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July 19, 2007 at 1:28 PM in reply to: Is the liquidity tide finally rushing out of Wall Street? #66523July 19, 2007 at 1:28 PM in reply to: Is the liquidity tide finally rushing out of Wall Street? #66587
(former)FormerSanDiegan
ParticipantWhich if I remember correctly, caused credit contraction, which either caused or exacerbated a recession in the early 90’s.
Exactly. And the stock market took a couple deep (but short-term) hits during the period. Worst drop during recession was about 18%, but recovered within about 6 months.
This was nothing like the over-exuberant market of 2000. When recession happens I’d expect a 6-18 month market correction of 15-20%. Not a repeat of the late 90’s overinflated stock bubble. Just my opinion.
July 19, 2007 at 9:00 AM in reply to: Is the liquidity tide finally rushing out of Wall Street? #66459ParticipantI agree with f_l_u. If you have been shorting the market for the past year or so, the problem is that the market has remained rational for too long. I don’t see anything close to the overvaluation in the market that we saw in 2000. The market is not significantly (more than 10%) overvalued IMO. It seems to me to be more like the 80’s era of Junk bond kings, leveraged buy outs, and an upcoming S&L crisis.
July 19, 2007 at 9:00 AM in reply to: Is the liquidity tide finally rushing out of Wall Street? #66524ParticipantI agree with f_l_u. If you have been shorting the market for the past year or so, the problem is that the market has remained rational for too long. I don’t see anything close to the overvaluation in the market that we saw in 2000. The market is not significantly (more than 10%) overvalued IMO. It seems to me to be more like the 80’s era of Junk bond kings, leveraged buy outs, and an upcoming S&L crisis.
Participantwhether it’s an undisclosed 1031, a set back in loan underwriting, a lender request for second appraisal, or whatever, isn’t there always something late in the game that throws a monkey wrench into the works ?
Participantwhether it’s an undisclosed 1031, a set back in loan underwriting, a lender request for second appraisal, or whatever, isn’t there always something late in the game that throws a monkey wrench into the works ?
ParticipantSurveyor is right. From a cash flow perspective there are much better places to consider. But, for many of us, out-of-town is tough. Even if you have a property manager, and even if you get plenty of extra cash flow to compensate, it is very difficult to understand the subtle issues of various sub-markets of out of town investments. I would suggest areas that you are familiar and have someone you trust outside of your RE team (e.g. former home town, areas where relatives live and you visit occasionally, etc) if you are to consider this.
As for this particular property. You might get a second look at it this fall when it becomes a REO.
ParticipantSurveyor is right. From a cash flow perspective there are much better places to consider. But, for many of us, out-of-town is tough. Even if you have a property manager, and even if you get plenty of extra cash flow to compensate, it is very difficult to understand the subtle issues of various sub-markets of out of town investments. I would suggest areas that you are familiar and have someone you trust outside of your RE team (e.g. former home town, areas where relatives live and you visit occasionally, etc) if you are to consider this.
As for this particular property. You might get a second look at it this fall when it becomes a REO.
ParticipantThis would be a rare occurrance in today’s San Diego market, so it is either a great find or a really crappy neighborhood.
Rents can indeed fall, but what percent decline would be associated with your $100-500 difference ?Some details would help address this …, such as
purchase price and monthly rent.With this little margin, you would still be counting on appreciation. The 100-500 difference is likely to get eaten into by maintenance costs. $100 per month is not much. One major repair (heater, water heater, A/C, pipe break, dishwasher) per year eats that up. Trust me, I’ve had each of these things happen to me in a property I’ve for 6 years. One per year is standard, plus all the other minor maintenance issues (clogged toilet, skunk removal, paint) and vacancies will take your positive cash flow.
You’ll still likely have the tax benefit associated with depreciation, which might save you a few hundred $ per year in taxes, depending on your situation.
So, you won’t get much cash off this place, all things considered. You’ll still have to depend on appreciation to make money on this deal.
If you get numbers like this in Barrio Logan I would not buy. However, for bread-and-butter areas like Clairemont, when the numbers look like that (a few hundred bucks positive per month) I would buy. We are a long ways from that in the current market.
ParticipantThis would be a rare occurrance in today’s San Diego market, so it is either a great find or a really crappy neighborhood.
Rents can indeed fall, but what percent decline would be associated with your $100-500 difference ?Some details would help address this …, such as
purchase price and monthly rent.With this little margin, you would still be counting on appreciation. The 100-500 difference is likely to get eaten into by maintenance costs. $100 per month is not much. One major repair (heater, water heater, A/C, pipe break, dishwasher) per year eats that up. Trust me, I’ve had each of these things happen to me in a property I’ve for 6 years. One per year is standard, plus all the other minor maintenance issues (clogged toilet, skunk removal, paint) and vacancies will take your positive cash flow.
You’ll still likely have the tax benefit associated with depreciation, which might save you a few hundred $ per year in taxes, depending on your situation.
So, you won’t get much cash off this place, all things considered. You’ll still have to depend on appreciation to make money on this deal.
If you get numbers like this in Barrio Logan I would not buy. However, for bread-and-butter areas like Clairemont, when the numbers look like that (a few hundred bucks positive per month) I would buy. We are a long ways from that in the current market.
July 18, 2007 at 8:45 AM in reply to: Research (or Speculation) as to timeline for Mortgage Resets and NODs #66276ParticipantIt’s just a guess, but anyone who refinanced using an ARM probably withdrew much or maybe all their disposable equity when they did it; why else would someone use an ARM in a refi?
There could be a host of reasons. I have two personal examples, since I refinanced to ARMs twice in my life. In neither case did I tap additional equity.
In one case it was to get a much lower rate on a house I planned to sell within 2-3 years (personal residence sold in ’05). In this case no additional equity was taken out and the loan was about 65% LTV and for the 2 years I remained, I saved about about $400 per month. In the other case, it was a rental property, where I wanted to improve cash flow, so I lowered my payments and took a 5-year AR at about 50% LTV
Maybe I’m the exception, but at times there are lots of reasons to consider ARMs rather than equity extraction. However, in the current market the spread between 30-year fixed and 3, 5, 7 and 10 year ARMS is so small that it makes sense for a lot fewer people these days.
July 18, 2007 at 8:45 AM in reply to: Research (or Speculation) as to timeline for Mortgage Resets and NODs #66340ParticipantIt’s just a guess, but anyone who refinanced using an ARM probably withdrew much or maybe all their disposable equity when they did it; why else would someone use an ARM in a refi?
There could be a host of reasons. I have two personal examples, since I refinanced to ARMs twice in my life. In neither case did I tap additional equity.
In one case it was to get a much lower rate on a house I planned to sell within 2-3 years (personal residence sold in ’05). In this case no additional equity was taken out and the loan was about 65% LTV and for the 2 years I remained, I saved about about $400 per month. In the other case, it was a rental property, where I wanted to improve cash flow, so I lowered my payments and took a 5-year AR at about 50% LTV
Maybe I’m the exception, but at times there are lots of reasons to consider ARMs rather than equity extraction. However, in the current market the spread between 30-year fixed and 3, 5, 7 and 10 year ARMS is so small that it makes sense for a lot fewer people these days.
Participant“tranche” is correct
If you say it fast it sounds like “trash”
Participant“tranche” is correct
If you say it fast it sounds like “trash”
July 16, 2007 at 8:13 PM in reply to: Chowderhead blows his top at foreclosure caller on KOGO show today #66077ParticipantI actually refinanced my house with Mehran Aram back in 1999 or so. No complaints.
Rearding Chamberlain. He’s like a stopped clock. You would have made a ton of money following his advice 7-8 years ago, but he’s an obvious perma-bull, numb-skull.
I also remember some of his guests in the last 90’s advocating day-trading tech stocks. Wonder how that turned out ?
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