And the other shoe drops................

General Real Estate Investing
1

Today Cerberus finally admitted that they could NOT find buyers for the BONDS that they wanted to sell inorder to purchased Chrysler.

Last week Allison Transmission had the EXACT same problem with their attempted LBO. THAT IS NOT GOOD!!

People and Financial institutions are voting with their pocket books here. Things are worth what they are until THEY ARE NOT.

Pete, this forum is about real estate, why should we care???

We should ALL care because this is the proverbial “tip of the iceberg”

Liquidity is drying up in front of our eyes folks.

That means…

EVERYONE PAYS MORE TO BORROW MONEY!!!

Pay attention NEW GUY’S, this is not your Dad’s real estate market anymore.

Think I being too negative??? Go to Youtube and in the search box type in…

Florida Housing Crash 50% Off

It’s already STARTED there, and COULD be coming to a town near you very soon.

You can STILL make money, I AM NOT telling ANYONE they can’t, but you better be buying at BIG discounts.

2

It sounds like this could be the perfect time to start buying multi-unit property. As far as the Florida Housing Crash, I think the prices have been overpriced for many years so the crash would actually help.

Richard Stephens

3

Pete, its actually worse than you think with LBO financing. All the big financial institutions are getting stuck holding the bag on these bonds. Wall Street owns them and cant sell them. The big boys told the private equity guys that they would buy the debt even if they couldnt place it. Like i mentioned before, the corporate bond market is in a freefall. Wall Street is taking big losses on these lbo bridge loans. Just wait until credit committees at the big wall street shops tell the traders that they need to reprice, restructure and get this paper off their books. Just wait until Wall Street bonuses suck and NYC housing goes into the toilet.

There are a few more shoes that will drop. Once equities start selling off for real, and they will, it will get ugly. While housing was the source of strength for such a long time, now people are looking towards equities. Believe me, equities will get crushed.

4

Brian, once again, I couldn’t agree more with your comments.

Anyone who listens to these nit wits from our goverment who go on TV and say “sub-prime isn’t speading into other parts of our economy” should be locked up.

It’s all just getting started. WAIT, JUST WAIT…You guy’s better start planning for a depression the likes of which WE HAVE NEVER SEEN! There is NOTHING to stop it THIS time. I keep mentioning the dot com bust because the FED engineered this housing BOOM to rescue our economy from that stock market collapse. They lowered rates to a point we hadn’t seen in 50 YEARS! That lit the fuse. Housing BOOMED, but NOW what do they do??? Think they can lower interest rates AGAIN??? THEY CAN’T…The U.S. Dollar is in FREE FALL and our country is up to it’s EYE BALLS in debt.

We’re SCREWED, just have a plan, because YOUR GONNA NEED ONE.

This is a snow ball, it just started rolling down hill, as it picks up speed it gets bigger and bigger.

Can’t say I didn’t warn you guy’s.

5

Please elaborate, Richard. I’ve not seen residential commercial buildings move down any appreciable amount over the last few years. If anything, sellers seem to expect more. As long as interest rates stay relatively constant, why would commercial values drop?

6

I hate being chicken little. please keep in mind that i post this stuff so that investors here dont get caught in a bad position.

i’d like to share a quote from a very prominent wall street money manager regarding real estate and wall street:

 ``This is not going to be a short affair,'' said V. Anantha-

Nageswaran, head of research for Asia at Bank Julius Baer
(Singapore) Ltd., part of Switzerland’s biggest independent money
manager. ``By the time it ends, in three to four years, people
will not want to hear of financial markets or real estate.‘’

Guys, this is the beginning of the selloff. be very careful of what you buy. there is mounting evidence that is all negative and very little, if anything positive.

7

EXCELLENT, EXCELLENT POINT!!!

This is EXACTLY what WILL happen here. It’s an INVERSION. Think about it, 2 years ago the general (insane) thinking was “THERE IS NO WAY YOU CAN GET HURT IN REAL ESTATE”

NJRE student nailed it with that quote. We’ll know we’re at the bottom when people don’t want to hear about real estate INVESTING. People will always need housing, that’s different than investing. Lot’s of people are going to get smoked here.

BE READY. If you are, your kids will consider you a GENIUS. (well, maybe not mine)

8

Just hit my inbox: http://www.forbes.com/2007/07/26/credit-equities-stocks-biz-wall-cx_lm_0727markets.html?partner=daily_newsletter

9

And another: http://www.forbes.com/2007/07/24/credit-crunch-subprime-markets-bonds-cx_lm_0724crunch.html?partner=financial_newsletter

10

petemfa wrote in July,

EXCELLENT, EXCELLENT POINT!!!

This is EXACTLY what WILL happen here. It’s an INVERSION. Think about it, 2 years ago the general (insane) thinking was “THERE IS NO WAY YOU CAN GET HURT IN REAL ESTATE”

NJRE student nailed it with that quote. We’ll know we’re at the bottom when people don’t want to hear about real estate INVESTING. People will always need housing, that’s different than investing. Lot’s of people are going to get smoked here.

BE READY. If you are, your kids will consider you a GENIUS. (well, maybe not mine) "

So, my question is, what is your investing philosophy now?
What have you done since this posting in July as far as investing?
Thanks,
dlb
.

11

What you do now is the TOUGHEST thing there is to do…

NOTHING!!!

Jimmy Rogers is a LEGENDARY investor, one of his quotes sums it all up.

" The hardest thing to do for most people is to do nothing. People feel as though they ALWAYS have to be DOING something. What usually happens is people make their first investment, they’re scared because they’re new to this. So they research, dig, grind, and find a great opportunity and they make money, they were PATIENT. They do this a few times and make more money. Then they make their mistake… They now think they KNOW something, and as soon as that happens they lose BIG."

Here’s my philosophy… When the DOW, Real Estate, Bonds,and The U.S. Dollar are all falling. I don’t have a philosophy! Something is happening here that NO ONE understands.

I KNOW it’s as bad as I’VE ever seen it. When that happens your play is to KEEP what you already HAVE. People in this country are about to experience a huge draw down in wealth. Now is NOT the time to being trying to scalp $10K or $20K on a home that is falling in value every month. The winners will be the guys who are still around WITH MONEY when this all settles.

Joesph P. Kennedy sold EVERY stock he owned in September of 1929, one month before the crash. He did that because he was getting tips on stocks from shoe shine boys. He said, “When shoe shine boy’s know more about the market than I do it’s time to sell.” Basically Joe and his family rode the entire deprresion out with very little effect on their finances. HE KEPT WHAT HE HAD!

I’ll still buy real estate but it’s got to be a BLOW OUT price to get me in.
I have a friend who just finished a 2 bed 1 bath starter home rehab, completely gutted it. NEW EVERYTHING. Priced it at $189K, it sat, dropped it to $179K it still sat. Now this is about as low as it gets around here for a starter home and it’s ALL NEW inside and out! Still for sale. I don’t know how bad this is going to get, but I sure as hell am not going to try and figure it out with MY MONEY.

What do I lose by sitting on the sidelines here??? Someone please tell me??? Because from where I sit the sideline has tremendous upside right now. I keep my capital, my credit rating, and my sanity. Pretty good in my book.

12

Man I am glad I am with like minded people. I had an opportunity to get out of my primary residence two years ago. I would have cleaned up, but wife wasn’t with me, so we sat. The value of our home has dropped $50-60k. I am one of the fortunate ones, my mortgate is 30 year fixed, and we got in at pre sale prices. The price of our home could fall another $100k, and we would still be ok.

That said, I have decided to save money and work on my credit. I was planning on buying a rental property next year, but if I have to wait a bit longer so be it. In the mean time, I think starting my own business is the way to go so that I can stack some money in the mean while.

j

13

What’s with all the naysaying here huh? Didn’t any of you bother to listen yesterday to our fearless leader good ole’ boy George W?? He’ s VERY optimistic about our economy and described the present economic conditions as being “resilient and flexible”… AND just when you thought he couldn’t get any dumber or more clueless about what’s going on in the world!!! sheesh.

14

With all that spin I’m now dizzy…

15

Bush is the epitome of “if you want to succeed do the opposite (or have a rich daddy).”