BTW, New home sales #'s just relased. Lower than expected and last months numbers were revised much lower than previously. This is not a positive. The biggest drop was in the Northeast, -11%, which is very interesting as it has been a source of strength in home sales.
I fix just enough to get the bank to finance and THAT'S IT.
Pete,
What’s the basic type of stuff that typically needs to be “operational” in order for a SFH to be able to obtain financing at time of sale?
Thanks,
-Mike
Lets remember what we are doing here everybody. This sub prime mess means that people are loosing their houses. We are buying these houses. More houses lost the lower the prices go. That means good news for us. These people that lose their houses don’t dry up and turn to dust…they still need a place to live. They will rent from us. This means more income for us. This is the beauty of real estate heads we win tails they lose. We always come out ahead. Now how is this sub prime mess bad for us again?
petumfa & bluemoon great to read,lol YOU GET IT!!!
buy 50% on the dollar…thats even better
my 2 cents
Robert A. Doncaster, Jr.
Import/Export Entrepreneur & Investor
*** DO YOUR HOMEWORK ***
Chicago Illinois USA
& sometimes Salzburg, Austria
NJRE student,
Glad to hear you join in. I always look forward to reading your thoughts on this stuff. Always very insiteful.
I know you work in the securities business. This is the EXACT reason I post this info. For FREE we get insite from parts of this economy that some of us are closer to than others. When someone like property manager Mike, NJRE student, and other very intelligent people have opinions and insite THAT is what these forums are ALL about!
Allagash,
To answer your question about what needs to be operational for banks…
It may surprise you… The roof for instance can be old, if it’s not leaking that’s OK, BUT for some reason the house will have to have floor coverings. I never understood this, it’s OK to have a crappy old roof but if I don’t put carpet on the floors because the new owner might want to pick out their own stuff NO GO!
Termites… Can have damage, CAN NOT be structural or active infestation, plumbing and septic must work, and the hosue can’t have one of those old heaters that centrally heat the whole house.( the knid that are basically just big room heaters)
I do some cosmetics, if the kitchen cabs are junk or ugly it takes me 2 days to rip them out and get new ones installed (HUGE bang for the buck there) Also, lots of CLEANING, you’d be surprised at how much just that adds to the homes value.
Great hearing from everyone, you don’t have to agree with me. I just lay this out there because I HAVE personally seen people go BANKRUPT just trying to do better for their families. My theory is NOW is the time when people get smoked. It’s the “trying to catch a falling knife” theory. 4 years ago my 7 year old son could flip houses and make money because just holding them worked. THOSE DAYS ARE OVER. Still TON’S of opportunity out there, but a little seasoning goes a long way now.
petemfa would love to have lunch with u some day and talk politics …hehe lol
You know what u are talking about,its amazing that many more dont see your advice,whats that old saying…a mind is like a parachute,you have to open it up for it to work…
p.s. i wonder how many will act on your advice…
peoples greed will get the best of them,thats why the handyman special did better…its all marketing… lol
my 2 cents
Robert A. Doncaster, Jr.
Import/Export Entrepreneur & Investor
*** DO YOUR HOMEWORK ***
Chicago Illinois USA
& sometimes Salzburg, Austria
petemfa,wait to u see what Cerberus Capital Management is going to do to GM…those union guy will be slammed,those are the folks who bought GM etc
lol hehe
my 2 cents
Robert A. Doncaster, Jr.
Import/Export Entrepreneur & Investor
*** DO YOUR HOMEWORK ***
Chicago Illinois USA
& sometimes Salzburg, Austria
Hi Pete,
Thanks for the response.
-Mike
Robert, here’s a freebe.
Your last comment about Cerberus? (they bought Chrysler) it doesn’t matter though because your right, those contract talks this summer will be VERY different with WALL ST. on the other side of the table.
Man, I don’t know where you went to school but you are batting 1000 here. Watch what happens…
Last year Goodyear stock was $10/share around this time, The company offered the Union (UAW by the way) a one time $1 billion payment to take over ALL health care costs for retirees. THEY took it. Goodyear now has nothing to do financially with retirees medical costs. Watch the Big 3 take the same deal. Goodyear stock is now over $30.
The boys at Cerberus are watching and waiting, but you want to know who the winner will be…???
FORD!!! Buddy, buy it, buy it, buy it… It’s $9/ share RIGHT NOW. They are unloading that dog Jaguar and Land Rover is going with it. With all the private equity money out there it should bring in a big number. Mullally has done this before with Boeing right after 911.(turned around a dying company with huge Union problems)
The new Taurus/500 has been redesigned and really looks good. (did I just say that? It does, really) and it was just named THE safest car in America by the Insurance testing board. (will sell a lot of cars) The Fusion has seen a 15% increase in sales since the Toyota challenge commercials started. It just goes on and on. Watch it, If your like me and love the contrarian theory on investing in ANYTHING, this one bares watching.
By the way want to read something interesting about TOYOTA google search “toyota engine sludge problem” Big problems in the near future for Toyota. Watch, and remember where you heard it.
I love Tony Robbins! HAHAHAHAHA!!! Good one! :beer
thanks petemfa
oooppps sorry about that,Chrysler…brain fart…too much knowledge hehe
my background is X-Aeronautical Engineer… that industry is toast too hehehe
i am all self taught…u can make some good $$$ playing off the bad times…
i have quite a diverse background as yourself.
i read read read read then act,then repeat…
a couple weeks ago i posted about prison stocks,back in 95 i was recommended them…people laughed…look at the charts on google,.,.,.,.,.,.,.
they will still go up with all the illegal problem and when folks go to booze and drugs when they lose there house
p.s. born in raised in newport, ri…had some help from my grandparents and their friends,the ol’timers up north new there stuff,.my grandfather was a friend of william vanderbuilt III (i think it was the 3rd), heheh lol…my grandfather was involved in many businesses…diamonds…landscaping etc…coins,hehehe he told his son and so on…
duplicate the rich,
There’s one thing that will keep the interest rates at a modest level, China. They are the biggest buyer of the bonds that mortgages are turned into. We are the biggest buyer of China’s goods. It’s a circle. There’s a reason China pegged their currency to the USD for years. Even now, it’s movement is pretty limited.
Mortgage rates will only skyrocket if China stops buying the bonds. China won’t stop buying the bonds as long as we buy their stuff. Around and around we go until someone flinches.
Interest rates are very much an international thing now. They often have to do with future exchange rates between currencies as well. As long as China keeps their exchange rate to the USD around the same, then interest rates can stay low.
It has to do with investors expecting a certain return for a given risk level. Say investors want 7% for AAA bonds. Well, if someone in China wants to buy bonds in USD, then they need to consider what the value of the USD will do over the life of the bond. If the dollar falls enough, then their return could be negative. To adjust for the fall of the USD, they’ll demand a higher return on the bond so they net their 7% after taking exchange rate changes into account.
It has to do with interest rate parity. You can study it and predict changes in exchange rate based on interest rate differences.
What happens when the hyper inflated Chinese stock market makes it’s inevitable return to the mean. (CRASH) It’s GOING to happen, not if, just when???
Read some of the stats on the makeup the typical Chinese investor, It reads like a summary of Wall St in the 1920’s. Can we all say SELL!!! That’s what their going to say when it goes.
These markets are like a constantly moving 3 dimensional puzzle, everyday pieces are added and taken away. One thing NEVER changes however, and that is peoples reaction to FEAR, GREED, and HOPE. It has no international boundaries.
I just want to thank EVERYONE for their input here. We’re all part of this puzzle and reading this is a sample of the theory right in front of us.
We have read about the Hope some people have, the fear, and even the greed can be represented.
It’s all right in front of us. We look at it all the time. BUT…
It’s like that house you drive by every single day and never noticed until someone paints it. This experiment, if we can call it that, is exactly what we can all learn from. Taking information and using it to make a profit. It’s funny to me how some people get so uptight about these subjects. It’s investing, plain and simple, the more info, the better decisions we ALL make.
I will say China and India still have major social issues to face. Their median incomes are $1,200-2,500. That’s beyond poor and about 500M people in each country are at or below that income level. Combined that’s 3 times the population of the US making under $200/mo.
They are going to face huge infrastructure issues with simple things like phones, running water, waste water treatment, trash disposal, hospitals, schools, etc. They have to invest money in their poor. History has down that if the rich/poor gap gets too wide you have social revolt. Can they invest in the poor quickly enough to avoid major social issues?
There was a time in the 80’s where everyone said Japan would destroy the US. We’re still waiting for that to happen. There’s one thing about the US economy. It’s far more capitalist than a lot of other countries. That allows businesses to react much faster to changing economic conditions. This helps make economic slumps much shorter.
The US isn’t perfect, but it’s still the best economic model out there. Look at the dotcom bust. That was in 2001. By 2003 or 2004, the fortune 500 were reporting record profits as a whole and have every year since. Sure, some entire companies were lost but there’s also plenty that kept on going.
Maybe it’s living in Silicon Valley. We call it the cycle of life. There’s always companies laying off people and there’s always some new startup that’s hiring.
Go to google and enter… Bank of International Settlement warns of DEPRESSION.
It’s not just me.
This is going to get UGLY very SOON. Make your plans!!
This one is pretty scary…
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/24/cnbis124.xml
I’ve always thought that the prospect of the economy going up and down are a lot like grading on the curve. It reminds me of a chemistry class I took were the average grade was about 58% right. 80% was and A in that class. I learned real quick the old adage " you don’t have to run faster than the bear, you just have to run faster than you hunting partner. "
No matter which way the economy goes, there will still be those that work harder and smarter and their ability to live and grow will always be much above those that can’t or won’t work as hard and as smart.
my 2 cents,
DB
d-sbrown,
You are absolutely correct. Some people read this stuff I put up here and think I’m being negative. Nothing could be further from the truth.
We are entering a time that will be looked at for the next 50 years as THE absolute best time to invest in real estate there may have ever been. I think 2008 will see banks throwing in the towels. So far they have been slow to respond but in my part of the world (New England) the foreclosure rates are going through the roof. And, these houses ARE NOT BEING purchased. It can only lead to one conclusion.
Be ready, it’s coming>