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November 8, 2011 at 2:06 PM in reply to: OT: Washington Corrupted to the Core by Lobbyists – 60 Minutes Piece #732454November 6, 2011 at 9:00 PM in reply to: Buying again, 2 years after Short Sale – questions for you pros #732348
SD Realtor
ParticipantEveryone can argue all they want. If the buyer has any thoughts of walking, then putting as little down as possible is the best bet. There really is no argument. If the buyer never intends to walk or is not going to sell in a short period of time then a larger downpayment is better. There is no argument that a larger downpayment is better for all possible outcomes.
As for the moral hazard…. come on now, quit kidding yourselves, we lost that quite awhile ago. Don’t jump on this guy for following the rules.
November 6, 2011 at 1:37 PM in reply to: Buying again, 2 years after Short Sale – questions for you pros #732334ParticipantAs you can see clearly it is more important for people to pass judgement then to understand what may be right for you. In the end if there is a finite probability of you walking for whatever reason then coming in with the smallest downpayment possible is how you mitigate that risk. I don’t need to post amortization tables for you to understand you will pay much more interest in the long run. I also doubt this will be the last home you ever buy so keep that in mind. You will probably also find that trying to argue what is best for may be lost on others and will simply lead to long long posts that try to meld you into doing something that is for your own good.
November 4, 2011 at 12:09 PM in reply to: Buying again, 2 years after Short Sale – questions for you pros #732233ParticipantThat was me. Really? You don’t see people walking away from an asset that has substantially lost value? Yes people do have to live somewhere so why would anyone choose to live in an overvalued asset that is losing value, pay property taxes on it, pay homeowners insurance on it, possibly pay mello roos and HOA on it, while it loses value daily?
Look around you right now… The cost of basic food goods, utilities, water and fuel has gone up WAY WAY WAY more then annual rents. You can have inflation without strong rental rate increases. Similarly people with large cashpiles will make a KILLING on real estate when (NOT IF) when rates rise and real estate drops. It may be 2 years away, maybe 10 years away, maybe longer… However to think that people will not walk away is foolhearty. I am not saying it is not a good time to buy now, certainly better then 03 but the sytem we have in place promotes home ownership that is nothing more then a rental. By that nature it can behave in a more transitory nature because we enable it to be that way. You create a much more stable market buy demanding a much harsher equity stake.
November 4, 2011 at 7:00 AM in reply to: Buying again, 2 years after Short Sale – questions for you pros #732213ParticipantI am sorry but I do not think the poster did anything wrong besides making a stupid decision to purchase a home near the top of a bubble. That was lunacy and the seller is a poster child for why we should not have 0 down loans, or for that matter FHA loans. Forcing buyers to come up with equity (in my opinion at least 20%) would lead to a much more stable market.
So given the first mistake that the buyer made, the way that the buyer dealt with the problem was perfect. Haters who want to blame the buyer should blame all of the other entities, including our govt for enabling the buyer. Blame the lender who originated the loan, blame the party that purchased the security, blame the ratings agency that took the security and probably gave it a triple A rating, and blame the govt for promoting all of this. If there was a simple 20% equity rule this person would have never been able to buy the home in the first place.
As for moving forward the problem I see is that nothing has changed. This buyer can still get into a home with a miniscule equity payment, is still going to count on appreciation, and is MUCH MORE ENTICED to enter the market now due to lower prices and lower rates. The probabilities of further market decline ON THE SURFACE seem much less then in 2003. However what happens if after a few years down the line interest rates spike and property values drop say another 20%? What will happen to this buyer and millions of others like him. Some will stay and some will walk again… As much as the haters want to blame them, they are working within the confines of the system that is established. Don’t hate the player hate the game.
It is also probably fair to assume that if someone has done something that is hard to do once, it becomes slightly easier to do later. That is, if the events warrant it, why not walk a second time.
I am not so sure that urging this person not to buy because there is a probability that they will walk again is valid. I think urging them to evaluate their finances and start to save money rather then living without savings is valid. Personally I wouldn’t do what they are doing with regards to buying a place but that is just me. To say that is enough but to project on them and say no you shouldn’t buy because the odds are that you will walk away is not really fair. If they buy and the market craps and they are throwing thousands on a turd asset then they SHOULD WALK AWAY and sell it short… again.
November 2, 2011 at 2:27 PM in reply to: Buying again, 2 years after Short Sale – questions for you pros #732038ParticipantVety good point eavesdropper. If you are going to purchase a home and are counting on appreciation then you should reconsider making the purchase.
ParticipantWait a minute… the Mikey show is not thoughtful discourse???
The real twilight zone would be if Obama and Ron Paul woke up with swapped brains. Would an Obama who espoused the policies of Ron Paul be embraced by his party? Certainly Ron Paul has not been. That would be interesting…
The other unanswered question would be if the world turned upside down and Rob Paul did win we would most likely see gridlock that would make the current gridlock look like a racetrack.
Hard to have hope these days but I won’t throw in the towel.
ParticipantYou are welcome markmarx. Honestly I do agree with many of the arguments that PR and SK make. You are giving it your best shots with your responses in a specific manner which is good. Keep the faith.
ParticipantSome of what you said has merit. Unfortunately I think some hate Obama because he is black which is sad. I think there are alot who don’t like his policies and you seem to take that as a personal attack against him.
I would say Ron Paul very much is in competition with Obama. He wants to be president doesn’t he? I don’t believe that Ron Paul would support the massive federal spending that Obama supports. As you stated, Obama is endearing to you because he represents your ideals, I feel that Ron Paul is a heck of alot closer to representing my ideals then Obama. In that same breath I would agree that he’s to simplistic and yes I think some of his ideas are a bit kooky.
I believe Obama is very likeable for the reasons you pointed out however I don’t believe his rise to power is remotely based on his talents. You refer to him as a constitutional scholar and I would disagree with that. Someone like Ron Paul who has toiled through years of congressional service to me is much more talented then Obama and has worked much harder to achieve what he really believes in, albeit with little success. Obamas term of service prior to being the president was akin to a cup of coffee in the big leagues. I would refer to Obama as being very gifted and smart and his party quickly realized that and then threw every ounce of support behind him. He is tall, he is good looking, he is very well spoken, he has charisma and he has the ability to make people believe in him and like him almost regardless of his policies.
There is no other candidate like that and there probably will not be for a long long time. Regardless of any polls or public opinion, or whether any of his programs have worked, will work, or will simply add more debt, he will most likely win. He will convince people his policies have worked and that more policies will follow that will help them even more. I may not agree with that, and certainly you will agree with that, but in the end, more people will buy in as will their unions, and other organizations.
Not the same for Paul or for anyone else in the GOP for that matter.
ParticipantI would agree with you bg. Markmax does make a strong effort to back his cause with logical arguments rather then broadstroke generic statements of hope, ideals, etc… SK and PR are smart guys and he did his best to keep up with them. Enjoyed reading his posts. I may not agree with all of them but they are presented in a logical manner and that is appealing.
Participant“I like Obama because, personality wise, he enbodies my generation and my ideals better. Some people like Reagan or Sarah Palin, or Haley Barbour for the same reason.
Plus I like Obama simply for the fact that he’s too perfect and riles up so many of his opponents who are eager to find faults but can’t find any.”
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No contest. Markmax how do you expect Ron Paul to be able to compete against somebody who is “too perfect”. Brian I think you won hands down!
November 1, 2011 at 9:18 AM in reply to: Buying again, 2 years after Short Sale – questions for you pros #731853ParticipantInteresting post. Sellingmyhome I would presume that some posters would shake their heads at you because of your previous experience of short selling a home. That is, if you have already been burned by the housing market why in the world would you go right back into a market that some feel is poised to drop again. Additionally some people may view someone like you as part of the problem, that is people who bought in a deteriorating market when they should have never bought in the first place.
I think that in a potentially unfair portrayal because none of us here know the facts and each individual has an unique experience. However, I would argue that previous homeowners like yourself, who did indeed deal with the problem within the parameters of what was available to you, did the best you could. That is, you went and sold the home short. You worked with the lender, you did not take some stupid loan mod, it appears from your post that you minimized the toll on your credit report, you did not freeload and stay in the home and let it default. I don’t want to sit here and sound like I am commending you but I do think you handled your previous situation well.
I also think it is unrealistic to think that people who default or short sell should never be able to purchase a home again. Furthermore I am not so sure it is realistic to put a moratorium or an “X” year waiting period on former short sellers or defaulters. With that said, if I WERE A LENDER whould I put a higher premium on a former short seller or defaulters loan? Yes I probably would…However that is the lenders decision and not my decision.
What is more important is your own analysis of what makes you think that if you buy again, you will not have to short sell again? What is different this time? Are you maiking more money? Is there an element of stability that you have now that you did not have when you bought the first time? In order to qualify your purchase this time around you need to come up with a very convincing argument why this will not happen this time around. Are the rent vs own numbers alot different now?
ParticipantAllan and UR I agree that the GOP is pretty laughable right now.
I do think that if Hillary ran she would beat everyone in the field including Obama…
The debate I would pay to read about would be Brian and his passion for Obama and the young rookie upstart Markmax and his blind faith for Ron Paul.
Let the games begin!
October 31, 2011 at 9:52 PM in reply to: Will the bank let me borrow for an investment property? #731813ParticipantAN had the best answer, talk to a mortgage professional. We have been procurring rental properties over the past year. Here is the criteria we have had to satisfy for our lender in order to get the loan.
– The downpayment has to come from seasoned funds in your account. If you want to get a loan from a relative then you will need to let that money sit in your bank account for at least 60 days, some lenders may require a longer amount of time.
– If you want you can put your relative on the loan application, then you will not need to worry about the seasoning.
– You will also need to show reserves. In our case we have had to show 6 months reserves for each property we have including our owner occupied home. That is we have had to show cash reserves for 6 months of payments for all of our rentals and our home which is absolutely absurd. (note our case may be out of the ordinary because we have several rentals, if this is your first it may not be as stringent with regards to reserves)
– You will have to make sure that your debt to income ratios are okay. This will be determined by the lender.
If you are looking for cash flow you better make darn sure you are doing your calculations properly. I am curious why you think you need to make a purchase in the 300k range to cash flow? Why not start with a small condo and you don’t need such a big nut to cash flow? Have you owned a rental property before? I am not trying to scare you out of it, I have seen plenty of posts on here that make rental property ownership seem like hell. For some maybe that has been the case, for me it has not been. Conversely it is not easy money and I vet out my tenants carefully and even with that I have had my issues before though they all have been resolved without courts or large losses on my part.
Personally I would feel very uncomfortable borrowing 75k from someone as a downpayment for a rental property. That is very nice of them. However I don’t like the way the numbers run. You have only 10k in cash? You guys make 145k which is awesome but why do you only have 10k in cash? Something is not adding up unless you have large investments somewhere else which is great if you do. Anyways, before I started making more property investments I would build up my cashpile for that rainy day in case something happened to that 145k/yr income flow. Then when I have 6 months to a years worth of savings socked away then perhaps invest. That is just me though and I am very risk averse. If you do wanna make a purchase maybe start small… you can always buy more!! Talk to a lender…
ParticipantYR that is sad to see the seller is going to want to go through the court system. That is pretty lame.
R – another good example of an agent behaving badly. Possibly a conversation with the broker of that agent is a good idea so that the agent will stop the bad habits?
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