Texas based Home builder D.R. Horton reported a 40% drop in orders LAST QUARTER!
They contribute it to people’s INABILITY to sell EXSISTING homes.
Folks, that light up ahead is a train coming at us and it ain’t filled with presents.
I know, I know, too negative. Nope, just a realist. I really think we’ll have an orderly retracement of prices then it will all come back. Yea, RIGHT :flush
Those with cash will be rewarded, be patient, be patient, it’s just getting started.
So, given that you think housing is going to implode, what do you think is a good strategy to pursue? Wholesaling?
I think you right on the money Brian.
I definitley don’t have all the answers, and you’re a very smart guy from what I’ve read of your posts.
I can tell you what has been working for me. I’m in Southern New England, Houses are selling, if priced right! We have a HUGE foreclosure problem here, just like most places. We had 250 (250) listed LAST WEEK in the local paper. The oldest mortgage out of 250??? 2004!!!
With that in mind here’s what I’ve been doing. First, my buying has slowed WAY down. If I can’t absolutely STEAL something I walk. Let me give you an example. A Lady had a house in a nice middle income area, pipe burst while she was in Florida last winter. About $15,000 worth of repair work needed (that’s MY prices) ARV About $225K to $230K. Purchased the house for $160 add in the $15K to bring it to $175 BLOW OUT PRICED IT at $210 Gone in 1 week! You have to be willing to leave money on the table. Forget pricing them at market and waiting for a lowerer offer EVERYONE is going that. CUT THAT PRICE on DAY ONE. It goes to MLS and people KNOW it’s underpriced.
That’s it. Buy low and SELL LOW!
I remember when the housing bust of the 1980’s occurred in Houston. I looked at houses that were selling for ½ what they should have been selling for. Everybody got freaked out and decided to sell even more aggravating the problem. If you look back you say that you should have bought all the houses you could at those bargain prices. Well we are in those times again. My goal is to own the world. With these prices going down this is great news. I need prices to go as low as possible so that I can acquire more and more houses. Low house prices equal accumulation of assets.
Making money is not the same as getting rich. You get rich by acquiring assets that pay you not by doing activities that make you money. When you sell a house that is an activity. When you have houses rented the asset pays you. You are rich when you can leave for a month and still make as much money as if you were at home. You can’t get rich if prices are rising, you get rich when prices fall. That allows you to accumulate wealth.
My goal is to own the world.
Bluemoon - I hope that you are going to leave a little of the world for the rest of us!
Petemfa - In your honor, I bought a new book yesterday entitled “Crash Proof - How to Profit from the Coming Economic Collapse”. I was only able to read the first chapter yesterday, but so far I really like it. I’ll give a full report when I finish it!
I wonder how many more cards can be pulled out before the whole house of cards comes tumbling down?
Mike
Mike,
I have ONE question for you, and I mean this SERIOUSLY.
How does it feel to KNOW, let me repeat that, KNOW you’re going to be a multi-millionaire in less than 10 years??? Really, how many people can say that? Your there man, you just have to let the time click off.
I’ve learned a ton reading your posts, I know your in Ohio, and prices there are EXACTLY where they need to be for what your talking about to happen. We’ve got some more pain to endure in New England. But I’m telling you Mike, You are right again! Buy when there is blood in the streets. I just have to wait a little longer up here. My best educated guess is 2008 will be THE year for us in New England. It’s going to get UGLY>
DR Horton is huge company and subject to not only the real estate market but the fickleness of the stock market. Real estate is a long term approach to generating wealth. Apart from riding the market cycles in your long term holdings, there are always good deals in any market. Work hard and you can succeed.
Petemfa
2008 for us I too am in New England
somewhat new but learning fast
I’ll be more than ready by then
good stuff here as I see it and understand a few things
about my market
I 'm curious how do you get that deal you referenced
i.e. how do I find that person whose pipes busted
New article to read: http://www.usatoday.com/money/economy/housing/2007-07-17-home-builder-sentiment_N.htm?csp=34
How would you like to be a homebuilder trying to sell a bunch of inventory when the coming wave of foreclosures hit and the gimmick loans all adjust?
Mike
Considering no one would finance the purchases and the people that can get financing would have a list 100 yds long of discounted properties…yeah, sucks to be them.