Did any of you buy (or still own) investment property, and sell at the peak? Do any of you still own housing investments, and are wondering if you should sell now?
I have nothing, nothing at all against real estate investing. I truly do think it is (was) the road to wealth. Heck, I've bought and sold three houses myself over the past 9 years.
What I do have something against is obvious bubbles, and negative cash flow, and disrespect for the fundamentals.
Some of you probably bought housing as an investment a while ago, at the low prices, are cash flow positive with your rental income and are sitting pretty. Many of you probably bought your houses at the low, years ago, and still have tons of equity.
But for that group - the real estate holders - doesn't it worry (or sicken) you that every night you fall asleep in your asset, your asset value is falling? Don't you feel like you should get out now, rent for a bit, then get back in in a few years after the drop?
Let's hear your stories, and bubble plan
June 04, 2006
Let's hear from the Investors, Flippers and Real Estate Holders out there
Subscribe to:
Post Comments (Atom)
38 comments:
I have a home and two rental properties......no plans to sell any time soon.
Now is the perfect time to buy an apartment building
I have 8 rentals in Texas. None in California.
FYI- Drove by a U Haul shop in Dallas, Texas today. They are offering a $400 special from Dallas to California. Why? They are receiving so many one way rentals from California they are overloaded with them.
Makes total sense. People moving from CA to same house in Dallas for 1/3 the cost.
They are also getting away from the chaos to be going on in CA.
Sold inherited house in 01/05,almost 400%. Own family home outright, no plans to sell, no loans of any kind on anything.
Let housing prices drop to the ninth pit of hell! "And Awaaaaaaay
We GO !"-Jackie Gleason.
I sold one primary residence, two investment properties, and I am still holding one investment property. I sold one of them at the nick of time. The closing was delayed three times, and I thought it would not go, but I just kept sticking my fingers in the holes of the bucket to keep it going and finally it went through - whew! I will hold the one that I have since it is cash flow positive.
I can't imagine the sick feeling that people must have if they are leveraged with an ARM and reading the celebrations of the end of the boom on these websites.
Own a house I love, near my work, great for my kids, lots of land, and is not in a "rich mans trailer park" i.e. Most of today's high end developments with your neighbor's kitchen next to yours...
I paid off the mortgage, and the property is about 1/3 of my overall portfolio, so I feel safe riding it out. Owned for 8 years.
Staying away from investment property for a couple of years, but am looking forward to bargain hunting a distant waterfront second home for cash$$$ someday.
I have nothing.
Bought a condo in NoVA (Reston) in 2000 for 100K. Sold early 06 for 319K. Buying at a market low point was just luck but this site, Bens blog and SoCal's site definitely convinced me to sell it when I did. Thank you bloggers!
Put 20% down on new place in downtown Denver
10K on gold/silver/Platinum/Palladium
40K in the stock market, mostly in a target 2045 retirement fund, the rest in Muni's and foreign funds
Paid off my car and credit card debt.
Saving and waiting now. I sure hope that the doom and gloom a lot of people predict on these blogs doesnt come to pass. time will tell.....tick....tick....tick....
Im in chicago and sold amarginal property in nov. of 04 for 200% more than i bought it for in fall of 99 was positive cash flow with section 8 and a 15 year mortgage w/20% down. Then the taxes and insurance almost doubled and the ammount of rent section 8 covered started to fall and i oculd see my cash flow positive position dwindling. So im out and sitting in cds at almost 5%. In the mean time they keep building more inventory.
sold second home in July 05 (1 week on market)
bought all gold and silver - physical
I just lost my job. The damn dollar sliding towards 1.30 did me in.
I hope everyone reading this understands this; you might be next. Sell your overvalued RE now! Try and be smart with the gains for tomorrow you might be in my boat - and there's hardly room for you!
Well, there's no universal answer for anyone. I own a paid-off house in a neighborhood that I like, five minutes drive from the job that I love. It's four bedrooms, three bathrooms, 2200 square feet, big fenced-in yard. When my children leave for college in eight years, depending on the market at the time, maybe I'll sell, maybe I'll stay here and enjoy having a big house, maybe I'll move somewhere to a smaller place and rent this house out for income.
And in a couple of years, when the market really tanks and more affordable properties start becoming available, maybe I'll even buy another rental property or two. I certainly wouldn't buy an investment property right now; my realtor told me that in the new subdivisons in our town, the builders are asking $215,000 for houses that were orginally going to be $250,000. Little three bedroom McHouses with no greenery and teeny yards, way out on the outskirts of town.
Okay, Dogcrap Green, question - you say now is the perfect time to buy an apartment building - isn't it possible the market will become flooded with rentals? There are a million stubborn investors out there who are saying "Hell no, I won't/can't afford to lower my price!" and when they can't unload their house, they are going to try to rent, at least for a year or two. For the near future, I could see the market becoming saturated with rental homes. (And then my theory is, after a year or two the investors' ARMs will be go back to the market rate, the rent they are getting won't cover their mortgage, they will see the market isn't coming back any time soon and they will stop throwing away good money after bad and sell their houses. Massive sell-off, plummeting prices and soaring foreclosure rates in a year or two.)
Florida Girl
"Put 20% down on new place in downtown Denver"
no offense, but I don't think you've learned a thing...downtown Denver condos are incredibly overpriced and are being bought mostly by people coming from the bubble areas who don't know the Denver market
you're gonna reget this move I'm afraid
I think cash flow real estate in appreciating markets is the easiest path to wealth.
That said, I've pretty much bailed. I sold an investment condo purchased in 1999 in 2003 and a house purchased in 2000 in 11/04 with 100% and 180% gains. The condo has gained another 100% since I sold it but dropped 5% since peak last summer. The house gained 20% since I sold it and has dropped 5% since peak last summer. Both are in markets with rapidly increasing inventory, would take months to sell the current market, but I still missed out on quite a bit of appreciation. I still hold one investment property in France I own outright that produces minor cash flow and provides a nice vacation get away, but am considering selling that one too as Paris looks quite bubbly. It represents nearly a third of my net worth that I like having in Euros. Am living in cheap (university subsidized) apartments until 6/07 and hope to buy an 8-unit building in LA and occupy one of the units myself for a year or two around then. I suspect the stigma that has been attached to renting in recent years will start to erode as it becomes crystal clear that it's by far the best choice for professionals wanting to preserve capital and a full 1/4 of those who became "owners" in the past five years will be in serious trouble next year. I will probably start looking at single family homes with appreciation in mind again in 2008-2010 or so, unless I hear of some actual short sales or foreclosure deals that REALLY cash flow a year or two after all the seminar clowns have been flushed out of the market. Kiyosaki's rules that they must cash flow on the day purchased AND be in appreciating area really apply. I also won't buy anything as a rental in a place where I wouldn't live myself and even though the market is now quickly coming back to serve us picky buyers, I'll wait until all the "I buy houses for Cash!" license plate holders on Lexuses and BMers are safely parked in a car lot with a big blinking "I buy cars for Cash!" sign over it and the water cooler chatter is all about investing in alpaca farms or fertilizer stocks.
"you're gonna reget this move I'm afraid" re:Denver
Its not an investment property, and I can turn it into a cash positive rental if I had to. What do I care if the value changes, I plan on owning/living in it for a long time. Isnt that part of the mantra on this blog?
You people are a little heartless. I totally understand your perspective on the flippers and speculators, but have you no sympathy for the everyday folks who are caught in this impending disaster? I bought my first home (a condo in Chicago) in March of 2005. I didn't buy it to flip it, or rent it, or impress anyone. I was just finally ready to buy, and didn't want to rent forever. (And I was somewhat oblivious to the real estate frenzy, as Chicago seemed to start cooling off a little a few years ago.) I didn't "stretch" to buy it or use a wacky mortgage. And here's the thing: at this point I am not only financially invested in my home, I am EMOTIONALLY invested too. I can't imagine selling it right now, (probably for a near loss) renting again, and trying to time my jump back into ownership. I love my place, and I plan to be here for the foreseeable future. The problem is, will the foreseeable future turn into 20 years whether I like it or not?
you're gonna reget this move I'm afraid" re:Denver
Its not an investment property, and I can turn it into a cash positive rental if I had to. What do I care if the value changes, I plan on owning/living in it for a long time. Isnt that part of the mantra on this blog?
You shoulda rented until winter time then bought something at foreclosure or something. Or maybe you got a great property downtown, we don't know. LODO is cool, hope you don't have a bunch of bullshit condo fees though.
Chicagogirl, I almost bought a place in February for a place to live. I got close to actually signing the papers then a friend showed me the tax records and how much the scumbag flipper was trying to profit from me, it was a $100K markup in 4 months time with no improvements to the property. I backed out and the property is still on the market. I'm still a bitter renter, but I've learned that renting can be a better decision financially. Congratulations on your new place, I wish I had my own. I'm sitting on the sidelines now waiting to see what happens.
"you're gonna reget this move I'm afraid" re:Denver
Its not an investment property, and I can turn it into a cash positive rental if I had to"
- uh, you might wanna check the math there.. I looked myself at Denver lofts a year ago - $500,000 for a 1 - bedroom, would have rented the same place for $1,400 a month... so about 40% on the dollar... a HORRIFIC investment
unless you're buying one of the many foreclosure condos in denver, I'm not sure how you could get to cash flow positive on anything there - vastly overpriced condo market and horrific rental market - the perfect bubble storm
brought 62 investment houses in LA between 1989 and 1991, still plan to hold on them.
I just lowered my asking price for a condo I bought last year in Northern Virginia. I moved South to a lower cost of living and to a good job. So my hope is that I can rent the property out if it does not sell. My condo is a walk from some big time computer company offices (Oracle, Microsoft).
Sure would be nice to get some profit to use in my new cheaper to live community, but that is not looking good now. It could be worse. I could be unloading something with little equity in middle America, I guess.
chicagogirl said...
"You people are a little heartless. I totally understand your perspective on the flippers and speculators, but have you no sympathy for the everyday folks who are caught in this impending disaster? I bought my first home (a condo in Chicago) in March of 2005. I didn't buy it to flip it, or rent it, or impress anyone. I was just finally ready to buy, and didn't want to rent forever. (And I was somewhat oblivious to the real estate frenzy, as Chicago seemed to start cooling off a little a few years ago.) I didn't "stretch" to buy it or use a wacky mortgage."
Well, if you didn't stretch to buy it, and don't have a wacky mort, then what's the problem? Even if the value goes down, you should be ok, right...if you are telling us the truth. Just live in your place and be happy, and don't look at it as equity. Look at it as shelter.
As far as being heartless, well, yes I do tend to be heartless with people who don't do their research (or don't demand that their agents do it). People who admit that they are "oblivious" don't deserve a lot of respect or sympathy. Cutesy helplessness doesn't work in this situation. This isn't a pair of Jimmy Choos, it's the biggest purchase you will ever make.
Chicagogirl loves her place and can afford it, she's just worried she may be tied to it for the next 20 years.
And she may be right. It is a valid concern.
Personally, I don't think anyone should be buying right now who is not planning to stay in that home FOREVER.
Good luck Chicagogirl. Thank God you love your place and can afford it. If at some point, you really want to move, then you'll deal with that when it happens.
Really, do not worry about that right now.
Almost bought a house a few times in the first few months of this year. Lucky nothing panned out. Started reading this blog and others blogs and decided in April to rent.
Now using all the money to buy Gold, Silver, Inverse Dollar fund, Precious Metal Stocks, ...
So lucky I didn't buy.
chicagogirl has no problem. Basically people are born "short" the real estate market. Everyone needs a place to live, and when you buy your first place you are "flat" finally. If the price of chicagogirl's apartment declines she will have to save some money before she can sell her place and move "up" to a nicer home eventually. BUT, if prices kept rising, she would ALSO have to save money before buying a nicer home. A falling market makes her next home cheaper. If the only property you own is the house you live in, you can afford to keep living there, and you eventually plan to move "up" you should not be freaked by a declining market.
I owned one "investment" apartment in Massachusetts. Bought for 14k + 20k in renovations in 1993, sold in 2004 for 120k. Now I own a Midwest small-market apartment REIT, which is cash flowing well, and I am sure no "bull" on the real estate market. I think the bubble cities will see 50% declines, peak to trough.
Bought my 1st house (5rm, 2ba on a postage stamp lot) in March '03 for 275K south of Boston, sold in September '05 for 328k (after 15k in improvements), then bought for 385k (8rm, 1 full ba, 2 half ba, .25 acres) in the next town south. Planning to stay longterm, 80/10/10 mortgage (fixed @ 5.625 and 8), can pay the mortgage and expenses, so happy where I am. Would love prices to keep going up, but since I don't see my house as an investment, not too concerned either way...
"- uh, you might wanna check the math there.. I looked myself at Denver lofts a year ago - $500,000 for a 1 - bedroom, would have rented the same place for $1,400 a month... so about 40% on the dollar... a HORRIFIC investment
unless you're buying one of the many foreclosure condos in denver, I'm not sure how you could get to cash flow positive on anything there - vastly overpriced condo market and horrific rental market - the perfect bubble storm "
A response from the website guru himself! Im honored! love the website!
Keith, I swear Im on the same page as ya. I sold and bought out here in Denver about a year and half ago. If I knew then what I know now Id be renting for less. Live and learn I guess. BUT 1 bedrooms are NOT 500,000 out here. Enter 500K into realtor.com for area codes 80202(LODO,'lower downtown')80204(a little bit east)and 80203(just south of the capital, where I bought)
500K gets you just about every 2 bdrm there is.
Again, I bought my current place NOT as an INVESTMENT. Its my place, and Im keeping it for awhile. The mortgage payment is my only major bill and its about 1/3 of my net income.
Where can I find previous purchase prices on NYC apts? Nice place in midtown I'm interested in...but had no plans to buy for some time. I do like this place, though...but want to see how bad the increase has been
$500,000 in denver/boulder - I was looking at the brand new lofts in central denver and pearl street in boulder.. and afraid, yes, they were after all said and done hitting $500,000. and I said no way.
true, you can get a 1 bedroom probably for $200,000. I was looking at some whack high end stuff...
c in abq: "cutesy helplessness" and Jimmy Choos? Uh...I think you misread me there.
My concern is one of mobility. Thanks to anonymous (both of you) for your input.
I bought in San Bernardino County in 2003 for 108K, fixed up the rotten thing to put in sweat equity...cost of fixin's: 30K. Sold Jan 06 for 274K (it was only 864 sq. feet 2bd/2ba with no permits). I split the equity with my father and now I own a duplex and condo paid off and am making wonderful cashflow while I rent. As far as my goals go...I've got both investments up for sale...one for 25% more than I bought it for...if it doesn't sell, it doesn't matter b/c it was making positive cash when I owed 100%. The duplex is up for 50% more than I bought it for...but it was a foreclosure and I put 10% of the bought price into it...if they sell as I feel they will before summer (they both have 10% cap rates) ends, I'll buy a 4plex and a duplex with 50% for each.
Bob the builder. I live in the Inland Empire. I am sure you ARE AWARE THAT THE INVENTORY IS THROUGHT THE ROOF and sales are SLOW. Did I mention SLOW SALES IN MID JUNE? Good luck flipping you POS properties. You are just another specu-vestor amongst a sea of them. Crash and burn baby. Call me whne the fire sale is going on. BTW ...nice MLM website you got going on there. That solidified my hunch that you are just another lazy as looking for a poor to riches formula. Dime a dozen.
Purchased home to live in CA outside of Los Angeles in 2002 for 230K, valued at 600k today, no plan on selling as I need a place to live. Bougth 2nd home in Aug 05 in Victorville (desert between Las Vegsa and LA)for 359K (1300 sq. ft) flipped it in March 2006 for 416k - think I got out at the top, same house model selling for 405k now.
I say briefly: Best! Useful information. Good job guys.
»
Hello Friend! I just came across your blog and wanted to
drop you a note telling you how impressed I was with
the information you have posted here.
Keep up the great work, you are providing a great resource on the Internet here!
If you have a moment, please make a visit to my bad credit loan mortgage rate site.
Good luck in your endeavors!
Hello,
www.apartmenthuntingsecrets.com Be smart and know how to negotiate with the apartment complex you want to live on.
Learn how to ask the key questions to get the best price.
Learn how to get the best apartment ever.
Post a Comment