Housing Bubble Bursting?

[DTB]

Mike:Hmmm, why buy or sell if you are not influenced by risk? You keep challenging the "bubblers" insisting they should sell to avoid the risk of losing some of their equity, did you not?

It does seem silly, doesn't it?

It seems to me Mike, you are arguing to buy and sell based upon your firm belief that the price of your home is going up or down and renting or not renting.

All I am doing now is showing you that the investors, mortgage companies, banks, hedge funds, etc., all have a way to play specific real estate markets for housing. Who knows, maybe Fannie and Freddie will be purchasers of this product since they have enormous portfolios of mortgages, which they have created derivatives themselves and sold them to investors.

You too can play the game of risk management with the "big boys" Mike!:new_popcornsmiley:

1. When I make the buy decision, the "risk" is gone. Are there variables that could affect my bottom line? Of course, but once I've identified what I want to do, the "risk" is inaction.

2. I manage the risk by being on the street looking at opportunities every day. Last 2 deals as an example. Price in 400K, rehab 150K 6 month window, target selling price 750-800K. Risky?

 

[Randolph Kinney]

Mike, sweat equity investing are we? That is too old but it is valid.

Everyone has their way of investing (gambling). Some do it buying tax liens, some do it buying collectibles, some do it buying and selling options, some do it with arbitraging, some do it with hedging, farmers do it selling futures, Kellogg does it buying futures, etc. You get the point.

And just because you are on a winning streak does not make you an investment adviser or immune to loss. You get the point.

All the really really smart people can't seem to admit that they ever have made a bad investment, a losing investment or have taken a loss. That's what makes them so smart. :new_popcornsmiley:

 

[DTB]

Wow! According to Case-Shiller-Weiss, the forecast for the San Diego market area is going down! See attached PDF.

I love the disclaimer at the end. Priceless!

When I make a recommendation to a client or buy ourself, you can take it to the bank.

 

[Randolph Kinney]

I love the disclaimer at the end. Priceless!

When I make a recommendation to a client or buy ourself, you can take it to the bank.

FISERV CSW assumes no responsibility for the user of or reliance on this forecast and shall not be liable for loss of profits, loss of use, or incidental, consequential, tort or exemplary damage as a result of such use.

Yes, I like it too. It probably reads like the one in your appraisal reports too. I believe I will put that one in my appraisals too.

So Mike, if I give you $100,000 to invest, what sort of guarantee do you give that I can take to the bank? Are you willing to post bond for it? If so, I can write you a check right now.

 

[DTB]

IF you passed muster as an investor, which right now it looks doubtful, you would get 1/4 share in a project with 23-25% return in 6 months. Just like everyone else.

 

[Mike Simpson]

"...still going, and going, and going, and going, and going, and going...

Wow! According to Case-Shiller-Weiss, the forecast for the San Diego market area is going down! See attached PDF.

I'll never cease to be amazed at some on the Forum.

If they're not out Crusading (making trouble for people), they ringing the alarm bell...over, and over, and over again.

Bubblicans have come straight through a stock market crash, the doldrums, into the new paradigm, and now that we appear to be entering yet another period of CHANGE (soft landing)...ya'll are STILL predicting doom & gloom, and wishing the pox on whomever's house who happens to disagree with you. SIMPLY AMAZING!

While Crusaders admonish other appraisers for using their knowledge to invest...they indicate they're waiting to invest themselves. 'They're just waiting for the markets to BURST so they can get a deal'. But for them...tomorrow never comes.

I think the real "gamblers" are the ones who stick to their dire predictions--year, after year, after, year, after year. You're the one's who're risking your credibility when your predictions fail to materialize. It's like the 'Boy Who Cried Wolf' and Rip Van Winkle' all rolled into one.

-Mike

 

[Pamela Crowley (Florida)]

Whatever...

 

[The Warrior Monk]

If they're not out Crusading (making trouble for people), they ringing the alarm bell...over, and over, and over again.

Yup...I'm one of those.

I "predicted" the tech stock crash too..."predicted," of course, means seeing the obvious.

It's seems to me like you are confusing the issues. Just because the market goes down on a whole doesn't mean that you can't make money on RE. You're not buying at market value; you're buying at a depressed price. So bubble or no bubble you are going to make money. If you can get a property at a below market price you can always make money. If the market is on the upswing, you can make even more money.

Stating that because you are making money in RE is an argument against the bubble is not valid.

It's the same thing with stocks. I picked up some stocks that I believed were undervalued, and made money on every one of them, regardless of the direction the stock market as a whole was going. Buy low, sell high.

 

[Mike Simpson]

"Whatever..."

That's my least favorite word in the whole world. Especially when it's said with a Valley Girl/Boy accent, and a roll of the eyes! It's like fingernails on a chalk board.

"Stating that because you are making money in RE is an argument against the bubble is not valid."

It's certainly ONE argument David...especially when we consider the Bubblicrats have been carrying on for so long. Let me take you for a walk down memory lane:

It all began on the television, and in print in the year 2000, about six months after the Stock Market fiasco. Sensationalist media latched onto the term 'Bubble' because, they'd used it for the stock market & it had come to pass. Just imagine how many viewers would tune in, or read if they could scare them into thinking their houses would go the way of their retirement funds.

Forum Parrots (or to use a term George coined--"chattering monkeys") first picked up the mantra in 2002. To be fair...I saw problems back then too, however, markets changed (as they invariably do), but the Bubblicans either never acknowledge the fact, or insinuated rising prices was a giant conspiratorial fraud, perpetrated by unethical Agents/Realtors, 'Skippy,' Builders/Developers, Loan Officers/Mortgage Brokers, Investors/Speculators, Buyers & Sellers, and Politicians (in other words...everybody but them-ethical-selves). I'm sure I've forgotten some in there too!

I think those of us that dwell on the other side of Bubblonia (Neverland), use the fact that we've made money to illustrate we've been right all along. Moreover, we often fall back on this argument as a defense mechanism as Bubblanese can get quite nasty over this issue. I've been accused by one of giving "dangerous advice," yet my clients have made more than a million (probably closer to a few million) in equity in just a few short years (no one's lost to date). It's a useless argument though as we're then just accused of "caring about nothing but money."

Lets face it...even the Bubporters on T.V., are slacking off of these silly stories. People have become angry w/them, they've been made to look the fools, and it's obvious to everyone by now (with the exception of the most die hard Bubblatrops) that the 'Soft Landing Scenario" is what's unfolding here.

However, I'm confident we'll have overwhelmingly more negative stories to read on the Forum as the years unfold, regarding the housing markets (how many "tipping point" theories have you read here already?). I also believe around the years 2008-2009...we'll probably see a resurgence--second coming if you will--of the dreaded "Housing Bubble."

-Mike

 

[Mike Simpson]

"You're not buying at market value; you're buying at a depressed price."

This is a mistake I see a lot of experienced Investors make...assuming the only way to invest is to buy @ a depressed price.

However, this isn't how I choose to invest @ all. I want to avoid depressed properties (too much work for my tastes).

I prefer to buy in the path of short term future growth & ride the equity elevator. To do that...you've got to do your homework...it's not a matter of luck, and has absolutely nothing to do with "gambling."

I do not equate real estate investment risk with the risk involved with gambling. I lived in Nevada for 15 years. While I studied the games & learned to count cards....I never played...the odds are overwhelmingly stacked against you. Not so in investment real estate, where if you do your homework, the odds are in your favor.

-Mike