I'm starting to smell.....

[+ Charlie]

Charlie, I can keep a secret... sssshhh. . Actually, no one will read this post anyway. So do tell... who is that not-to-be-named escort?

That is a can of worms I do not intend to re-open.

[jackjackjack]

That is a can of worms I do not intend to re-open.

OK then, moving on. I bet those gold colored wool dress pants look bitchin on you..... hahaha

[mike carey]

that 1971 Renault 12

I never regretted my 1975 burnt orange Renault 12!

[+ stevenkesslar]

Remember though that it was the investors that helped drive the market...(you can thank me later)...In Florida for several years, 80% of all sales were cash. SO yes, many first time buyers were shut out, but there was a reason that investors were sitting on the needed cash (God I sound like a Republican)

 

I'll edit the word investor and replace it with "speculators" and say this. It was speculation that helped drive the housing market into the dumpster. I loved the book "All The Devils Are Here" and would argue speculators can mean everything from the CEOs of AIG and Countrywide to the head of Fannie Mae to every greedy homebuyer who took out a subprime mortgage thinking home prices can really go up 20 percent a year forever. I was one of the guys that can thank other people's stupidity or greed for helping me buy homes at fire sale prices, but I have a hard time seeing myself as the hero that came in and saved the economy. Maybe 4 years of President Trump will cure me of my humility. Check back with me in 2020.

[+ Charlie]

OK then, moving on. I bet those gold colored wool dress pants look bitchin on you..... hahaha

"Looked"--I bought them when I was 17, before leaving for my freshman year at college, because the salesman told me they would be a big hit on campus. In stead, everyone pointed at me and laughed the first time I wore them, so I put them back in the closet, never to be worn again.

[+ Charlie]

I never regretted my 1975 burnt orange Renault 12!

My 71 Renault 12 was a disaster; one time it broke down in rural Ohio on a Saturday night, and I was stuck there till Tuesday while the only dealer for many miles searched for replacement parts. After seven months, I traded it for a 1972 model (because I still liked the looks), but that one was just as shoddy, and after the entire gear shift came off in my hands while changing gears on the New Jersey Turnpike, I swore off Renaults and traded it in on a dependable Toyota.

[bigvalboy]

I'll edit the word investor and replace it with "speculators" and say this. It was speculation that helped drive the housing market into the dumpster. I loved the book "All The Devils Are Here" and would argue speculators can mean everything from the CEOs of AIG and Countrywide to the head of Fannie Mae to every greedy homebuyer who took out a subprime mortgage thinking home prices can really go up 20 percent a year forever. I was one of the guys that can thank other people's stupidity or greed for helping me buy homes at fire sale prices, but I have a hard time seeing myself as the hero that came in and saved the economy. Maybe 4 years of President Trump will cure me of my humility. Check back with me in 2020.

 

Well I don't see myself as a hero either, I was being a little facetious in my comments. I would argue that speculator and investor are not interchangeable terms.

[mike carey]

I swore off Renaults and traded it in on a dependable Toyota.

After my reliable R12 I had a Fuego, which was a sporty-ish coupé. It was a delight to drive, but it had an intermittent fault that had the engine simply stop and restarting was random. The dealer could never work out what it was. After a Teutonic intermission, with a 3-series BMW, I have had two Citroëns and couldn't have been happier with them!

[+ stevenkesslar]

In the end, I'm just a guy, who saw real estate spiral out of control, and realized that it wasn't sustainable. Two years prior to the collapse, we would sit around at lunch betting on when the collapse would come. Towards the end, it was just crazy, it wouldn't end. Will it be Christmas? Will it be in the Spring? Maybe by summer?...LOL..so we just waited. It wasn't rocket science, except for those that were greedy. When the collapse came, it was hardly a surprise.

"One mans trash is another mans treasure"

 

Yes, that all reads incredibly true, and incredibly tragic.

 

Here's two differences between us.

 

One, I was probably way more tuned out right before the game of musical chairs stopped. I remember flying back from Mexico with a client circa 2005 and doing a tentative cash flow analysis of what houses in Sacramento selling for $300,000 or so at the time might sell for AFTER the crash. I estimated the prices might go down to $200,000. My client guessed $150,000. I said, no shit? I ended up buying them for between $50,000 and $125,000.

 

Two, I was an affordable housing advocate before all this started. Back in the 1980's, I helped organize the first "hit" (meaning "takeover") of Fannie's Mae's headquarters in Georgetown, meaning about 1000 people, low income advocates, took over the offices of David Maxwell and demanded to negotiate about making mortgages more available to inner-city borrowers, Within a year we had a $1 billion Community Home Buyers Program. Clinton put those kind of initiatives on steroids and the home ownership rate started to climb. When Subprime 1.0 crashed in 2001 or so (due to a recession, not Bush) it hurt a little, but mostly everybody came out fine and home ownership rates climbed higher. Circa 2002 or 2003 I was thinking it was a good thing that the Countrywides were making it easier for low-income people to buy by priciing in risk. I figured that in the long run, as you said, prices always go up, so even if you got fucked a little on interest rate, it would work out well in the end. I think it was about 2004 or 2005 when appreciation went into double digits that I first started thinking, "This ain't gonna end well." It didn't, as we all know.

 

So I have this deep moral ambivalence about it all. On the one hand, I'm one of the guys that tried mightily to open Pandora's Box, and it worked well enough for 20 years or so. On the other hand, I'm also just a guy that said, "Geez, seems like this is outta control. Wonder if it's gonna end in a buying opportunity?" Nothing wrong with that.

 

In the end the ones that profited were all pretty much centered on Wall Street or at least engaged in Wall Street shenanigans, and who paid the price was just about everybody else. The redemption for me would be Bernie Sanders or Elizabeth Warren end up President and I pay higher taxes because I'm one of those rich fucks that benefitted from other people's pain, even though I did nothing to cause it. That's what makes me a liberal. My conservative friends say, hey, you deserve it. You were the bold guy who took all the risks.

 

I think it's bullshit. People got screwed. I agree with you. Investors are not speculators, but whichever category you want to use to describe yourself, we ought to feel grateful, pay more taxes, and make things right.

 

(End of liberal blah blah).

[Frequentflier]

I'm always impressed by stories like this. I hope the Detroit Institute of Art puts up a plaque or names a room for this kind teacher.

 

http://www.metrotimes.com/Blogs/archives/2016/01/13/late-dps-art-teacher-leaves-171-million-to-dia

[Frequentflier]

I don't think people should be pressured from society or our government to own their home instead of renting. I think people should first and foremost have a bunch of money in savings/safe investments and never fall below a conservative minimum balance - that certainly exceeds six month of living expenses - I think 24 months.

 

I think all mortgages should be recourse. I don't like that investors, like me, can get a mortgage on a rental property and if at some point I don't like the economics I can walk away and the lender can't access the $100 million I have in my stock portfolio. Ok, only that much if I hand write that number on the monthly statement. I think there have been some changes on mortgage lending laws in this regard by state but in several I know they are non recourse. And I do think taxes should be due on debt forgiven, whether mortgage or other. There is no law that says people need to become real estate investors. If someone wants to do that, they should wear their big boy panties.

 

I've sold some rental properties recently because the market is so high. I looked at the after tax cash I'd receive and decided it was better to sell and get a fairly safe 5% while keeping it liquid while waiting for the next real estate value cooling off period, or not With so much detail on property values available online I saw that values were at the highest ever and I'm very happy with what I've made. For every "if only I hadn't sold last year I'd be richer today" there are even more "my property is so under the mortgage or less than what I paid for it". They are investments. Be patient buying. Money, contrary to the saying, won't actually burn a hole in your pocket so wait until a low entry point (real estate or stocks) and set an exit value. And of course, its America, people are free to do what's best for them with their money. Whether that's buy high on debt or watch values go up, then down and have no cash left to be opportunistic.

 

I'm surprised that after the last housing crash that people can buy homes with down payments as little as between 0-15%. My parents raised me that it had to be at least 20%. And if the market slides, an unexpected repair arises, a condo special assessment is issued or a job loss occurs how much money do you think the no or low money down buyer has in reserve?

 

I've decided to retire sooner than I thought I would. I'm saving like a demon.