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Re: Long-term returns from real estate
Old 11-19-2006, 06:42 AM   #41
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Re: Long-term returns from real estate

well i know id never go above 3 thats for sure
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Re: Long-term returns from real estate
Old 11-19-2006, 06:52 AM   #42
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Re: Long-term returns from real estate

Quote:
Originally Posted by mathjak107
well i know id never go above 3 thats for sure
Oh, sure you would. What if the owner(s) had all 3 daughters on the payroll and they didn't do squat? The earnings are artificially depressed.
Now, say they are still showing big numbers (solid - proven) and you can add back the daughter's wages and benefits on top of the nice
profits already built in? Or, maybe everyone in the family drives
a Lexus (like C-T) totally covered by the business? You have to analyze
that stuff. One more thing. It's almost always a bad idea to buy the
stock of a small family owned corporation. I have done it, but usually better to buy the assets.

JG
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Re: Long-term returns from real estate
Old 11-19-2006, 08:28 AM   #43
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Re: Long-term returns from real estate

Whch daughter is the best looking?
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Re: Long-term returns from real estate
Old 11-19-2006, 01:12 PM   #44
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Re: Long-term returns from real estate

Hey, even though I posted earlier about how I believe house prices are going down and will continue to do so in San Diego, I didn't mean to badmouth RE as an investment vehicle. The signals were plain to see a year and a half ago that it wasn't time to buy a house here for investment purposes. My investments in multi-units outside of CA have been doing extremely well. I think you can do well in general by buying multi-unit residential and not necessarily in your back yard.

I'm always a little amused when financial articles talk about stock price increases beating out real estate price increases. Uhh, but when you put 25% down on your RE investment you're using leverage to multiply your actual return. Apples to oranges you might say? Why can't you put 25% down on stock purchases? Because it is considered too risky.
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Re: Long-term returns from real estate
Old 11-19-2006, 01:16 PM   #45
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Re: Long-term returns from real estate

Thats the irony, long term for me stocks beat by a wide margin all our real estate but im still to chicken to buy on margin
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Re: Long-term returns from real estate
Old 11-19-2006, 01:51 PM   #46
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Re: Long-term returns from real estate

Quote:
Originally Posted by califdreamer
Hey, even though I posted earlier about how I believe house prices are going down and will continue to do so in San Diego, I didn't mean to badmouth RE as an investment vehicle...
There is no need for us to do it. Let Gary Shilling do it for us:
Quote:
Originally Posted by Gary Shilling
Existing home prices in September fell 2.2% from a year earlier, the biggest drop in the 38 years of National Association of Realtors data. That matched the August decline and was the first back-to-back fall since 1995.
:
Quote:
40% of new house sales in September are not owner-occupied
Quote:
Over half of existing homes for sale are vacant
Quote:
Past patterns suggest a two-year gap between the decline in house sales and the collapse in prices. But given the huge amount of speculation this time, the gap may be shorter, 1 1/2 years in our judgment. Since sales peaked in mid-2005, the big slide in prices might well commence roughly at the end of this year.
Quote:
The Federal Reserve estimates that last year, they took $719 billion out of their abodes and spent half of it on goods and services. That's 4.1% of consumer outlays...
Many choice quotes there. He predicts that the big drop will start at year end. Most optimistic outlook is that it might be delayed to 4Q07.
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Re: Long-term returns from real estate
Old 11-19-2006, 02:50 PM   #47
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Re: Long-term returns from real estate

Prices for waterfront in my neck of the woods (MD) have held steady, but sales numbers are down. Nobody wants to budge.
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Re: Long-term returns from real estate
Old 11-19-2006, 07:47 PM   #48
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Re: Long-term returns from real estate

Lot's of nice pictures in Shillings report ... but I think his prediction of steep declines in 07 is ahead of it's time. A RE run up that took 12 years to create can't bottom-out in 2 years; too little liquidity in RE.

My guess - if this bottom follows previous - is it'll take 5-6 years. Assuming it already started, that means 2010-2011. Think deep recession too.
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Re: Long-term returns from real estate
Old 11-19-2006, 10:21 PM   #49
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Re: Long-term returns from real estate

Quote:
Originally Posted by rmark
Whch daughter is the best looking?
She's the one you keep on, unless you are married and wimpy.
Then you keep the ugly one.
Now that I think about it, this
identical situation cropped up many times back when I was
working. I know a couple of guys personally who make me wonder what their wives are thinking when I see their secretaries. And, they are both
in 2-person offices. I used to hire on looks way back when. Preferred
someone easy on the eyes, especially in my workaholic period when I spent more time with my staff than my wife. Good looks will help you in most any venue I suppose. New thread?

JG
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Re: Long-term returns from real estate
Old 11-20-2006, 01:09 AM   #50
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Re: Long-term returns from real estate

Buy and hold or playing the fix-up/flip game is not the best way to make money in real estate. The best of way is doing your research and investing in property that has immediate opportunty for change of use. By change of use I mean subdividing or rezoning for a higher and better use.
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Re: Long-term returns from real estate
Old 11-20-2006, 03:40 AM   #51
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Re: Long-term returns from real estate

more and more its become a professionals game. once in a decade you may get a nice run up like we had but for all its glory i dont find real estate a great investment anymore. its to localized , to leveraged in a shaky market and to many tenents to make your life miserable. after 20 years of landlording when everything is sold im thru. .. only real estate that may be worth it is a personal residence since you have to live somewhere.
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Re: Long-term returns from real estate
Old 11-20-2006, 08:26 AM   #52
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Re: Long-term returns from real estate

Quote:
Originally Posted by mathjak107
more and more its become a professionals game. once in a decade you may get a nice run up like we had but for all its glory i dont find real estate a great investment anymore. its to localized , to leveraged in a shaky market and to many tenents to make your life miserable. after 20 years of landlording when everything is sold im thru. .. only real estate that may be worth it is a personal residence since you have to live somewhere.
I understand your position completely, but for me...............I prefer
RE to such an extent that (if I was younger), I would get back into it.
Not full time of course. I'll concede that maybe if I'd done it full time
over a long period I might not be quite so enthused. Cashing your interest
and div. checks is a lot less hassle than chasing the rent and fixing
leaky toilets.

JG
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Re: Long-term returns from real estate
Old 11-20-2006, 08:30 AM   #53
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Re: Long-term returns from real estate

Quote:
Originally Posted by Hydroman
Buy and hold or playing the fix-up/flip game is not the best way to make money in real estate. The best of way is doing your research and investing in property that has immediate opportunty for change of use. By change of use I mean subdividing or rezoning for a higher and better use.
Agree "change of use" can be good. Do not agree it is the "best way".
That's a pretty broad statement to make.

JG
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Re: Long-term returns from real estate
Old 11-20-2006, 01:06 PM   #54
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Re: Long-term returns from real estate

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Originally Posted by kcowan
There is no need for us to do it. Let Gary Shilling do it for us: :Many choice quotes there. He predicts that the big drop will start at year end. Most optimistic outlook is that it might be delayed to 4Q07.
Doses Shilling discuss apartment investing in areas that have been underpriced during the housing boom?

Not all RE investments are houses. None of my holdings are.
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Re: Long-term returns from real estate
Old 11-20-2006, 01:10 PM   #55
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Re: Long-term returns from real estate

this is why i say real estate is a very personalized issue, i can only speak for my own dealings both as a landlord and as a seller of real estate trying to make a profit at times. im not convinced it was worth the effort
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Re: Long-term returns from real estate
Old 11-20-2006, 02:03 PM   #56
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Re: Long-term returns from real estate

Quote:
Originally Posted by tryan
Lot's of nice pictures in Shillings report ... but I think his prediction of steep declines in 07 is ahead of it's time. A RE run up that took 12 years to create can't bottom-out in 2 years; too little liquidity in RE.

My guess - if this bottom follows previous - is it'll take 5-6 years. Assuming it already started, that means 2010-2011. Think deep recession too.
Normally the cycle is 14 years, 7up and 7 flat or down. The correction will be more severe depending on the mood of prospective buyers. If you really absorb what all those charts are portraying, most indicate a state that we have never seen before.

But then, if any of us could forecast the future, we would be rich already and not bothering with Firecalc.
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Re: Long-term returns from real estate
Old 11-20-2006, 02:38 PM   #57
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Re: Long-term returns from real estate

I figure as long as the economy to still producing, there will be new suckers homebuyers to take up the slack. Even if they buy short sales approved by banks - or tired sellers - to clean up exotic mortgage mess; the landing COULD be soft.

Enter a deep recession - or heaven forbid, depression - and it COULD be as bloody as Shilling foresees.
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