May 27, 2006

Six Ways To Profit From A Real Estate Collapse

From Forbes - the big question on HP'ers mind - how to make $$ during the meltdown. Not great advice, still looking for the magic bullet, but here's theirs: Hat tip to Uknow...

Buy In Depressed Markets
If you're a committed property investor, consider exchanging a pumped-up property in a hot coastal market for a comparable place in markets that are already deflating.

Play The Vulture
Sometimes in an overpriced and illiquid market, you can snatch up a good deal well in advance of the fall. To get the best deals, call the distressed homeowner before the bank moves in to foreclose

Circle With The Sharks
If being a vulture is too labor intensive, try buying from foreclosure sharks.

Don't Become Prey
Make sure you don't get into a position where a vulture calls you. Even with the low mortgage rates of recent years, a lot of people bought by using by high-test "negative amortization" financing or its evil twin, the "interest-only" loan.

Downsize Your House
Maybe you have too much house. The answer: Sell while you still can get a respectable return and move to a smaller residence

Turn To Wall Street
When real estate heads down, the big money flows into big apartment buildings. So far this year, says SNL Financial, apartment REITs have delivered a total return of 16%.

22 comments:

christiangustafson said...

My life fades. The vision dims. All that remains are memories. I remember a time of chaos. Ruined dreams. This wasted land. But most of all, I remember The REALTOR®. The man we called "Lereah".

To understand who he was, you have to go back to another time. When the world was powered by the green fuel. And the desert sprouted great cities of Italian granite and stucco. Gone now, swept away. For reasons long forgotten, two mighty investor tribes went to war and touched off a blaze which engulfed them all.

Without credit, they were nothing. They built a house of straw. The thundering mortgage brokers sputtered and stopped. Their leaders talked and talked and talked. But nothing could stem the avalanche. Their world crumbled. The cities exploded. A whirlwind of looting, a firestorm of fear. Men began to feed on men. On the roads it was a white line nightmare. Only those mobile enough to scavenge, brutal enough to pillage would survive. The flippers took over the highways, ready to wage war for a 30-year fixed. And in this maelstrom of decay, ordinary men were battered and smashed.

Men like Lereah. The warrior Lereah. In the reset of an Option ARM, he lost everything. And became a shell of a man, a burnt out, desolate man, a man haunted by the demons of his past, a man who wandered out into the wasteland.

And it was here, in this blighted place, that he learned to live again...

keith said...

dude, post of the year. original?

fill us in and this will become its own thread

Anonymous said...

The true bargains are two or more years away. Don't be tempted to buy now because of inventory, and someone who cuts their asking price from $599,000 to $549,000 when they bought two years ago for $299,000. I tried to "bottom fish" good companies a few months after the tech crash, and no way. I remember the 80's in the NorthEast in which it took about 4 years for the bottom.

You want to buy when no one wants to, and the banks make it really, really hard to get a mortgage again since they are so burned. But then again, they may make it easier with "take over payments" to anyone in order to keep it off the books.

Chris G said...

If those who deal with foreclosures are called "vultures" and "sharks", why don't they have a similar term for unethical realtors who push buyers into an unaffordable house?

Oh wait, they're called "trolls" -- never mind.

Anonymous said...

I think the first post is an adaptation of the Gothic opening voice-over to "Mad Max: the Road Warrior".

My life fades. The vision dims. All that remains are memories. I remember a time of chaos. Ruined dreams. This wasted land. But most of all, I remember The Road Warrior. The man we called "Max". To understand who he was, you have to go back to another time. When the world was powered by the black fuel. And the desert sprouted great cities of pipe and steel. Gone now, swept away. For reasons long forgotten, two mighty warrior tribes went to war and touched off a blaze which engulfed them all. Without fuel, they were nothing. They built a house of straw. The thundering machines sputtered and stopped. Their leaders talked and talked and talked. But nothing could stem the avalanche. Their world crumbled. The cities exploded. A whirlwind of looting, a firestorm of fear. Men began to feed on men. On the roads it was a white line nightmare. Only those mobile enough to scavenge, brutal enough to pillage would survive. The gangs took over the highways, ready to wage war for a tank of juice. And in this maelstrom of decay, ordinary men were battered and smashed. Men like Max. The warrior Max. In the roar of an engine, he lost everything. And became a shell of a man, a burnt out, desolate man, a man haunted by the demons of his past, a man who wandered out into the wasteland. And it was here, in this blighted place, that he learned to live again...

Anonymous said...

Oh yeah. How to profit from a real estate collapse.

This is not so easy.


(a) bankruptcy attorney

(b) producer of new reality shows

"Take this home and shove it!"

"Survivor: Mortgage Payoff Edition"

"The Secret Bordello Next Door: desperate housewives in debt"

Anonymous said...

"Secret Bordello 2: Desperate Realtor(TM) Edition!"

Bake McBride said...

***Chris G said...
If those who deal with foreclosures are called "vultures" and "sharks", why don't they have a similar term for unethical realtors who push buyers into an unaffordable house?***

Isn't the word realtor synonymous with "vultures" and "sharks"??

After this crash real estate agents will make lawyers & Used Car Salesmen look like Choir Boys.

christiangustafson said...

Yeah, I wish I had written that. I picked up a DVD of "The Road Warrior" today, a must-have for the sophisticated investor. I adapted the narration to fit the Crisis of Our Age, the housing bubble.

Also, I get a huge thrill typing "REALTOR®".

God, I love the panic blog, it has secured its niche in the bubble blog foodchain.

Robert Coté said...

Let's summarize: exchange buy low, buy low, buy, don't sell, sell then buy, buy. Did iget thm all? See the issue?

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