[justdoitstewart]

[quote=pri_dk]Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.[/quote]

I’m not following you here, who’s peddling anything? Seems like a good discussion to me about 1. buying non performing loans from the banks 2. and can residential real estate be considered an investment

I think it’s pretty crazy to say residential can’t be treated as an investment, but like the other posters said, the word is up for interpretation.

[justdoitstewart]

[quote=pri_dk]Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.[/quote]

I’m not following you here, who’s peddling anything? Seems like a good discussion to me about 1. buying non performing loans from the banks 2. and can residential real estate be considered an investment

I think it’s pretty crazy to say residential can’t be treated as an investment, but like the other posters said, the word is up for interpretation.

[justdoitstewart]

[quote=pri_dk]Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.[/quote]

I’m not following you here, who’s peddling anything? Seems like a good discussion to me about 1. buying non performing loans from the banks 2. and can residential real estate be considered an investment

I think it’s pretty crazy to say residential can’t be treated as an investment, but like the other posters said, the word is up for interpretation.

[justdoitstewart]

[quote=pri_dk]Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.[/quote]

I’m not following you here, who’s peddling anything? Seems like a good discussion to me about 1. buying non performing loans from the banks 2. and can residential real estate be considered an investment

I think it’s pretty crazy to say residential can’t be treated as an investment, but like the other posters said, the word is up for interpretation.

[justdoitstewart]

[quote=pri_dk]Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.[/quote]

I’m not following you here, who’s peddling anything? Seems like a good discussion to me about 1. buying non performing loans from the banks 2. and can residential real estate be considered an investment

I think it’s pretty crazy to say residential can’t be treated as an investment, but like the other posters said, the word is up for interpretation.

[justdoitstewart]

Do it Jumby!

[justdoitstewart]

Do it Jumby!

[justdoitstewart]

Do it Jumby!

[justdoitstewart]

Some of you are missing the point of the post; it wasn’t to dissect if the destroyed home would help or hurt the FB/flopper. It was supposed to be about the mentality of the FB/flopper in a desperate situation that might have a “way out” (in their mind) and also how it will affect the Diego economy/housing prices.

(Alot of the people that are in the mess of being a FB/flopper are the same people who have no clue how their insurance works.)

[justdoitstewart]

Some of you are missing the point of the post; it wasn’t to dissect if the destroyed home would help or hurt the FB/flopper. It was supposed to be about the mentality of the FB/flopper in a desperate situation that might have a “way out” (in their mind) and also how it will affect the Diego economy/housing prices.

(Alot of the people that are in the mess of being a FB/flopper are the same people who have no clue how their insurance works.)

[justdoitstewart]

Some of you are missing the point of the post; it wasn’t to dissect if the destroyed home would help or hurt the FB/flopper. It was supposed to be about the mentality of the FB/flopper in a desperate situation that might have a “way out” (in their mind) and also how it will affect the Diego economy/housing prices.

(Alot of the people that are in the mess of being a FB/flopper are the same people who have no clue how their insurance works.)

[justdoitstewart]

LOL, I totally agree. I guess my thought was most people don’t think like that honestly. They don’t know how it works if their house burns down. I know some floppers that are in trouble and they really think that this could be a “good thing”. I’ve already talked to a few on the phone.

Maybe my title should be different? (Kind of like your title about real estate is not a hedge against inflation)…..j/k

[justdoitstewart]

LOL, I totally agree. I guess my thought was most people don’t think like that honestly. They don’t know how it works if their house burns down. I know some floppers that are in trouble and they really think that this could be a “good thing”. I’ve already talked to a few on the phone.

Maybe my title should be different? (Kind of like your title about real estate is not a hedge against inflation)…..j/k

[justdoitstewart]

LOL, I totally agree. I guess my thought was most people don’t think like that honestly. They don’t know how it works if their house burns down. I know some floppers that are in trouble and they really think that this could be a “good thing”. I’ve already talked to a few on the phone.

Maybe my title should be different? (Kind of like your title about real estate is not a hedge against inflation)…..j/k

[justdoitstewart]

Emotions aside….

Short term, my thinking this may help continue to push prices down…

Long term, I’m wondering how much San Diegans’ home insurance will rise.

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