tag:blogger.com,1999:blog-27697009.post2867708755874863828..comments2024-02-29T03:21:35.007-08:00Comments on The Great Depression of 2006 : Real Estate Investment MusingsJim in San Marcoshttp://www.blogger.com/profile/09435296419912935381noreply@blogger.comBlogger35125tag:blogger.com,1999:blog-27697009.post-31073634712034382942012-12-07T07:04:47.999-08:002012-12-07T07:04:47.999-08:00I can see viable arguments for both ways when it c...I can see viable arguments for both ways when it comes to renting vs owning. I suppose it depends on where you are living, your budget, and where you plan to be in 5, 10, & 20 years.<br />-Jon @ <a href="http://www.wholesaledealmatcher.com/" rel="nofollow">real estate investors</a>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-90446500645080791352012-01-31T09:26:08.833-08:002012-01-31T09:26:08.833-08:00The part of the country you live in makes a differ...The part of the country you live in makes a difference. I live in Wisconsin and real estate values did not bubble much, nor collapse much here. There are numerous foreclosures, but they have more to do with long term unemployment. Still your reasoning is sound, although our taxes are a sky high burden here.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-67549528847865847892012-01-22T22:24:50.830-08:002012-01-22T22:24:50.830-08:00Before considering real estate as an investment in...Before considering real estate as an investment in a rental market study the actual experiences of landlords in the area. In many places you might have a terrible time trying to evict a tenant for non-payment of rent. My next door neighbor moved to Florida and rented his house. After 15 months of living in the house without paying any rent the tenant moved to Puerto Rico leaving my neighbor with no money and a filthy house.NewYorkernoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-22599486088907396502012-01-15T08:32:27.808-08:002012-01-15T08:32:27.808-08:00Jim --
The "rise of dark inventories" h...Jim --<br /><br />The "rise of dark inventories" has been getting alot of play this week<br /><br />http://www.businessinsider.com/the-rise-of-dark-inventory-in-housing-and-oil-2012-1<br /><br />I was wondering if you had an opinion on this topic?<br /><br />ThanksAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-74031619431439710512012-01-15T05:08:42.940-08:002012-01-15T05:08:42.940-08:006:05pm,
You are making rentals out to be a sure be...6:05pm,<br />You are making rentals out to be a sure bet. There are many things that can go wrong along the way. Even if everything goes as planned financially, the owner still might lose. Stress, lost opportunities, time sink, interactions (situations).<br /><br />as an aside,<br />Ask those who bought in Detroit 10 years ago how they are doing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-43316633376445782212012-01-14T12:45:39.599-08:002012-01-14T12:45:39.599-08:00Hi Anon 11:52
Now you are making sense.
Right no...Hi Anon 11:52<br /><br />Now you are making sense.<br /><br />Right now the banks have our savings and no one to lend it to. Hardly anyone qualifies for a loan.<br /><br />Japan was able to salvage their banking system by paying zero interest and investing in American Treasury's for 20 years. It worked out OK for them.<br /><br />So our banks borrowing from the Fed short term and investing the proceeds in long term treasury, will probably help the bank meet payroll and pay interest to depositors, but that's not going to make anyone rich.<br /><br />Normally the banks write a loan for 100k and sell it to a private investor and manage the loan for a half percent. So if you can turn that 100k over 20 times in a year, you generate about 10 percent interest on the 100k. In todays market, buying long term Treasury's at 3 percent and holding them isn't much of a deal. The bank is more likely to write a 100k loan at 7% and hold the mortgage on the books.<br /><br />You are right about the money being gone. Everyone is sitting on their dollars in the bank. But if everyone was to go out and try to spend them, the shelves would be bare. There are too many dollars and too little product.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-67500239359776603102012-01-13T20:27:19.191-08:002012-01-13T20:27:19.191-08:00Everybody who existed prior to the installment by ...Everybody who existed prior to the installment by the power elite of The Federal Reserve in 1913 is dead. We were all born into it and raised with it. We know of no other way, which is why no one can think straightforwardly about it. This country's framers did not plan for a private independent corporation controlling our money, printing money and meddling in our economy. Jefferson fought the idea. Jackson fought the idea and won. That viral ilk kept coming back and trying and trying again to get into the position where they controlled the currency. The 16th Amendment, bringing in the Fed Reserve and income tax, was one of the last nails in our coffin and has brought us to where we are today.<br /><br />Banking is no longer banking. The corruption is horrendous. The leveraging is horrendous. Loaning money that you don't have is unconscionable. <br /><br />We can never have sound monetary or fiscal policies as long as the power elite have their fangs (The Fed Reserve) in our jugular artery.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-58384104008391431542012-01-12T20:47:42.641-08:002012-01-12T20:47:42.641-08:00Jim,
I don't have any debt so there is nothing...Jim,<br />I don't have any debt so there is nothing for me to rationalize or justify about.<br /><br />You've got it wrong. It is even in the WSJ. Banks borrow from the Fed Reserve for less than 1% and then buy long term treasuries and profit on the spread. One of the little tricks that is done by the government and The Fed to help the banks out (cronyism and plutocracy).<br /><br />I've read books and seen DVDs explaining the banking system and the Fed Reserve. They don't agree with what you are telling me.<br /><br />You should watch "The Money Masters" and "Money As Debt" and read "The Creature From Jeckyll Island".<br /><br />The big joke on everyone is that... there really isn't any money! <br /><br /><br />Anon 11:52 AKA 2:21Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-16597588061961506402012-01-12T19:09:30.481-08:002012-01-12T19:09:30.481-08:00Hi Anon 11:52 AKA 2:21
Your statement "Banks...Hi Anon 11:52 AKA 2:21<br /><br />Your statement "Banks are loaning out money that doesn't exist." is false. The statement "If everyone wanted their deposit money back the banks wouldn't be able to deliver" is true and rather obvious. Thats why the Federal Reserve was created, to keep banks from going broke when there was a run on the bank.<br /><br />Your quote "The Fed Reserve creates money out of thin air and gives it to banks for zero or little interest" is wrong again, they give over night loans to banks that need capital advances because of an accounting screw up or other glitch and they charge enough that the bank would rather avoid the charge by correcting the problem.<br /><br />Your statement "There is not enough money to back up all the credit that has been extended" has some merit if you phrase it a different way, "not everyone is going to pay back their debts."<br /><br />The banks are not the villain. The credit card companies charge high rates for borrowers, but they aren"t stupid. Not everyone is going to pay, so they charge accordingly.<br /><br />Personally, I wouldn't loan you a dime, Your remarks give me the impression that you are just rationalizing why you won't pay for what you have already borrowed.<br /><br />Your view of the banking sector has just enough truth mixed into it in the wrong places, to limit your future success. Take the time to learn what a bank does and what services it offers. They don't print money, but knowing what they can do to you if you don't have your wits about you is a different thing. I've seen people refi a home three times in two years, and they haven't got a clue that they have been ripped off.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-30792691810668154192012-01-11T23:52:33.365-08:002012-01-11T23:52:33.365-08:00Banks are loaning out money that doesn't exist...Banks are loaning out money that doesn't exist. If everyone wanted their deposit money back the banks wouldn't be able to deliver. This is an unfair and corrupt activity. Banks loan money that they don't have. The Fed Reserve creates money out of thin air and gives it to banks for zero or little interest. Banks make money on the interest spread. Another unfair and corrupt activity. There is not enough money to back up all the credit that has been extended. This is no different than counterfeiting which is a crime. People are paying high interest to banks for money that doesn't even exist. Robbery.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-27234171270848040942012-01-10T20:16:11.063-08:002012-01-10T20:16:11.063-08:00Hi Anon 2:21
Banks can't create money out of ...Hi Anon 2:21<br /><br />Banks can't create money out of thin air. Congress has that ability as does the Federal Reserve in conjunction with the Treasury.<br /><br />Fractional Reserve lending is a method used to explain how the money supply increases and decreases.<br /><br /><br />The banks can loan out about 90 percent of deposits, not 9 times.<br /><br />The money in the bank is real and belongs to someone, like you and me.<br /><br />Our government is covering all of these losses with printed dollars. and the total is added to the national debt.<br /><br />The question you need to ask, is do you want to be paid in IOU's or gold? The way the law is written, dollar bills are legal tender. You won't get gold.<br /><br />Our government has borrowed all of the money in the banks. The banks are not the problem, its the government.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-23100479213196390252012-01-10T18:05:38.693-08:002012-01-10T18:05:38.693-08:00When home prices reach the bottom after another 20...When home prices reach the bottom after another 20-30% or more drop (which will happen gradually or possibly quickly, could take another 5 years) then they'll be some great deals for buying and owning single family residences as rental/income properties. Altho they aren't very good investments. Much better to own a small apartment building. Aptmt rentals will be in high demand from this point on for many reasons. People losing homes, baby boomers retiring and downsizing, unable to qualify for loans, the new generation entering the work force, etc.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-5591312989553866332012-01-10T14:21:02.229-08:002012-01-10T14:21:02.229-08:00Jim,
The banks didn't pay the sellers "re...Jim,<br />The banks didn't pay the sellers "real money". The banks created the money out of thin air with the widespread use of fractionalized reserve lending. You know that. The money was created by just punching out some digits on a computer keypad. Banks are allowed to loan out up to 9 times what they have on deposit. There is no real loss of wealth when someone doesn't pay back their mortgage, other bank loan or credit card. There was no money in the first place. This needs to be stopped. Everyone should default on their loans and pull their money out of the big banks and brokerages. That would take their power away and put an end to their raping and pillaging of America. <br />END THE FEDERAL RESERVE.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-81802620993237172492012-01-09T21:09:34.834-08:002012-01-09T21:09:34.834-08:00Hi Anon 9:56
I have to take exception to you blam...Hi Anon 9:56<br /><br />I have to take exception to you blaming the bankers. No one pointed a gun a people buying homes like crazy. It was consumer greed.<br /><br />My neighbor owes one million in real estate loans and has a 30k per year job.<br /><br />The banks paid the sellers real money and now hold the loans that the new owners are walking away from. You have every right to be mad at the banks for a different more real reason, it was your savings that they loaned out.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-14870042133512415882012-01-08T21:56:32.876-08:002012-01-08T21:56:32.876-08:00Right. You may have been one of the "fortunat...Right. You may have been one of the "fortunate ones" and bought and later sold a house after wild appreciation. (But even that is not a real gain. The higher "value" is just nominal and a result of inflation and demand that is artificial.)<br /><br />Setting up "The American Dream" of owning your own house and making it so important and having the government take an active role is assiting you to own a home is and was just a ploy created by bankers and all the other devious groups that want to stick a hose in you and suck the money out of you throughout your whole life. <br /><br />Debt serfdom. No thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-31467501507452571722012-01-08T19:55:11.286-08:002012-01-08T19:55:11.286-08:00I've built or remodeled or purchased over 8 ho...I've built or remodeled or purchased over 8 homes. Never lived in one of them. Sold them for profit. I'm 60. My wife and I have always rented, never lived in a house we owned. Don't like being stuck in a location;;; refuse to pay ridiculous interest (people wind up paying 2-3 times the cost of the house by the time they finally pay off their 30 year mortgage, banks are smart, people are stupid, how insane is that?);;; no property taxes, no insurance;;; no maintenance and repair costs;;; no wasted time cleaning or doing lawn work;;; if you don't like your neighbor or what is going on in your vicinity you can pack up and move;;; you don't need furniture if you rent furnished (more depreciating stuff you didn't have to pay for and don't have to worry about or haul around with you);;; but the most important benefit of them all is all the money and time saved so that you can do things for YOU (like education, health programs, hobbies, business activities, etc. etc.);;; in other words renting raises the quality of your life.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-62695092452564052152012-01-08T19:04:57.791-08:002012-01-08T19:04:57.791-08:00Hi Sell Real Estate
Your description describes my...Hi Sell Real Estate<br /><br />Your description describes my life.<br /><br />We still rent in California, but between the rental I have had for 25 years and what we save renting over owning, our son will comfortably make it through Berkeley 4 years, fully financed by the wife and I.<br /><br />Your recipe for investment works just fine.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-85464384551016889062012-01-08T17:49:56.738-08:002012-01-08T17:49:56.738-08:00Hi Anon 10:26
You are right, There has to be some...Hi Anon 10:26<br /><br />You are right, There has to be some intrinsic values in owning a home. The walls don't have to be painted white, the carpets don't have to be light tan, and you can plant trees, build a greenhouse, or a barbecue pit. <br /><br />With a rental, the owner can tell you to move if he wants to sell the home or move back in it.<br /><br /><br />It's still way cheaper to rent in California. That could change in a couple of years.<br /><br />For a lot of couples, home ownership is a retirement savings plan, that is an unplanned accident. Which is a good thing.<br /><br />Thank you for your comments.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-70099462192511337462012-01-06T22:47:29.527-08:002012-01-06T22:47:29.527-08:00Hi,
Real estate investing needs a long term vis...Hi,<br /> Real estate investing needs a long term vision. As individual investors we save money, purchase real estate and try to increase our portfolio over time, hoping that by the time we retire, if not before, the cash flow from the investments might pay for college for our children and then pay for a comfortable retirement.Sell Real Estate Notehttp://www.seascapecapital.com/noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-36329346626350473272012-01-05T22:26:56.442-08:002012-01-05T22:26:56.442-08:00As my first post to this thread, I just wanted to ...As my first post to this thread, I just wanted to say that there is more to home ownership than just $, especially for a first purchase. I bought a home, and because of that, I started reading your blog. There has to be some intrinsic value there. :)<br /><br />Many renters would not read your blog. They have no idea what is coming up next, unless you are talking television lineups.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-82702116279040451482012-01-05T20:01:15.564-08:002012-01-05T20:01:15.564-08:00Hi Dearieme
Welcome back
Tax laws vary from coun...Hi Dearieme<br /><br />Welcome back<br /><br />Tax laws vary from country to country. I imagine there is a way to avoid inheritance taxes. It has become an art over here. We have 1031 exchange programs that allow you to sell one rental property and buy another with the proceeds and avoid tax and at the same time you get to depreciate the new investment for another 27 years. Living Trusts are another. Some farmers have very large insurance policies on them and when they die, the non taxable death benefits pay the probate taxes.<br /><br />Just reading about your 40% inheritance tax rate had me trying to think of ways to avoid it. It certainly doesn't sound very fair.<br /><br />In my case, I'll have to get rich first, before I worry about estate taxes. With my luck, I'll win the lottery at age 90 and the grand kids will be mixing antifreeze in my Gin and Tonic.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-86792781437976375392012-01-05T18:05:22.718-08:002012-01-05T18:05:22.718-08:00Put your rental properties in a CRT (Charitable Re...Put your rental properties in a CRT (Charitable Remainder Trust).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-36151511664901016802012-01-05T15:06:45.496-08:002012-01-05T15:06:45.496-08:00"Let your relatives inherit": not hereab..."Let your relatives inherit": not hereabouts - inheritance tax is 40% in the UK.deariemenoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-36456754108532193592012-01-05T13:47:45.735-08:002012-01-05T13:47:45.735-08:00Hi Anon 11:17
The first rule of real estate is to...Hi Anon 11:17<br /><br />The first rule of real estate is to never sell, borrow on it maybe. Of course, you can't do that if you paid too much for it unless you're Donald Trump.<br /><br />Let your relatives inherit and the capital gains from depreciation drop off.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-87107217160261435172012-01-05T11:17:41.888-08:002012-01-05T11:17:41.888-08:00One note on depreciation.
When you sell, the IRS c...One note on depreciation.<br />When you sell, the IRS collects<br />"recapture of depreciation."<br /> So if you depreciate the house by $100,000. you owe taxes on that gain, even though it was not money paid to you.Anonymousnoreply@blogger.com