Real Estate: Coming Up Roses

[+ stevenkesslar]

http://www.housingwire.com/articles/33987-sp-case-shiller-house-prices-beat-expectations-gain-1-in-march

 

http://www.marketwatch.com/story/the-housing-market-any-way-you-look-at-it-cant-lose-2015-06-19

 

In light of the long thread on high rent, two stories that are good news.

 

Real estate prices are stabilizing and now growing at a sustainable rate of about 5 % a year nationally. I'd guess this means years of continued recovery in the housing market and economy ahead.

 

Meanwhile, for people who have not bought - e.g. Millenials - there is no reason to think that it's too late to dive in to most markets. Silicon Valley may be hopeless. But things look good in Texas, and most other places.

 

The homeownership rate is back to where it was around 1990 or so before the whole bubble started. That means the likely next step for homeownership rates is stable to up.

 

If you don't like increasing rents, time to think about buying???

[+ azdr0710]

thanks for these posts, Steven.....as usual, we need to keep in mind that a home is to live in, primarily, and is only very much secondarily an investment.....also, the entire history of our economy is one of boom-and-bust, especially in the West....

[+ WilliamM]

="stevenkesslar, post: 976406, member: 4739"]Meanwhile, for people who have not bought - e.g. Millenials - there is no reason to think that it's too late to dive in to most markets. Silicon Valley may be hopeless. But things look good in Texas, and most other places.

 

Steven, I recently filed a claim with the VA for an illness due to Agent Orange while in the military in Vietnam. It was my first VA claim, and I sought guidance at a non-profit veteran's counseling center.

 

I would recommend that Millenials seek housing counseling from HUD-approved neighborhood-based, non-profit housing counseling agency as they make decisions about buying their first house.

[+ stevenkesslar]

Meanwhile, for people who have not bought - e.g. Millenials - there is no reason to think that it's too late to dive in to most markets. Silicon Valley may be hopeless. But things look good in Texas, and most other places.

 

Steven, I recently filed a claim with the VA for an illness due to Agent Orange while in the military in Vietnam. It was my first VA claim, and I sought guidance at a non-profit veteran's counseling center.

 

I would recommend that Millenials seek housing counseling from HUD-approved neighborhood-based, non-profit housing counseling agency as they make decisions about buying their first house.

 

Excellent idea, particularly anyone young on this site will need to think about how to get a mortgage approved -even if they are an escort.

 

I'm a poster child for the fact that its possible. You just have to lie a little. What a shocker !

[thickornotatall]

your personal home is the best way to save money....taxes plus insurance can be costly...but are tax deductible...If you are in your 20's you probably don't think that having a home all paid for with a standard 30 year mortgage is the best way to secure your future...You may not able to buy (afford) what you want..however trading up after 10 years is the way to go...Stop wasting your money on $5 coffees....do you really need a $250 belt...Put yourself first and save save save...We bought our first condo on Union Square off 15th St when everyone thought it was a bad neighborhood....walking is better than a cab ride...eating at home...so many ways to live a good life without wasting good savings and investments...

[+ WilliamM]

Excellent idea, particularly anyone young on this site will need to think about how to get a mortgage approved -even if they are an escort.

 

I'm a poster child for the fact that its possible. You just have to lie a little. What a shocker !

 

Steven, I thought about going into considerably more detail about buying a first house in my earlier post in this thread.

 

I did not not write about the issue of qualifying for a mortgage for those with non-traditional sources of income. Thanks for mentioning the mortgage issue straight up.

 

It's also important for younger people to be aware of their possible credit rating errors, easier to fix usually than people believe. Also, unless you have a buyer's broker, never forget the broker is working for the seller. And always include a home inspection by an ASHI-certified home inspection company in the agreement of sale; please read that inspection report carefully! ASHI = American Society of Home Inspectors.

[thickornotatall]

Steven, I thought about going into considerably more detail about buying a first house in my earlier post in this thread.

 

I did not not write about the issue of qualifying for a mortgage for those with non-traditional sources of income. Thanks for mentioning the mortgage issue straight up.

 

It's also important for younger people to be aware of their possible credit rating errors, easier to fix usually than people believe. Also, unless you have a buyer's broker, never forget the broker is working for the seller. And always include a home inspection by an ASHI-certified home inspection company in the agreement of sale; please read that inspection report carefully! ASHI = American Society of Home Inspectors.

Very important.....Pay your credit card off every month.....late payments all show as negative points....Check your credit score...free once a year....

[+ WilliamM]

..We bought our first condo on Union Square off 15th St when everyone thought it was a bad neighborhood....

 

I want to underline that you bought a condo, not a house that required major and minor renovations and repairs.

 

The homebuyer is response for the renovations and repairs, if the dwelling is not a condo. Unless someone in your household is handy at fixing things (or has a lot of money), you might want to think twice about a fixer-up house.

[+ sam.fitzpatrick]

I did not not write about the issue of qualifying for a mortgage for those with non-traditional sources of income.

 

There is a difference between "non-traditional" and "unverifiable" sources of income. If two or three years of filed tax returns are provided and they reflect a consistent level of income as a business owner, then the revenue is usually considered.

[+ stevenkesslar]

There is a difference between "non-traditional" and "unverifiable" sources of income. If two or three years of filed tax returns are provided and they reflect a consistent level of income as a business owner, then the revenue is usually considered.

 

That's exactly how I have done it. They go off 2-3 years of taxes for my "personal trainer" business.

 

Along the way I have had to have clients write letters verifying I was their "trainer" and I had to use my "personal trainer" website to verify I am self-employed. All easy to do.

 

The biggest favor a client ever did me is add my name to a saving acct. he had so I could use it to document sufficient liquid cash reserves, since a lot of my reserves were tied up in stocks or IRA. It cost him nothing, and I could not have withdrawn a penny without his knowledge and consent, but it helped me get multiple loan approvals and I will be forever grateful.

 

Recently I had the realtor I bought my last house from over to dinner to thank him, during which time I told him my real occupation. He laughed and said I should have put the word "escort" on my loan app as it would have given the mortgage broker a laugh, and then he would have told me to take it off. Both my realtor and mortgage broker were awesome professionals. I did exactly what they said, and they steered me to a perfect touchdown.

[+ WilliamM]

That's exactly how I have done it. They go off 2-3 years of taxes for my "personal trainer" business.

 

Along the way I have had to have clients write letters verifying I was their "trainer" and I had to use my "personal trainer" website to verify I am self-employed. All easy to do.

 

The biggest favor a client ever did me is add my name to a saving acct. he had so I could use it to document sufficient liquid cash reserves, since a lot of my reserves were tied up in stocks or IRA. It cost him nothing, and I could not have withdrawn a penny without his knowledge and consent, but it helped me get multiple loan approvals and I will be forever grateful.

 

Recently I had the realtor I bought my last house from over to dinner to thank him, during which time I told him my real occupation. He laughed and said I should have put the word "escort" on my loan app as it would have given the mortgage broker a laugh, and then he would have told me to take it off. Both my realtor and mortgage broker were awesome professionals. I did exactly what they said, and they steered me to a perfect touchdown.

 

One of the most informative post I have ever seen in this message forum, especially for escorts just starting out.

[+ stevenkesslar]

The Rent Is Too Damn High, Take Two:

 

http://money.cnn.com/2015/06/24/real_estate/housing-middle-class-rent-affordability/index.html

 

In the country's most expensive cities -- like San Francisco, New York and Boston -- almost half of renters making $45,000-$75,000 annually faced "disproportionately" high payments. Rent prices have been rising faster than paychecks-- especially among the middle class. "Income growth for those folks has been especially weak," said Keith Gumbinger, vice president of HSH.com.

 

Nearly half of renter households in the U.S. were "cost burdened" in 2013, Harvard's report found. Of those renters, more than 25% had "severe burdens," or contributing more than 50% of their income to cover their rent payments.

I almost posted this as an addendum to Chris's post on "The Rent Is Too Damn High" but that thread was so long I figured it would just get lost. Not surprisingly, as home prices go up, rents are going up with them.

 

Part of what makes this difficult for escorts, I suspect, is that rents are highest in many of the markets that are best for escorts - like New York, San Francisco, and LA. I rented in San Francisco for a decade, and had the benefit of rent control at least, so my rent for a one bedroom rose from "only" $1500 to about $1800 over a decade. When I left in 2012 the rent for that unit immediately went up to over $2500 for the next tenant, and my guess is it would rent for more like $3000 today. At least during the 2000's it was way more cost effective to own a home in Portland, rent it out, and pay rent in San Francisco, because I could make a lot more money as an escort simply by living in San Francisco, and the rent covered the mortgage payment on the house in Portland, which also built up equity. If I were doing the same thing today, getting in the door at $3000, the math would still probably work, but it would be less desirable.

 

Part of the reason I am posting this is that it's only going to get worse for renters, so I hope that escorts that plan to keep doing this for a while, as opposed to until they graduate from college and start a "real" job, are making plans for dealing with rents that will just keep rising. The good news is there are a lot of escorts who own a home or condo in one place, and travel to other places to make money. Hotel rooms in places like New York ain't exactly cheap either, but it's still better economics than just paying a huge percentage of escort income in rent. And there are still lots of housing markets where home prices are affordable.

[+ Funguy]

Pussy…cat (excuse me, Tiger) - excellent post above. You only left out 1 thing for those up and cuming youngsters and that is: save, Save, SAVE!

25 years ago I recommended those 3 words to the son of a friend as he got his first job. He did well in the job and moved up the coporate ladder, made more and more money, kept saving (retirement accounts, etc.). Now at 47 he could retire completely at a style of living unchanged from present.

 

I say again, save, Save, SAVE!!!

[+ WilliamM]

Part of the reason I am posting this is that it's only going to get worse for renters, so I hope that escorts that plan to keep doing this for a while, as opposed to until they graduate from college and start a "real" job, are making plans for dealing with rents that will just keep rising. The good news is there are a lot of escorts who own a home or condo in one place, and travel to other places to make money. Hotel rooms in places like New York ain't exactly cheap either, but it's still better economics than just paying a huge percentage of escort income in rent. And there are still lots of housing markets where home prices are affordable

 

I agree with everything your posted in this thread. Excellent advice, Steven. I was involved with buying and selling houses all my work life, including helping many, many others. I would have written more here, but I resolved to think about other think when I retired. You have my homeownership juices flowing again (but only slightly).

[ZhenXBear]

What does everyone think a good "target" should be when selecting a rental property? Steven mentioned that people are paying up to 50% of their income in housing.

 

My goal has always been to try pay for all of my major expenses out of one paycheck while using the other one for savings, incidentals, and utilities. I also max my 401k contribution every year to the Federal maximum.

 

I've definitely noticed that wages are not keeping pace with prices and it's becoming increasingly more difficult to do this, though.

[bigvalboy]

Pussy…cat (excuse me, Tiger) - excellent post above. You only left out 1 thing for those up and cuming youngsters and that is: save, Save, SAVE! I say again, save, Save, SAVE!!!

 

And never underestimate the power of 'Compound Interest'.....

[+ not2rowdy]

your personal home is the best way to save money....taxes plus insurance can be costly...but are tax deductible...If you are in your 20's you probably don't think that having a home all paid for with a standard 30 year mortgage is the best way to secure your future...You may not able to buy (afford) what you want..however trading up after 10 years is the way to go...Stop wasting your money on $5 coffees....do you really need a $250 belt....

 

The “old school advice” I recall is that you really need to live in the same location for 7 years before it makes sense to buy vs rent. That same “old school advice” said you need to put 20pct down. That was ensure equity and to avoid PMI (Private Mortgage Insurance) fees. It can be argued as to whether that advice is still valid today - but the real estate crash would likely not have happened if borrowers (and lenders) had followed that old advice.

 

The Rent Is Too Damn High, Take Two:

Part of what makes this difficult for escorts, I suspect, is that rents are highest in many of the markets that are best for escorts - like New York, San Francisco, and LA....

 

...it's only going to get worse for renters, so I hope that escorts that plan to keep doing this for a while...are making plans for dealing with rents that will just keep rising. The good news is there are a lot of escorts who own a home or condo in one place, and travel to other places to make money.... And there are still lots of housing markets where home prices are affordable.

 

I entered the Las Vegas market near it’s bottom a few years back. It’s curious to me that it doesn’t seem to have much appeal to escorts. yes, it’s hot in the summer. But it’s a dry heat. Not nearly as oppresive as locations with lower temperatures - but high humidity. It has good airline connections with the world. An international (above average $$) visiting clientele. Not too far from LA, San Diego, Phoenix. It has a true 24 hour city life. Affordable real estate prices. No state income tax.

 

The link takes you to a site where you can click on real estate information for various zip code over several years.

 

Click on: Click here for Internet Version

 

http://activerain.com/blogsview/4403291/las-vegas-real-estate-appreciation-map-by-zipcode-more

 

Location, Location, Location!

 

I am NOT a real estate agent.

[robberbaron4u]

Realty as a speculative investment will have, as with all other such investments, "risk". In the past week, I represented, as their attorney-in-fact, two sellers who gambled on reality appreciation before the collapse of that particular market in 2008; one lost $80,000, the other $2M on their respective rolls of the dice. My last such investment, the conversion of a historic hotel property to a luxury assisted living facility, yielded a return which paid for no more than a aperitif at Galatoires's restaurant.

[+ stevenkesslar]

Realty as a speculative investment will have, as with all other such investments, "risk". In the past week, I represented, as their attorney-in-fact, two sellers who gambled on reality appreciation before the collapse of that particular market in 2008; one lost $80,000, the other $2M on their respective rolls of the dice. My last such investment, the conversion of a historic hotel property to a luxury assisted living facility, yielded a return which paid for no more than a aperitif at Galatoires's restaurant.

 

Just so it's clear, I'm not promoting real estate as a speculative investment.

 

For reasons spelled out by several posters in this thread, it is going to be hard enough for most escorts to own a home as their principal residence, because of down payment requirements (although with FHA you can go as low as three percent) and because of underwriting requirements. The time to think about buying real estate as investment property is after you've owned a home for years - I bought my first rental home 7 years after I bought the first home I owned and lived in. And while buying any home involves risk, so does renting. Over a long period of time, most people have done way better buying homes and living in them than by renting. It is oversimplistic, but to me the difference between owning and renting is the difference between between solidly middle class versus being unstable middle class to poor. All the studies on net worth show this, even a few years ago AFTER a lot of middle class wealth had been wiped out by the housing bubble. Middle class people have never gotten rich 0ff golden parachutes or stock options, and they are even less likely to in the current "rich people first" economy we live in.

 

Having said that, while I suck at stock market timing, I have turned out to be very good at real estate market timing. I think the difference is that with real estate, if you pay attention, it's just a lot easier. That's partly because most of the time real estate markets do go up. And the way to know they are about to go down is when they are going up 20 percent a year in places like California and Florida and the media is singing in chorus "home prices never go down," like they were in 2007. All the data right now show that after a brief period of a few years, after the bubble burst, where you could buy real estate at fire sale prices, it is now back to "normal" and probably sustainable rates of appreciation.

 

There's always risk, but almost regardless of what happens, any escort that buys a home this year and owns it 20 years from now is going to be way better off than if they rented for the next 20 years.

[robberbaron4u]

And when California slides into the Pacific, then what???

Just so it's clear, I'm not promoting real estate as a speculative investment.

 

For reasons spelled out by several posters in this thread, it is going to be hard enough for most escorts to own a home as their principal residence, because of down payment requirements (although with FHA you can go as low as three percent) and because of underwriting requirements. The time to think about buying real estate as investment property is after you've owned a home for years - I bought my first rental home 7 years after I bought the first home I owned and lived in. And while buying any home involves risk, so does renting. Over a long period of time, most people have done way better buying homes and living in them than by renting. It is oversimplistic, but to me the difference between owning and renting is the difference between between solidly middle class versus being unstable middle class to poor. All the studies on net worth show this, even a few years ago AFTER a lot of middle class wealth had been wiped out by the housing bubble. Middle class people have never gotten rich 0ff golden parachutes or stock options, and they are most likely less likely to in the current "rich people first" economy we live in.

 

Having said that, while I suck at stock market timing, I have turned out to be very good at real estate market timing. I think the difference is that with real estate, if you pay attention, it's just a lot easier. That's partly because most of the time real estate markets do go up. And the way to know they are about to go down is when they are going up 20 percent a year in places like California and Florida and the media is singing in chorus "home prices never go down," like they were in 2007. All the data right now show that after a brief period of a few years, after the bubble burst, where you could buy real estate at fire sale prices, it is now back to "normal" and probably sustainable rates of appreciation.

 

There's always risk, but almost regardless of what happens, any escort that buys a home this year and owns it 20 years from now is going to be way better off than if they rented for the next 20 years.

[+ stevenkesslar]

And when California slides into the Pacific, then what???

 

Oh, sweetie. That's a no brainer.

 

 

I'm gonna hold on tight, and The Rock is gonna come save me.

[+ Funguy]

Only part of the state will fall into the Pacific. When it happens, Steven's Palm Springs property will be ocean-front!

[robberbaron4u]

Only part of the state will fall into the Pacific. When it happens, Steven's Palm Springs property will be ocean-front!

By the charts, Palm Springs will be a deep-sea reef. . .

[bigvalboy]

Only part of the state will fall into the Pacific. When it happens, Steven's Palm Springs property will be ocean-front!

 

Maybe...LOL..BUT if the Southern San Andreas lets go, or the Garnet Fault, it will split Palm Springs in two and Steven will be in deep caca, and he will need me to come rescue him and save his ass. and after all his name calling, this WB is not so sure he'll send the jet. feel free to call me an asshole again, I kinda deserve it this time....

[+ stevenkesslar]

Maybe...LOL..BUT if the Southern San Andreas lets go, or the Garnet Fault, it will split Palm Springs in two and Steven will be in deep caca, and he will need me to come rescue him and save his ass. and after all his name calling, this WB is not so sure he'll send the jet. feel free to call me an asshole again, I kinda deserve it this time....

 

Don't worry BVB. I've completely given up hope in your schizophrenic behavior. You are now supposed to be Greece, and I'm to count on you for financial help? You're even more fucked then I'll be if the San Andreas fault opens as wide as your lying ass.

 

(Note: I did NOT call you an asshole).