all got student loans. And some younger friends as well. Not too many of my friends had wealthy parents that saved up and paid for their college education.

There WERE a few where their parents saved up a bit of college funds but it wasn’t nearly enough for what it actually cost so they still had to get student loans.

Sure, there are financial aid packages out there or grants, work study, etc. I got a few of those but it still wasn’t nearly enough to pay for everything. It was just the sad reality. Sure, I probably shouldn’t have joined a fraternity and had that type of expense but I wouldn’t have changed things for a second and had a wonderful college life.

I’m not sure if there are any studies or formal statistics to say what the actual percentages are of total number of people that get student loans and default on them or can’t quality to purchase a home due to it.

But I feel very comfortable in saying that people like me, the responsible ones that pay it back and are more responsible aren’t in the minority. I have plenty of friends that did the same thing.

My best friend and lawyer went to Harvard. His family was very poor. He did quality for some financial aid but he still had massive student loans. Then he had to put himself through law school with yet more loans. He was like me and paid them all back on an accelerated schedule.

All my old college buddies that did get student loans. I don’t know a single one that defaulted on their loans. I believe some did defer some when times were tough but the truth is they would have never gotten to where they are now without student loans.

So I AM a big proponent for student loans and using them intelligently and responsibly. But I actually truly believe that the vast majority of kids use them responsibly.

I absolute agree with the others it’s pure stupidity for some of these people out there to go into horrible majors. And I also think it’s highly questionable for older people to go back to school (if it’s expensive) later in life.

A woman that I knew that used to work for my company was making GREAT money for her position. She was an executive assistant and making darn good money (around $75,000) and keep in mind this was the late 1990’s so $75,000 was more back then. I can’t remember how old exactly she was but I’d say 50ish.

My company was really generous and took good care of people that stayed with the company and were loyal. So she would have kept getting raises and we gave bonuses too. Well, one day she says she is quitting as she is just not content with her career. I was really puzzled because she was already in her 50’s. I can’t even remember what she was studying but I believe it was law.

Well, by the time she finished no one would hire her. So it was money down the drain.

There are plenty of examples on both sides of the issue but definitely student loans are very important when used responsibly and intelligently, IMHO.

Sure, it does make sense to go to community college or other State schools, etc. But in life in many fields it DOES matter where you went to school or at least you will have a big leg up vs. other peers with the same degree from worthless schools. It’s sad but just life.

[earlyretirement]

BG,

I totally agree with much of your post. It’s so spot on target the part about seeing what major you will go into. I see it all the times including with my brother and sisters which I’ve had heated arguments over the years in the past.

I’m one of those kids that graduated with over $100,000 in student loans (and keep in mind this was a while ago!). It’s actually not hard to do when you’re going to a top school or even a not top school that is private or if it’s a State school and you are paying out of state tuition. Add in room and board, books/supplies, just every day living stuff, fraternity/sorority, etc. Not hard to rack up over $25,000 a year or much more!

Fortunately upon graduating I found a great job and worked to climb up the corporate ladder. I made some pretty phenomenal income and my goal was just to pay off the student loans ASAP in as few years as possible.

All my friends found pretty decent jobs that paid well. Several of them also had student loans. But instead of trying to pay them off early they were buying a $50,000 car out of the gate, living in a super expensive apartment, traveling and just pretty much still living paycheck to paycheck when it is was all said and done. (Kind of how BG mentioned).

I kept the same car I had from college. I lived in a fairly mediocre (i.e. affordable) apartment for a few years, even though I was making amazing money and could afford more. But I know I was the exception not the norm.

It’s wicked the system of these student loans because lenders are lined up to just dole out TONS of student loans. Maybe things have changed today but back when I was going to school it was VERY easy to get student loans. You wanted more? No problem. Because they aren’t dischargeable in bankruptcy the lenders were practically throwing money at you.

And it was NOT just college loans. At the time, credit card companies weren’t barred from coming on campuses and they would pay students to try to get other students to sign up for credit cards. (I believe that is illegal in most states now). Well, I had a part time job at the time. I remember how crazy it was because I kept signing up for credit cards because at the time they were typically giving away some freebie. I think I graduated with something like $100,000 in available credit if I wanted to spend it. I always thought it was INSANE to give someone young with not much income that kind of available credit. I’m sure that doesn’t exist today thank God!

I’m sure today is probably different but I know people that are totally screwed and can’t buy a house and a good example. My best friend’s sister in law graduated from a no name private university (i.e. pretty crappy quality education but extremely pricey). She didn’t get a worthless degree. I believe she got a business degree and works in a bank now.

Nothing high level or anything. I believe she also got an MBA degree (at the same private expensive university). So here is a girl that is in her mid/late 20’s that has over $180,000 in student loans! Keep in mind she didn’t get some worthless Art History, Sociology, Anthopology, Fine Arts, Psychology, Communications, etc. She got a business degree with an MBA degree.

However, she didn’t study to become a doctor or lawyer or another profession where she can make really significant income. She lives in a small town in the Midwest where there are barely any jobs and struggled to get that job.

She has so many different student loans with so many different lenders. My best friend sat down with her and tried to make her understand which she needed to pay off first as some were higher interest. LOL.

I thought it was comical because she works at a bank! Seems like common sense to me. Some of these loans were VERY high which seems absurd for this extremely low/no interest environment that we are in.

And the real kicker and something telling is although she works at a bank, she could only get a VERY small portion of it refinanced at a lower rate. Some of the rates are shocking. Her own employer a bank, didn’t want to touch refinancing it. LOL. What does that say?

She makes ok money and her husband works a restaurant job. They probably won’t be able to buy a house any time in the near future. Not with $185,000 student loans.

Pretty ugly what the trends are with costs of some of these college and universities. I’m just wondering what college will cost in 12-15 years when my kids have to go off.

I don’t agree with BG’s point of “don’t get a college loan”. Not at all. I just think that you have to really take an intimate look at what field of study you will go into, the prospects for employment in that field, how much your education costs vs. typical salary levels in that field.

I’m a good example how college loans can and do work. Same thing with many of my close friends my age that also got lots of student loans (albeit in decent fields like law, medicine, accounting, engineering, etc). NONE of these people could have gone to college and became or achieved what they have in life without borrowing for college.

So the answer is NOT to say, “Don’t borrow for college”.

[earlyretirement]

[quote=bearishgurl][quote=livinincali] . . . The fear of inflation and search for yield are significant driving factors in today’s market. There’s plenty of people hiding out in real estate as a safe haven that would probably rather be invested in something else. I honestly think investor speculators looking for yield are probably much weaker hands than traditional owner occupiers. It will be the perfect storm when rates rise. Not only will mortgage rates go up but at the same time those that were looking for yield are going to try to exit.[/quote]

livinincali, I disagree that free-and-clear RE owners are “weaker hands.”

It doesn’t matter that these “investors” were/are seeking yield. If it is not a good time to sell, they don’t have to. If rates go up, they can continue to rent their propertie(s) out in lieu of investing in something more passive. I just don’t see CD’s, MM funds and bond yields going so high as to rival rental income from an investment property purchased right and with all cash.

“Traditional owner occupiers” didn’t buy to “make the numbers work.” They bought what they liked where they personally wanted to live (within the confines of their qualifications).[/quote]

I agree with BG on this point regarding cash buyers. I have a lot of experience dealing with cash buyers. I’ve purchased literally hundreds and hundreds of properties for investors in the past decade (all 100% cash). I’m speaking about hundreds of millions of dollars worth of properties.

These people are NOT “weak hands” for the most part. As BG correctly mentioned, they can ride out any ups OR downs. They aren’t forced to sell. The only few exceptions I’ve seen are people that had major life events that are not in the norm (i.e. finding out they are going to die and want to liquidate to make it easier on their family, major medical illness of them or a spouse/kid/etc, major loss from some uncommon event like their house or business burned down). And out of over 500+ people it’s only been probably 10 that I’ve known that were “forced to sell”.

But these things are VERY rare. Cash buyers are typically the total opposite of “weak hands” that would be forced to sell if prices dipped.

I agree with the various distinctions mentioned of “hedge fund, private equity fund, venture capital, etc”. Many of these funds ARE buying and much of it isn’t leveraged at all.

Also, it’s almost impossible to figure out what % is owner occupied vs. rentals in many cases. Many investors hire third parties to assist them purchase and the properties are put in the buyer’s own name most of the times. You’d think that if you were buying in cash you’d always use an LLC but many people don’t bother with this.

I own several properties in 5 different countries and some of them have had turmoil, high inflation, corrupt leaders and politicians, ups and downs but as a cash buyer I don’t care what happens locally and not having a mortgage I could care less what the “sales value” is. I just ride out any ups and downs and rent it out. Sure, cash flow can be reduced at times but no need to be “forced to sell” being a cash buyer.

I avoid all the “noise” mentioned above and just try to buy in the best areas and typically there is ALWAYS some demand for rentals. My main goal is cash flow not capital appreciation. (sure it’s nice and icing on the cake but that isn’t my goal) and probably it can be said of many cash buyers.

[earlyretirement]

Oh definitely I agree with you BG that San Diego will always be an attractive area to own properties. Especially from people from fly over states as you mentioned before. I know several people that live in Texas that fly over to San Diego once a month even for a long weekend. (They have houses in La Jolla).

One woman I just had coffee with in La Jolla lives in Dallas and she originally bought a house for her daughter to live in but her daughter moved to Los Angeles so the house just sits empty! She said she uses it but rarely. Lots of people like her as well.

Also, again BG is correct about the Mexican nationals that own in the area. I’ve met several. And as she mentioned it’s NOT drug money or anything to do with drugs. It’s clean money. MANY business owners that own successful small, medium and large companies over there.

My friend in La Jolla that lives in a gated community said his community is chock full of wealthy Mexican owners like this. And I know Coronado has many as well. (Heck, look at that woman that was busted in Mexico that was stealing money from the school system there). She had a place or two in Coronado. (In her case the money was tainted).

Also, lately I’ve met several people from South America that own places here in San Diego. Just got introduced from friends of friends. People have this mistaken assumption that anyone from Latin America that has millions to buy a place cash but be a druglord or something.

I lived in South America for many years and I can tell you the wealth over there would shock you. Argentines, Brazilians, Uruguayans, Peru, Colombians…… many many own businesses over there or just family money and they make Americans look like paupers.

People down there don’t have the cheap and easy credit like we have here. In many areas down there you MUST pay cash for your properties. Mortgage products like we have don’t exist in some of these places.

I actually love it down there because you see someone that “owns” a place and they really do “OWN” it. Not the bank. There are NO foreclosures there. You see a guy driving around a BMW or Audi or Mercedes and it means they have a lot of $$$$. Here it means nothing where someone lives or what they drive.

Heading into the future I believe you will see more and more foreign nationals buying properties in San Diego. Sure, lots already do in Florida but I’ve noticed a trend over the past 2 years that more are starting to shift their investments to California now that it’s more affordable.

[quote=ctr70]”3. I was just offered a stated income loan at 3%, max stated income being 3x liquid assets after closing, letters of reference required. Don’t be so sure — creative financing is back, at least on the right coast. Of course, this is still better than a NINA or NINJA loan of years past.”

—–>Yes but you need a huge down payment for a loan like that today, 30-40% down. A loan with 20%-40% down has almost ZERO risk of default. 2003-2007 they were doing stated income ZERO DOWN for people with shitty credit! HUGE difference! Apples and oranges! So I disagree with you, creative financing is NOT back. Anything with more than 20% down is not creative financing IMO.[/quote]

Absolutely ctr70 is spot on target. This is nothing compared to the “creative financing” you saw leading up to the bubble. That simply will NOT happen again. I do think the VA and FHA needs to be more stringent but it’s not like that is funny money either like before.

We will NEVER see the type of thing we saw before. It simply won’t be allowed. Not only apples and oranges. But apples vs. coconuts!

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