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mydogsarelazy
ParticipantThis seems like the right place to post my song lyrics — just in case you didn’t seem them in the other forum. Don’t have a tune for this yet…
JS
_______________he Upside-Down Blues
___________________________________REFRAIN:
My father told me “Never rent”
But now my equity is now all spent
Thought I would always have my McMansion
Ever appreciating, to serve as my pensionNow my ARM is broken
And on bills I am chokingI’ve got those upside down Blues…
_____________________________________I bought in the Spring of 2002
When the housing boom was fresh and new
Although I barely had enough money for rent
I had no trouble financing one hundred percentKnew I would never regret
My huge load of debt
Since California real estate
Does nothing but appreciateAdjustable rate,
interest only subprime
I borrowed a million
My payment: a dimeSan Diego, LA and Corona Del Mar
It seems 800 k won’t go very far
My jumbo loan gave me the leverage
To buy something quite beyond the national averageFour Thousand square feet
At first seemed pretty sweet
I took my counters for granite
It was like owning a planetI had my place near the coast
Many miles from the sprawl
I had a Beamer in the driveway
Plasma screens in the hallIn 2004 prices were hot
My net worth through the roof had shot
I did a cash out refi no points
And spent 200k on travel and jointsTo get a loan I had to fog a mirror
They made it easy to get in arrears
The bankers knew I would never unload
They passed a tougher bankruptcy codeFor four great years Greenspan was my hero
Now my fridge and net worth are both sub zero
In a pinch, I thought, I could always sell
Now my American dream is a vision of hell.We are all understanding
That there is no soft landing
I was rich on paper
Now my equitys vaporI’ve got those upside-down blues
My commute is a bummer
I can’t pay for my Hummer
And I’m busting my ass
For three dollar gasNow that I am in repo
No longer shopping at Home Depot
My family needs a place to go
Where real estate is really lowA friend of mine says a boom is coming
Although it involves a bit of slumming
So off I go with little loot
I am buying a condo in Eastern BeirutREFRAIN…
ParticipantBetween 1985 and 1995 I purchased five properties in a remote, high desert area. The properties included 40 acre and 10 acre parcels, some smaller parcels with cabins and eventually a small home with a well.
During the years, I sold most of them and made small profits on some, lost a bit on others. All in all it was a break even kind of thing, but I had fun in the desert camping and hanging out.
Then in 2001 I made my last purchase, which was a small house with a well. The real estate boom hit, and after investing a total of about $3k in repairs to the place I sold it in 2005 for six times what I had paid for it.
My point? If I had paid attention to what my friends and family said about the desert I never would have made the best investment of my lifetime.
There are opportunities everywhere, but of course luck, timing and history are going to play their roles…
JS
ParticipantWHOOPS!
Left off the date and time:
Sept. 21 —
Is the Boom Going Bust?
Location: Chancellor’s Conference Room, UV207, University Village, 1201 University Ave., Riverside
Time: 5:30 p.m. to 7:30 p.m.
ParticipantI have a relative who is also totally in “denial” and whose spending is out of control.
Nine months ago when I told him “don’t do it” he went ahead and put a deposit on an expensive new house. Escrow closed on the new place two weeks ago and — as expected — his existing home isn’t even on the market yet since it needs repairs. and his idea of what it might bring is very high.
He will be paying two mortgages for the foreseable future, just as I told him he might, and I think he is speeding towards bankruptcy.My point here: I told him in depth and detail — and I did it calmly — why his timing was totally wrong, and he just became angry. I did no good at all.
It is true, some people just will not listen. They live in a dream world. People with spending problems really are like alcoholics who just don’t believe they have a problem.
JS
ParticipantHi Everyone,
Just would like to say “thanks” to all of you for your comments. My friend read the thread and it gave him a lot to think about.
JS
ParticipantHi precurser,
You are so fortunate to have found this board. You are getting some awesome advice here.
I have one sure-fire investment for you.
If it is possible, and the house you are in is large enough, you and your girlfriend should take on a boarder. I know, this can be annoying, but I used to have a place near USC in LA and I had USC students as roomates that I found in the Daily Trojan. Seriously, I had some wonderful people living in my back room.
Then take the rent (say $500 per month?) put it in a joint savings account and let two years go by.
You will have more than $12,000 saved, you will have watched the price of housing go down and when you do buy a place you will have extra dollars for movers, repairs, furnishings, landscaping etc.
In this economy dull, cautious investments are the only ones to make!
JS
ParticipantHi precurser,
You are so fortunate to have found this board. You are getting some awesome advice here.
I have one sure-fire investment for you.
If it is possible, and the house you are in is large enough, you and your girlfriend should take on a boarder. I know, this can be annoying, but I used to have a place near USC in LA and I had USC students as roomates that I found in the Daily Trojan. Seriously, I had some wonderful people living in my back room.
Then take the rent (say $500 per month?) put it in a joint savings account and let two years go by.
You will have more than $12,000 saved, you will have watched the price of housing go down and when you do buy a place you will have extra dollars for movers, repairs, furnishings, landscaping etc.
In this economy dull, cautious investments are the only ones to make!
JS
ParticipantHi Everyone,
Can I just say that I do think he makes a good point about inheritance…
Yes, in general I think his comments demonstrate a lack of awareness, but in thinking about why the housing market got so over-inflated in the first place you have to consider some things that just don’t show up in the standard formulas.
For example:
– More than two incomes paying a mortgage. On our street, a pair of brothers from the Phillipines bought together and it looks like there are a number of wage earners under that roof. Immigrants often pool resources.
– Hidden income. I tend to believe the US has a substantial financial underground. This makes me think of another neighbor who is from another country and tells us that he makes a living in “retail.”
– Inheritance has to be a factor. When estates come the way of Californians I would think that real estate is the place they most likely park it.
JS
Not a real estate professional, just someone who follows the market
ParticipantHello Powayseller,
I think it is great that you are encouraging your sons to be creative.
When I was in Jr. High and High School I was drawing animated cartoons, giving puppets shows and eventually building my own dune buggy. I was very hands on and creative.
When I got to college (went to Stanford) I just kept on going in that vein, and declared an art major. My parents and I fought quite a bit about this, but eventually they realized I was serious. Because I loved my major so much I was very motivated and graduated with Distinction. I was one of two painting majors in my entire class.
I went on to get an MFA in Painting, and have had a great, very happy career as an artist and as a Community College art professor.
My stepson recently graduated with an MA in Urban Planning from UCLA, but what got him through school — and also got him scholarship money — was that he excelled in dance. That took a lot of confidence on his part, as boys take a lot of ribbing if they dance, but he just didn’t listen.
You might enjoy this book: The Rise of the Creative Class
JS
_______________________________________________________
Not a real estate professional, just someone who follows the market
http://www.johnseed.comParticipant1) Do you currently rent or own your residence?
Own
2) Did you sell your residence in the last two years because you thought prices had topped out?
We put a deposit on our new home in November 2003. By the time we closed escrow on in in August 2004, our existing home had appreciated more than 100k over what we had expected to sell it for, and our new home had appreciated — at least on paper — about the same amount.
We sold our existing home for triple what my wife had paid for it in 1996, and used the proceeds towards the down payment on our new home, new furnishings and a new car for which we paid cash.
In July of 2005 I sold my vacation home and acreage in the High Desert for six times what I had paid for it in 2001.
3) Did you sell before the peak, at the peak or after the peak (give percentages)?
I would say that we sold our home for about 90-95% of peak value, and our vacation place sale was perfectly timed.
4) How did you come the conclusion there was a bubble (from a friend, news, independent analysis, Piggingtons)?
I had been through the cycle of prices going down in the early 90’s and always felt that this boom would have a bust sooner or later.
5) Will you buy back into your former neighborhood?
We bought our house because it is in an area with great schools and only 15 minutes from where I work. We plan to live here at least until my retirement in another 15 years and very likely longer.
6) If you have not sold, are considering doing so?
No plans to sell. We have a small 15 year fixed mortgage — which we may pay off in ten years — and love the house. Because of the appreciation we captured during the boom years, we live in a McMansion on a Love Shack mortgage.
7) If you have not owned in the last ten years (or ever) is it because you were priced out? How far would prices have to drop for you to be able to buy?
ParticipantHere’s how I feel about the big house issue…
My feeling is that small spaces work best when there are plenty of reasons to be out of them nearby. In other words, a small beach house sounds great to me. I have had some cabins in the high desert, from 500 to 800 square feet and I loved them since I was always out on the patio, or going hiking.
A small apartment in a great city like New York or San Francisco also seems very appealing to me.
That said, we have a large home in Murrieta, and where we live I prefer lots of indoor space. With our warm summer weather we sometimes need to be indoors a lot and often need our own spaces. I have two daugthers and a baby on the way, and we like our space.
Of course, most of the time we are all together in the big house. It amazes me how I will find a corner to read in and within five minutes we are all there, my wife, the two girls and our dog, all curled up in 10 square feet!
Home cooked meals? Almost every night!
JS
Not a real estate professional, just someone who follows the market
http://www.johnseed.comParticipantSo here is my advice:
Let’s say that you can rent a really nice place for $2,000 per month. Let’s also say that since you won’t have a huge interest deduction for your tax return that you can kiss another $500 per month goodbye.
If you rent for five years, save $1,000 per month and earn 5% interest you will have — I need math help here — what close to $70k in the bank in addition to what you have saved now?
If you buy you risk losing your equity. You also might need to spend some $$ redecorating or repairing this home.
Renting looks good to me
JS
Not a real estate professional, just someone who follows the market
http://www.johnseed.comParticipantSorry for the confusion….
The repo is across the street from me in Murrieta. The broker is handling three repos in Murrieta/Temecula and one in Escondido.
JS
ParticipantSince the mediterranean was came up, I should mention that I have a friend, a dentist formerly from Sacramento, who has lived in Portugal a few years. He really likes it, finds it affordable and has re-done an old farm house surrounded by orange trees. He has good access to the rest of Europe via rail.
His two complaints are that the schools aren’t so hot, and he does have a teenage daughter, and also things move slowly by our standards.
JS
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