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temeculaguy
ParticipantAsianautica, the 125x rent multiplier is absolutely still a valuable yardstick. The 3% swing in interest rates is offset by the market psychology and media. Things are different now, they are worse, appreciation is a non factor so rent nuetral is the new buzzword. Why become a landlord in MM is you have to exceed the rent multiplier while you don’t have to in another area, in this county and state or not. You don’t live there, your wife doesn’t care where the rental is, it is all math. Most in-town landlords became such because they moved up and kept their old house as a rental. Pure landlords buy where it pencils out the best. There are many rental markets where 125x can be obtained today and that is where the landlord dollars will go. If you can buy a place today for 250k that will rent out for 2k within days, and it’s still there, unsold, then 125x becomes the standard EVERYWHERE. I can almost buy rentals that are rent nuetral (meaning the rent covers the mortgage and the taxes/ins after a 20% down payment, try getting 6% with 5% down on an investment property in a declining market). Most of San Diego County doesn’t pencil out for a landlord yet which is why the areas that someone with money wouldn’t want to live are falling faster, they were more dependent on investor price support.
Venture into the areas people with money want to live and want to send their kids to school and the dynamic changes, because the deciding factors change (happy wife, enjoyable life, etc.) people are more willing to overlook the math. For how long that remains is the eternal question on these boards.
ParticipantAsianautica, the 125x rent multiplier is absolutely still a valuable yardstick. The 3% swing in interest rates is offset by the market psychology and media. Things are different now, they are worse, appreciation is a non factor so rent nuetral is the new buzzword. Why become a landlord in MM is you have to exceed the rent multiplier while you don’t have to in another area, in this county and state or not. You don’t live there, your wife doesn’t care where the rental is, it is all math. Most in-town landlords became such because they moved up and kept their old house as a rental. Pure landlords buy where it pencils out the best. There are many rental markets where 125x can be obtained today and that is where the landlord dollars will go. If you can buy a place today for 250k that will rent out for 2k within days, and it’s still there, unsold, then 125x becomes the standard EVERYWHERE. I can almost buy rentals that are rent nuetral (meaning the rent covers the mortgage and the taxes/ins after a 20% down payment, try getting 6% with 5% down on an investment property in a declining market). Most of San Diego County doesn’t pencil out for a landlord yet which is why the areas that someone with money wouldn’t want to live are falling faster, they were more dependent on investor price support.
Venture into the areas people with money want to live and want to send their kids to school and the dynamic changes, because the deciding factors change (happy wife, enjoyable life, etc.) people are more willing to overlook the math. For how long that remains is the eternal question on these boards.
ParticipantAsianautica, the 125x rent multiplier is absolutely still a valuable yardstick. The 3% swing in interest rates is offset by the market psychology and media. Things are different now, they are worse, appreciation is a non factor so rent nuetral is the new buzzword. Why become a landlord in MM is you have to exceed the rent multiplier while you don’t have to in another area, in this county and state or not. You don’t live there, your wife doesn’t care where the rental is, it is all math. Most in-town landlords became such because they moved up and kept their old house as a rental. Pure landlords buy where it pencils out the best. There are many rental markets where 125x can be obtained today and that is where the landlord dollars will go. If you can buy a place today for 250k that will rent out for 2k within days, and it’s still there, unsold, then 125x becomes the standard EVERYWHERE. I can almost buy rentals that are rent nuetral (meaning the rent covers the mortgage and the taxes/ins after a 20% down payment, try getting 6% with 5% down on an investment property in a declining market). Most of San Diego County doesn’t pencil out for a landlord yet which is why the areas that someone with money wouldn’t want to live are falling faster, they were more dependent on investor price support.
Venture into the areas people with money want to live and want to send their kids to school and the dynamic changes, because the deciding factors change (happy wife, enjoyable life, etc.) people are more willing to overlook the math. For how long that remains is the eternal question on these boards.
ParticipantAsianautica, the 125x rent multiplier is absolutely still a valuable yardstick. The 3% swing in interest rates is offset by the market psychology and media. Things are different now, they are worse, appreciation is a non factor so rent nuetral is the new buzzword. Why become a landlord in MM is you have to exceed the rent multiplier while you don’t have to in another area, in this county and state or not. You don’t live there, your wife doesn’t care where the rental is, it is all math. Most in-town landlords became such because they moved up and kept their old house as a rental. Pure landlords buy where it pencils out the best. There are many rental markets where 125x can be obtained today and that is where the landlord dollars will go. If you can buy a place today for 250k that will rent out for 2k within days, and it’s still there, unsold, then 125x becomes the standard EVERYWHERE. I can almost buy rentals that are rent nuetral (meaning the rent covers the mortgage and the taxes/ins after a 20% down payment, try getting 6% with 5% down on an investment property in a declining market). Most of San Diego County doesn’t pencil out for a landlord yet which is why the areas that someone with money wouldn’t want to live are falling faster, they were more dependent on investor price support.
Venture into the areas people with money want to live and want to send their kids to school and the dynamic changes, because the deciding factors change (happy wife, enjoyable life, etc.) people are more willing to overlook the math. For how long that remains is the eternal question on these boards.
February 24, 2008 at 2:04 PM in reply to: Temperature Check for 2008 – Now how low do you think it will go? #159050ParticipantI like 50% a fair estimate, but agree with Bugs that there will be variables by community but overall it will be close to 50%. I think the more desirable areas built pre-bubble will see the lowest decline in percentage and be at those levels for the shortest amount of time, but at the same time, waiting for bottom, I would hold off on setting an exact dollar amount for re-entry, we are in a paradigm shift. There are too many unanswered questions, there is no historical model for the cycle we are in, these are interesting times, to say the least.
My personal favorite post of Bugs’ (and one that has saved me at least 100k to date) was where he outlined a “knife catching prevention diet” of sorts and how every time you think things have reached re-entry prices, evaluate the inventory numbers, wait 6 or 8 weeks and see if thing went up or down in both price and inventory. This ship won’t turn around in two months and buying within two months of the bottom won’t be so bad so it is a good plan, one that prevents you catching a falling knife and from missing out on that same La Costa/Encinitas place for 500k, if that happens to be in the cards. It is more likely that is a possibility than having it shoot up to 650k within two months of you spotting it at 600k.
February 24, 2008 at 2:04 PM in reply to: Temperature Check for 2008 – Now how low do you think it will go? #159345ParticipantI like 50% a fair estimate, but agree with Bugs that there will be variables by community but overall it will be close to 50%. I think the more desirable areas built pre-bubble will see the lowest decline in percentage and be at those levels for the shortest amount of time, but at the same time, waiting for bottom, I would hold off on setting an exact dollar amount for re-entry, we are in a paradigm shift. There are too many unanswered questions, there is no historical model for the cycle we are in, these are interesting times, to say the least.
My personal favorite post of Bugs’ (and one that has saved me at least 100k to date) was where he outlined a “knife catching prevention diet” of sorts and how every time you think things have reached re-entry prices, evaluate the inventory numbers, wait 6 or 8 weeks and see if thing went up or down in both price and inventory. This ship won’t turn around in two months and buying within two months of the bottom won’t be so bad so it is a good plan, one that prevents you catching a falling knife and from missing out on that same La Costa/Encinitas place for 500k, if that happens to be in the cards. It is more likely that is a possibility than having it shoot up to 650k within two months of you spotting it at 600k.
February 24, 2008 at 2:04 PM in reply to: Temperature Check for 2008 – Now how low do you think it will go? #159357ParticipantI like 50% a fair estimate, but agree with Bugs that there will be variables by community but overall it will be close to 50%. I think the more desirable areas built pre-bubble will see the lowest decline in percentage and be at those levels for the shortest amount of time, but at the same time, waiting for bottom, I would hold off on setting an exact dollar amount for re-entry, we are in a paradigm shift. There are too many unanswered questions, there is no historical model for the cycle we are in, these are interesting times, to say the least.
My personal favorite post of Bugs’ (and one that has saved me at least 100k to date) was where he outlined a “knife catching prevention diet” of sorts and how every time you think things have reached re-entry prices, evaluate the inventory numbers, wait 6 or 8 weeks and see if thing went up or down in both price and inventory. This ship won’t turn around in two months and buying within two months of the bottom won’t be so bad so it is a good plan, one that prevents you catching a falling knife and from missing out on that same La Costa/Encinitas place for 500k, if that happens to be in the cards. It is more likely that is a possibility than having it shoot up to 650k within two months of you spotting it at 600k.
February 24, 2008 at 2:04 PM in reply to: Temperature Check for 2008 – Now how low do you think it will go? #159363ParticipantI like 50% a fair estimate, but agree with Bugs that there will be variables by community but overall it will be close to 50%. I think the more desirable areas built pre-bubble will see the lowest decline in percentage and be at those levels for the shortest amount of time, but at the same time, waiting for bottom, I would hold off on setting an exact dollar amount for re-entry, we are in a paradigm shift. There are too many unanswered questions, there is no historical model for the cycle we are in, these are interesting times, to say the least.
My personal favorite post of Bugs’ (and one that has saved me at least 100k to date) was where he outlined a “knife catching prevention diet” of sorts and how every time you think things have reached re-entry prices, evaluate the inventory numbers, wait 6 or 8 weeks and see if thing went up or down in both price and inventory. This ship won’t turn around in two months and buying within two months of the bottom won’t be so bad so it is a good plan, one that prevents you catching a falling knife and from missing out on that same La Costa/Encinitas place for 500k, if that happens to be in the cards. It is more likely that is a possibility than having it shoot up to 650k within two months of you spotting it at 600k.
February 24, 2008 at 2:04 PM in reply to: Temperature Check for 2008 – Now how low do you think it will go? #159439ParticipantI like 50% a fair estimate, but agree with Bugs that there will be variables by community but overall it will be close to 50%. I think the more desirable areas built pre-bubble will see the lowest decline in percentage and be at those levels for the shortest amount of time, but at the same time, waiting for bottom, I would hold off on setting an exact dollar amount for re-entry, we are in a paradigm shift. There are too many unanswered questions, there is no historical model for the cycle we are in, these are interesting times, to say the least.
My personal favorite post of Bugs’ (and one that has saved me at least 100k to date) was where he outlined a “knife catching prevention diet” of sorts and how every time you think things have reached re-entry prices, evaluate the inventory numbers, wait 6 or 8 weeks and see if thing went up or down in both price and inventory. This ship won’t turn around in two months and buying within two months of the bottom won’t be so bad so it is a good plan, one that prevents you catching a falling knife and from missing out on that same La Costa/Encinitas place for 500k, if that happens to be in the cards. It is more likely that is a possibility than having it shoot up to 650k within two months of you spotting it at 600k.
ParticipantBsharma-while the economy, job loss and foreclosure can increase the pressure people feel, these things have always happened and are usually related to alcohol/drugs, mental illness, jealousy/infidelity or a combination of them all. Sane and Sober people rarely snap and go on a killing spree because of financial setbacks, there is always much more to the story that the media misses.
ParticipantBsharma-while the economy, job loss and foreclosure can increase the pressure people feel, these things have always happened and are usually related to alcohol/drugs, mental illness, jealousy/infidelity or a combination of them all. Sane and Sober people rarely snap and go on a killing spree because of financial setbacks, there is always much more to the story that the media misses.
ParticipantBsharma-while the economy, job loss and foreclosure can increase the pressure people feel, these things have always happened and are usually related to alcohol/drugs, mental illness, jealousy/infidelity or a combination of them all. Sane and Sober people rarely snap and go on a killing spree because of financial setbacks, there is always much more to the story that the media misses.
ParticipantBsharma-while the economy, job loss and foreclosure can increase the pressure people feel, these things have always happened and are usually related to alcohol/drugs, mental illness, jealousy/infidelity or a combination of them all. Sane and Sober people rarely snap and go on a killing spree because of financial setbacks, there is always much more to the story that the media misses.
ParticipantBsharma-while the economy, job loss and foreclosure can increase the pressure people feel, these things have always happened and are usually related to alcohol/drugs, mental illness, jealousy/infidelity or a combination of them all. Sane and Sober people rarely snap and go on a killing spree because of financial setbacks, there is always much more to the story that the media misses.
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