patrick.net

"still populated by the same 20 posters"

So I guess Patrick being interviewed by no less than the WALL STREET JOURNAL still qualifies us a "radical fringe group"? They certainly seem to be taking groups like this seriously. Collectively we called the subprime meltdown to the "t"! Why would anyone here feel compelled to respond at all?

This is pointless.

Here's a great simple saying - "You can go into foreclosure if you can't pay your mortgage and as a bonus you could end up bankrupt."

I knew a renter who rented for 5 years at $2,000/yr. He spent $120,000 on after tax money on rent, and guess what his return is? Negative 100%, while property prices went up 20%.

Ooh, ooh, I can top that!: I know a renter who went to a bunch of Kiosaki/Reddick/Allen RE get-rich-quick seminars and convinced himself he was a miniature-Donald Trump. He bought 9 properties with all kinds of neg-am/IO crazy loans and racked up $2.2 million in debt. He lost 5 of the homes to foreclosure and barely broke even on the other 4. He's now up to his eyeballs in hock, and possibly facing divorce & living in his car. Great story, check it out!: http://iamfacingforeclosure.com/

Yeah, the house were buying sure made the previous "owners" a ton of money. Hmmm lets see, lost 140K in 3 years. Not including carrying costs.

But they more than made it up on the tax savings. oh my thats funny.

But then again troll, you are absolutely correct, if you filter out all the areas where prices have gone down, and focus only on the 7 houses in Malibu and the 3 in Pac heights that have sold. It's threw the roof.

Partay I say, it's a real estate boom.

Really now, I say just delete the troll, like they do when this particular troll posts on craigslist.

Hey DinOR - is it a good time to enquire about your daughter's soon to be in-laws "great" housing idea?

Can we talk about sushi or knives? What's the difference between good sushi/knives and great sushi/knives?

DAQU / MP / FR / TOS,

Please come to SCAL Blog Party III over at Mr. X's on July 7th. Mr. X and I have something 'special' we'd like to give you.

So your hypothetical renter never had a rent increase? Riiight.

Just for the sake of argument... how do you think his 120k rental expenses stacked up against the short sellers? Of which there are many, and all of whom were paying more than 2k a month in interest.

Just how much money did buyers lose on their underwater foreclosed homes? More than 100%! Sweet deal!

Buy now and be priced in forever!

Claire,

Thanks. Oh and I'm sure when Randall H. esq. has time to weigh in on your reverse split question he'll add much more. It's just been my experience that people tend to freak out if it's a split or rev. split. I tend to freak out when they have rights to issue more shares (which can dilute shareholder value).

The, ahem... in-laws have toned their "proposal" way down. Evidently seeing the folly of their ways. It's been decided that the only way "it" can work is for the kids to rent out their house and in turn provide a built-in renter (not loan-owner) of the in-laws un-sellable monstrosity. This way (presumably to create the max leverage) they will fill the hole on both ends where rents are cash flow negative. To which I said fine.

Like Joe Walsh says: You bought it, YOU name it! :)

"Deny all you guys want"

O.K... I give up. What IS.... the difference between good and great sushi knives!?

DAQU

Marin is over a bridge, and the toll is $5 bucks. Boondocks.

And here I thought it was the most expensive real estate market in the country. Must be a media conspiracy, right?

Claire,

Quick off topic question, because I figure some of you probably know - I did try some of the other forums, but it doesn’t look like they are fequented very often -

The answer depends on a lot. It can go either way for you. It's all about dilution. If you wish, feel free to email me and I'll see if I can offer any useful advise.

As a general rule of thumb, all such actions are intended to minimize dilution of the founders & investors. There's also a big difference in whether your shares are in options or founders equity.

Anybody see this over at cnn?

http://tinyurl.com/2dcu8y

Talk about a bad way to start 'retirement'!

Yeah, the house were buying sure made the previous “owners” a ton of money. Hmmm lets see, lost 140K in 3 years. Not including carrying costs.

Would've gone down further if you waited?

"and the toll is $5 bucks"

Yeah, you're willing to throw 2-3 mil. at a house but a "fin" a day is going to break you? What can you do w/ five bucks?

More "neg/am logic".

DinOR - I believe they have already diluted the shares (without issuing any extra to those that held some already), but it kept the company afloat - I told hubby that there's no point rocking the boat, because the major investors are the ones who are going to call the shots anyway.

Hope the in-laws "plan" works ....... for happy families sake.

O.K… I give up. What IS…. the difference between good and great sushi knives!?

The edge. No not the guitarist from U2. The way the edge is ground. That and the steel. Folded many many times to form a discontinuous carbide network, low carbon center with a high carbon martensite edge. You are looking for a single bevel edge not a double bevel, think right triangle.

So now you know, and knowin is half the battle*

*GI Joe

DinOR

I tend to freak out when they have rights to issue more shares (which can dilute shareholder value).

They always have those rights. No VC will invest otherwise. The early round investors will often reserve the right to participate in later rounds, sometimes with various restrictions or clauses. But they pretty much always have a way to protect dilution. The founders many times do not. The option pool is never protected from dilution, but instead is sometimes expanded if deemed necessary. Many times expansion of the option pool comes at the expense of the founders, depending upon the strength of the founders versus investors.

Randy H - thanks, I may email you. Hubby has some founders stock and some options, but as a lesser worker bee, he is excluded from selling his shares until 6 months after IPO - at which point it won't matter what the offering price is, it will be decided by the market!

DAiryQUeen Says:

> I knew a renter who rented for 5 years at $2,000/yr. He
> spent $120,000 on after tax money on rent, and guess
> what his return is? Negative 100%, while property prices
> went up 20%.
> There’s a great, simple saying “You can’t get rich renting.”

A man on a business trip back in 1966 who was about to rent a Shelby GT350H from Hertz for $17 a day but then he remembered “You can’t get rich renting” so he bought the car for $3,700 and just sold it at auction for $150K…

http://tinyurl.com/2xpatx

P.S. Things must be REAL slow at the open houses these days since we are getting a lot of posts from DQ/MP/CR (who forgot that DQ was a new name when she mentioned knowing that the same people have been posting over the years)…

Randy H,

Thanks for clearing that up. I haven't often been involved in that so it's nice to get up to speed a little.

DAQU says to FAB,

You can’t get rich renting.

Oh so true. DAQU, you are the font of knowledge.

By the way, FAB, was that you I saw driving your Aston Martin DB9 down Bay St. a couple weeks ago?

SFBB,

Now that "Steve" finds himself back looking for a job (the worst part of working) it hardly qualifies as "retirement" at least not in my book.

These people are the poster children for "Never Saw it Coming" (Karen Cerulo) which I couldn't find btw. Even though their retirement accounts are being depleted to the tune of 15K a month feeding gators down in FL they are still RE believers! In-f@cking-credible.

As their story unfolds you could see several junctions where they could've gotten off (or at least gotten reasonable) but NO.....!!! They were going to be FL RE MOGULS! 3,700 s/f for two people? Totally reasonable.

Surfer X,

I know all about discontinuous carbide networks and low carbon centers and martensite and all that! I mean.... doesn't everybody? :(

"DAQU says to FAB,
You can’t get rich renting."

There's no faster way to poverty than buying wrong.

Randy H Says:

> By the way, FAB, was that you I saw driving your
> Aston Martin DB9 down Bay St. a couple weeks ago?

I’ve only driven a DB9 once (and it wasn’t on Bay Street). With the money I’ve been saving renting in SF I could be driving a Vanquish S (the Big brother of the DB9). I’m not going to rush out and buy a new one but you may see me in one of the new little Vantage Volantes in a few years as depreciation works its magic…

http://tinyurl.com/3yoj5e

DinOR,

Yah, that's why I put quotes around retirement. They managed to leverage their retirement 'nest egg' quite a bit, but at least they could sell all the houses except their primary and still have money in the bank, so they're not as hard up as, say, Casey.

@Malcom,

Obviously DQ can't be bothered with the facts (and has been particularly desperate of late) but SFBB shared this,

http://tinyurl.com/2dcu8y

and it well describes how an entire lifetime of 'doing the right thing' can unravel in less than 2 years by selecting the wrong entry point. This couple is SO stupid I can't believe they allowed their real names to be used!

DAiryQUeen Says:

> Malcolm - Tell that (“You can’t get rich renting”) to
> anybody buying over the past 30 years! And tell
> that to any renter renting over the past 30 years!
> lol Ouch.

Didn’t Casey buy within the past 30 years?

I bet the 46,760 CA homedebtors that got NODs in the first quarter (a 148% increase from 2006) of this year were just trying to get even richer by not paying the bank…

http://www.dqnews.com/RRFor0407.shtm

SFBB,

Additionally... at the rate Mr. and Mrs. PUTZ are raiding the IRA (all) of that will be added as regular income creating TAX HELL! I don't believe the article mentioned that?

With the money I’ve been saving renting in SF I could be driving a Vanquish S (the Big brother of the DB9). I’m not going to rush out and buy a new one but you may see me in one of the new little Vantage Volantes in a few years as depreciation works its magic…

With any luck, thanks to money saved renting in Marin and the magic of successful startup liquidity, around the same time I'll be able to finally afford the Alpina Z8 I always wanted.

"I can't quit my job, I am unemployed..."

You uh... still finding that "funny" do ya? Jeff?

Oh and check the date. August 2005. That's going to be on a lot of tombstones.

Jeff Putz

12 April 1966- 10 August 2005

(Officially died from severe complications of negative cash flow 3 January 2008 but had been on "life support" since 8/10/2005)

Surfer-x:

Whilst the folding of the steel allows the creation of a very pretty grain, I would think it's only necessary from a practical standpoint if you were using the traditional tamahagane instead of modern alloys.

requiem, I used steel to avoid lengthy explanations to the heathen round eyes.

Person,

......... (hmmm).....?

Yeah SURE! WTF? Can you imagine being that couples "financial advisor"? I mean it looks like by the time they sought ANY kind of outside opinion they were so b@lls deep in it what can be done but damage control?

The truth is, firms HATE these kind of "clients". They are nothing but a liability. Frantic and constantly behind the eight ball, generating ZIP revenue yet constantly demanding things yesterday! They said every thing they had is now in a money mkt. (apparently to have it liquid and ready to further feed gators) so they've missed out on some decent upside there. Which equals... MORE liability.

From what I've read on the extensive coverage of the FL market these people are toast. If Muggy were here he would say "All your flip for profit beach properties are belong to Muggy" (I'm sure).

DAiryQUeen,

It's quite possible to do a DCF (discounted cash flow analysis) on renting vs buying which is much more informative than talking about returns on investments made decades ago. I've done them for myself. Considering it would cost me at around $1500/month (after tax) extra to own there's significant opportunity cost.

$1500/month, in 30 years at 10% a year compounded monthly (low end of historical stock market returns) is $3,380,000.

How am I not getting rich renting?

MiC

DAiryIdiot,

What you're missing is that everybody on this board is saying "Don't buy a crashing housing asset" and not "Don't buy housing."

When renting and buying are roughly equivilant in pricing, and you plan on not moving for at least 5 years, it's a gimmie.

When buying is over twice as expensive, especially after a retarded run up like we've seen, buying now vs. buying in 5 years makes a lot more sense.

Buy now at 1.2 million, or spend 120,000 on rent and buy in 5 years at 800,000.

Who comes out on top in that scenario? (Hint, it's not the buyer.)

If you don't believe there's going to be a decline in prices, fine, go buy a shitload of houses and rent them out until you cash in on that sweet, sweet equity. And please, start a blog about how it goes.

SP - I think you hit the nail on the head about the trade off between salary and shares. Up until now, the hubby has been sticking it out in the expectation of a nice reward from the shares, now it seems that isn't going to happen and his salary sucks for what he does! So he is pissed off, with not a lot he can do about it.

Also, mathematically, although initially it seems the same amount of money with the reverse split, if you make some assumptions (guesses) it seems to me he would be better off with a lower share price, i.e $4, because if they go up from $4 to $8, then selling 100,000 shares grosses $800,000, whereas if they go on the market for $20, go up $4, but you only have 20,000 shares then you only gross $480,000 - the shares would have to go up to $40 a share to get the same return - realistically, which would be easier to do -to go up $4 a share or to go up $20 a share? As we all know that share price is not entirely connected to the fundamentals anymore.

Although I guess that works both ways, if the shares go down in value by the same amount then you make more with the reverse split option - I just don't know this kind of stuff too well.