Real Estate as Investment
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Mr._johngalt
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I sold several properties on land contract
(seller financing). In many of those, I sold hoping that
the buyer would default and I could then take the property back. None ever did.
JG
(seller financing). In many of those, I sold hoping that
the buyer would default and I could then take the property back. None ever did.
JG
tryan
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Maybe not...sold a property via owner financing toooo early. Assessed value has since tripled.
Been there too ... carried the note - first position - for a young family. They made 7 years of on time payments. Then re-fi'd to lower the rate and pulled ~100k out of the property. Bought another - larger - house and rent out the smaller one. Can't decide if I am a saint or sucker.
Been there too ... carried the note - first position - for a young family. They made 7 years of on time payments. Then re-fi'd to lower the rate and pulled ~100k out of the property. Bought another - larger - house and rent out the smaller one. Can't decide if I am a saint or sucker.
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
From the "Holy Cow" department...
My $250k home purchased two years ago was recently valued at around $350. Last week a house 5 up from mine sold for $394k.
I may try selling this, setting up a cardboard box by the side of the road to live in, wait a couple of weeks and see what I can get for the box...
My $250k home purchased two years ago was recently valued at around $350. Last week a house 5 up from mine sold for $394k.
I may try selling this, setting up a cardboard box by the side of the road to live in, wait a couple of weeks and see what I can get for the box...
Mr._johngalt
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I was not sure if this question was directed to someone specific or just generally. Anyway, just briefly............in 1998 I rented a large 2 bedroom
apartment in a small rural town for $330 a month. Talked landlord into all new paint and carpet before I moved in. The neighbors were not
"country club" types, but a good deal. In less than a year I rented
a 600 SF efficiency right on the water (same river we live on now) large
deck
and detached garage for $425 a mo. The house we are in
(100 feet of water frontage/1100 SF) would rent for about $600.
The average apartment in the local papers is in the $400-500
range. You can rent a real nice house here for $700-800.
Anyway, another advantage of living out in the hinterlands.
JG
BUM
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Re: Real Estate as Investment
We are deep into real estate investment...all unplanned.
Our residence in NY is appreciating nicely as commuter transportation to NYC improves. est. $400k
Our NC townhouse-by-the-sea has rocketed off the charts in the last 3 years and is approaching "name your own priceville". est $500-600k this week
Recently inhered a 900sqft 3br home on an acre. All fixed up and ready for sale. est 300k Not so fast says DW...Lets put the kids in there
Our daughter is getting married this month and the plan is for them to pay all expenses (about 600/mo). They now pay 1200/mo living together. The idea is for them to save enough in a year or two for a down payment on a bigger house anywhere they choose.
No mortgages. Total cost basis $380k Now I know this is a nice problem to have but as they say...you can't eat real estate. We have an opportunity to pick up a new house in FL at a good price. I'm not the landlord type and DW is an "accmulator". She is not ready to sell anything. "You never know when grandchildren..." :
Like it or not we have to start thinking as real estate investors not multi-home owners. This is becoming full time employment.
We are deep into real estate investment...all unplanned.
Our residence in NY is appreciating nicely as commuter transportation to NYC improves. est. $400k
Our NC townhouse-by-the-sea has rocketed off the charts in the last 3 years and is approaching "name your own priceville". est $500-600k this week
Recently inhered a 900sqft 3br home on an acre. All fixed up and ready for sale. est 300k Not so fast says DW...Lets put the kids in there
Our daughter is getting married this month and the plan is for them to pay all expenses (about 600/mo). They now pay 1200/mo living together. The idea is for them to save enough in a year or two for a down payment on a bigger house anywhere they choose.No mortgages. Total cost basis $380k Now I know this is a nice problem to have but as they say...you can't eat real estate. We have an opportunity to pick up a new house in FL at a good price. I'm not the landlord type and DW is an "accmulator". She is not ready to sell anything. "You never know when grandchildren..." :
Like it or not we have to start thinking as real estate investors not multi-home owners. This is becoming full time employment.
Mr._johngalt
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Hello BUM. I am envious of your RE activity and success. I can't
hack it anymore, but the urge won't die. On Saturday I went to a farm auction just in case they wanted to "give it away". I was prepared to buy in that case. Luckily it sold at a "fair" price
(meaning way too high for me). Yesterday I noticed a waterfront
lot in our subdivision for sale and I called just out of curiosity.
So far this is a harmless passtime as I rarely buy anything.
I am always happy after I pass up these deals, but when the'next one pops up, I can't resist the urge to check it out.
It's like an old man still noticing an attractive female, long after
the ability to follow up is long gone
JG
hack it anymore, but the urge won't die. On Saturday I went to a farm auction just in case they wanted to "give it away". I was prepared to buy in that case. Luckily it sold at a "fair" price
(meaning way too high for me). Yesterday I noticed a waterfront
lot in our subdivision for sale and I called just out of curiosity.
So far this is a harmless passtime as I rarely buy anything.
I am always happy after I pass up these deals, but when the'next one pops up, I can't resist the urge to check it out.
It's like an old man still noticing an attractive female, long after
the ability to follow up is long gone
JG
tryan
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Rents are definately a drag on home prices. Selling a small inner-city SF at $180k that might fetch $1100/mo rent. Tried $1200/mo with the last tenant but they couldn't cut it (left in Feb). Tenants simply refuse to play along in the RE price mania.
This creates an interesting dilema, why would an owner accept 4-3%/yr on their investment (annual net rents vs. current price) AND have to "work" to get it. Especially if one believes prices are peaking. If you believe prices have more room to run ... no-brainer, hang-on. Decisions, decisions...
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Its even better here. The disparity is ridiculous. I saw a 10 acre property with a 2000 square foot house on it, lake view, nice quiet area about a 5 minute drive from a major road that has all the shopping you can name...$1800 a month. I might get $1200 a month, maybe $1300 renting out this place.
Now you know why I sold my wifes old house...$240k for sale, $1000 a month tops to rent. The math just isnt in the favor of being a landlord vs dumping at these prices.
I'm sorely, sorely tempted to sell and move into a rental. Unfortunately this is the perfect place to raise a kid (8 home cul de sac filled with little kids and great neighbors) and I'm very very sick of moving furniture.
Now you know why I sold my wifes old house...$240k for sale, $1000 a month tops to rent. The math just isnt in the favor of being a landlord vs dumping at these prices.
I'm sorely, sorely tempted to sell and move into a rental. Unfortunately this is the perfect place to raise a kid (8 home cul de sac filled with little kids and great neighbors) and I'm very very sick of moving furniture.
jimmycarter
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I like real estate, especially the kind that makes money. Many years back I took a trip out to Colorado. I saw opportunity with the way the state is structured. The mountains block a large portion of the state and I knew the growing population would force development right along the base of the mountains. I bought land north and south of Denver and made out nicely.
I do not understand the California rental market. If you only are getting a return of 3-4%, not counting your own labor, why in the world is anyone in the landlord business? Especially renting single family homes that could be sold for big bucks. Sure looks like a bubble to me.
In Arizona where we have most of our real estate interests, many apartment owners are converting their buildings to condos as the value is so much higher. I am hoping two buildings we have interests in are converted and all sold out before interest rates increase.
In Arizona where we have most of our real estate interests, many apartment owners are converting their buildings to condos as the value is so much higher. I am hoping two buildings we have interests in are converted and all sold out before interest rates increase.
Real estate speculation at it's finest! Picked up a copy of the sunday fishwrap last week (San Diego Union Tribune). They had an interesting article about the discrepancy between the high home values vs. the low rent levels, and that as the gap continued to widen the market looked more like a bubble. After the obligatory quotes from Proffessor Sourpuss ("Yes this is a bubble, we're all doomed!") and the President of the local real estate board ("No bubble, everything is just peachy! To the moon! Can I plug my business now?") the article ended with a theory that as people watched values rise so fast in San Diego, even people out of town looked to buy and ride the appreciation wave up, further driving up demand for purchases and accelerating the home value increases. BUT in turn, since they didn't live there, they wanted to rent out the place to mitigate mortgage cost, so rental supply became flooded i.e. rent barely outpacing inflation. Thus the widening gap and low margin.
I got a call today from a socall investor interested in my 2 fam. They offered $800k to start with. Of course, I would have to sell within 1 to 3 months. 3 houses down, a house was sold last year for $575k which was gutted and extended and is still being worked on. That probably added another $200K easy.
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I think there really isnt ANY reason for people to rent a home out here. They either just havent run the numbers yet or havent realized how much they can get for the rental.
My wifes old neighborhood is a little rough. Stabbing across the street diagonally over drugs and a woman last month and 3 guys robbed the corner store 3 lots up with shotguns a couple of months ago. Most of the homes sold for under $60k up until a few years ago. Most of the homes are rented by the usual drug and welfare crowd.
I'll bet the 240k we just got for ours (admittedly completely remodeled) will open a few landlords eyes who may decide to dump their renters, clean up the place and sell it.
I would not, however, be buying into these markets just to ride the speculation. I cant see that theres any "there" there. Its not like manhattan or the SF bay area where there is a limited amount of space and commuting in/out is disasterous...we're in an area where there are VAST tracts of unused land. Thousands of acres of nothing but grass and trees. Some are being used for rice paddies or peach orchards, but they've torn out several 500 acre peach orchards recently for home building.
Based on my particular home, $390k for an 1800 square foot basic stucco tract home on a quarter acre. The reconstruction cost per my insurance company is about 200k. So my quarter acre is worth almost 200k?
I dont think so. Its a bubble. Its only a question of whether it'll pop, slide down slowly for a long time, or go sideways for a really long time. You cant really push mortgages past 40 years, and interest-only mortgages can only take you so far.
My wifes old neighborhood is a little rough. Stabbing across the street diagonally over drugs and a woman last month and 3 guys robbed the corner store 3 lots up with shotguns a couple of months ago. Most of the homes sold for under $60k up until a few years ago. Most of the homes are rented by the usual drug and welfare crowd.
I'll bet the 240k we just got for ours (admittedly completely remodeled) will open a few landlords eyes who may decide to dump their renters, clean up the place and sell it.
I would not, however, be buying into these markets just to ride the speculation. I cant see that theres any "there" there. Its not like manhattan or the SF bay area where there is a limited amount of space and commuting in/out is disasterous...we're in an area where there are VAST tracts of unused land. Thousands of acres of nothing but grass and trees. Some are being used for rice paddies or peach orchards, but they've torn out several 500 acre peach orchards recently for home building.
Based on my particular home, $390k for an 1800 square foot basic stucco tract home on a quarter acre. The reconstruction cost per my insurance company is about 200k. So my quarter acre is worth almost 200k?
I dont think so. Its a bubble. Its only a question of whether it'll pop, slide down slowly for a long time, or go sideways for a really long time. You cant really push mortgages past 40 years, and interest-only mortgages can only take you so far.
BUM
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Re: Real Estate as Investment
From Atlantic Beach to Long Beach, NC hellzapoppin. On the one hand I could sell at almost 3 times my purchase price in 3 years,. OTOH I'd likely never have anything like it again. The deeded boat slips alone have gone up 4 times since 2002. Its only paper profits
BUM
Beachbumz said:Hi Bum!
I know that's the truth. We sold one side of our duplex in Emerald Isle, NC in May, 2003 for $525K, we sold the other side in Oct 04 for $780K, now they are asking $950K!
Beachbumz
From Atlantic Beach to Long Beach, NC hellzapoppin. On the one hand I could sell at almost 3 times my purchase price in 3 years,. OTOH I'd likely never have anything like it again. The deeded boat slips alone have gone up 4 times since 2002. Its only paper profits
BUM
Mr._johngalt
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Hello BUM and all...........yeah, there is the rub. You know
you can sell for big money, but if you want to duplicate what you
sell, it can get chewy. For example, I don't see how I could better
our position by selling either residence (Illinois and Texas)
unless we downsized drastically. So, we sell and have the cash.
Now what?
JG
you can sell for big money, but if you want to duplicate what you
sell, it can get chewy. For example, I don't see how I could better
our position by selling either residence (Illinois and Texas)
unless we downsized drastically. So, we sell and have the cash.
Now what?
JG
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Not in CA...prop 13 keeps the property taxes nice and low. My wifes old house had a $480 a year property tax bill. My current place has one based on 252,000 in value while its worth close to 400k.
The benefits of living in a granola state...
The benefits of living in a granola state...
BUM
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Re: Real Estate as Investment
My neighbor has a crappy old house on less than an a 1/4 acre 2 blocks from the beach. In 2002 he thought could get $100k and "git back to the hills." He put it up for sale last week at $700k
BUM
Hi Beach!Beachbumz said:Hi Bum!
I know that's the truth. We sold one side of our duplex in Emerald Isle, NC in May, 2003 for $525K, we sold the other side in Oct 04 for $780K, now they are asking $950K!
Beachbumz
My neighbor has a crappy old house on less than an a 1/4 acre 2 blocks from the beach. In 2002 he thought could get $100k and "git back to the hills." He put it up for sale last week at $700k
BUM
tryan
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This is exactly why I've been a SF seller since 2000. Closing on one of my last 6 Monday. Sub-prime lender, no-doc loan .... can't wait to see the rate! And the city's first murder was less than a block away from this beauty.
Enjoy.
I read all these skyrocketing real estate prices here. Wow, some of you have been quite lucky.... I wonder whether anybody knows how TX is expected to do in the next few years. I know there are quite a few people that have started getting real estate in Austin and other places in TX and moving out of e.g. California. The RE tax is crazy here but the housing prices are still quite affordable. Some small pockets in Austin have skyrocketed but only very select areas.
Vicky
Vicky
Mr._johngalt
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Hello Vicky. We covered the affordability of Texas real estate a couple of times. Please don't talk about this again. Charlie and REW and I would prefer if people didn't find out about this as
it would just encourage more relocation to The Lone Star State.
JG
it would just encourage more relocation to The Lone Star State.
JG
BUM
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Hi vicky,
Good luck guys trying to keep Texas a secret. My brother in law retired a few years ago to Austin. Loves it. Wont shut up about it. Thinks hes a cowboy. He sent me a belt buckle about the size of a garbage can lid.
Go visit Austin for a couple weeks vicky... its the only way to find out for sure.
Good luck guys trying to keep Texas a secret. My brother in law retired a few years ago to Austin. Loves it. Wont shut up about it. Thinks hes a cowboy. He sent me a belt buckle about the size of a garbage can lid.
Go visit Austin for a couple weeks vicky... its the only way to find out for sure.
