The Rent Is To Damn HIGH!!!

[bigvalboy]

WB? ....Now I am confused...

 

 

 

#2. Buy Less Than You Can Afford

# 1. Take Your Time

 

Hate to say, WB, but I think you're confused. We're talking about buying homes now, not buying escorts or having sex with them.

[bigvalboy]

Ha...just got the "WB" reference. I'm a bit slow today, I've been preoccupied worrying about American Pharaoh.

[+ stevenkesslar]

Ha...just got it the WB reference. I'm a bit slow today, I've been preoccupied worrying about American Pharaoh.

 

Which confirms my point. You are selective, and buy less than you can afford, and yet you still expect them to be hung like a horse.

 

That probably also explains why you like to take your time when you have sex with them.

 

Have fun, and try to stay out of the ER. (That stands for emergency room, Warren).

[curiousnomore]

OK. I've looked at all available options and there is only one possible destination: Atlanta. Its convenient for me lol. But seriously, I know you will make an informed decision that works for you.

[Kevin Slater]

I'm a big fan of leverage. I don't want to be caught without a mortgage, and the only existing note on my rental properties is almost paid off. So I'm trying like hell to purchase a third place. God, the process is frustrating, especially when you're self employed. One bank asked to see copies of the checks that were deposited into my Fidelity account. (Um, why? You have a copy of my 1040 and Schedule C where that income is reported. It matches the deposits you see going into my account. And like hell I'm showing you the cancelled checks from clients.)

 

Then there's the Manhattan real estate market. I've signed two contracts already, the first sat unsigned on the seller's desk for a week before they decided to go with an all cash offer. (Who the fuck has $750k free cash laying around?) The second turned out to be a sponsor-controlled building. (Too many renters and too concentrated ownership for the banks to be happy. Not sure why I had to inform the seller of this rather than vice versa.) I hate to think the lawyer bills I'm running up on these deals that go nowhere. (In NYC, you get lawyers involved early in the process. The realtors have a sweet gig: 6% commission yet the lawyers do all the paperwork.)

 

Just signed a third contract today. We'll see if this one goes through.

 

As to whether real estate or the equities market is a better place to put one's assets, I say why chose? I'm also a fan of diversification, across many asset classes. A stock portfolio is in many ways scarier than real estate, but a whole lot easier to acquire.

 

End rant.

 

Kevin Slater

[+ deej]

I don't want to be caught without a mortgage

 

It's a sane position. Mortgages are cheap money right now, and when you're facing retirement it may end up being the only tax deduction you have left!

 

God, the process is frustrating, especially when you're self employed. One bank asked to see copies of the checks that were deposited into my Fidelity account.

 

I feel your pain, having just gone through it. "We need to know where the money came from!" "It came from me!" I happened to have the check stub and deposit receipt and that appeased them for a time.

 

Then we went round and round over statements showing the deposit because the statement period had not closed so of course I did not have a statement. At one point I actually asked the loan officer whether she'd ever been a bank customer. (And in the same email I pointed out that she already had what she was foaming at the mouth to get.)

 

As to whether real estate or the equities market is a better place to put one's assets, I say why chose? I'm also a fan of diversification, across many asset classes. A stock portfolio is in many ways scarier than real estate, but a whole lot easier to acquire.

 

Yes, yes, and yes.

[Kevin Slater]

Mortgages are cheap money right now

 

They're quoting me 2.5%! (On a 7/1 ARM, if I park 250k in assets with them for a few weeks 'til the deal closes, then I can pull that back.) At 2.5, yes sir, may I have another?

 

Kevin Slater

[+ quoththeraven]

I actually think a diversified financial portfolio is easier to assemble and less risky than investing in real estate if one uses modern portfolio theory and indexed funds. For my treatise on that, see this thread.

 

Part of the reason I say this is that most real estate markets go through a downturn. A diversified portfolio can still experience negative return, but it's not exposed to as much risk. A former client that was a leader in the insurance and annuity business went belly up because it overinvested in real estate that in turn wasn't sufficiently diversified as to location.

 

As an ex-lawyer, I give you props for getting your lawyer involved early not because it means more fees for the lawyers (although it may) but because the surest way to screw up something with legal implications is to consult the lawyers last. Unfortunately that's what my firm's clients often did, especially when it came to my area of expertise.

 

Good luck with your latest offer.

[+ stevenkesslar]

God, the process is frustrating, especially when you're self employed. One bank asked to see copies of the checks that were deposited into my Fidelity account. (Um, why? You have a copy of my 1040 and Schedule C where that income is reported. It matches the deposits you see going into my account. And like hell I'm showing you the cancelled checks from clients.)

 

Yes, I went through that that rant. Bless you, Kevin, for being smart and for being honest about it.

 

The most bizarre demand a few years ago is that one lender told me that I had to document every single deposit I made in every account: checking, savings, whatever, whether it was a cash or check deposit. Both types of deposits turned out to be difficult to document. The bank I had my checking account with at the time, US Bank, actually told me they had a "privacy" policy that they could not make copies of checks deposited in my account, even if I was the one that deposited them. (Unlike my current bank, they did not have online copies of check deposits, which is perhaps why they blamed their technological inferiority on "privacy.") And the mortgage lender I was trying to get the loan from said that any cash deposit - which in my case could mean either money from a tenant or a client - would be treated as a liability, i.e. a loan, against me, unless I could prove it was actually income. When I pointed out that there was a pattern of monthly cash deposits made at the beginning of the month that happened to coincide exactly with the rent amount on the lease for a rental property, they said that didn't matter - they would still assume I was borrowing the money unless I could prove the money was not a loan to me, but rental income. They used the all purpose excuse of saying this was a Fannie Mae requirement, which it wasn't. Eventually I dumped that lender because I decided it was useless.

 

The most frustrating part of the whole process is that either my judgment sucks, or it is simply impossible to tell upfront which mortgage lenders are really competent at their jobs, and which ones suck. Several that I doubted turned out to be very thorough and got the job done with minimal pain, and several that seemed to know exactly what they were doing dicked me around for a month or two or in one case about four until they finally rejected my application based on some criterion that I disclosed to them in the first minutes of my initial inquiry to them.

 

My guess is I'm telling you something you know better than me, but the pity party you have to go through is worth it because when it's all said and done, nothing about what you are doing is pitiful - it's all going to end in success. The key word is another one that starts with "p" - persistence. A big hug to you and keep it up!

[+ deej]

They're quoting me 2.5%! (On a 7/1 ARM, if I park 250k in assets with them for a few weeks 'til the deal closes, then I can pull that back.) At 2.5, yes sir, may I have another?

 

I've never been a fan of ARM. The thing about "adjustable" is they adjust and rarely in your favor. But when you have the assets to put into a quick turn, it can be sweet.

 

Even fixed rates are absurdly low right now.

 

If you shop pretty hard you can also find annuities that guarantee a return of 5% or market rate, whichever is higher, and also guarantee an income for life.

 

As Ephram said, money is like manure. It isn't worth a damn unless you spread it around encouraging things to grow.

[+ stevenkesslar]

Texas really IS amazing. Its the people that make it a joy. Everyone is kind, courteous and doesn't cancel or reschedule.

 

Killian, darling:

 

News flash!!!

 

http://www.companyofmen.org/threads/they-ate-this-for-breakfast-and-guess-what-happened-next.105440/

 

Apparently the formula goes like this: Grits + Guys / Texas = $$$$ + Kindness

 

I'd say Houston is looking better and better for you by the minute.

 

Now we know why people down there are so gay ..... err, I mean friendly.

[+ stevenkesslar]

One more piece of data overload that favors Texas. With thanks to Epigonos, who emailed it to me last week while I was traveling. For once I was too busy having sex to spend time engaging in verbal diarrhea and intellectual masturbation instead.

 

http://www.realclearpolitics.com/articles/2015/05/28/the_changing_geography_of_racial_opportunity_126749.html

 

Looked at from the perspective of racial opportunity, 13 of the best 15 cities are in the old Confederacy. Houston is #12 on the list. Atlanta is #1. California is generally bad news for people at the bottom the ladder looking to move up, although the part I live in - the Inland Empire - is better than SF or LA. And while a lot of it has to do with jobs, a lot of it is about the affordability of home ownership.

 

If you don't want to read the whole thing, here's key excerpts:

 

We found, for all three major minority groups, that the best places were neither the most liberal in their attitudes nor had the most generous welfare programs. Instead they were located primarily in regions that have experienced broad-based economic growth, have low housing costs, and limited regulation. In other words, no matter how much people like Bill de Blasio talk about the commitment to racial and class justice, the realities on the ground turn out to be quite different than he might imagine.

 

Perhaps the greatest irony in our findings is the location of many of the best cities for minorities: the South. This is particularly true for African-Americans who once flocked to the North for both legal rights and opportunity. Today almost all the best cities for blacks are in the South, a region that has enjoyed steady growth and enjoys generally low costs. Indeed, of the top 15 cities for African-Americans, 13 are in the old Confederacy starting with top-ranked Atlanta, No. 2 Raleigh, No. 4 Charlotte, No. 6 Virginia Beach-Norfolk, No. 7 Orlando, No. 8 Richmond (a distinction it shares with Miami and San Antonio), as well as four of Texas’ large metro areas: No. 12 Houston, No. 13 Dallas-Ft. Worth and No. 8 San Antonio. The only two other metros are “inside the Beltway”: the metropolitan expanses of Washington and, surprisingly, Baltimore.

 

Perhaps the biggest determinant of immigrant and minority opportunity has to do with home ownership. In the aftermath of the housing crash, minorities, notably blacks and Hispanics, suffered tremendous losses. This exacerbated the largest cause of the wealth gap between minorities and whites: the extent of homeownership, which represents the key asset class for most Americans.

 

Some of the worst results -- in terms not only homeownership but income -- are ironically in those part of the country that purport to be most sympathetic to minority interests. In New York, Los Angeles and San Francisco, between 25 and 30 percent of African-Americans own their own home. In Atlanta it’s nearly 50 percent and well over 40 percent in most of the other Dixie metro areas.

 

What this study shows us is, if nothing else, the relative worthlessness of good intentions. As we have seen over the past 50 years, the expansion of transfer payments, while critical to alleviating the worst impacts of poverty, have not generally been best at promoting upward mobility for African-Americans and, increasingly, Latinos. If higher welfare costs and political pronunciamentos were currency, New York, Los Angeles, Boston and San Francisco would not be, for the most part, stuck in the second half of our rankings.

 

Ultimately what really matters are the economics of opportunity. Many of the cities that scored best for all three groups -- the Washington, D.C. area, Houston, Dallas-Fort Worth, San Antonio and Austin -- have enjoyed stronger than normal economic growth over the past decade.

 

Given the persistence of racial tensions, this data begins to give us a clearer understanding of what actually works for America’s emerging non-white majority. Denunciations of racism, police brutality and xenophobia may be all well and good for one’s sense of justice. But if you want actually to improve the lives of minorities, we might consider focusing instead on policies that promote economic opportunity, keep living costs down, and allow for all Americans to enjoy fully the bounty of this country.

 

In short hand, to paraphrase Chris Eisenhower:

 

Wake up, Killian—you're having a bad dream. You were stuck in New York, and all the opportunity moved to Texas.

 

I'm not sure if that's despite Perry or because of him, or some of both, but it is what it is.

[+ Funguy]

Ha...just got the "WB" reference. I'm a bit slow today, I've been preoccupied worrying about American Pharaoh.

 

Hey, BVB - they call him "the horse with the misspelled name" - it's "Pharoah".

And with him being worth so much now, why are they taking a chance and racing him again?!

[bigvalboy]

Hey, BVB - they call him "the horse with the misspelled name" - it's "Pharoah".

And with him being worth so much now, why are they taking a chance and racing him again?!

 

Good eye funguy. Yes of course it's Pharoah. I had hoped that they would retire him, however more knowledgeable minds will prevail.

[Mocha]

What a great thread. Thanks for posting this Chris.

 

Seattle is in a bit of a pickle we are having massive population growth but we don't have the infrastructure to support it. http://grist.org/cities/in-seattle-the-rent-is-too-damn-high/

 

I've looked at Seattle, even the hotels are quite too expensive to really be motivated to take a trip out that way, even though I did get some offers to come. But, Seattle isn't the only place. Denver has gotten stupid with their rent AND rental cars. Or maybe it's always been that way, but it's gotten worse. Rents are $1,000+, they keep building these "luxury apartment buildings" that are very plain and basic, have stainless steel appliances, but are ridiculous expensive. landlords are trying to capitalize and get a marijuana grower to pay their rent. A rental car for a week in Denver is routinely $500-600, or about $50-80 a day. For anyone not familiar with car rentals, $150-250 a week is about normal nationwide, with $100 a week not out of the question. And it's no wonder there's barely any local or visitor clients in this town anymore. And yet, there's a steady stream of new escorts coming here thinking there's actually business out here.

 

Tristian Baldwin had the right description...

[Mocha]

Today almost all the best cities for blacks are in the South, a region that has enjoyed steady growth and enjoys generally low costs. Indeed, of the top 15 cities for African-Americans, 13 are in the old Confederacy starting with top-ranked Atlanta, No. 2 Raleigh, No. 4 Charlotte, No. 6 Virginia Beach-Norfolk, No. 7 Orlando, No. 8 Richmond (a distinction it shares with Miami and San Antonio), as well as four of Texas’ large metro areas: No. 12 Houston, No. 13 Dallas-Ft. Worth and No. 8 San Antonio. The only two other metros are “inside the Beltway”: the metropolitan expanses of Washington and, surprisingly, Baltimore..

 

This article isn't telling the whole story though. I'm not really thrilled by the way the article claims the best cities for Blacks are in the south. All of my relatives have been from the south, and stayed in the south. Most have done well for themselves, but I'm the ONLY person in all of my relatives to live outside of the south. But when people are lead to believe the best places for Blacks are in the south...they don't go anywhere else.

 

From a gay perspective, I attest the south isn't the best for ALL blacks. Go outside the cities, there's no opportunity. Non of those cities listed are particularly great when you add escort to the sentence, except DC...but that's based on visiting, and as attractive as DC appears as a market, it's a fierce competition among Black escorts. Ditto with Atlanta. Outside the escort business, those so-called best for Black cities are very cutthroat, and it's the Black folk doing most of the keeping other Black folks down. In the 2 times I've been to DC, staying for about a week each time...I've never had a black client. And DC has no shortage of Black money. I'd have to wonder if White escorts have a different experience.

 

And I am totally turned off about the prospect of moving to DC after all that Baltimore shit went down. That stuff affects business for ethnic escorts....my business went dead during those 2 weeks, and I was 3,000 miles away in the SW. I can't imagine how much more dead it would have been had I planned a trip anywhere near Maryland.

 

That being said, sad but true...in America, I find the best cities are the ones that aren't majority Black. But, one would have to be vigilant because some cities like Denver, Minneapolis, and Kansas City with low populations of highly concentrated blacks aren't much better. They would much quicker date, befriend, or hire a white or Hispanic person than another black person.

 

People I've come across in Florida, Conneticut, New York and Cali...I've found to be more equal opportunity. Every other state, you end up taking your chances never knowing what you're going to end up with. As for Houston, it often seemed racist to me from both Hispanics and Whites and was never really a "great" place with friendly people.

 

I'm ready to leave this country by the time I'm 30.

[Samfoslom]

Don't abandon the west coast just yet. Check out my hometown of Sacramento.

 

We are an up and coming city, being recognized for our growing city amenities such as new restaurants, and clubs, and activities such as "second Saturday," where people do a regular trek through art galleries and restaurants and street bands. Young professionals are skipping the suburbs to move downtown because of the nightlife. We are building a new $500 million Kings Arena in the center of downtown, and as the old railroad yard redevelopment projects get underway (mixed use shops, restaurants, business and housing) the downtown footprint will increase by about 25%. The SF triple A baseball team is here, and the Kings, well..., did I mention we are getting a new $500 million stadium??

 

We are an "affordable" California city, located within an hour+ drive to either San Francisco to the west or Lake Tahoe to the east, and there are four wine regions in between. Last August, Forbes Magazine rated the 14th "coolest city" in the US. An excerpt below:

 

Washington, D.C., is one of six East Coast cities that make the top 20 of our list of America’s Coolest Cities. Perhaps not surprisingly, California one-upped the entire East Coast. A whopping eight Golden State metro areas make our list: San Francisco, 5th; San Diego, 6th; Riverside, 8th; Oakland, 12th; Sacramento, 14th; Los Angeles and San Jose tied for 16th place; and Santa Ana, 20th. They all boast large young adult populations and relatively high levels of cultural diversity.

[Irtwo]

And I am totally turned off about the prospect of moving to DC after all that Baltimore shit went down. That stuff affects business for ethnic escorts....my business went dead during those 2 weeks, and I was 3,000 miles away in the SW. I can't imagine how much more dead it would have been had I planned a trip anywhere near Maryland.

 

 

That's interesting. You should write an article about that for one of the papers or magazines, it's a intriguing aspect to the events that happened.

[Rudynate]

Don't abandon the west coast just yet. Check out my hometown of Sacramento.

 

We are an up and coming city, being recognized for our growing city amenities such as new restaurants, and clubs, and activities such as "second Saturday," where people do a regular trek through art galleries and restaurants and street bands. Young professionals are skipping the suburbs to move downtown because of the nightlife. We are building a new $500 million Kings Arena in the center of downtown, and as the old railroad yard redevelopment projects get underway (mixed use shops, restaurants, business and housing) the downtown footprint will increase by about 25%. The SF triple A baseball team is here, and the Kings, well..., did I mention we are getting a new $500 million stadium??

 

We are an "affordable" California city, located within an hour+ drive to either San Francisco to the west or Lake Tahoe to the east, and there are four wine regions in between. Last August, Forbes Magazine rated the 14th "coolest city" in the US. An excerpt below:

 

Washington, D.C., is one of six East Coast cities that make the top 20 of our list of America’s Coolest Cities. Perhaps not surprisingly, California one-upped the entire East Coast. A whopping eight Golden State metro areas make our list: San Francisco, 5th; San Diego, 6th; Riverside, 8th; Oakland, 12th; Sacramento, 14th; Los Angeles and San Jose tied for 16th place; and Santa Ana, 20th. They all boast large young adult populations and relatively high levels of cultural diversity.

 

Sacto must have changed since I was last there. 8 or 9 years ago, I was there for 3 days on business. I found it very bleak.

[Samfoslom]

yes it has...very much

[Frequentflier]

Real estate values go through cycles. Buy in a hot market if you want but don't be shocked when it turns and make sure you have sufficient cash flow to service any debt you took on. Or, you can bail on the loan like too many have in the past. I'm one of the potentially few that think loans on non owner occupied properties should always be recourse - follows the borrower to other assets.

 

For those of us who are landlords, remember that you'll likely want to depreciate your rental property each year as even if you choose not to the gain upon sale assumes you have been.

[instudiocity]

For those of us who are landlords, remember that you'll likely want to depreciate your rental property each year as even if you choose not to the gain upon sale assumes you have been.

Um, WHAT?

[Kevin Slater]

For those of us who are landlords, remember that you'll likely want to depreciate your rental property each year as even if you choose not to the gain upon sale assumes you have been.

 

Um, WHAT?

 

He's right.

 

Briefly, when you own rental property, you get to depreciate the value of the structure (not the land) on a 27.5 year schedule. (Take the purchase price, deduct the amount of that attributable to the land, and divide the rest by 27.5. You write that number off your schedule E each year as depreciation.) When you sell, the IRS taxes the accumulated depreciation at 25%. FF's point, and the real kicker, is that you owe taxes on accumulated depreciation whether you claimed it or not. The tax hit is on the amount you depreciated, or could/should have. See the last paragraph if this page: http://homeguides.sfgate.com/tax-implications-not-charging-depreciation-rental-property-41748.html .

 

Kevin Slater

[instudiocity]

He's right.

 

Briefly, when you own rental property, you get to depreciate the value of the structure (not the land) on a 27.5 year schedule. (Take the purchase price, deduct the amount of that attributable to the land, and divide the rest by 27.5. You write that number off your schedule E each year as depreciation.) When you sell, the IRS taxes the accumulated depreciation at 25%. FF's point, and the real kicker, is that you owe taxes on accumulated depreciation whether you claimed it or not. The tax hit is on the amount you depreciated, or could/should have. See the last paragraph if this page: http://homeguides.sfgate.com/tax-implications-not-charging-depreciation-rental-property-41748.html .

 

Kevin Slater

I just didn't understand it, the way he wrote it. And with your explanation, I cannot understand why anyone wouldn't depreciate their rental properties. Otherwise, they're screwing themselves annually and they're going to get screwed at the end, too!

[Guest Wetnwildbear]

“What happens is, you get a bank, you get a chain yoga studio, you get a boutique gym, and you get a restaurant serving $16 bowls of ramen,” Criscitello says while showing me around Capitol Hill. “Eventually you walk around and you realize, I just passed a bunch of places where I can’t afford to shop, I can’t afford to eat, and I can’t afford to live.”

 

I am a Seattle native and while I will always have a reverence for my home we are facing serious problems. When my lease is up in a few months I am packing up and moving to the midwest were things are still affordable. Seattle is in a bit of a pickle we are having massive population growth but we don't have the infrastructure to support it.

 

http://grist.org/cities/in-seattle-the-rent-is-too-damn-high/

Hey Chris --- I have plenty of room for a hot man like you == your own bedrm/bath/Florida Room with Fireplace -- One rimseat and sling already in place -- plenty of room for more! What I am thinking is just what philly needs a hot discreet playhouse with a Hot furry kinky cub and and a campy madam to put on the show and work security~ PM me to talk about your new home~