[earlyretirement]

Personally I think prices will continue to deteriorate some more here in the next year or 2 but if you found the perfect home for you and your family and you can comfortably afford the payments (including HOA and property taxes, Mello Roos, etc) AND plan to live in it for a longer period of time then you are perfectly fine.

If the house isn’t the perfect fit for you and your family and you’re not in any big hurry to move, I certainly don’t think you will lose anything waiting a bit longer.

Like you, I waited on the sidelines for many years but I recently bought a home 2 months ago and perfectly happy with my decision.

I’m over in your neck of the woods as I bought in Santaluz so I have higher HOA and Mello Roos but the schools are great in that area and the quality of life is excellent. I think you have to just mentally decide whether you accept to live in a MR area and if so, you bite the bullet and do it.

Just as the housing bulls thought house prices would go up forever….now you have housing bears that think housing will go down forever. Things move in cycles. Housing isn’t going to go down forever.

While I do think house prices in that area can dip some more. I wouldn’t lose any sleep over it, unless you leveraged yourself beyond what you can comfortably afford.

Also, on high end homes, rental prices are fairly expensive in San Diego so if you are going to be in the house long term you have to look at all the numbers.

I say enjoy your new home and try not to stress about it too much. Yeah, prices can go down some more but it’s just about impossible to perfectly time the absolute highs and the absolute lows.

Congrats.

[earlyretirement]

[quote=davelj][quote=earlyretirement]

I remember several years ago telling everyone and their brother to sell short all the banks and bond insurers and financial companies.

I had several clients that worked at Lehman Bros (LEH). I even told many of them why I was shorting the company they worked at and how I believed it would go under. We always just agreed to disagree on the future of LEH and the market.

They kept going on and on how it would never happen and the sad thing is many of them had most of their net worth tied up in LEH stock. Many of them kept buying on the way down “averaging down”. I ended up short selling LEH into bankruptcy.
[/quote]

Please also tell us about the financials that you shorted which survived and subsequently doubled and tripled. It defies reason that LEH was the only one you placed a bet on. Inquiring minds and all…[/quote]

I short sold TONS of companies/stocks. Yes, many of them came back but I covered short positions in December 2008/January 2009. I didn’t catch the absolute bottom in March but then again it’s impossible to perfectly time the absolute bottoms and tops.

I’m not saying I’m any financial genius because I’m certainly not. But I don’t think it took a genius to see that things were in bad shape.

Also, I’m not saying all the plays I made were correct. After harping over and over how horrible the banking/financials were. I tried to catch a falling knife with Washington Mutual. I shorted it down to the single digits from way up high and made quite a bit of money. But then I bought and went long 2 days before it totally collapsed. I didn’t think the US government would let it collapse. Boy was I wrong!

So that’s what I get for trying to catch a falling knife. The government let it collapse and basically handed it over to Chase Bank. The stock became almost worthless overnight. I lost $250,000+ in two days. That hurt.

I’m reminded of that as I just got some paperwork in the mail last week from a class action lawsuit…as usual the lawyers will make all the $$$$. It said I could get 7 cents per share or something silly like that.

Yeah, lots of financials came back and I missed the upside on them. But many of them are still in horrible shape. Look at Citigroup. Without the reverse split they’d be less than $3.

I am however long in BAC in the $6’s which I’ll hold for the long term as I do think they will come back. They have a TON of toxic waste on the books but I’m comfortable buying in the low $6’s there.

[earlyretirement]

Mr. Rastani is absolutely correct when he says traders care what happens to the economy. Traders don’t care what happens. They are out to make a buck. I’m surprised the BBC cast seemed so surprised by what he is saying.

He was also correct that many traders dream of recessions. Me personally I dread them because everyone suffers. But he was absolutely 100% correct when he said the average guy on the street can make money during recessions as well.

I remember several years ago telling everyone and their brother to sell short all the banks and bond insurers and financial companies.

I had several clients that worked at Lehman Bros (LEH). I even told many of them why I was shorting the company they worked at and how I believed it would go under. We always just agreed to disagree on the future of LEH and the market.

They kept going on and on how it would never happen and the sad thing is many of them had most of their net worth tied up in LEH stock. Many of them kept buying on the way down “averaging down”. I ended up short selling LEH into bankruptcy.

Denial is a very strong thing. People don’t realize just how close to a total economic collapse we had just a few short years ago. And the scary thing is many of the same problems out there were never solved….

[earlyretirement]

Wow UCGal,

GREAT post. Excellent but it sounds like you went through a nightmare situation…

[earlyretirement]

I agree that Elizabeth Warren is a kind and decent person. However, I’ll say that anyone that truly understands the US political system and process can tell you that if she gets involved in politics or elected to office, most likely you will see a different Elizabeth Warren vs. the one now.

It’s sad but politics is dirty and many times you have to do things you don’t want to do. You have to raise funds, you have to give in on certain issues that you believe in and barter for other things.

The way things are structured, it’s very difficult for people like Elizabeth Warren to really “change the system”. I do think it’s a positive to have people like her in office but it would take many many many “Elizabeth Warrens” to really improve things.

I hope she wins but I hope she doesn’t get corrupted like many other politicians. I personally don’t think she will become corrupt but will find it is almost impossible to get things done.

As to Obama….whether you are a Republican or a Democrat, I haven’t talked to anyone that thinks he is living up to the potential of what he promised. From both sides, I think it’s safe to say he has been a huge disappointment. And his popularity numbers reflect that fact.

[earlyretirement]

I’ve done over 50 renovations and my approach with contractors is to get at least 3 very detailed quotes from them. Especially important is breaking down the labor vs. the actual materials.

I’d do a bit of extra work as I’d supply them with an excel spreadsheet to fill in the cost for each thing in each room. That way I could easily see where the differences were.

And then it’s just a matter of them either agreeing to go lower or match another quote or not.

It was a really educational experience for me as many times, contractor A would show me how they were able to get it down or explain it was impossible, etc.

Some contractors are busier than others and value their time more. But the key is just seeing where the differences are and seeing if they will agree to match it.

It’s been my experience, if you’re really cool with them and not a jerk about it, most will match others if it’s truly and apples to apples comparison of the quotes/materials.

[earlyretirement]

[quote=paramount][quote=earlyretirement]I agree with the others (especially EconProf’s post) that you most likely need to lower your price until you get it rented out.

The market has a way of telling you what fair value is. Also, you have to really objectively and subjectively evaluate your property vs. others on the rental market.

Is there anything that is obviously negative on it vs. other properties in the area? Bad decor, ugly bathrooms, dirty, etc? I know some owners that don’t objectively do a comparison on their property vs. what else is on the market.

I compare it to parents and their kids. No parent wants to admit their kid is ugly. And even parents that have ugly kids, probably don’t think they are ugly. Many think they are very beautiful when they are scary (think Seinfelt episode on “stunning baby”). It can be the same with properties.

Also, what is the make up of the property management fee? Do you pay a monthly flat fee to pay the bills? And then a percentage of all rentals? If so, they aren’t really making too much unless they book it.. No? What kind of rates are you paying? How much is the property manager actually making not renting it out?

Also, what competition for property managers is there in the area? I agree sometimes the property manager is to blame but many times it’s just owners that either have properties that are substandard or trying to charge too much relative to the condition of the property. Basis supply and demand issue.

I’m not saying that is the case with yours because I don’t know your case. But it clearly does you NO good to have it sit empty.

Also, how does your property manager go about advertising and getting new clients? Have you talked to other owners that they manage?

A good tip sometimes is to do a bit of detective work and have a friend contact the property manager to set up viewings that they have and set up several including yours and other comparable properties that they manage on the same day and just see how what they say during your visit vs. other property visits. It could be worth the time to do something like that.[/quote]

I really took an objective look, and I studied the market closely and like has been mentioned I came in at market value.

I had others go through the house and tell me honestly what they thought. They all said the same thing – the house is immaculate. Newer kitchen, new carpet, paint, outlets, switches, toilets…the list goes on and on.

Very good location, quiet street – all the right ingredients.

Prop Mgmt fees are $395 for tenant placement, then about $110 per month including eviction insurance.

I interviewed over 10 prop mgmt companies before deciding on the one I chose.[/quote]

Sounds like you definitely did things the right way and have a nice property and it just came down to price. Congrats on getting it rented now. 🙂

[earlyretirement]

[quote=sdrealtor]I beleive it has to have some impact just not the pizza party some of you are hoping for. Time and again I have seen the impacts of various changes being muted to a very high degree. Lower prices at some some price points? Sure. Much lower? Think again.[/quote]

I’d agree with this. I’ve posted before definitely it’s NOT going to help prices at all. I think everyone agrees on that point. I just don’t know how much it will affect prices in NCC but I do see some softening due to this. Just basic principles of economics.

It will be interesting to see how much it softens due to the change.

Everyone and their brother is trying to lobby against the reduction now. Even people that were formally pro-reduction have now changed their tune including Moody’s top economist. They know how fragile the market is now and are desperate to do anything that could help.

I just bought a house 2 months ago (I held out for many years) but I’m all for them lowering the ridiculously high limits that they kept raising for years.

[earlyretirement]

I agree with the others (especially EconProf’s post) that you most likely need to lower your price until you get it rented out.

The market has a way of telling you what fair value is. Also, you have to really objectively and subjectively evaluate your property vs. others on the rental market.

Is there anything that is obviously negative on it vs. other properties in the area? Bad decor, ugly bathrooms, dirty, etc? I know some owners that don’t objectively do a comparison on their property vs. what else is on the market.

I compare it to parents and their kids. No parent wants to admit their kid is ugly. And even parents that have ugly kids, probably don’t think they are ugly. Many think they are very beautiful when they are scary (think Seinfelt episode on “stunning baby”). It can be the same with properties.

Also, what is the make up of the property management fee? Do you pay a monthly flat fee to pay the bills? And then a percentage of all rentals? If so, they aren’t really making too much unless they book it.. No? What kind of rates are you paying? How much is the property manager actually making not renting it out?

Also, what competition for property managers is there in the area? I agree sometimes the property manager is to blame but many times it’s just owners that either have properties that are substandard or trying to charge too much relative to the condition of the property. Basis supply and demand issue.

I’m not saying that is the case with yours because I don’t know your case. But it clearly does you NO good to have it sit empty.

Also, how does your property manager go about advertising and getting new clients? Have you talked to other owners that they manage?

A good tip sometimes is to do a bit of detective work and have a friend contact the property manager to set up viewings that they have and set up several including yours and other comparable properties that they manage on the same day and just see how what they say during your visit vs. other property visits. It could be worth the time to do something like that.

[earlyretirement]

Thanks Jacarandoso! I’ll check them out and stop by there this weekend. Some of their stuff looks fabulous and great they do other things besides just staircases.

Definitely I wouldn’t do the job myself…I’ll be the first to admit I’m NOT handy around the house at all. 🙂

[earlyretirement]

I agree with the others when you have the option to choose between Paypal or credit card, I’d go with credit card as the protection process is quicker and easier. Almost any credit card that I know if there is a problem will immediately credit you back whatever you had a dispute with.

Dealing with Paypal.com can be slower.

But I will say that they have GREATLY improved their customer service over the years. I’ve been using Paypal since they first came out. And in the early years it was like pulling teeth dealing with customer service and believe it or not they never even had a phone number on their website to contact anyone! It was a nightmare.

But over the years, they have really gotten great both from the consumer side but also from the merchant side. I used them for one of the companies I owned and once you do a lot of volume with them, they assign you a Manager that you can call or email with ANY issues and they solve them immediately.

It’s amazing just how many people use it now. We did several millions of dollars a year in transactions and I think the breakdown was like 60% credit cards but 40% of the clients wanted to use Paypal.

It’s really amazing all of the new technology out there these days like Four Square, etc.

But from the consumer side, I still think credit cards are the best with the strongest protection.

[earlyretirement]

[quote=threadkiller]I’ve got a 5500W one. Puts out 45 amps @ 120V. It is loud, I’ve heard that Hondas are quieter. If I use mine again I will be cycling it most likely. For the approx. 5 hours that I ran it, it used approx. 2 gallons of gas.[/quote]

Thanks Threadkiller…. I’ll check out a few this weekend… I figure it can’t be a bad idea keeping it in the garage just in case along with some other things I’ll stock up on including some LED lamps that would have come in handy this past week.

[earlyretirement]

[quote=Huckleberry]Pablo & EconProf

Do either of you know of any conservative hard money lender’s you can refer based on good experiences?

Would like to look further into this but when Googling for local firms, many websites look pretty cheesy and send red flags of potential fraud…[/quote]

The plain truth is that anything/anyone paying out amazing returns will have some element of higher risk to it. Only you can decide if the risk/reward ratio is worth it to you. But I’ve seen many people over the years promise great returns and “low/no risk” and that just wasn’t true.

So just keep that in mind.

[earlyretirement]

Just out of curiosity, do any of you Piggs have a generator at home? If so, what type/brand is it? After this I was looking into getting a generator but there are so many types out there I was curious if anyone had one. I honestly haven’t ever met anyone that had one in their home.

[earlyretirement]

Yeah the prices have plummeted. So much so that companies like Solyndra (that the US government gave $535 MILLION in loan guarantees)… has just folded.

The only time I was in a house that used solar energy was a few months ago in Maui. The house we rented used solar energy but we always had to flip the switch to take a hot shower as it would never generate enough power to give a really hot shower.

I was always curious about others experience with solar…..

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