Posted on 03/05/2005 8:05:02 AM PST by Willie Green
LOL !!!
An attorney friend of mine peddled a couple of short stories I wrote and now he sees himself as a "literary agent", and he's bugging me for something else. I was hoping someone had something for me to 'coast off of'.
But keep me in mind.
Great thread Willie!
As for their vulnerability to a downturn, of course it would hurt their business. But they run off their inventory of houses with 6 months in ordinary times. If that doubles, so what? This isn't a power plant or office building type thing, where the asset only comes back to you over 25 or 30 years. Do they own land, sure, but typically they hold it under options to buy until they are ready to sell units. They have something like $4 billion principle value in land options they can exercise or pass on. Lots of developers go in hock up to their eyeballs at the top of hot real estate markets, and go bust. I just don't expect them to be one of them (remotely).
As for what I do, these days I am a research analyst for a software company that does science and technology stuff (math, formal modeling tools, etc). In the nineties I did practical finance, as an investment advisor. I got clients out before the bubble popped and left finance for scientific software. (REITs were part of the cash-out strategy for some of them). Before that I was in grad school.
the tax code should be structured to discourage speculation in residential real estate. this kind of stuff drives prices up for people who actually need to live someplace. its just fueling the real estate bubble.
this is true. except that when RE goes, it will take the banking system with it, as well as freddie and fannie.
Using a "fast turn" instead of a "buy and hold" strategy regardless of the negative cash flow.
Our 1983-bought $117,000 San Diego property was in negative cash flow the entire time we paid the 15 year mortgage until the mortgage was paid off 9 years into the loan.
Now, that property spits out $1,400 per month in rental income and is worth about $400,000.
My only regret is that I did not "buy and hold" ten more just like it.
Yes, of course, let us get the government involved, they always make things better...
< /sarcasm >
You sound purty smart.
Thanks for sharing.
the 1986 tax reform did exactly that regarding the tax treatment of real estate - Reagan passed that.
I think that buying home is about buying home. If you love the home, then it's well worth it.
Of course, we live in California and just made half a million on our last home. We were there 13 years.
The only problem is if the bubble bursts, and my hubby loses his job at the same time. Hopefully, that won't happen. It didn't happen with our last home. However, it didn't make any money for the first 5 years. If our new home levels out now, we would have already broken even on our investment. If it goes up, then we'll be making more money.
Ok... so the way I see it, after reading and reading in this forum- is that most if not all of you agree that real estate is a GOOD investment, but not for everyone.
So then, my question, and the reason I've surfed on over and found this site is this: We are seeking to relocate to Arizona, buy land and build... we own a home in California that we are paying a mtg on. Is it smarter (I guess this separates everyone here) to sell said property and reinvest starting fresh etc. or is it better to RENT out our home in California, let it pay for itself (we hope) and be in debt while we start over...? Any takers on this question? Appreciate any input.
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