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To be clear the lease back originators are the pros and the investor is usually a sucker in that they assume they have bought the property for market value sweetened by a relatively higher cap rate (interest rate).
I don't think those guys r suckers. They know exactly what they're doing iIMO and want to keep playing with cash having very little if anything to lose.
They purchased something like 66 percent of li ve for a couple million dollars about 5 years ago and now got to take on a new biz as they blew thru all their cash (on the legacy biz)they raised thru a share offering. They then got to sell and leaseback those properties (like 8 of em) getting a new pile of money to play with, over $10 mill I think and cash levels r already back down to a few million even with increased profitability and some cash flow from assets line in balance sheet. Who knows where all that money went.
Notice too they didn't shut down their hugely money-wasting legacy biz right away and losses r increasing instead of decreasing as they wind down. Makes me wonder if they have friends or family working at the local office getting some of theirs before the cash dries up again. Probably a good pump and dump trade but eventually mostly worthless like the countless other garbage companies doing wrong to shareholders over time IMO.
Anyhow I have no skin in it so not gonna worry about it if others can scalp a gain out of it either way. :)
All IMO only.
Re: your reaction to lease back. I am posting here as others probably not interested.
I ran away from some lease backs like Red Lobster. It cost like 5 million and I would get 5.65 interest ( eye rolling to ignore the overpaying) in Northern Fla. for leasing out for 30 years with all the options they have, they would pay a 5% increase every 5 years...........but I realized that property was only worth 3 million on this triple net lease for Red Lobster......So I was overpaying for the property and if they went BK I would be out 2 million. Red Lobster was assured a stable leasing for 30 years,
and I considered myself a sucker if I signed the contract, as many buyers do not do that kind of DD..
At the time I thought interest rates would be lower, the 10 year was close to 2%, went down as low as 1.37% since, now about 1.55%... But I was not buying property, I was buying a bond dressed up like a Red Lobster.
So if a Co. sells their property for a premium and can lease it back for eons at almost same rent, it can be a great idea as a Co is assuring itself a stable lease while pumping needed cash into their working capital.
Now with the interest rate thing going for so long against consensus, I would have been ok ( if I bought the overpriced property), just as I would if I bought any historically low interest bond then, as I could unload the property now to another sucker, further sweetened by our current extreme low interest rate environment....... but that is like a pumper of a POS stock surprised later after he sold, his crap had unforeseen value.
Another Real Estate Crash Looms: Sam Zell Dumps Holdings, Warns "The Fed's Deferred Reality For Too Long"
If you haven’t heard yet, median home prices in the United States are on a tear having reached all-time highs in April. To boot, rental prices have gone insane, showing a year-over-year inflationary increase of 8%. On top of that, stock markets are rocketing back to their own all time highs based on the premise that the U.S. economy is seeing healthy growth. By all official accounts, it appears that we’re back on track.
But appearances can be deceiving and highly acclaimed investment guru Sam Zell isn’t buying the hype. In fact, he’s taking this opportunity to sell… in a very big way.
Wolf Richter explains:
And he has been selling. Back in 2007, he once again proved his sense of market timing. As the commercial property bubble was already teetering, he sold Equity Office Properties Trust to Blackstone for $23 billion, not including $16 billion in debt. Then prices crashed, and commercial property defaults hit the banks. As the dust was settling at the end of the Great Recession, he went on a shopping spree.
Now he’s selling again, unloading multifamily properties at peak prices on a massive scale just when a multi-year construction boom is flooding the market with new supply.
So when Sam Zell speaks, our ears perk up.
Read the full report at Wolf Street
In a recent interview with CNBC Zell noted that zero interest rate policies are removing the risk of borrowing, making it easy for big banks and finance companies to keep pushing supply onto the market.
Easy credit. What could possibly go wrong?
A lot, according to Zell:
“Overall we’ve come off this extraordinary period of liquidity and this extraordinary period of low interest rates… I think we’re unlikely to see a repeat of that going forward, and I think we’re going to see more supply in what had been pretty tight markets.”
“In the most simplistic terminology, I would ask you the question, if something is free, is it valued? Is it appropriately risked?”
“We have distorted markets. Maybe we have bubbles.”
“The problem is I think the Fed should have raised interest rates two years ago, and therefore today would be able to make a much more rational decision as to what to do. The problem is that they’ve so deferred reality for so long that I think they have a serious credibility problem if they don’t raise rates.”
Everything seems to be booming again – easy money, easy lending, rising prices, and a bread and circused populous.
Never mind the nearly 50 million Americans on food stamps, the six million millennials living in their parents’ basements, or the massive spike in business debt delinquencies.
Should Americans be preparing for another collapse?
Probably not, because despite all of the market distortions, there is really no need for concern. This time it really is different.
http://www.zerohedge.com/news/2016-05-29/another-real-estate-crash-looms-sam-zell-dumps-holdings-warns-feds-deferred-reality-
Looks like everyone is shy on CUO LOL. I had to hit the ask several times to get a decent position built after sitting on bids for a few days and did budge price up a bit.
Like I said very few sellers at this point but again maybe patience will allow small opportunities as long as someone doesn't start moving it up with a bigger push to get shares.
I think this is the best risk/reward opportunity in the microcap space simply because of the info U can find to secure comfort looking forward quite a ways. Of course lots of unknowns or surprises can happen but the knowns if U look hard enough seem very solid for the next many years IMO.
All IMO only.
I just reread post and noticed it sounded like Ronald Gidwitz running for Chicago office. He was running for Governor (Illinois obviously).
Thanks for the clarified DD.
Definitely keep an eye on CUO. They have too many tailwinds working for them although there are a couple hurdles they are working on getting cleared. If things go well, they could be making a lot of money 2017-2018 compared to what they did last year and 2016 should be better than 2015 IMO.
It's quite different from AYSI in that while being owned by a single family, this is a well known and established family (Gidwitzes). The CEO's cousin ran for Governor in Chicago several years back.
They've bought shares at times and company has too, quite the opposite of the Kosteckis. They also have traded on the NYSE for well over a decade now and have the smallish buyback in place for down the road.
Who knows could be a momo if the materials sector continues upward like it has been and this starts hitting new highs.
They do take a good chunk off the top ('they' meaning CEO's salary/compensation mostly and lease a very nice place in Chicago away from ops) but when their margins and sales hit a certain point, that doesn't have nearly the impact it does when times are tough with earnings.
Last Q DDA was light so U might want to subtract about 5 cents EPS but still for slowish Q4 it was pretty impressive and this was all in advance of Colorado Springs's push for road repair/overlayment, bridge repair, etc... that will start showing later in 2016.
Give Colorado Springs a year or two of their new sales tax earmarked for roads and I think the company will be in a terrific spot. If Pueblo starts to recover, even better.
If not, they should have lots of work with CACS segment not to mention expanding fan coil production (and signed on a couple new customers for heater/furnaces). I'm suspecting they could boost CACS revs by 15% or more per year as things progress just from Colorado Springs projects with all the various work that will be coming online.
The 4 ready mix companies in Colorado Springs will be busy for several years IMO. One is a big competitor (MLM) but they've been working on expanding EBITDA upward too so not expecting much more price competition than what they already had. Concrete prices have been heading higher for several Qs now actually after a bit of lag (on margins) from higher cement prices.
The company has a share buyback with some left in it but they have too many potential growth drivers rt now and want to work on securing more aggregates tonnage and fan coil production expansion before focusing on buyback IMO. Pikeview is an older quarry that will probably be in reclamation phase around 2020.
It's not easy to collect shares unless you are patient and sometimes willing to creep the price up (what I did hitting the ask several times as I built position) but I think there's a window of time since Q1 is usually seasonally weaker and I think it is tremendously undervalued right now regardless of share structure. The markets have had a big run and may pull back so that may help give a small buying opportunity too but I think most of the sellers have been defeated now without moving price up from here.
I think they can earn net EPS $ in Q1 due to margin expansion but am totally guessing on that, a small loss would not surprise me nor upset me (they lost about $300K operationally last year Q1).
Q2 and Q3 2016 I think we start to get a small feel for the potential of what lies ahead the next several years.
Given what I think will be a multi-year expansion for CACS, that might be another chance to buy on weak Q1 but I would want to own some before then just in case they do well for a weak Q1 and if they mention anything about CACS backlog/guidance as Co Springs starts to get some concrete work going.
There's a lot of downside safety I think (with tangible book and increasing margins) and a lot of upside potential if people start looking at it more even with the Gidwitz family control of company shares structure.
Float is very thin but that's why now is the time to start nibbling and building position. They should have several years of good ahead of them after 9 years of really bad. Their cyclical segments have bottomed out and are heading upward even with the stock way down here, a terrific time to buy a micro on the cheap in cyclical industry segments that have blue sky ahead after years of punishment and attrition.
All IMO. Good luck.
My Condo group is very manageable, as can be phone responded all over world once ya get to make friends with super for a 20th of any official prevailing management rate. Wish I was able to sell last property
and buy new Condos now as a trade as reasonable as 2009- 2011..
Trying to start a social media Co, wish I made enough money in Micro stuff to fund ( not going to happen), that is buy a small one (like BLIN) and imbed my application....as going the legit retail way is a money eating non-starter. Have to prowl the software patent lawyers to see if I can at least divulge my idea without being trampled by the out-smarters.
Well one step closer to BK or a peripeteia.
Saw your CUO DD, reminds me too much of AYSI, as my brain addicted to sparing with a lot of motion (ha, sometimes for naught). But your stuff had nice performance in old days, so I will be keepin an eye.
Ouch. That sounds as painful as being a direct hands on landlord. I divested single family last year and am back to scrounging for cheapo micros again. Retirement is 'delayed' as always, starting to wonder what it is anyway. :P
We definitely timed the 'bottom' on real estate as far as looking for rentals back in late 2011-2012. The rates of return were/are tremendous in % terms on a little condo I picked up end of 2011. Not much invested but wish I'd bought a bunch of those little condos of course in hindsight. It all gets taken care of by property mngmnt and they've raised rental rates fairly consistently no pain but has gain.
Well now its the hardest thing I faced , finding a 1031 tax postponement by trading for another property.....Every week I fell in love with a new State, wound up attaching myself to the whipping post paying a manager to pay another manager and a lawyer who could track all this doing just routine clerical stuff to the tune of 90K and the start of a new project that will send me on a 5 year arbitration protest as I avail myself paying new "spankers". Lost so much money could not afford to even see the places I bought in Atlanta and Seattle. What a genius.
12 Ways to Generate Seller Leads Fast
1.) Postcards
Mail simple postcards to areas with high turnover rates and include a link to a landing page. Use a call to action such as: We have buyers looking in your area, if you’re thinking about selling, now is the time!
2.) Google
Run Adwords campaigns for premarket keywords.
3.) Facebook
Run Facebook ads to lead capture pages offering home valuations.
4.) Craigslist
Post “we buy houses” ads on Craigslist.
5.) Drop-Off Zestimates
Drop off a printout of the zillow page for homes around your current listings. Make sure the zestimate is clearly visible on the printout. Include a neon-colored post-it note that says: Curious what your home is really worth? Call 123-123-1234.
6.) Retargeting
Run a retargeting campaigns for your current website’s visitors. Adroll is a great way to get started with this.
7.) Send This Email
Email your buyer leads and ask: Is there a home you need to sell before you buy?
8.) Newsletters
Send an email newsletter to your entire database. (Bonus – segment your database by city, timeframe, type or price range for better results.)
9.) FSBOs 2.0
Call FSBOs and expired listings (if you’re brave enough). You can start for free, by contacting FSBO listings on Craigslist, or set up an IFTTT recipe to notify you when a new FSBO is listed.
10.) Facebook Groups
Start (or join) a Facebook group for your city or neighborhood. If you put in the effort to cultivate a community, it will provide you with continual business for years.
11.) Nextdoor.com
Make sure you are signed up on Nextdoor for your local neighborhood and post recent sales, market trends and stats regularly. Every update you post sends an email to the entire neighborhood!
12.) Make Me Moves
Message “Make me Move” homeowners on Zillow. You can think of these prospects as pre-FSBOs.
source = http://boldleads.com/12-ways-generate-seller-leads-fast/
also here is more real estate seller leads
http://boldleads.com/
Its so weird they take down price of some real estate I am under contract by 100K and yet in truth scalping 45 bucks from a stock has more existential meaning cause in the latter my brain gathered
all the neurons around the little greenbacks to the micro degree?
Ok here is run down on triple net leases, I think they suck unless you feel interest rates of the 10 year go to 1%...Ya get 5 1/2% if lucky on piece of property worth 1/2 its current value, but entity gets to sell the parcel at double to sustain their next 20 year rent with no increases (or 1% per year), made for dumb money
lazies like me.
Ok Ok I see I will have to do it myself.
Found a group that will manage the shebang for me with 11-13% net cash profit, did not realize I get double by financing 3/4 of the total cost at 5% with a 10 year mortgage.
OK trying some 2016 serendipity.
Need some commercial property with good "dirt", with 8% return(cap) and I do not have to manage, will pay "extra commissions" where necessary at closing.
$2 million mortgage: No down payment, no joke!
If San Franciscans can afford the city's skyrocketing rents, then they can afford the monthly payment on a $2 million mortgage. That is the logic behind a new offering from the San Francisco Federal Credit Union: Its new "POPPYLOAN" (Proud Ownership Purchase Program for You).
"We have programs to help low-income people, but for the vast majority of young professionals, there is no hope or no help for this middle-class band in San Francisco," said Rebecca Reynolds Lytle, the credit union's senior vice president and chief lending officer.The nonprofit credit union has 34,000 members.
To qualify for the loan, which requires no down payment, borrowers must work in San Francisco or nearby San Mateo County. The loan must be used for the purchase of a primary residence and cannot be used for a refinance. Private mortgage insurance is not required. The loan is a 5/5 adjustable-rate product, which means it can only adjust at five-year intervals. This is atypical of most adjustable-rate loans, which usually change annually after the initial lock period. This loan can only increase by 2 percentage points each time, up to 6 percentage points over the life of the loan.
"The credit union is willing to take the additional collateral risk if we can mitigate our long-term interest rate exposure. There are built-in protections for the borrower. When we qualify people for the loan we calculate the payment today and again if rates were to change by 2 percent, and that's the payment they qualify for," said Lytle, who points to the credit union's very low delinquency rate now and during the recent housing crash.
Homes in San Francisco are some of the priciest in the nation, and rents are equally high. The median San Francisco home price was $1,110,000 in October, an increase of 11 percent from one year ago, according to CoreLogic. That is about five times the median value nationally. Renters in the city pay nearly 47 percent of their incomes for rent, according to Zillow. That share was just 30 percent between 1985 and 2000.
"What we would pay here for a down payment you could take to another market and pay cash for a house," added Lytle, who received over a hundred emails from potential customers Wednesday, just after the product went live on the credit union's website.
San Francisco's home values have soared in the last decade, thanks to an abundance of tech-sector cash. With very little room for additional construction in the city, competition for housing, both rental and owned, is fierce. Middle-income workers there are struggling, doubling and tripling up in housing or commuting long distances to their jobs. Because rents are so high, they are also finding it next to impossible to save for the down payment necessary on a traditional loan.
In an atmosphere of continued cautious lending, the product has raised some eyebrows, but it is nothing like the no down payment, no-doc, risky products that were behind the housing crash. Borrowers are fully vetted, income and assets verified, and while there is no minimum credit score, the vast majority of the credit union's borrowers have above-average credit scores.
"We've always done very conservative lending. Our philosophy is you lend to the person, you have to understand their situation and verify what they're telling you," said Lytle.
The credit union, which has been in existence for 60 years, holds all the loans on its own books. Credit unions make the loans to their members, so they already have a relationship with their customers.
"Credit unions have quietly carved out a niche of offering what appear to be high-risk (low or no-down payment loans, loans to borrowers with low credit scores and/or high DTIs) products to its members," said Guy Cecala, CEO of Inside Mortgage Finance. "They are very comfortable making these loans to members who they know and understand, and the loans have performed very well, with low delinquencies or defaults."
Large banks have a much larger and more diverse customer base, he said, and therefore could not offer these products. Nonbank lenders, who have stepped into the lending market in a big way over the last few years, generally sell their loans to Fannie Mae and Freddie Mac, or offer loans insured by the FHA, none of which would accept a no-down payment loan at that high a price. Another credit union, Navy Federal, offers a similar no-down payment mortgage product for up to $1 million in the Washington, D.C., area.
"Credit union regulators appear very comfortable with the risks credit unions are taking in their mortgage product offerings," added Cecala.
http://www.cnbc.com/2015/12/10/2-million-mortgage-no-down-payment-no-joke.html
"The Fallout Ratio" Is Flashing Red -
The Chart That Realtors Don't Want You To See
Given the way that the Wall Street Journal and its biggest client, the National Association of Realtors keep you in the dark and feed you manure, they must think you are a mushroom. They did it last week with the “existing home sales” and have done it again this week with the “pending home sales” release. Pending home sales were down, not up, in May, as the report said.
Here’s why the WSJ may not be interested in allowing you to see the light of day. Rupert Murdoch’s Wall Street Journal is the PR affiliate of his Move, Inc. which operates websites and mobile products for the NAR. The NAR is the monolithic, monopolistic US housing marketing cartel that controls the market, spending billions to disseminate its propaganda to the public and to manipulate Congress. The incestuous relationship between the NAR and Rupert Murdoch’s organs prevents any possibility of fair and balanced reporting of the news when it comes to housing (or virtually anything else around which Murdoch has his power mongering propaganda tentacles).
“Pending home sales” are contracts, reported at the time the contract was signed by both buyer and seller. “Existing home sales” are the closings (aka “settlements” in some states), when the deeds are transferred. The contract is when the actual, real-time meeting of the minds takes place. This is far more timely market data than the data on closings.
The closing is the official transfer of the deed, which usually occurs 30-60 days after the date of the contract. This data is then delayed in recording and reporting by another 30 days or so. By the time the media reports “existing home sales” the data is stale. Case Shiller compounds the problem by using a 3 month average, causing another 6 weeks of lag.
The Wall Street Journal’s headline was true.
U.S. Pending Home Sales at Highest Level in Nine Years
But this isn’t news. Sales have been at their highest levels in 9 years since February, if we exclude 2010 when tax credits goosed the market artificially. Note that February is when mortgage rates hit their lowest levels since 2012. Since then they have ratcheted higher.
The Journal reported that contracts rose 0.9% in May on a seasonally adjusted basis. No big deal, except for the fact that it’s false. The Journal neglected to report that sales were really down in May, not up, and that apparently a materially increasing percentage of sales are falling through. That fact tells us something more important about the condition of the market than that contracts are at a high level. The Journal has no vested interest in reporting this. It has a vested interest in making the market look good.
Contracts actually fell by 2.3% in May. That’s actual, not seasonally adjusted. This is the real number. The seasonally adjusted number is a statistically manipulated number. Real versus unreal; I report, you decide.
I looked at April and May data since 2001, and there’s not a shred of evidence of a seasonal difference in sales between April and May. Not one scintilla. Sometimes May sales are up a little from April’s and sometimes they are down a little. It’s about a 50/50 split. Yet the NAR and its media handmaidens persist in this charade of presenting seasonally adjusted data as if it is somehow real and meaningful. They assiduously avoid doing any analysis of the actual data. They probably cover their eyes and scream “I can’t hear you” if this data inadvertently crosses their line of sight.
We put the actual data on contracts on a chart and see for ourselves how these real time indicators of the market are behaving. We don’t need any statistical manipulation or propaganda to tell us what the market is doing. We can see for ourselves.
Some contracts fall through and do not close. The number of sales that fall through is also a critical market indicator that no one pays any attention to. I have developed an indicator called the Home Sales Fallout Ratio to give us an idea of the trend of contracts (aka “pending home sales”) falling through and failing to close, and it is telling us that, while sales are at a 9 year high, trouble is brewing in the current version of the bubbly housing market.
So sales were down 2.3% in May in a possible response to a rise in mortgage rates. And the Fallout Ratio has also broken out as mortgage rates have risen off their lows of February. This could be a harbinger of mass destruction should mortgage rates begin a persistent rise from here. It may be time to get in the fallout shelter and out of the US housing market. Look out for the housing mushroom cloud. Don’t be a victim of the media manure and home sales fallout.
http://www.zerohedge.com/news/2015-07-01/fallout-ratio-flashing-red-chart-realtors-dont-want-you-see
I added to my load NYC junk ( 18 units) with this post:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=95176670
Looking to buy more ( and sell some rental buildings), wanted the post office in downtown L.A. but was just sold..5000 sq feet in NYC would buy a modern building a block long with roof parking for 120 cars, and near all the L.A. downtown developlment ...... Hate to buy the "safe " Walgeens triple net for measly 4.5% interest for 20+ years, but must trade for a commercial package as do not want to manage commercial buildings, just want to hold the lease.
Real estate is a very local market. I'm sure there are examples where prices are at the extreme. Many articles claim that real estate is currently at the next bubble phase. It's hard to figure out right now... I'm in the rental business and rents are good and going higher... That typically doesn't happen during a buying frenzy. As long as our government is setting the supply, demand and cost of money all bets are off in relying on common sense. For various reasons people are paying much more to rent than the cost of property ownership. That makes it good for investors as myself but will also change.
Is this a bubble (?), cost 90 million to build and 1.6 for sale ( just spoke with broker):
http://www.uspspropertiesforsale.com/default.asp?f=listing_details&listingid=422910&listingtype=22
Bizarro Housing Bubble Spills Over Into "Overbid Madness", $10 Million "Flips" In 24 Hours
Case in point: San Francisco, where realtors have had to come up with a new term to explain what is happening when a house just sold for $600,000 above the $1.5 million asking price! The term: "overbid madness" and it explains well the buying frenzy that has engulfed the smallest portion of the housing market - that of the rarefied ultraluxury housing where the wealthy - almost exclusively offshore buyers - merely flip properties back and forth from each other without regard for price, comps or any other traditional valuation metrics. The underlying objective - parking illegal cash into the safety of the US housing market in which the NAR is a perfectly willing receptacle of laundered money.
But San Francisco has nothing on the the insanity that has gripped the ultra luxury housing segment in New York, where within 24 hours, an overzealous seller tried to flip a $31 million three-bedroom condo at One57 purchased on May 6, to an even more overzealous buyer on May 7 for... $41 million - a $10 million price increase in one day!
More... http://www.zerohedge.com/news/2014-05-10/bizarro-housing-bubble-spills-over-overbid-madness-10-million-flips-24-hours
A radio AD I could not figure out until reading this link:
http://www.businessinsider.com/national-realty-the-company-that-uses-your-credit-to-shadily-develop-real-estate-2010-4
I so agree with you its not funny!
And excuse this run on sentence but the words do not want to end........
I still do not know how any, yes a single home owner was hurt by the housing crises any more than a person who would hike in the desert without enough water claims foul and was a victim, as free choices are dangerous
and toxic when outcomes do not match ones wishes.
home-ATM machine man. crazy
It's amazing how gullible people are.
I mean, she even refinanced twice into a higher monthly payment.
I realize that everybody was looking out for themselves and making the quick buck by collecting fees and then passing the hot potato on to the next guy. But, somewhere along the way a person has to figure some things out... It's impossible to have legislation against all levels of stupidity.
Thundering poster child for this site:
http://www.nytimes.com/2014/01/26/business/the-tale-of-a-house-and-an-entire-market.html?hp&_r=0
What state are your properties?
Some observations on your posts.
In my opinion Real estate investment is mainly luck, you are lucky that you were able to have money when prices were at historical corrections.
I bought a property years ago whose cost only demanded 5K as a down payment and returned 3-4 million in net rents over the decades and is being offered at 2000 times the down payment. It is exaggerated luck, although I was a slave to the building and had no management so probably put in 25K per year
in torture touring every crevice, but juxta-positioned me into thinking I was hot shit.
I find any well appointed apt needs only a partial renovation every 15 years, so in my opinion top apts are not a weighty pressure. The apts I rent attract people who make 1/4 million per year and I can re-freshen their apts in 2 days per 1000 sq.
I like the Condo model best as sick of taking care of whole building, roof, back yards, garbage and boiler and plumbing, utility interferences, floods etc.
In NYC real estate taxes are getting too high now as city wants conversion to Condos (or co-ops) so they can raise taxes considerably , cost me $800 an apt per month, large grab off my bag.
So Real Estate best when price is below replacement costs and geographical dynamics, change in zoning etc changes dramatically ( slum turns into gentrified palace to live.
Unless unless one has have 40 million and bid on rarest apt which appreciate the most anywhere in this environment. Or simply have access to funds which offer a minute down payment, and rising prices offer refinancing for branches of geming up even in modest of rising climate.
Another point is that I like Condos with more than 300 units, I am in one which has 450 and that keeps the maintenance 20% lower by virtue of having so many apts pay for the staff which does not grow as much once over 100 units.
I grabbed some Condos in Marina Del REY, 4% return with depreciation schedule, better than cash and capital gains seem to be 40%+ on the earliest ones.....square foot price is still 1/4 of NYC prices and twice as luxurious......out of whack hoping to see a 3 bagger in 5 years.
Well that remains to be seen. It's too early to say for sure that we are in the clear on housing. I bought two very attractive investment properties last year
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=71305534
so I put my money where my mouth is. So far, at least in my area, prices have firmed and are actually ABOVE the high of the 2007-2008 time frame. In years past we have purchased new construction for investment but the price difference is huge right now and the only way to go is with pre-owned real estate. Everything is occupied and rent checks are in the mail box... I don't have to chase people for the rent. That's a huge advantage to investing in higher priced/quality homes... The rents are higher and people that lease can afford the rent because they have a decent job. We have a vacancy coming up in January so the place will get a complete upgrade... Hardwood floors, granite counters, stainless appliances, custom finish on kitchen cabinets , new carpet and paint. This property is in a prime location and will not be vacant for long. We will receive top $$ for a good return.
I'm looking for another one but the selection has narrowed considerably, and prices are up. I'm a long term investor so the location is very important... Those properties are hard to find in my area right now... at least for a decent price.
You were right on the money, like SLP.
Here there was the bottom call actually just sayin.
Brother, can you spare a $50,000?
I'm glad you did well with real estate. I'm afraid to do anything because I'm afraid you're right about the bubble and the fact I have no money either. Maybe one day I will venture into real estate.
Peace
Rubble turned into a bubble, I am un-godly rich, need a cool billion though to do just one thing right.
This board has crawled to a stop which is good I guess because it mirrors what's going on with the current market. Len, are still around?
http://pennyauctionsavings.com/
YES this board rocks, only 18% yearly gains but on big leveraged money bets more like 100%!!!!!!!!
Heat alert sending messages to one billion people (foreigners big investors here) that Venice beach area in Los Anglos including Marina del Rey, Santa Monica, Venice Beach etc never has such heat problems.. 60's-70's today............
These messages are signaled to the brain and a slow creep cuases spikes in demand!!!!!!!
Yes like invisible gold!!!!
Bubble may now be artificially held up by Blackstone type groups doing what I wanted to but could not.: use low cost financing to buy up all the distressed property I can. Major problem for me is no way to take care of whole building but big boys could pool management for that chore. When interest rates rise they will try to off load their holdings and will add to selling forces somewhere along the line.
Just got back from L.A. hanging with broker there unreal, selling condo and such like pizza.in span of 5 minutes closed two all cash 10 day escrow deals. Downtown LA starting to bust out. My theory on the upward home price increase there is the frantic switching of bond holders seeing their principle collapse and dumping into the upward eddy of home price swoon, unreal. Many parts of Santa Monica area and such reverting back to pre- depression collapse vigor. This watershed fury may not be long lasting once cash buyers drain and prices too high for application finger holders, but nevertheless, interesting as all get out.
OK parts of LA CA experiencing a bubble, I am borrowing low interest to buy on theory pent up demand overshoot, and then a disappearance of buyers on small corrective........trying to catch a blip for a scalp as new buys more expensive and tax base higher.
Hey Littlefish no more buying, heard through grapevine you
wanted even more?
I got outbid by late comers, juiced up on new dynamic of missin bottom boat. Caught just a few as was just getting feel of soothing
rhythm denting into offsetting some bad stock holds, which line my portfolio like a giant indelible tattoo I can't remove.
Yea man, fiscal cliff is not deep enough for the inroads a clumsy debacle could spectacle to me,lol. Was told a fait accompli could demolish my LTNYX if the bipartision compromise gets wholesome and eats my meal ticket on tax frees.
OT:"Deep- Down" in my heart, I wish such a stock name would just crawl up and nudge me some plus so I can claim a kinship with honorable mention.
Amen brother!
As mentioned on this board earlier, I was looking in earnest a year ago at residential houses and finding some decent stuff but looking now is almost futile. I got a little but like U nowhere near empire building ('empire out') stages.
Have been largely back to looking at stocks now but still wary and heavy in cash. Pffft.
I can't buy stuff in 500K range in my sweet spot in Marina Del Rey, now cost 100K more and almost no more short sales or bankruptcies. That is putting me in bad mood as wanted to "empire out" and now can't swell unless torrent of real demand which will come creeping slower than any decade since 70's. The hunt and peekers will now cram all the dumb glory stuff hitting the market, which had got through the cracks to me earlier by just my lazy prowling for sloppy thirds.
Dependably hurtful recession only cheering space for a hopeful reversal in this scenario.
Len is probably off on his Own island these days with the money he must have made Hoarding gold all these years! lol He can't be in kansas anymore.
Sounds like a good idea. Thanks
Think they have freeday here for PM's, you may wish to ask him as he is famous for having a very conservative view of stocks.
I was just wondering what he was thinking on the coming year... oil, housing and the economy in general.
Let me take that. yes he is but he is getting ready for winter odds and ends, yet always there if you need him.
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