patrick.net

condos below 40K... damn, I wish I had that option :-)
Good for you Roberto!

now if you can post your CREDIT CARD number and SOCIAL SECURITY number here ... *grin*

Mark - have you considered what could happen to Vegas economy over time when slowly more and more state and local governments allow gambling due to being broke? Taxpayers are fed up with higher taxes - its much easier to pass a law to allow indian gaming off the reservation. They tried to pass this recently in CA i think but no luck yet.

Really the only reason Vegas exists is due to state laws restricting gaming - as these slowly go away Vegas might end up a ghost town with a million vacants like Baltimore/Detroit. Especially if gas is $5+ a gallon it will kill vegas.

PockyClipsNow says

Mark - have you considered what could happen to Vegas economy over time when slowly more and more state and local governments allow gambling due to being broke?

Very good point!

The thing is that Vegas has a 50 year head start on all the Indian gambling casinos and such. It's not just gambling anymore that attracts people to Vegas. The entertainment infrastructure is there to the point that it'll take decades for any other locality to become the destination that Vegas is for entertainment. You won't see $100 million Cirque Du Soleil theatres/stages built anytime soon in these up-and-coming locations. It took Vegas 40 years to get to that level of maturity (I was in awe when I went to see O! at the Bellagio the first month it opened).

By the time that happens, the price/rent ratio is so well tilted in the investor's favor in Las Vegas, that it won't matter that your property is worth 10% of what you bought it for, since you will have derived so much cash-flow income by then.

Mark: I would tend to agree it will take so long for this to be a factor it wont matter....

I'm planning on spending a lot more time in 'the dessert' checking out real estate this winter.

One plan I have is to spend 500k to buy 10 rentals. If they each net 500 a month profit average thats 5000 a month and I could 'semi retire' if i wanted to assuming I could pull this off.

It sure would suck to buy into a 'future ghost town' but you can protect yourself like Roberto has done buy buying near mass transit/colleges. Also maybe buying near the local HUD /welfare office/city hall/prison/jail/food4less/walmart might be a good tip. Avoid buying near gold or silver mines! hehe.

PockyClipsNow says

One plan I have is to spend 500k to buy 10 rentals. If they each net 500 a month profit average thats 5000 a month and I could ’semi retire’ if i wanted to assuming I could pull this off.

The point is to continue your real profession, which is hopefully a career you already enjoy. The $5k per month profit is just icing on the cake. 1-2 years later you'll have enough profit to purchase another property cash.

That's the best way to protect yourself from the doom-and-gloom you hear about Social Security and Medicare being bankrupt soon.

PockyClipsNow says

Also maybe buying near the local HUD /welfare office/city hall/prison/jail/food4less/walmart

Churchill, 1909:

"And a friend of mine was telling me the other day that, in the parish of Southwark, about 350 pounds a year was given away in doles of bread by charitable people in connection with one of the churches. As a consequence of this charity, the competition for small houses and single-room tenements is so great that rents are considerably higher in the parish!

"All goes back to the land, and the land owner is able to absorb to himself a share of almost every public and every private benefit, however important or however pitiful those benefits may be.

"I hope you will understand that, when I speak of the land monopolist, I am dealing more with the process than with the individual land owner who, in most cases, is a worthy person utterly unconscious of the character of the methods by which he is enriched. I have no wish to hold any class up to public disapprobation. I do not think that the man who makes money by unearned increment in land is morally worse than anyone else who gathers his profit where he finds it in this hard world under the law and according to common usage. It is not the individual I attack; it is the system. It is not the man who is bad; it is the law which is bad. It is not the man who is blameworthy for doing what the law allows and what other men do; it is the State which would be blameworthy if it were not to endeavour to reform the law and correct the practice.

We do not want to punish the landlord.

We want to alter the law."

http://www.landvaluetax.org/current-affairs-comment/winston-churchill-said-it-all-better-then-we-can.html

Maybe some day we will realize taxing the shit out of leechfuck slumlords to break their business model is a win-win.

Not going to, as they say, hold my breath on this of course.

Troy says

Maybe some day we will realize taxing the shit out of leechfuck slumlords to break their business model is a win-win.

Landlords provide a valuable service to people who prefer to rent instead of own. Some rent because they find that it makes sense for their paticular situation financially over owning. Some rent because they live paycheck to paycheck and can never save for a downpayment (because they live beyond their means, or make too little income), even in places like Las Vegas or Phoenix where it's cheaper to buy than to rent.

Nobody forces these people to rent. Most landlords that aren't from old money simply lived way below their means and saved up for such an investment which will help their financial futures. Would you rather eliminate all landlords and only allow the horrific public housing projects to replace the valuable service they provide to society?

Now, of course it makes sense that you're more likely to make a better return on your investment if you rent close to a WIC center or Walmart instead of a Whole Foods Market.

Mark_LA says

Landlords provide a valuable service to people who prefer to rent instead of own

I really hate self-serving bullshit statements like that.

Nobody forces these people to rent.

Supply is artificially limited by all the LLs, making the price of entry of ownership higher.

LLs of SFHs as LLs are just leeches on the productive. I think LLs of MFH is perfectly respectable for economic and social reasons you state, but I'd like to see Prop 13 protections removed for LLs and their rents taxed relative to their profits.

Landlordism is an immense drain on this society and is in fact one of the dominant reasons the economy and society itself is fucked now.

Troy says

nd their rents taxed relative to their profits

Already done...the profits are reported on IRS 1040 Schedule E: http://www.irs.gov/pub/irs-pdf/f1040se.pdf .

But like you and Churchill would like to believe, they take the taxes that landlords pay and recycle them back to WIC centers and welfare checks that get cashed at Walmart, only to benefit the landlords who own properties next to those places.

If I choose to be a renter, then I can't rent a house with a yard and swings for my kids to play in? I must rent an apartment in order to keep the prices of SFHs artificially low for owner occupants by curtailing demand?

Earlier in my career I was a management consultant with one of the Big Four firms and spent most of my time traveling on business. So you're saying if I choose to go back to that career again, I shouldn't be able to rent a real home (which I get reimbursed for) when I'm assigned to a project out of town for 6 months, where my daughter can play in the back yard? My only option as a renter should be the Oakwood apartments?

Doesn't make a lot of sense to me.

Mark_LA says

the profits are reported on IRS 1040 Schedule E:

You kinda misunderstand. I was speaking of economic rent really, and more towards the confiscatory level of taxation.

Prop 13 and rent control has resulted in the basic freezing of mfh supply in LA and SF. If a LL improves his building or builds a new one he gets hit with higher taxes based on the value of the capital improvement.

This is retarded. We should encourage new building by taxing it less, not more. AND we should also tax the shit out old buildings that have run through their depreciation and should probably be replaced with better stock.

Renting out of condos and SFHs should be illegalized, as a business at least. No interest deduction. Just fuck off and find a better, more constructive use of your capital.

they take the taxes that landlords pay

LLs don't pay those taxes, those are pass-through taxes from rents. LL income is not based on costs, it's based on what the market will bear.

If I choose to be a renter, then I can’t rent a house with a yard and swings for my kids to play in?

If rents were taxed then buying wouldn't be the Major Production it is now. It's only due to the fact that the Rent is Too Damn High that houses cost so much. Eliminate rents and the price of housing will crash to the capital cost of the improvement + the premium it takes to win the bid against others who would want to live there.

My only option as a renter should be the Oakwood apartments?

Your transient story is just smoke to obscure the millions of Americans that are rent slaves in this country.

Transient homeowners in your example should not really displace people who need a place to live in their community.

AFTER those people get their homes, then the transient rental market could be accommodated.

Part of the problem this society has is the great dichotomy between SFH and MFH housing. I'd like to see us reduce this gap; I have ideas but it's pointless bringing them up here & now since all this housing crap is never going to improve in my lifetime, if ever.

Troy says

http://www.landvaluetax.org/current-affairs-comment/winston-churchill-said-it-all-better-then-we-can.html

Interesting link. Probably worthwhile for anyone in this debate, whether they agree with it - or you - or not, just to capture the different perspective.

Troy says

Mark_LA says
Landlords provide a valuable service to people who prefer to rent instead of own
I really hate self-serving bullshit statements like that.
Nobody forces these people to rent.
Supply is artificially limited by all the LLs, making the price of entry of ownership higher.
LLs of SFHs as LLs are just leeches on the productive. I think LLs of MFH is perfectly respectable for economic and social reasons you state, but I’d like to see Prop 13 protections removed for LLs and their rents taxed relative to their profits.
Landlordism is an immense drain on this society and is in fact one of the dominant reasons the economy and society itself is fucked now.

To understand your blathering anyone that makes money on any property other than an apartment complex is the devil and are evil leeches. Uncle Ho would be very proud of you, but fortunately, most of the people in VN have abandoned Uncle Ho's principles long ago! You are stuck in the past. You often quote Ho Chi Mihn, so how come you have never moved there permanently? Are the current communists in power not communist enough for you? I've spent a considerable amount of time in Vietnam over the past 2 decades, and most of the Vietnamese people don't even feel the same way you do. They love to make money and would love to be even more capitalistic. Most people are the same around the world, it's just their governments that are different. If you talk to the average Vietnamese citizen in either Ho Chi Minh City (Thành phố Hồ Chí Minh) or Hanoi they are capitalist at heart and wish they could be even more so. Your utopia in the US would be all renters living in apartments with no one renting homes from the evil American leeches. Oh yea, sort of like we have now and we call them slums, goverment housing, "The projects." U.S. "projects" are paradise compared to the equvilent in Ho Chi Minh City, Dalat, Hanoi or any other big city in VN. Get a clue because your behaviour and mindset is offencive even to the Vietnamese people.

@roberto - dont get me wrong....phoenix is my second favorite city in the usa (behind san francisco..but SF has an ocean!). what i like about phoenix are (were?) the stable middleclass. if you like the outdoors the mountains and desert are just a short drive away...fantastic climate for hiking and 4x4....phoenix is 'california without an ocean'...LOL.

10 years ago before the big build, it was a different city. all the new construction in queen creek and buckeye and west surprise are going to be a drag on phoenix and arizona in general.....a really scary situation.

people that denegrate phoenix as a whole are really ill informed but we are no where near a bottom in housing or the economic downturn. i predict 50% of housing in the phoenix metro area will go to zero...yes zero. no one will buy and the gov will bulldoze new homes just like they did in the 1930's. wait til the MERS problem really kicks in......!

I can see Troy is frustrated with high priced housing, so am I. But you can't ever change the system really. p13 is permanent and so are 'slumlords' - who get a bad rap. In fact landlords have been having there azz handed to them during this crash if they bought during the bubble. Its work and has huge risks attached to it from loss of $, lawsuits, you could get killed also I suppose. In fact in Los Angeles I am alway seeing sec-8 people who live in the SAME or better housing than I do. Its common for them to be in regular 'middle class housing' not slums. Quite frustrating to have leeching welfare 'liars' who drive a mercedes live in same house as me when I have savings, a real job, and drive a honda. Anyway we are all equally free to become sec-8 leeches or landlords - its freedom get it?

A better approach would be to play the game - now might be an OK time to 'lock in' a low p13 tax rate in CA so you could 'victimize' people by letting them live in your house in exchange for a promise to pay you. I dont like to get involved in 'how the tax code SHOULD work' discussions its a pointless wasto time. So is being angry.

Troy consider moving to AZ or LV - there is no p13 in those states (so your taxes get jacked up perpetually! heaven?! i think not) but the prices are totally sane and 'real world pricing'.

So many people complain about the high prices where they live (coastal CA, manhattan, etc) but of course no one wants to move to flyover....which is a huge reason prices are high...

PockyClipsNow says

Quite frustrating to have leeching welfare ‘liars’ who drive a mercedes live in same house as me when I have savings, a real job, and drive a honda.

2 weeks ago I was at the market in Glendale, CA and someone in front of me was paying for their groceries with a new type of credit card I had never seen with a beautiful picture of the California coast labeled "Golden State Advantage". Later on I figured out this card has replaced the old paper "Food Stamps" people used when I was a kid: http://www.ebtproject.ca.gov/ .

When I was in the parking lot, I noticed this person was packing up the groceries that he had bought with the tax dollars we all pay and made their way to his pocket into the trunk of their Mercedez S-class with pimped-up 20" chrome wheels.

PockyClipsNow says

Its work and has huge risks attached to it from loss of $, lawsuits, you could get killed also I suppose.

Robbing a bank is "work" and has huge risks, too.

The value of an economic activity is simply the wealth creation involved. LLs do not create wealth. They expropriate it.

Yeah I know welfare cheats are 'reality'. I know a guy whose 'common law wife' lives with him - she got him setup as a sec-8 LL but get this - he cashes the checks and gives the $ to her. Of course she gets all other welfare (food stamp/AFDC).

Most people I know actually marry thier wife legally (dumb!)- then she quits her job after the first baby is born and they can never ever get welfare due to the husband has income. Much much smarter to not get married and leech off the system I suppose. Its legal too athough I have read the gov can inspect your house to make sure 'no man is living there' -cuz thats illegal?- but they give you plenty of notice so lots of time for him to clear out. hilarious.

lurking says

Get a clue because your behaviour and mindset is offencive even to the Vietnamese people

It's kinda funny how the Viet Minh won their war partially due to the abusive absentee landlords living the fat life in the cities on the backs of tenant farmers, and now they have fallen right back into the same historical pattern of high land values and abusive landlords.

Exact same thing happening in "Communist China" -- rampant speculation in housing impoverishing working people and causing truly colossal misallocation of investment.

The sad thing is, back in 1970-71, for a brief period of time the prior agrarian economy of Vietnam (before it industrialized in the 80s and 90s) was in fact made the most just and equitable, with tenant farming reduced from 60%+ in the coastal lowlands to almost non-existant, thanks to Thieu's "Land to the Tiller" program that was partially funded by the US. (We paid the administrative costs and the GVN paid to buy out the LLs via bonds).

http://www.time.com/time/magazine/article/0,9171,905909,00.html

To understand your blathering anyone that makes money on any property other than an apartment complex is the devil and are evil leeches

And as for my "blathering", all I can say it my moral arguments have a VERY strong tradition, stretching from Adam Smith's "Wealth of Nations" to Jefferson's private letters, to Thomas Paine's "Agrarian Justice", to 19th century moral philosophers like J.S. Mill, and to much of the intellectual milieu of the Progressive Era, eg. Mark Twain, Tolstoy, George Bernard Shaw, Sun Yat-Sen, and hundreds more.

http://www.cooperativeindividualism.org/georgism_01.html

Capitalism's strength is the capitalist creating and/or bringing to market goods and services. But land was not created by the capitalist, it was created 4.5 billion years ago! And land that is in demand needs no marketing, these days at least.

When someone is profiting from something that he did not create, that's a form of theft. So much of the crap economics of the world can be found in this exploitation -- the collapsed housing bubbles of Japan, the US, UK, Spain, Ireland, and no doubt China and Vietnam.

All this misinvestment and the poverty among progress is entirely due to not understanding land economics.

http://en.wikipedia.org/wiki/Progress_and_Poverty

Troy: I can't imagine a world where its illegal to rent a house out. CCCP? Cuba? Where? Even in communist china they can rent out thier house. Are hotel rooms ok to rent? If so can I rent you my house 'nightly' and thats ok but month to month is not? Private land ownership is the basis of every successful country that ever did or will (so far) exist.

PockyClipsNow says

I can’t imagine a world where its illegal to rent a house out. CCCP? Cuba?

Oh, no. It is very legal in Cuba to rent your house to foreign tourists: it's called "casa particular" and the govt. explicitly permits and taxes it. It was legal and widely practiced in USSR, too.

PockyClipsNow says

I can’t imagine a world where its illegal to rent a house out.

I would just tax rents all to hell to get the supply out of the LLs hands and into families who desire to buy.

Curiously, this does not even go against Prop 13 : )

And as for how well the modern economy is doing, maybe you're not up on current events but take a fucking look around you.

I am taking a look around very hard and I see only things getting better and better.

We should all celebrate as real estate 'gets back to normal' - I have been waiting for this since 2004. Low RE prices means everyone wins and there is more money to buy things and support your local community (or buy crap from china).

I think I have the same taxation belief Troy has which is basically "dont tax me, tax the #%*% outta the other guy". Most people are on this page.

PockyClipsNow says

I am taking a look around very hard and I see only things getting better and better.

LOL.

http://www.nytimes.com/2010/11/18/us/18calif.html?src=twrhp

The shit has not yet hit the fan, locally, statewide, nationally, or globally.

But it's certainly arcing towards it.

lurking--

I'm not sure. The dog really doesn't look that happy...

robertoaribas says

If I continued to write why I think most housing will go down, and didn’t post that I am actually buying, i would be called a liar on here if someone found it out. Post it and I’m a braggart.

Nope--no one would call you a braggart for that.

robertoaribas says

Doesn’t matter at all, I made half a million dollars on the bubble on the way up, I intend to take it way past a million dollars on the other side.

This statement on the other hand...

robertoaribas says

So it truly is a no-win situation, at least with the no count low class stupid people on here [ie the last two who chose personal insults, rather than any reasoned based response]
Doesn’t matter at all, I made half a million dollars on the bubble on the way up, I intend to take it way past a million dollars on the other side. “oh he doesn’t have friends”… “on he is a braggart…” whatever. Sad to be as jealous and pathetic as the two who just chose to make those comments

Only stating the facts. You are constantly denegrating others by calling them Stupid, Idiot, Dimwits, Nitwits and other childish names. Everyone on this site knows this unless they have you on ignore. Peace Out!

robertoaribas says

So it truly is a no-win situation, at least with the no count low class stupid people on here [ie the last two who chose personal insults, rather than any reasoned based response]

You mean personal insults like this classic Roberto from http://patrick.net/?p=579625#comment-705358 :

mark: yes your logic is stupid, we don’t want your smug ass out here anyways. One of my good friends has a place in malibu beach colony, those people piss on your neighborhood. I stay in her guest house, on the lot next to sting’s house when I am out there.

robertoaribas says

12 hour days of remodeling work were MUCH harder than I remembered, I better do some Yoga or something!

I recommend my friend Liisa, who is a great yoga teacher in Mesa.

robertoaribas says

709hannah: I have been in real estate investing for 15 years. My successful track record is fairly clear at this point.
college kids have been my BEST renters. Absolute best. Yeah sometimes rent is a bit late, as in “I am a bit short, but I called my dad and he is sending me the rest, can I pay it on Friday?” I have never lost a single $1 in rent to a college student ever, and while I know it can happen, it simply hasn’t happened to me ever. In fact, I went 8 years without a day of vacancy due to college kids handing my place off to their friends over time. Roommates moved, out others moved in but I had zero seconds of vacancy for 8 years, a remarkably good way to run a rental.
You might be surprised to know, but every home needs carpet and paint eventually. Buying them knowing they need that, plus washer/dryer and fridge hardly counts as proof that an area is “all trash”. that particular home, my lifelong friend wants to live in, so I’m even less worried, though I suppose his 3 year old son will spill some stuff on the floor, that hardly counts as abusive.
I have never rented to section 8, so I can neither comment to nor need to respond to your assertions along those lines.

Arizona must be much nicer to landlords than California. Here we had a renter not paying for 8 month, and he was protected by the law... and we had to pay his utilities too while at it.

Will a 2 car garage provide more ventilation for renters seeking to maximize their meth-processing capability? If I were a pharmaceutical entrepreneur, I sure as hell would be willing to pay $100 more per month in rent in order for some peace of mind!!

robertoaribas says

I closed on my 14th home.

Whoah, bubba. That's probably a little too invested in desert rentals for my tastes, but hey...I don't know much about Phoenix. Median prices on SFH in Victorville is up 20% from last year. I'm thinking of unloading two or three of my units until things shit the bed again.

Dang, buy me a few then too Roberto. 3br here has jumped from $100k up to $150k in the past few months with rents hovering around $1k/mo and taxes near $2k. IMHO not worth the headache at $150k, but if I could get your prices I'd be buying too.

FortWayne says

we had a renter not paying for 8 month, and he was protected by the law... and we had to pay his utilities too while at it.

This is why I always avoided being a land lord. My first rental I bought with a partner. He rented to a very nice Christian couple. We said no pets, no pets were a clause in the lease, but they got a German Shepard. I found out about the dogs when they reported a gas leak.

Oh, the German Shepard had puppies. They kept the puppies in the kitchen, and for some reason, I guess by moving the stove in, and out from the wall, the gas hose broke.

I went to talk with them, went in, saw the mess, and the gas leak, and was very excited.

They filed a restraining order against us, stopped paying rent, and yes we had to pay utilities. It took six months to get them out, and they had trashed the place.

After that I only bought what I could sell. I've had renters from time to time, but never really liked it.

robertoaribas says

In arizona, you could have had them out in about 45 days...

There is a thing about not paying rent if your property is unsafe, or doesn't provide utilities.

They sued us for not providing a working stove, and they had filed a gas leak report with the utilities. The gas company are the ones that turned the little lever on the supply line to the stove to shut the gas off.

In the hind sight of forty years, these people were pros. They had the attorney before they called us.

robertoaribas says

home 1: zip 85015 26K.

robertoaribas says

home 2. zip 85201 33K.

robertoaribas says

Home 3. 85281 42K

Darn, maybe I should consider greener Real Estate pastures.

The cash investor house flipping here goes all the way out to Fontana !

Ok, yesterday I saw some nice properties, a bit more expensive but reasonable, that I liked online in Miami, don't know the neighborhood though.

For whatever reasone, flipping is not going on in Dallas, would need to research Miami more.

Don't worry, Phoenix may be a little too red neck for me like Texas...

David Losh says

In the hind sight of forty years, these people were pros.

Did your partner not speak to their previous landlords? I hear stories like this and always wonder if people don't do their due diligence. But, it takes me at least 3+ hours to screen a tenant. More if they have credit issues or something that isn't spot on. I check every scrap of information I can find in social media or other 'internet aggregator' tools like Spokeo, and NEVER trust the information they put down (particularly their current landlords contact info). Call the county to get the property owner's information and usually you can find their contact info online. I figure every hour I put into a screening saves me 10+ hours of headaches down the line.

Not trying to be arrogant, and someday I know I'll probably get burned.. Only had one 'surprise' so far. Girl had a solid application, but then moved in her boyfriend without permission. With a bit of carrot and a bit of stick, I had her out 20 days after she moved in.

Mark_LA says

2 weeks ago I was at the market in Glendale, CA and someone in front of me was paying for their groceries with a new type of credit card I had never seen with a beautiful picture of the California coast labeled "Golden State Advantage". Later on I figured out this card has replaced the old paper "Food Stamps" people used when I was a kid: http://www.ebtproject.ca.gov/ .

When I was in the parking lot, I noticed this person was packing up the groceries that he had bought with the tax dollars we all pay and made their way to his pocket into the trunk of their Mercedez S-class with pimped-up 20" chrome wheels.

They do this a lot in Vallarta. You see them use the EBT for groceries, and a second cash transaction for alcohol. All while working off the books elsewhere, and collecting from the state at the same time.

David Losh says

They filed a restraining order against us, stopped paying rent, and yes we had to pay utilities. It took six months to get them out, and they had trashed the place.

After that I only bought what I could sell. I've had renters from time to time, but never really liked it.

And that's a Christian couple, I shudder to think what some of the renters we have turned away would have done.

One time we had this lady of color come in who just fit a really ugly stereotype, entitled, rude, and she told us that she was really upset that her lawsuits against the county and previous landlord were taking too long so she could get the money to pay her rent. I really think we dodged a bullet there.

Anyhow, haven't been doing any landlord type of stuff ever since. It sure is not for everyone.

gbenson says

Did your partner not speak to their previous landlords? I hear stories like this and always wonder if people don't do their due diligence.

This was 1984 and they had excellent references from other Christains. My partner was a very seasoned investor.

The attorney they had was a Christain just doing God's work.

He had a good job, and she stayed home. We did as much as we could to check these people out.