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Old 01-16-2008, 10:50 AM   #141
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Are these in Detroit?
I know some neighborhoods in New Orleans that would fit the description....
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Old 01-16-2008, 12:34 PM   #142
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It's like a car wreck . You can't look away .
+1. I don't even bother with the "facts" flying back and forth at this point. I am just skimming for the good humor parts.
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Old 01-16-2008, 12:36 PM   #143
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Assuming 5% inflation, a $200k house in 1980 would certainly be worth $458k now. However, the rest of your math is shaky at best, and intended to mislead at worst.

If there are still 13 years left on the mortgage, that money must be removed from the $458k selling price (at least $100k based on low 5% interest rates and $40k down). In addition, you also need to remove realtors fees (@5%, this is around $20k). So now we are down to $338k. With approximately a $250k gain ($458k-$200k), there will be minimal taxes if the house was owner-occupied.

In comparison, $40k invested in the stock market (and not even on margin) would return $220k or so.

But this still isn't the complete math. We would also need to take into account taxes (property), tax-writeoffs (based on salary, other deductions), maintenance, and equivalent rents (and rent inflation) to get a better idea whether this purchase makes financial sense. (This neglects intangibles.) In other words, the $338k vs. $220k is a best case scenario given equity vs. housing appreciation.

Purchasing a house can often make sense financially - but often is not always. And as the plots Twaddle has posted indicate, now is a very precarious time to be purchasing property in the US.


So feel free to keep on posting about your investing genius - but I (and I am sure others) would appreciate a bit more care on your part when posting numbers. Because if these "errors" of yours continue, I'll start to question whether you've slid past enthusiasm and into the realm of dishonesty.

Cheers.
Cho uyo

This is an intermediate real estate thread. I did not intend to mislead anyone as you can see by my post 98, where I referred to the almost $300,000 gain, that I subtracted the mortgage payoff. Investors at the intermediate level and higher generally do not pay full Realtor fees if any so I did not subtract them. I also assumed a positive cash flow (or costs below renting for owner occupied) well before year 17 even for an average buyer using YOUR average appreciation rate. When you go to the beginner real estate thread I believe there is the definition of average so you will realize that intermediate (above average) investors have higher rates. The graphs are way more colorful there also. Pretty graphs. . I thought I was also being generous to you by assuming 17 years of 10% returns in the market. I’m all ears if you can guarantee that. I encourage you to read up on the taxation of capital gains so you won’t make erroneous comments concerning tax liabilities. I won’t even chide you about not mentioning a Starker delayed exchange as that is best discussed in the advanced real estate investor thread.

Please don’t take this harshly. I don’t blame you for assuming you were on a beginner thread with all the beginner level whining. But before you go talking all potty mouth, I suggest you go to the beginner threads to get up to speed. We’ll wait, we ain’t going no where.
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Old 01-16-2008, 01:19 PM   #144
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Here is a good read.

Housing Crash Continues, Bubble Pops

Sort of runs contrary to the claims of our "advanced" real estate investors.

When I closed I paid no fees so I may be beyond "advanced" but in reality I was bonking the real estate agent (female, at least I think). I got a great education during the purchase process.

EDIT:
Holy crap I just saw that someone thinks this is an intermediate level thread. Uhhhh, just sayin, a little more study and time in grade and this may not seem so daunting to you. I consider this thread to be a psychology thread about people who get very defensive and respond smugly.

Don't anyone assume I'm talking about you in particular. That's called being paranoid. No one is out to get you. It's a great world except for this housing debacle.
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Old 01-16-2008, 01:34 PM   #145
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Honobob and CFB present themselves as savvy investors. They acknowledge that it's possible to lose money in real estate, but not if you're smart like they are.

We are lucky to be in the presence of not one, but two Sam Zell-like experts. I suggest we listen to them.

I believe they made their money in places like Sacramento and Las Vegas. I, for one, would love to get some insight into their investment analyses. Was it based on cash flow? Demographics? Zoning restrictions?

Let's all be quiet now and listen....
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Old 01-16-2008, 03:03 PM   #146
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Here is a good read.

Housing Crash Continues, Bubble Pops

Sort of runs contrary to the claims of our "advanced" real estate investors.

When I closed I paid no fees so I may be beyond "advanced" but in reality I was bonking the real estate agent (female, at least I think). I got a great education during the purchase process.

EDIT:
Holy crap I just saw that someone thinks this is an intermediate level thread. Uhhhh, just sayin, a little more study and time in grade and this may not seem so daunting to you. I consider this thread to be a psychology thread about people who get very defensive and respond smugly.

Don't anyone assume I'm talking about you in particular. That's called being paranoid. No one is out to get you. It's a great world except for this housing debacle.
Well I don't have 50 minutes for you but here's a start. Better yet, why don't you start another thread to discuss your issues. Let's keep this one about real estate.

In psychology, psychological projection (or projection bias) is a defense mechanism in which one attributes to others one’s own unacceptable or unwanted thoughts or/and emotions. Projection reduces anxiety by allowing the expression of the unwanted subconscious impulses/desires without letting the ego recognize them. The theory was developed by Sigmund Freud and further refined by his daughter Anna Freud, and for this reason, it is sometimes referred to as "Freudian Projection"
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Old 01-16-2008, 03:38 PM   #147
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Let's all be quiet now and listen....


Like that’s gonna happen………

But just incase you can hear in between snorts. Honobob never claimed to be a savvy investor, just a successful one which is why I am totally baffled by people (intelligent ones) who try and fail or are afraid to even try! Honobob has always bought at market! Honobob has always bought through a Realtor. Honobob even admitted that his seemingly gift from above ability to select good tenants could be a fluke.

I don’t understand why people buy properties if they believe the value only appreciates at the rate of inflation and ownership is much greater than renting. I don’t understand why people get all wet about a property they think they can buy at 50% off when that was the price they sniffed at three years ago and pronounced it to be ridiculous. Why would you buy anything that drops in value so drastically? I don’t understand why you would buy a property and complain about the type of tenants it attracts.

So no. Honobob makes no claim to being savvy. Honobob is no idiot though and as he explains in chapter 3 of his book,” Honobobs Best Buys for Believers and Bozos” …oh wait I’ve said too much. Honobob has learned much here so I’m not gonna give away the farm (real estate phrase. See appendix III) Everything Honobob knows can make you a successful investor and is included in my 500 page book. It’s only 499 words total but I learned here you won’t feel like you’re getting a deal unless it seems way more complicated than it is and Today just for you Honobob is slashing his normal price of $59.99 to just three easy small payments of just $20.00. You’d pay more for a haircut! Operators are standing by.


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Old 01-16-2008, 03:40 PM   #148
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twaddle, I rarely disagree with you because you are extremely sharp witted and better yet, rely on fact. You bad man you. In the future please use smugness, arrogance and grandiose performance claims. You will fit in well at that point.

But no let's not listen to shills for real estate. There is an obvious agenda and the willingness to tailor stories to support the denial.

And honobob, I've been really just ribbing you a bit. It's really not personal at all. Sorry for causing you anxiety and stress. And in the psychology field, invoking Freud is very, well let us just say, old school.

And my problem is that as a newly retired university employee and professional genealogist, I lacked sufficient "superiority" in real estate knowledge and bought what everyone in Frankfort thought was a great buy. That included a BIL in the tax office in Traverse City.

So, uhh, I'm on this thread as a voice of normallcy.

I wonder really if falling house prices are considered a myth by you, why are YOU here. You've posted nothing of value other than you claims of superior knowledge.

Twaddle please don't allow the false reporting to go unchallenged.

I've tired of the attacks.
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Old 01-16-2008, 04:02 PM   #149
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I lacked sufficient "superiority" in real estate knowledge and bought what everyone in Frankfort thought was a great buy. That included a BIL in the tax office in Traverse City.
Transference is a phenomenon in psychology characterized by unconscious redirection of feelings for one person to another. One definition of transference is "the inappropriate repetition in the present of a relationship that was important in a person's childhood."[1] Another definition is "the redirection of feelings and desires and especially of those unconsciously retained from childhood toward a new object."[2] Still another definition is "a reproduction of emotions relating to repressed experiences, esp. of childhood, and the substitution of another person . . . for the original object of the repressed impulses."[3] Transference was first described by Sigmund Freud, who acknowledged its importance for psychoanalysis for better understanding of the patient's feelings.

Yeah, much harder to flail your frustrations at a family member even if the relationship is just through marriage.

TBPu, you're new to this maddness but I assure you it's all in good fun. Even the Twad and I only had our one little spat. He did change his name shortly thereafter. But I am serious about making money but if not keeping an open mind to experiences of others and being open to the dark side puts money in your pocket more power to you.

Today is a good day to buy real estate.
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Old 01-16-2008, 04:05 PM   #150
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Hey, I enjoy listening to shills for real estate. There are so few left these days.

Honobob is a successful real estate investor. CFB too. As for me, I made a lot of money in real estate, but I consider myself lucky rather than successful. My returns far exceeded anything I could imagine based on fundamentals. I owe it all to the bubble. Thank you, bubble!

Now the bubble is deflating. I still own one last house, but I don't consider it an investment. It keeps the rain on the outside, and that's all I ask of it.

I do think there are savvy real estate investors out there. I.e., those whose success is a product of factors other than luck and bubbles. But speculating based on past growth or hoping that your neighborhood becomes gentrified or popular doesn't strike me as "advanced" real estate investing.
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Old 01-16-2008, 04:18 PM   #151
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way to go are honobob, back from the ledge. That's the spirit. I know it seems like a 180 degree mood swing but those are normal (cough). Kidding.

Since you mention it's a good day to buy real estate. Maybe you'd be magnanimous and suggest a strategy for a nearly penthouse condo in the Four Seasons on Market St. One floor beneath Gavin. Nice city paid security.

Any strategy?

Twaddle, I owned VGPMX and VWO and at 1mil each until October. That true but even if not it's a damn good lie. Now am I a genius or what.

Early 2004, bought 1mil of VGPMX at various mid teen prices. Sold in Oct 2007 for 2.8mil plus.
Mid 2005 sold most of 1mil in MSFT and bought VWO. Sold in Oct 2007 for 2mil.

I'm either a UMich professor with a genius ability in stocks or I'm a liar. But, I do plan to sail out of SF in May on a very nice little boat.
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Old 01-16-2008, 04:23 PM   #152
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But speculating based on past growth or hoping that your neighborhood becomes gentrified or popular doesn't strike me as "advanced" real estate investing.
Intersting though how frequently that has worked, and worked big in our lifetimes. I remember back in the 70s thinking that the popular idea of escalator profits in real estate seemed incredibly naive, but often successful.

Where else in life can so many people with ordinary gifts get a free ride up?

A few people recently have made huge money shorting this bubble, and my hat is off to them. Because years of past experience said "Thou shalt not fade residential real estate."

Regarding gentrification, a lot of places it has not worked. But in Seattle it has been a good middle class investment for a young person to buy a single family dump anywhere within 2-4 miles of downtown, live in squalor, put bars on the windows and avoid walking around at night, and eventually enough of your types will be in the neighborhood that real estate agents are no longer afraid to come around, and in fact have informally changed the name of the neighborhood to something more palatable- like South Capitol Hill.

Ha
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Old 01-16-2008, 04:36 PM   #153
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Honobob is a successful real estate investor.
Which is all I ever claimed to be and I was successful back in the seventies, the eighties, and the nineties, long before your lucky time came about. Todays events really have no impact on my long term plan as it's pretty much same ole, same ole, but with a better PR man.

And as Honobob promised yesterday. Here's what the Big Boys are doing!!!!


150 Spear sold 2001 for $102,400,000 Probably negotiated when dot.com still had fumes.
150 Spear sold 2007 $142,500,000 6% compounded annual appreciation + the income stream.

75 Hawthorne sold 2004 $97,000,000
75 Hawthorne sold 2006 $125,000,000 About 15% per year.

333 Market sold 2005 $155,000,000 Old Chevron headquarters, nice!
333 Market sold 2007 $370,000,000 55% per year appreciation Ok they did put a little money into it. I think about $35,000,000 but still pretty good overall.

So it still makes me wonder why if I'm making money, everybody I know is making money, and the Big Boys are making money in real estate why am I being asked to bail out people I don't know and actually am not sure exist?

Twaddle, are you a bailout schill?

P.S. How about a graph for my book sales. It's not for my ego, the guys in shipping want to plan expected overtime.
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Old 01-16-2008, 04:54 PM   #154
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way to go are honobob, back from the ledge. That's the spirit. I know it seems like a 180 degree mood swing but those are normal (cough). Kidding.

Since you mention it's a good day to buy real estate. Maybe you'd be magnanimous and suggest a strategy for a nearly penthouse condo in the Four Seasons on Market St. One floor beneath Gavin. Nice city paid security.

Any strategy?
Stay the Hell away from the Four Seasons if you value your life. It's all Brittany and Lilo. Hell, even Gavin fessed up to a drinking problem. He does have a city driver though.

Here's where the bigger money is going.

The St. Regis Hotel just closed escrow on its last luxury condominium unit.
As of July 14, the property was officially and completely sold out, all 102 condominiums having closed escrow. The final sales are a key landmark for developers Carpenter & Co., Starwood Hotels & Resorts and the San Francisco Redevelopment Agency.
Though the building had 85 of 102 units under contract eight months ago, those sales were secured with partial deposits and were not final until they closed escrow.
"We're all out there celebrating," said Alan Mark, who led marketing of the condominiums.
Included in the sales were three penthouses sold to developer Victor MacFarlane for $30 million, as first reported by the Business Times in December.
By the end of January, MacFarlane had hired Cuban-born architect Orlando Diaz-Azcuy to lead a renovation estimated to cost $20 million or more.

YOU HAVE BIGGER MONEY, RIGHT?
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Old 01-16-2008, 05:07 PM   #155
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Twaddle, I owned VGPMX and VWO and at 1mil each until October. That true but even if not it's a damn good lie. Now am I a genius or what.

Early 2004, bought 1mil of VGPMX at various mid teen prices. Sold in Oct 2007 for 2.8mil plus.
Mid 2005 sold most of 1mil in MSFT and bought VWO. Sold in Oct 2007 for 2mil.

I'm either a UMich professor with a genius ability in stocks or I'm a liar. But, I do plan to sail out of SF in May on a very nice little boat.
Very nice. I started a tech company in 1996 and sold it in 1999.

Who needs to be smart when we can be lucky?

Now that real estate is over, where will the next bit of luck come from?
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Old 01-16-2008, 05:11 PM   #156
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honobob,
errrr, I hope you are kidding about the St. Regis condos. You do know that Gore and Tipper, the Beverly Hillbilly crowd, live there.

No I don't have the BIG money like you claim but I can afford a nice little ocean putter boat.

Twaddle, a very astute observation/question. Not only real estate but some other former glory holes are closed. No pun intended. As a visionary of some renown, I profess to know about as much as Memphis Minnie. Not much it would seem. BUT, I believe the next mega-Bob will be the person who devises a way to re-introduce "barter" into our lives.

So for instance: As a former tenured Professor of Psychology at U of M. I would agree to rid hono of his demons ( and delusions of knowledge in that field) for some advice on buying a sky pad in SF. No taxes. No big legal fees just a deliver your goods and I'll deliver mine.

Barter. The Future.
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Old 01-16-2008, 05:13 PM   #157
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But, I do plan to sail out of SF in May on a very nice little boat.
Mu.uu....uu..sssst exercise compulsion control. Help me out here you guys, I don't have all day.

TPBu, although claimed to be very nice do you really want to bring your lil' dinghy to San Francisco. P.S. The Parade is actually in June.


I feel so bad, but in a good way

He he! He said putter!

We should have a IM feature here.

Big Money takes the hills out of even a hillbilly.
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Old 01-16-2008, 05:17 PM   #158
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Now that real estate is over, where will the next bit of luck come from?
Great question. Where will the next bubble be, so we can ride it a little before it pops? We've seen gold (70s), internet (90s), real estate (00s), oil (00s), what's next?
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Old 01-16-2008, 05:18 PM   #159
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So it still makes me wonder why if I'm making money, everybody I know is making money, and the Big Boys are making money in real estate why am I being asked to bail out people I don't know and actually am not sure exist?
What's next, deny the Holocaust occurred?

While we're on the subject, let's throw in a reference to Nazis and Hitler and see how much further we can take this foaming-at-the mouth thread. Anyone want to wager it ends when someone in the bunker finally shoots him or her self in a vital organ? Bound to happen since both feet are already riddled with bullet holes.
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Old 01-16-2008, 05:19 PM   #160
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Great question. Where will the next bubble be, so we can ride it a little before it pops? We've seen gold (70s), internet (90s), real estate (00s), oil (00s), what's next?
Food? I don't know what type, but corn? pigs? some kind of commodity I am thinking

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