Forum Replies Created
-
AuthorPosts
-
powayseller
ParticipantHow many of the 44,000 people leaving San Diego last year ended up in Southern Riverside County? Probably quite a few…
Welcome to the forums, Dennis. How are sales going up there?
ParticipantThanks for posting. Keep saving – it gets harder after you own a house and have kids.
My biggest regret is that I delayed working until age 27, so I had only 3 years to earn money before having my first child. So those of you saving, keep it up. Once kids come along, and you lose that second income and have more expenses, you can’t save as much.
And before you say women can keep working after baby, the most lucky babies are the ones who fall asleep nursing in their mommy’s arms and wake up in a quiet room; no comparison to getting a bottle, Gerber baby food, and a noisy daycare center with the typical 2-month staff turnover. Older kids still need an encouraging word, a loving touch, a snack prepared. I’ll never leave my kids with daycare or home alone after school as long as we can afford to be there. Husbands benefit when kids and the wife are happy, dinner is made, the house is clean and humming. These choices cost money, and we made the decision early on to get a mortgage reliant on only 1 income.
Homeownership is very expensive too. Just ask your homeowning friends how much they spend at Home Depot, and on other remodeling and repairs.
ParticipantDocteur made millions on his last deal, and paid off his house. I think it was a wise move. I bet Warren Buffett paid off his house too. My former neighbors are $10K away from paying theirs off.
Why do people who can afford to, pay off their homes? Because they can.
Besides, where else can you get a 5% return? Maybe in a CD, but after taxes, you’re easily down to 3.5-4%. In the stock market? Not risk free. You risk losing principal. As a matter of fact, many investment pros are now advising people to get out of the stock market (Bill Fleckenstein, Barry Ritholtz, Yakamoto Forecast, Zeal Newsletter, economist Joseph Ellis).
The days of the carry trade are over. No longer can you borrow at 0% from the Bank of Japan, or at 3% from your home, and hope to make more money in stocks. Interest rates on homes are high, and the stock market is overvalued.
I am curious though, where you can do better than the interest rate on your home, without taking on more risk?
ParticipantMy understanding is that traditionally stated income loans were only for the self-employed. Their loan approval however depended on their assets. Today’s no-doc loan doesn’t require proof of assets, right?
The source of the problem is the global liquidity and that investors were seeking higher returns when global interest rates were so low. The Fed often puzzled about the low risk premia demanded by investors. If investors had demanded a proper risk premium, shouldn’t they have demanded at least 3-5% above the market rate for anyone with 0% down and no documented income? The investors who took on these loans deserve what comes their way. I only feel sorry for the unsuspecting homeowners, many of whom still believe we have only a 20% drop.
ParticipantAre you saying that the military will not allow an airport at any of its bases? If so, then Point Loma is the most viable option?
Participantduplicate
ParticipantYou can say the same thing about drugs: more rules about which drugs I can or cannot take is not anyone’s business. Why shouldn’t heroin be legal? Why should vicodin be available only by prescription?
Sometimes, laws are made to protect society, even if they quell an individual’s choice.
ParticipantHey Chris, as always, great commentary from you…On another thread, a poster argued that leverage can be used to your advantage to make money, and he gave some examples how he made money in RE using leverage. However, as you noted, people with money don’t use leverage. Look at Warren Buffett. He uses cash to buy billions of dollars worth of shares in the companies.
Anyway, great common sense advice. If you can’t buy it with 20% down, 15 yr or 30 yr fixed, at 30% DTI, you can’t really afford it.
ParticipantA seller may take a 5% haircut in the offer. I know if a house in foreclosure, and they finally got an offer 3 days before auction. The offer was 4% below asking price.
Sakina was right about seller expectations. They are still high, based on current sales.
The longer you wait, the more desperation is in the air, the more you can negotiate.
If you must have a house now, make an offer, but if you can wait, time will reward you.
Another thought: before making an offer on a house, make sure you have picked 4 houses you like. NEVER get yourself married to a particular house. That destroys your negotiating ability, your willingness to walk away. If you have 4 ready offers, and the 1st one doesn’t accept your offer, go on to house #2, and so on. Let each seller know you have 4 houses you like, and that will keep them from making a counter. The seller will know if they make a counter offer that you don’t like, you can abandon their house and go on to one of the others.
ParticipantToday’s Voice article says Miramar has been recommended as the site.
ParticipantI agree that overscheduling children has reshaped childhood from riding bikes, playing sports pickup games in the park, playing with your siblings, and sitting down to a home cooked meal made with fresh vegetables, to being driven around to activities commandeered by adults and catching a restaurant meal on the way home. This is a huge social experiment. After 10 years of somewhat participating in this lifestyle, I am out! No longer do I have to deal with the uppity parents who couldn’t figure out that I didn’t watch the 2-hr baseball game because someone had to be home to cook dinner. After all, to most people the family home-cooked sit-down dinner is as unimportant as the stay-at-home mom or the downpayment on a house idea. Our life is better without all that excess.
One thing I didn’t like about living on the 5 acres was the remoteness to friends, parks, school. It was too isolated, and the neighbors didn’t interact because they were too far apart. It’s not a good life for kids to be isolated on their 5 acres.
ParticipantStu, why do you think fall is a good time to buy gold?
ParticipantI was at Pottery Barn Kids recently, and was amazed at the number of young families shopping at the UTC store. How can they afford $600 desks for their toddlers? I bought my first child’s crib for $20 at a consignment store, a $25 bunk bed that I painted at a thrift shop when the 2nd one came along. I didn’t have one of those pull-wagons until my 3rd kid. My kids didn’t have their own bedrooms until last year, and until then, had to at least double up. The oldest was 14. How many young families would be able to live like that?
On Bill Handel this morning (640 AM, 6-9 am), he talked about a new study showing middle class parents are reducing retirement savings to buy stuff for their kids. The stuff has gotten more expensive over the years: sports camps, high school trips, sports trips to faraway places, iPods, designer clothes, activities galore, prom, cell phones, …The problem is that parents are scrimping on responsible retirement savings and getting into bankruptcy over these purchases, and that kids have a sense of entitlement.
Delaying gratification and stamping out entitlement are so important to teach our youth.
I think young people had to struggle harder to save for things even 15 years ago. The age of credit has changed the problem of waiting/saving into worrying about how to pay all those debts.
ParticipantEliminate stated income loans.
Qualify borrower of an ARM based on the what the payment will be if interest rates go to 10%.
Raise minimum FICO score requirements.
You know who’s to blame for all this: the investors who buy these products from the lenders. If investors demanded a proper risk premium for loaning $500K to a 630 FICO borrower with stated income, then that person wouldn’t qualify.
The Q is: why are global investos gobbling up these products? As long as there is demand for these loans, they will be made. (Like pornography, drug trade, and illegal immigration – demand fuels the trade, not legislation.)
-
AuthorPosts
