patrick.net

Bigsby says

And like I said, plenty of people over the years

That was then this is now.

I think you have to go back to the 1930s to see the amount of equity loss we have had in the past decade.

It makes me nervous enough to want to do something else.

And yeah, I can do this all day long with the charts, and graphs.

This shows the increases after the 2009 bottom, if you want to call it that, to a top, and then another decline.

Geez, that looks like complete volitility to me, not the safe haven investment we have seen traditionally.

David Losh says

Look it, there are always good deals, every day, in the Real Estate market place. A Real Estate transaction is between a buyer, and a seller.

Any time some yahoo starts making blanket statements about the Real Estate market place I know they don't know what the heck they are talking about.

Blanket statements? You specifically said that he (along with everyone else) had overpaid. Talk about blanket statements.

David Losh says

Bigsby says

And like I said, plenty of people over the years

That was then this is now.

I think you have to go back to the 1930s to see the amount of equity loss we have had in the past decade.

It makes me nervous enough to want to do something else.

And yeah, I can do this all day long with the charts, and graphs.

And the relevance of that to his purchases is what exactly? For someone who doesn't like blanket statements, you sure have a proclivity for making them.

Bigsby says

Blanket statements? You specifically said that he (along with everyone else) had overpaid.

Yeah, that's true, you got me, because you are right, there is a deal a day in Real Estate.

You're right, I was too focused on the point at hand.

Shiller's not buying.

http://www.businessinsider.com/shiller-artificial-real-estate-economy-2013-3

thomaswong.1986 says

one should hope its not based on hype, but more on fundamentals.. time will tell how prices correct. from my view, SFBA seems to get more hypsters than prior decades.. if they all have moved back to Socal/LA.. heck i will take that all day long.. its all job killers in SFBA.

one should be careful on what "has done better"

It was merely an observation. Although some might think otherwise, not everything written here is intended as an investment strategy.

SFace says

not buying in the SFBA was disasterous, no other way around it.

Is this another crystal ball observation?

Did you read the report?

robertoaribas says

David: I am not missing anything. the problem is, you are not intelligent, and I am, so you don't understand 2/3 of what I write. you are a fat stupid middle aged guy

ZING!

Everyone drink when Roberto calls someone stupid.

David Losh says

Bigsby
says

Then put up the charts that prove he paid too much for his purchases.

How many do you want? http://money.cnn.com/2012/02/28/real_estate/home_prices/index.htm

This indicates that after the great bottom call that Roberto had for 2010? I
can't keep track of the BS, prices fell to 2002 levels.

Depending on the local foreclosure speed, housing markets bottom in different years. Phoenix was more like in 2009 and is on an upward trajectory. In some other areas, it may not have bottomed out. My theory is that if FED (and other central banks) are in control, we will bottom out sooner or later (if not already.) The reason is simple that prices have to go up when we run out of foreclosures. If FED suddenly loses control on interest rate or another collapse happens (e.g., Europe blows up,) housing price will go down one step. For a person like David who likes long term stability, it is probably safer to keep it in cash. For me, I never see housing as a safe heaven and just use it as an investment tool when the timing is right.

haha I like it.

Hennessy's Tavern in Hermosa Beach gets #1 socal beach slot IMO.

http://www.hennesseystavern.com/hermosa_beach.html

I clearly need to travel more....

Mobi says

For a person like David who likes long term stability, it is probably safer to keep it in cash.

I'm thinking of buying another cleaning company.

That must have been fun. I had the horrible misfortune of living at home w/parents in college. Theres a college under every rock in CA so this is common.

Roberto nailed it.

Get rich slowly and work smart and hard.

I saw the same opportunity Roberto saw. But here is the difference. I didn't want to deal with rentals and people.

So I lost out of my own free will. I chose not to do what Roberto did.

But I don't begrudge him for his success like some of you do. And I especially don't go online without evidence and smear others. It is getting old.

David Losh says

"back again, with his mindless nonsense... you know david lousy brain, I bought the following homes:

single family homes:

60K rented 825, worth 100K today
76k rented 950, worth 120K today
80K rented 1100, worth 140K today"

Now I'm not saying that RE is not a good investment. However, when you state "worth 100K today" you lose all credibility. Until you sell it it is only worth its cash flow. During the bubble, people kept saying: my RE is worth this and that. We know how that worked out for them. Things are worth something at time of sale. Until then they worth nothing.

robertoaribas says

back again, with his mindless nonsense... you know david lousy brain, I bought the following homes:

single family homes:

60K rented 825, worth 100K today

76k rented 950, worth 120K today

80K rented 1100, worth 140K today

Here is where you lose credibility. Nothing is worth anything until it is sold. Any good investor (RE, socks etc) knows this. Until then, you can (and should) brag about your return on investment and not more.

skeptic says

Now I'm not saying that RE is not a good investment. However, when you state "worth 100K today" you lose all credibility.

But my Zillow Zestimate says so. LOL.

skeptic says

Now I'm not saying that RE is not a good investment. However, when you state "worth 100K today" you lose all credibility.

Why does someone lose credibility if the numbers they are quoting are accurate? If they would have to pay 30% more today to get the same property, with the same monthly rental income, isn't that data point meaningful?

If I bought for $100k last year, and was pulling in $1,000 per month, but could buy the same thing for $50k today, wouldn't people (rightly) point out that I would have been better to wait and buy a year later?

Sure, you have to actually sell the property to realize your gains...but the point is that he could sell the property for more, and that's a meaningful indicator that his decision to buy wasn't bad. His decision to not sell today might end up being terrible, and I'm sure people will point it out if that happens.

I don't know, it seems entirely reasonable to me to use current market values compared to purchase price to gauge a buying decision.

Phoenix Area February Home Sales

http://www.dqnews.com/Articles/2013/News/Phoenix/RRMAAZ130325.aspx

A key price gauge analysts watch, the median price paid per square foot for existing single-family detached houses, rose to $99 in February, up from $96 in January and up 37.5 percent from a year earlier. The February figure was the highest since it was also $99 in September 2008.

Lenders foreclosed on 1,232 Phoenix-area houses and condo units last month, up 103.6 percent from the month before and down 52.1 percent from a year earlier. The number of homes lost to foreclosure during the first two months of this year totaled 5,522, down 66.7 percent from the same period last year.

n February, 333 Phoenix-area buyers purchased two or more homes on the open market (excludes foreclosure auctions). That was up about 31 percent from the same month last year, based on an analysis of buyer names in the public record. (Note: In some cases individuals and partnerships buy under different names). This February these multi-home buyers purchased 1,003 homes, which amounts to about 13 percent of all homes sold and represents a 38.3 percent increase from the number of properties that multi-home buyers purchased in February last year.

The largest buyer identified in February, appearing in public records as "THR Phoenix LP" and "THR Phoenix LLC," purchased 159 homes, or about 16 percent of all homes purchased by multi-home buyers in February. There were 18 buyers in February that each purchased five or more homes, but only seven of them bought 10 or more. Combined, the buyers who purchased 10 or more homes in February acquired 260 homes, or about 26 percent of all homes bought by multi-home buyers.

http://www.azcentral.com/realestate/investors/top-three-investors-map.html

Top investors

Buying sprees by billion-dollar hedge funds and real-estate investment firms have investors owning nearly 20 percent, or one out of every five, of the region’s single-family houses and condominiums, according to an Arizona Republic analysis of recent sales data. That's double the number of rentals considered normal in metro Phoenix in 2000, according to housing-market analysts. The map below shows which of the top three investors owns the most properties, by ZIP code. Each ZIP code is colored based on which of the three investors owns the majority of properties.

David Losh says

Mobi says

For a person like David who likes long term stability, it is probably safer to keep it in cash.

I'm thinking of buying another cleaning company.

Cleaning company is not cash but it is probably more liquid than real estates in that sense (closer to cash.)

robertoaribas says

zillow, trulia, and plenty of others seem to think homes have values even on days they aren't sold, and work on algorithms to estimate such...

Now you have hit the nail on the head. I know exactly what you paid, what the trend line is, and can get a fair market analysis for the property that I want to buy, online, for free.

Here in Seattle we are in the home of redfin, where my very good buddy Glenn Kelman, an absolute novice to Real Estate, began hawking the discount Brokerage business model.

I refer to all of these web sites as Real Estate sales sites. They have a very vested interest in pushing Real Estate as a business model.

Actually they are pushing mortgages.

In the early days of Zillow, which is also another Seattle concoction, there was a law suit that was quashed brought by an individual who got a mortgage far in excess of her property value. She had applied for the mortgage through an online advertizer on Zillow. She had based her property value on a Zestimate.

In my opinion the game is rigged in favor of Brokerages who can spot hot markets, and target buyers.

So, no I don't have a lot of faith in this idea buyers will simply pay you, or any one else, more than you paid, unless they are a fool. Why would a buyer pay you twice what you paid for a property you have had for about five years?

All the information is there, so why would any one be that foolish?

David Losh says

So, no I don't have a lot of faith in this idea buyers will simply pay you,
or any one else, more than you paid, unless they are a fool. Why would a buyer
pay you twice what you paid for a property you have had for about five years?

All the information is there, so why would any one be that foolish?

Greed, hoping it would double again and they can offload it with superb profits. What else drives these bubbles?

Mobi says

Cleaning company is not cash but it is probably more liquid than real estates

I have three competitors in my market place, outside of National Franchises. The value of the company, combined with my web presence, is very high. Our domain names alone are valued over $25K.

My area of expertise is in restaurants. They are much more work, and the ultimate return is very low. You have to own the building to get the numbers to work.

lostand confused says

hoping it would double again

That's the other problem. There is a ton of information in the data, and the data can change rapidly.

According to the Roberto model of Real Estate market timing, the bottom, or top of the Real Estate market can turn on a dime.

I think more accurately it depends on the spin of the new discount Brokerage models. A buyers, or sellers market is equally good to them.

So today's strong buy sign, can turn to an equally strong sell sign, just like the stock market? I don't think any buyer is that foolish, but I've been wrong before.

David Losh says

So, no I don't have a lot of faith in this idea buyers will simply pay you,
or any one else, more than you paid, unless they are a fool. Why would a buyer
pay you twice what you paid for a property you have had for about five years?

A good reason is that some of those were distressed properties where conventional buyers could not get home mortgage loan with. Therefore, buyers had to either pay cash or get hard money loan. That's a discount by itself.

When those properties are sold agian in a few years, assuming foreclosure rate goes down quite a bit and interest rates are still low, conventional buyers will pay higher price for sure (with mortgage loan.) It won't be twice but it will be good profit. Didn't you profit by fixing up distressed propertied before? Where did that profit come from?

robertoaribas says

David, you claimed multiple times, I overpaid. NOW either show some evidence I overpaid, or shut up forever and quit posting on anything I write you lying dumb ass.

You provided your own evidence.

I'm sorry you are so insecure. You entered a fools market place which I've shown you time, and time again.

You don't want to see it, you want to play the game of the greater fool. Look at the Real Estate market place, there is nothing there, but hype.

Mobi says

A good reason is that some of those were distressed properties where conventional buyers could not get home mortgage loan with.

Real Estate is all numbers. Distressed properties are selling for full retail today because the buyer pool is so large. New investors, and even home buyers are buying at auction through other investment groups.

After the sale you take the cost of improvement, plus or minus what those improvements are worth to you, and that may be the price, but it sure isn't a profit.

Buyers should be very aware that they are in an artificially inflated market place. To say otherwise is just a lie.

Ok just for fun I'm pointing out the horrible grammar and spelling on David's website:

"March Madness!

We have six openings this year from people who have sold homes already. We have another three clients who will be marketing homes in the next month or so. That leaves us we nine every other week spots to fill on our regular schedule."

Roberto is a math teacher maybe we have an english teacher here to help?

PockyClipsNow says

we

Funny, yeah, let me fix that. Thanks for playing.

robertoaribas says

I own 2 such homes, one bought for $76K, the other for $46K...

The properties are worth what you paid for them. Now why would some one pay more than that? based on what data?

PockyClipsNow says

Ok just for fun I'm pointing out the horrible grammar and spelling on David's website:

Be sure to watch for our new mobile device user website coming at the end of next week.

David Losh says

Real Estate is all numbers. Distressed properties are selling for full retail
today because the buyer pool is so large. New investors, and even home buyers
are buying at auction through other investment groups.

The key is the numbers of the distressed properties. Is it growing or shrinking? If it shrinks down like in Phoenix, your profit natually grows in time. If it grows or flattens, profit margin is small and you want to be very selective. I suspect the delinquency rate was still relatively high in Atlanta and that's why your house lost value and Roberto's gain value.

robertoaribas says

because, you completely stupid

You have no data other than some fool paid more than the properties are worth.

People need to be very aware of your hype, and nonsense. Like I said, you paid what $50K?, but now the same property is worth $180K? Is that by magic?

Come on, how long do your really think the buying public will go along with this?

You have been provided tons of data, by myself, and a lot of people who post here. You don't want to see it, you never come back with anything other than the same tired Real Estate website sales data hype, and never explain the way the data is set up.

That sales data is based on the higher prices of other properties, like the new construction you linked to.

As far as I can tell Arizona is ripe for new construction, kind of the same Las Vegas is. So why are you comparing 13 year old houses to new?

mike2 says

Not sure wherew they get there data from but I can tell you for a fact that prices incresed a lot more than 10% in the SF Bay area.

You're making a very common mistake which is to compare statistical data with anecdotal data. Learn the difference and it will change your life!

robertoaribas says

However, he seems to have missed a very solid bottom now, and been unduly pessimistic about the recovery.

You keep making the mistake of stating Shiller's intent in making statements about markets as similar to yours. Your statements, such as "currently worth" reflect a short-term outlook, whereas Shiller's reflect a long-term outlook. The time value of money is represented by an exponential mathematical relationship with time in the exponent. For that mathematical reason, it has been found to be more helpful to one's wealth to maximize the value of the exponent as opposed to the value of the base.

robertoaribas says

I ride a bicycle to work, and walk my dog for fun. I'm almost purely vegan, and cook my own beans and vegetables at home... I drive a honda.

I, for one, am celebrating your forward thinking here. Apparently others here are much more traditional/conservative.

Starrstruck says

Roberto nailed it.

Get rich slowly and work smart and hard.

Getting rich in two years is not getting rich slowly. I'm taking "two years" from statements written by Roberto which suggest that's the time frame he's using to define his success in timing housing prices.

Starrstruck says

I, for one, appreciate Roberto presenting the facts and his experience in the Phoenix market.

As long as everyone understands they are two different things to be considered very differently.

The last graph on this article

http://www.calculatedriskblog.com/2013/03/real-house-prices-price-to-rent-ratio.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29

shows that phonenix has risen from the ashes much faster than Vegas.

Both of them are sometimes called 'suburbs of los angeles' due to the millions of CA refugees fleeing the state of CA. Not sure why NV hasnt recovered as much, probably still too much supply I suppose. I'm going to start paying more attention to this shit, its crucial.

PockyClipsNow says

The last graph on this article

http://www.calculatedriskblog.com/2013/03/real-house-prices-price-to-rent-ratio.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29

shows that phonenix has risen from the ashes much faster than Vegas.

Both of them are sometimes called 'suburbs of los angeles' due to the millions of CA refugees fleeing the state of CA. Not sure why NV hasnt recovered as much, probably still too much supply I suppose. I'm going to start paying more attention to this shit, its crucial.

Any plan to invest in Vegas? Any trick to do well as an absent landlord?

robertoaribas says

David Losh says

You have been provided tons of data, by myself, and a lot of people who post here

total lie...You seem to have two modes: lying, or being stupid.

Like I said you ignore data. Just because some one pays more is like some one who sells a rusty nail. People may pay $450K for a rusty nail, but it doesn't give it value.

I was smart enough not to buy into a highly manipulated Real Estate market place.

You seem so bitter. You're continually angry at anyone who sees your scheme, and calls you on it.

I'm really happy with my choices. I have much more income potential at a time you seem done.

So, I have a lot more questions for you, like why any one would gift you these extremely high rents. How do you see the future of your "investments" coming in at more money for you?

You don't get it, you paid full retail for your properties, are gouging rents, and calling yourself smart.

You just seem insecure.

FunTime says

I, for one, am celebrating your forward thinking here. Apparently others here are much more traditional/conservative.

Roberto is giving you the old timey conservative advice about how Real Estate only goes up.

We all know that isn't true, don't we?