Housing market

[NEMSZ]

Yeah but seriously, have you ever given a sound piece of financial advice ever? Not that I've read. I have anywhere from 4-10 mortgages at a time. Personally, I would advise you against handling your own finances from now on. Especially with 100% equity in a property. You could fall ass-backwards into money right now. If you aren't... well... don't shift the blame. If you're not making money now, you don't want to be.

Do you have that many mortgages because you own properties and rent them out then sell them and buy different ones etc? (I think there’s a loophole with doing that that makes you exempt from paying taxes)...

Im curious what you think is happening/going to happen??

I keep hearing from real estate guys that it’s never a bad time to buy (I guess buying options matter here, whether land or a fixer upper etc to get the Best Buy) unless you’re going to be living the property and not create cash flow..

 

[get it in ya]

Yeah but seriously, have you ever given a sound piece of financial advice ever? Not that I've read. I have anywhere from 4-10 mortgages at a time. Personally, I would advise you against handling your own finances from now on. Especially with 100% equity in a property. You could fall ass-backwards into money right now. If you aren't... well... don't shift the blame. If you're not making money now, you don't want to be.

100% equity in a property? Me? Lol

 

[OuchThatHurts]

Regarding real estate, there is never really a bad time to own but definitely 'less good' times. But even then, you're still making money on a well-researched investment property. But as of now, I can't keep a house listed. A month at most. This is in keeping with my opinion of less new development. There are many homes out there, selling at good prices, and buyers buying at low frightening adjustable interest rate loans. Raising rates slows the process but it hasn't stopped me from closing sales. My realtor loves the hell out of me! So the market slows down, it's two months instead of one month (remember to pick your properties FOR resale, not ownership).

A simple micro example: You want to buy an antique car or Harley, etc. Is that money better in your savings or mortgage or in a rapidly appreciating asset that you can have fun with? 'Take all the money they'll give you', is my motto, and send all those profits to... well... wherever ;-)

 

[maldorf]

Do you have that many mortgages because you own properties and rent them out then sell them and buy different ones etc? (I think there’s a loophole with doing that that makes you exempt from paying taxes)...

Im curious what you think is happening/going to happen??

I keep hearing from real estate guys that it’s never a bad time to buy (I guess buying options matter here, whether land or a fixer upper etc to get the Best Buy) unless you’re going to be living the property and not create cash flow..

My wife is a commercial real-estate lender for a big bank. She has told me that many of her biggest/richest customers don't pay many taxes. They know how to legally game the system.

 

[maldorf]

Should be interesting to see what happens to high rise condo values in Florida now after that building collapsed and killed hundreds. The talk is that values of the older condos have dropped sharply. Unforseen factors like that can come in to affect.

 

[NEMSZ]

Should be interesting to see what happens to high rise condo values in Florida now after that building collapsed and killed hundreds. The talk is that values of the older condos have dropped sharply. Unforseen factors like that can come in to affect.

I live about 30-40 min from where that happened, and I’ve already seen quite a few buildings on the beach get evacuated for similar reasons in the past few days...

For sure the market in that area and similar areas will take a hit (condos etc) but the house/townhouse market I feel is still pretty inflated and will stay that way until interest rates kick back in or something like that happens..

I’m not looking to buy for another 1-2 years anyway, because I don’t want to end up being one of those people who bought a house for 500k-600k and then a year later it’s worth 200k... So I’ll be waiting to see what happens and how the economy shifts from all this printed money... Hopefully there’s a way to correct what’s been done..

I’ve actually watched a few videos today of Robert Kiyosaki and some other guys like Bet David and they pretty much predict a big crash in the future... But apparently the people who made the most money were the ones willing to take the risk with business/real estate etc after the crash of 08’... There are quite a few guys who became worth $100 million+ from basically nothing at that time to a couple years later... And obviously these big time guys who were already worth hundreds of millions and billions made even more money lol...

 

[OuchThatHurts]

My wife is a commercial real-estate lender for a big bank. She has told me that many of her biggest/richest customers don't pay many taxes. They know how to legally game the system.

They do. Real estate is also poorly scrutinized by the IRS. Because they often have multiple properties, do all cash, they can report a loss in capital on one property and apply that to the capital gains on another property. And they can just keep doing it over and over, devaluing their own properties. For a small timer like me, I don't need to do it. All I do is start jotting everything down the moment I start looking at a property. Calculate all fees, time, closing costs, (deduct every expense you can, even paper towels, etc.) when buying and figure out what the net gain you want for that property. Then comes the selling. It's a PIA and a lot of paperwork. So if my gross profit is 60k, I'll dig around and add a new porch, landscaping, etc which are all tacked on to your cost basis for that property which will be the difference between purchase vs sale price (also faster turnover). So now my 60k profit is looking more like (less taxes and costs) more like 20 or 30k net which can be rolled over into the next purchase as a down payment (equity). The equity and properties start piling up. Unfortunately, many people can't do any of this because their net worth is low or less than nothing. They have nothing to collateralize the mortgages.

The big fish do all-cash type deals where they don't even have mortgages because they have many millions and can buy a million dollar home outright. I don't do that. Not with interest rates at 3% give or take.

Unlike when I started, I now use real estate agents myself. They find the properties, coordinate the contractors, repairs, inspections, appraisals, etc and make them move-in ready, handle the administrative side. He gets commission on every sale so basically I make him a lot of money so he's all smiles. I buy almost all in the $200-500k price range bc those are the ones that sell fastest. Here in my state, $2 mil will buy you a castle. In LA, Chicago, Arlington, DC, or NYC, $2 mil will buy you a small 3 bedroom fixer-upper. CA is the most ridiculous (the entire west coast is awful).

 

[EWRECK]

If you can afford the monthly payment,taxes,and insurance through thick or thin, buy it. You gotta live somewhere. Now if it’s for investment purposes only, another story.

 

[maldorf]

They do. Real estate is also poorly scrutinized by the IRS. Because they often have multiple properties, do all cash, they can report a loss in capital on one property and apply that to the capital gains on another property. And they can just keep doing it over and over, devaluing their own properties. For a small timer like me, I don't need to do it. All I do is start jotting everything down the moment I start looking at a property. Calculate all fees, time, closing costs, (deduct every expense you can, even paper towels, etc.) when buying and figure out what the net gain you want for that property. Then comes the selling. It's a PIA and a lot of paperwork. So if my gross profit is 60k, I'll dig around and add a new porch, landscaping, etc which are all tacked on to your cost basis for that property which will be the difference between purchase vs sale price (also faster turnover). So now my 60k profit is looking more like (less taxes and costs) more like 20 or 30k net which can be rolled over into the next purchase as a down payment (equity). The equity and properties start piling up. Unfortunately, many people can't do any of this because their net worth is low or less than nothing. They have nothing to collateralize the mortgages.

The big fish do all-cash type deals where they don't even have mortgages because they have many millions and can buy a million dollar home outright. I don't do that. Not with interest rates at 3% give or take.

Unlike when I started, I now use real estate agents myself. They find the properties, coordinate the contractors, repairs, inspections, appraisals, etc and make them move-in ready, handle the administrative side. He gets commission on every sale so basically I make him a lot of money so he's all smiles. I buy almost all in the $200-500k price range bc those are the ones that sell fastest. Here in my state, $2 mil will buy you a castle. In LA, Chicago, Arlington, DC, or NYC, $2 mil will buy you a small 3 bedroom fixer-upper. CA is the most ridiculous (the entire west coast is awful).

Yeah, she does loans for commercial properties like shopping strips, apartment complexes, etc. The owners make use of capital depreciations, things like that. By the end of the year many are showing net losses.

 

[OuchThatHurts]

Yeah, she does loans for commercial properties like shopping strips, apartment complexes, etc. The owners make use of capital depreciations, things like that. By the end of the year many are showing net losses.

Yup. That's the way it works. 20 years in business we showed a profit maybe 4 of those years. Even then it was minimal.

 

[Crazy_jay]

Too many pages to read them all. It's simple, interest rates are down, so house prices are up. That's capitalism. When interest rates trickle up, the market will slow and prices will start to come down but that cheaper house with a higher interest rate will cost you the same as that house at a higher price with a lower interest rate. Low interest rates are great for the seller, higher interest rates are great for the lender, it's all about a break even for the buyer.

As for lumber prices, I'd say they impact diyers the most. For those looking to remodel, they are getting great interest rates on their refinance cashing in equity or pulling a second mortgage, so lumber prices have little impact on them.

I do all things residential construction for a small construction company and all I can say is we are busy as can be. More work than we can shake a stick at and can't find good help for the life of us.

 

[get it in ya]

Yup. That's the way it works. 20 years in business we showed a profit maybe 4 of those years. Even then it was minimal.

That just sounds like way to much work for me lol. I like the passive income but sounds like you enjoy the game. I have a decent chunk invested in 3 properties but this is with other investors, these properties are 80-100 million each so I own a tiny piece of each lol. The mail box money is awesome with depreciation and appreciation real estate is amazing. I was always a stock guy but I just got sick of the ups and downs. Nothing beats cash flow, getting paid!

 

[pesty4077]

I can tell this is a USA based thread about houses, lol. I paid $93, 000 cash for my house in Romania. Brand new 3 bedroom with a huge yard. I just got done building a 6 x 3 meter garage and a 6 x 3 meter gazebo with a barbecue area, outdoor plugs and lights for night. I still haven't tapped into even half my front yard. I even put an outdoor dog run with gates and concrete.

What is good about this house is the second story can be done into 2 more bedrooms and a bath. Now here is the kicker, this same house I left California would go anywhere from 500,000 to a million in areas. Certain areas even more. Certain areas in USA are very over priced. Some are ridiculous. Except for the roof rafters, this house is mostly concrete, rebar and blocks. This is why some houses have lasted generations. The materials here are a fraction of the cost of USA.

I really don't care about equity as much as being in debt. All I can tell you is debt is what they want you to be in. I have a residual income and plenty of money in investments. I rather be debt free and own one house, but that is just me. If the market crashes, I don't have to worry about losing anything.

 

[maldorf]

I can tell this is a USA based thread about houses, lol. I paid $93, 000 cash for my house in Romania. Brand new 3 bedroom with a huge yard. I just got done building a 6 x 3 meter garage and a 6 x 3 meter gazebo with a barbecue area, outdoor plugs and lights for night. I still haven't tapped into even half my front yard. I even put an outdoor dog run with gates and concrete.

What is good about this house is the second story can be done into 2 more bedrooms and a bath. Now here is the kicker, this same house I left California would go anywhere from 500,000 to a million in areas. Certain areas even more. Certain areas in USA are very over priced. Some are ridiculous. Except for the roof rafters, this house is mostly concrete, rebar and blocks. This is why some houses have lasted generations. The materials here are a fraction of the cost of USA.

I really don't care about equity as much as being in debt. All I can tell you is debt is what they want you to be in. I have a residual income and plenty of money in investments. I rather be debt free and own one house, but that is just me. If the market crashes, I don't have to worry about losing anything.

I would have thought that real estate in Europe would be more expensive than the US since the countries are so small and land is a premium. Do you live out in the country or a suburb? Your situation sounds awesome. You priced your home in US dollars. Does the US dollar carry a lot of weight in Romania? Maybe that's one thing that gives you such buying power?

We built our first house here in Ohio back in 1997 for about $120,000. It was a small 3 bedroom 1800 Sq ft 2 story. The lot was a bit larger than 1/3 acre. Your price sounds even more affordable. Especially considering inflation.

 

[pesty4077]

I would have thought that real estate in Europe would be more expensive than the US since the countries are so small and land is a premium. Do you live out in the country or a suburb? Your situation sounds awesome. You priced your home in US dollars. Does the US dollar carry a lot of weight in Romania? Maybe that's one thing that gives you such buying power?

We built our first house here in Ohio back in 1997 for about $120,000. It was a small 3 bedroom 1800 Sq ft 2 story. The lot was a bit larger than 1/3 acre. Your price sounds even more affordable. Especially considering inflation.

No, I actually bought it in euros, I just told you price in USA dollars. The currency is Lei here and our dollar goes far. I think currently it is 1 dollar is about 4.10 lei. It also depends where you live in Europe, but overall Romania is a lot cheaper.

 

[OuchThatHurts]

That just sounds like way to much work for me lol. I like the passive income but sounds like you enjoy the game. I have a decent chunk invested in 3 properties but this is with other investors, these properties are 80-100 million each so I own a tiny piece of each lol. The mail box money is awesome with depreciation and appreciation real estate is amazing. I was always a stock guy but I just got sick of the ups and downs. Nothing beats cash flow, getting paid!

It's actually not bad. But my (our) business wasn't real estate. I was a majority partner in a PC. Our practice manager and accountants did the heavy lifting but billing and insurance really were pretty off the charts. What I've built on my own over many years, is a portfolio including stocks, bonds, mutual funds (for growth and dividend reinvestment), real estate, and other appreciating assets like gold and silver coins, precious stones, even a small amount in crypto. The idea is to have multiple revenue streams. I retired at 49 last year. Not billionaire rich, not even 100 millionaire rich. But enough to relax on and watch my son live his adult life and watch my girls grow up. I still serve on two boards for a living income, then there is real estate, then lastly, the odds and ends. These days, being dad is my toughest job. But smooth sailing so far. Now I have to figure out what to do with myself and my time.

I always thought by now I'd be in Antarctica counting penguins or tagging whales, maybe in the Savannah, tagging lions or some shit. I guess the universe had other plans for me so we'll see.

 

[maldorf]

No, I actually bought it in euros, I just told you price in USA dollars. The currency is Lei here and our dollar goes far. I think currently it is 1 dollar is about 4.10 lei. It also depends where you live in Europe, but overall Romania is a lot cheaper.

Yeah, apparently so. Thats a nice bonus. Sounds like you found a great place to live there.

 

[maldorf]

It's actually not bad. But my (our) business wasn't real estate. I was a majority partner in a PC. Our practice manager and accountants did the heavy lifting but billing and insurance really were pretty off the charts. What I've built on my own over many years, is a portfolio including stocks, bonds, mutual funds (for growth and dividend reinvestment), real estate, and other appreciating assets like gold and silver coins, precious stones, even a small amount in crypto. The idea is to have multiple revenue streams. I retired at 49 last year. Not billionaire rich, not even 100 millionaire rich. But enough to relax on and watch my son live his adult life and watch my girls grow up. I still serve on two boards for a living income, then there is real estate, then lastly, the odds and ends. These days, being dad is my toughest job. But smooth sailing so far. Now I have to figure out what to do with myself and my time.

I always thought by now I'd be in Antarctica counting penguins or tagging whales, maybe in the Savannah, tagging lions or some shit. I guess the universe had other plans for me so we'll see.

I hope you had a trust drawn up for your kids just in case things dont go well for you health wise. I think the bankers have ways that they can avoid inheritance taxes too when they set those up. Make sure your kids are well taken care of. Picking an executor that is in charge of everything until your kids are of the age you specify is very important. We had one created after my heart attack.

 

[OuchThatHurts]

I hope you had a trust drawn up for your kids just in case things dont go well for you health wise. I think the bankers have ways that they can avoid inheritance taxes too when they set those up. Make sure your kids are well taken care of. Picking an executor that is in charge of everything until your kids are of the age you specify is very important. We had one created after my heart attack.

Yup. From my grandparents all the way on down to the tikes.

 

[get it in ya]

It's actually not bad. But my (our) business wasn't real estate. I was a majority partner in a PC. Our practice manager and accountants did the heavy lifting but billing and insurance really were pretty off the charts. What I've built on my own over many years, is a portfolio including stocks, bonds, mutual funds (for growth and dividend reinvestment), real estate, and other appreciating assets like gold and silver coins, precious stones, even a small amount in crypto. The idea is to have multiple revenue streams. I retired at 49 last year. Not billionaire rich, not even 100 millionaire rich. But enough to relax on and watch my son live his adult life and watch my girls grow up. I still serve on two boards for a living income, then there is real estate, then lastly, the odds and ends. These days, being dad is my toughest job. But smooth sailing so far. Now I have to figure out what to do with myself and my time.

I always thought by now I'd be in Antarctica counting penguins or tagging whales, maybe in the Savannah, tagging lions or some shit. I guess the universe had other plans for me so we'll see.

I love it brother! Awesome!!! Love your plan and mind set! I have recently stopped killing myself working also because of the cash flow from real estate and I hope the cash flow and net worth keeps growing. Great job! Impressive! Love your thinking! One of the greatest things in my opinion is true financial freedom!