Real estate deals

Quote from QQQBALL:


almost anyone can buy real estate and in the right market make money. it doesnt mean they arent clueless... ive written demonstration report for professional designation and i can tell you, i was amazed at how efficient the markets are... the issue is, no one is gonna spend 6-8 weeks doing research & analysis.... pair sales, go back in time to get market adjustments...

please dont respond - lets just say we disagree and leave it there. i concede you made some dough on a few SFRs over the years.

the more distressed this market becomes, the more inefficent the price mechanisms. that is NOT just true of real estate markets either.
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Little did I know when I posted in this thread that I would be confronted and put down by a guy whose primary qualification seems to be that he has written a report. LOL.

I guess my 30+ years of buying, selling, renovating, and holding for rental several hundreds of single family homes and small apartment buildings pales in significance to that designation you got huh?

Yeah, let's just say we disagree on just about everything.

OldTrader
 
Real estate has very inefficient pricing.....how do you think people make money at it????


Single family residence, good shape, purchased by owner occupant for a 10 year hold is probably the most efficiently priced assuming close proximity and comparable square footage. Good agent representing seller....no distressed sale...


All other real estate has many variables that provide opportunities for smart buyer....

I bought 12 acres in the "hood" for $300,000...sold 10 acres to homebuilder for $300,000....kept 2 acres commercial frontage and sold for $265,000....took me about 10 months....seller simply did not know what to do with 12 acres...I did....

OldTrader is correct.....

SteveD
 
i agree with the posts made earlier. i am a trader. i am not a real estate guy. if i am to buy long term 5 to 10 year investment, what are some good real estate stocks, etfs, funds, thatt are available that may yield the same type of returns as an investment in a home for the same amount of time?
 
If you are going to buy real estate as an investment, my professional opinion would be to buy between Oct. 08-march 09. You can pick up R.E.O's far less that what a property can be built for. The right deal will put you in a positive cash flow after expenses. Real estate is on the cheap as well as the interest rates for those who qualify. This is the time that real money in real estate is made. First in first out. This is the buying cycle for the real estate elite investors. Also that credit has tightened, keeping renters are more likely since there is no more "do you have a pulse, here's a loan" happening anytime soon.
 
Quote from PatrickQ:

Dr. Zhivodka, I spent all day going through REOs in Phoenix, AZ yesterday. And, with all the current and soon to come foreclosures, offering the bank what they owe LOOKS incredible, but will it get even better?! RE is regional, but looking at the numbers, (Phoenix) it is going to be 2010 at the earliest till this region potentially turns, IMO. I simply could not believe what i saw yesterday reviewing foreclosures and REOs ALL in the best/most expensive locations in Phoenix. And, at actual numbers of recent SOLD REOs by the banks. Amazing! I started the process yesterday for putting my home on the market, and selling low, but got the cash and will be trading up. I cant believe others dont see the "spread trade", and hit the bid to get out! Thankfully, not everyone is a trader. hehe.
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What is so great about Phoenix?

There are mile long threads on "Phoenix" on nearly every realestate forum.

Herd mentality? Prices too cheap? they found oil under Phoenix? people like to bake in 110 weather? The water tastes better? what gives. Very confounding.
 
Quote from OldTrader:

Little did I know when I posted in this thread that I would be confronted and put down by a guy whose primary qualification seems to be that he has written a report. LOL.

I guess my 30+ years of buying, selling, renovating, and holding for rental several hundreds of single family homes and small apartment buildings pales in significance to that designation you got huh?

Yeah, let's just say we disagree on just about everything.

OldTrader
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oldtrader could not be more correct imo. i trade full time; but also help manage real estate that my dad and uncle built up over the past 40 years. they never bought anything that was efficiently priced. for example, the last building we bought was an old factory that no one wanted because they thought it was contaminated. as being local and knowing the owners (who lost the property to foreclosure) we knew better. to make a long story short; as the only bidder we closed at what we feel was a 70% discount. the cleanup was done legit @ a very low 30k.

that type of thing can be repeated; but like trading; there is an art that cannot be taught..imo.

as far as the difficulty of managing tenants; it sucks. that's why you must buy cheap because there are so many costs after the buy it would make your head spin..like buying a boat. no set it and forget it here.
 
Quote from OldTrader:


Yeah, let's just say we disagree on just about everything.

OldTrader
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im in commercial real estate field & have been since 1983. i was required to write a demonstration report in earning a professional designation - on a day-to-day basis few people have the time on inclination to do that level of research (i know i dont). CRE has been my biz (successful) since 1983. there are always deals out there; conversion deals, fixers, stupid brokers/bad pricing, etc, particularly for sharp investors, etc. i'm speaking in general terms.

given the time, data & ability, its amazing at how efficiently the market operates. its okey to disagree, but i assure you i know what im talking about... BTW, i dont like paying market either, but people who started buying Socal apts years ago, now look like geniuses even if they paid above-market prices.

i dont wanna be responsible for side-tracking this thread, so this is my last response.

my "sense" is that CRE is rolling over; kinda lagging the timing on the resi move, although we may get a bump in foreign buying due in-part to currency arb.

good luck.
 
Quote from hilojack:

Perhaps these "deals" you speak of aren't really deals and that maybe current market value is over-inflated? Real estate "values" are based on what comparable homes are sold at, not what someone actually wants to pay for it. And worse yet is that these "values" are determined by bimbos with big tits and part-time housewives. You want them valuing your equities? then why would you let them value homes? Agree with the rest of your post.
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Not exactly true. Let me give you an example. Right now, in certain parts of the country, current listings (offerings) are priced less than what similar houses sold for just a month or two ago. A buyer is unlikely to pay more than someone is asking in this market, even if recent "comps" support a higher value. Its called the "principal of substitution" and is the one of the main factors in appraisal pratice.

PS: Regarding "efficient" markets. RE can be very inefficient at times. Think about it. The concept of a "bargain" would disappear if RE was always 100% efficient. Some one mentioned properties that need work. A few years ago it was amazing to see that properties in good condition and properties in need of repairs/updating would sell for rouighly the same. It was a hot market and buyers would overlook this. Now, its the reverse, which is really a more typical market reaction.
 
Quote from Arnie:

Not exactly true. Let me give you an example. Right now, in certain parts of the country, current listings (offerings) are priced less than what similar houses sold for just a month or two ago. A buyer is unlikely to pay more than someone is asking in this market, even if recent "comps" support a higher value. Its called the "principal of substitution" and is the one of the main factors in appraisal pratice.

PS: Regarding "efficient" markets. RE can be very inefficient at times. Think about it. The concept of a "bargain" would disappear if RE was always 100% efficient. Some one mentioned properties that need work. A few years ago it was amazing to see that properties in good condition and properties in need of repairs/updating would sell for rouighly the same. It was a hot market and buyers would overlook this. Now, its the reverse, which is really a more typical market reaction.
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My point was that 1) the house was over-valued to begin with 2) any "price drops" are completely arbitrary. More to the point-- that moron RE brokers are the ones making these decisions. As many have mentioned since my original post, real estate markets are VERY inefficient. As a trader and investor, when I look at real estate, I consider what I would pay for it-- not what others might, the substitution value, or what some real estate agent tells me its "worth". You forgot that you can rent instead of buying.

I sold my place in NYC in 2006 and have been renting since. When i tried to trade up, I found the prices to be way out of whack. So I didn't buy. But I just saw a similar condo in the same building selling for 100K less than what they wanted for the one I bid on. Where are all of the rich russian and italian buyers now? LOL

Prices will continue to slide as the economy slows and interest rate hikes are feared.

To close, check out that show "Million Dollar Listing" to see how these morons operate. I rest my case.
 
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