2023 recession?

[LargeOrangeFont]

not painting myself into any corner... there is still timing to consider for the market... re-read what I wrote.

why sell your CA home? Obviously you felt you were near the top of this current cycle. Just because we all know that over LONG term real estate trends up, does not mean that cycles in the market do not exist, and there are better time to buy/sell, rather than just "anytime is a good time to buy"

I sold the CA home because I can triple my rental profit with the same investment and do it with more diversification and less risk. I was ready to keep it, but it didn’t make sense when I can leverage myself 2/3 less and make the same profit elsewhere.

Unless you are gonna move every 5-7 years, you are pretty well insulated buying RE vs renting. If it is a long term investment you also have to weigh the opportunity cost of waiting. No one ever said just buy RE blindly. No one also ever said wow RE and rents have really dropped in price in the last 10 years buying was a bad decision.


Everything is cyclical, that goes without saying. Prices will drop and rates will go up.. unless you are paying cash, it’s all the same unless you think it will take 6 years to get to the bottom like last time. People seem to think we woke up one day in 2008 and it was 2012.

 

[Your ad here]

Theres a lot of good reading throughout this thread. How many of you have heard of good debt vs. bad debt and know the difference? How many know what "going broke safely" means?

 

[CLdrinker]

Theres a lot of good reading throughout this thread. How many of you have heard of good debt vs. bad debt and know the difference? How many know what "going broke safely" means?

No clue. But let me pull an answer out of my ass.
Good debt something you are not upside down on. Or creates return on investment.

Bad debt. You fucked up.

Going broke safely no idea. Lol

 

[2Driver]

I said a bunch of pages prior to this post it may take a bit

In typical fashion the US consumer cant seem to adjust lifestyle and will burn through all the “savings”
we've heard about, then to keep the accustomed lifestyle they will transition to credit cards then BOOM !

Anyone catch the news last night. Consumer debt has climbed to a 10 year high in the past couple months as consumers burned through savings to keep up with inflation. LOL Fuse lit.

 

[rivrrts429]

Thanks brother! I got a new one coming out next week that will be solid. I missed this week because of other deal we were working on.

I gotta say those “what will it take” are really well done and hopefully help increase your marketing. That was a good idea to do those.

 

[RiverDave]

Wrong again eyes and ears are working for me in havasu

Who are you talking too?

 

[RiverDave]

Why does everyone have to assume that people bought their stuff with home equity? Also, you can't "eat up all the equity you have" because cash out loans only go to 80% LTV max or 89.9% with a 1st / 2nd combo which you have to be super qualified for.

Everyone buying boats and houses out here seem to be buying them Cash.. I don’t think all these guys are making that kinda money, so a good explanation of people buying houses and boats cash would be Helocs?

 

[LargeOrangeFont]

Everyone buying boats and houses out here seem to be buying them Cash.. I don’t think all these guys are making that kinda money, so a good explanation of people buying houses and boats cash would be Helocs?

That means they have a house paid off free and clear, and still have some equity in the primary. Either they sell the primary or walk away from it, make the bank take the L and have a Havasu house free and clear.

Boat... whatever. Most middle aged dudes with reasonable incomes can scratch together $100-300K from investments or retirement or juice their business to buy a boat if they wanted to.

 

[OldSchoolBoats]

I gotta say those “what will it take” are really well done and hopefully help increase your marketing. That was a good idea to do those.

Thanks brother, I got a good one coming up tomorrow. I will be in Havasu and I found a home listed for $395K. Because 2nd homes now have to be bought as investment property with a minimum 20% down, this one will be pretty eye opening as to "what it will take" to purchase a 3 bd / 2ba, 1309 Sq foot house with no pool, no fence and a 28' garage.

 

[LargeOrangeFont]

Thanks brother, I got a good one coming up tomorrow. I will be in Havasu and I found a home listed for $395K. Because 2nd homes now have to be bought as investment property with a minimum 20% down, this one will be pretty eye opening as to "what it will take" to purchase a 3 bd / 2ba, 1309 Sq foot house with no pool, no fence and a 28' garage.

Hold on to your butts!

I think I know the one you are talking about... it is the same floorplan as my house. If anyone has any questions about it, let me know!

One sold with a small pool for $309k in late 2019/early 2020.. I was looking at it for an AirBNB.

 

[EmpirE231]

I said a bunch of pages prior to this post it may take a bit

In typical fashion the US consumer cant seem to adjust lifestyle and will burn through all the “savings”
we've heard about, then to keep the accustomed lifestyle they will transition to credit cards then BOOM !

Anyone catch the news last night. Consumer debt has climbed to a 10 year high in the past couple months as consumers burned through savings to keep up with inflation. LOL Fuse lit.

this will mostly be made up of the middle - upper middle class people, spending it all to maintain a lifestyle they really can't afford.... but not willing to give it up.

hence the resident tax guy (shinto sp?) saying most clients can't afford to pay their taxes, and have to get on payment plans this year.

 

[Xtrmwakeboarder]

Is anyone looking at Ibonds to protect against inflation? 7% right now, and probably jumping to 9-10% next month? $10k per SSN isn't much, but it's better than 50 bps in a savings account.

 

[LargeOrangeFont]

this will mostly be made up of the middle - upper middle class people, spending it all to maintain a lifestyle they really can't afford.... but not willing to give it up.

hence the resident tax guy (shinto sp?) saying most clients can't afford to pay their taxes, and have to get on payment plans this year.

They are on payment plans for everything anyway...

 

[BHC Vic]

Is anyone looking at Ibonds to protect against inflation? 7% right now, and probably jumping to 9-10% next month? $10k per SSN isn't much, but it's better than 50 bps in a savings account.

I’m buying the boys some bonds using my unions PHIB program (participation has its benefits)

 

[Your ad here]

Thanks brother, I got a good one coming up tomorrow. I will be in Havasu and I found a home listed for $395K. Because 2nd homes now have to be bought as investment property with a minimum 20% down, this one will be pretty eye opening as to "what it will take" to purchase a 3 bd / 2ba, 1309 Sq foot house with no pool, no fence and a 28' garage.

30 year loan is $80k down payment with a monthly payment of around $1600 - $1800? To get that $80k down payment you would've had to earn $100k because of taxes. So that would make the house purchase price really cost $415k? Maybe more because I only figured federal taxes and not state?

 

[Havasu blue label]

Not all second homes are considered investment loans

 

[Havasu blue label]

And no other debt

 

[OldSchoolBoats]

Not all second homes are considered investment loans

As of April 1, 2022......loan level price adjusters have been placed on 2nd home transactions, basically making it impossible to purchase one with less than 20% down. Technically you can buy one with 10% down, but they are priced out of the market, so not available right now. It may be called a 2nd home, but for loan purposes we run as an investment property because the rate is better.

 

[monkeyswrench]

Boat... whatever. Most middle aged dudes with reasonable incomes can scratch together $100-300K from investments or retirement or juice their business to buy a boat if they wanted to.

No one else will say it...



"On behalf of the lower class, "middle-aged" folks "
...but I mean that in the nicest possible way

To a lot of people, some even here on this board, 100-300k is a pretty serious chunk of change.

 

[2Driver]

Is anyone looking at Ibonds to protect against inflation? 7% right now, and probably jumping to 9-10% next month? $10k per SSN isn't much, but it's better than 50 bps in a savings account.

It was discussed earlier, and I looked into it. No free lunch as I read it.

Its a 30 year Bond (no one is going long right now)
You have to hold 5 years but can cash out after 1 year and lose a 3 months of your interest in a penalty
Selling before 30 years doesn't mean you will get your money back, like any bond selling before maturity means you get the value of what its trading at, which for a 30 year bond will most likely be underwater in an interest rate increasing environment.

 

[LargeOrangeFont]

No one else will say it...



"On behalf of the lower class, "middle-aged" folks "
...but I mean that in the nicest possible way

To a lot of people, some even here on this board, 100-300k is a pretty serious chunk of change.

It is a chuck of change. It just depends on how people want to spend the money they have, or don’t have.

I’m taking about the people with a house in Havasu with an 80ft RV garage, a $90k truck, a $50k SXS, there is no other choice besides a $200k boat

Remember anything below $300k is poverty in So Cal.

 

[Xtrmwakeboarder]

It was discussed earlier, and I looked into it. No free lunch as I read it.

Its a 30 year Bond (no one is going long right now)
You have to hold 5 years but can cash out after 1 year and lose a 3 months of your interest in a penalty
Selling before 30 years doesn't mean you will get your money back, like any bond selling before maturity means you get the value of what its trading at, which for a 30 year bond will most likely be underwater in an interest rate increasing environment.

From what I read, the bond doesn't decline from its highest accumulated value, which would mean even when we switch to deflation, it wouldn't go underwater. Am I misreading? Below is an expert from seeking alpha

"But what if inflation rates crash and sink into outright deflation. This has happened for a few months in the past decade. No worries on this either. When a six month period has outright deflation, your accumulated I Bond interest simply freezes. The fixed rate never goes negative (unlike TIPS), and when inflation resumes, as it always does, accumulated interest begins to compound again from its highest previous point. What this means is that I Bonds effectively provide protection against deflation as well as inflation."

 

[monkeyswrench]

It is a chuck of change. It just depends on how people want to spend the money they have, or don’t have.

I’m taking about the people with a house in Havasu with an 80ft RV garage, a $90k truck, a $50k SXS, there is no other choice besides a $200k boat

Remember anything below $300k is poverty in So Cal.

I'm thinking there are some leveraged folks. More or less than the last time? That I don't know. I just know that every go around there are always those that learn their lesson. There will always be the new batch of guys (and gals) that ramped up their income at the same time the economy did.

It's only a cycle if you've seen it before. I truly feel bad for those that haven't.

 

[Your ad here]

No clue. But let me pull an answer out of my ass.
Good debt something you are not upside down on. Or creates return on investment.

Bad debt. You fucked up.

Going broke safely no idea. Lol

Good debt is making payments on something that appreciates in value and makes the debt holder money using someone else's money, for a fee (interest).
Bad debt is making payments on something that doesn't appreciate in value over time and/or doesnt generate an income as it's worked/used.
Going broke safely is thinking you have enough money to support yourself and lifestyle till your death. Keeping 1 million dollars in a CD that earns .1% interest or $1000 a year is secure but that's not keeping up with normal inflation.
Houses are an example of good debt. Everyone needs a place to live. History shows house values go up over time, long term. Short term there's dips and rises. It's an asset that you need but also increases in value as you use it. Long term doesn't take much effort for a return. Just live your life in it. Short term takes effort or risk for a return. Think fixer upper or market timing. Even if you broke even after 30 years it's still better to break even and own a home instead of paying rent for 30 years and not owning a home.

 

[Havasu blue label]

I would rather not buy the home if it’s going to take more then 5 years to have some up swing . As I always tell my buddies equity in a home is fake money

 

[LargeOrangeFont]

I'm thinking there are some leveraged folks. More or less than the last time? That I don't know. I just know that every go around there are always those that learn their lesson. There will always be the new batch of guys (and gals) that ramped up their income at the same time the economy did.

It's only a cycle if you've seen it before. I truly feel bad for those that haven't.

I don't feel bad, it is part of life. Some are good with money and some aren't. Those people that aren't will find away to live. Some people like going from boom to bust over and over in their lives. At the end of the day, no one was dying in the streets during the last recession. They won't in this one.

 

[CLdrinker]

Good debt is making payments on something that appreciates in value and makes the debt holder money using someone else's money, for a fee (interest).
Bad debt is making payments on something that doesn't appreciate in value over time and/or doesnt generate an income as it's worked/used.
Going broke safely is thinking you have enough money to support yourself and lifestyle till your death. Keeping 1 million dollars in a CD that earns .1% interest or $1000 a year is secure but that's not keeping up with normal inflation.
Houses are an example of good debt. Everyone needs a place to live. History shows house values go up over time, long term. Short term there's dips and rises. It's an asset that you need but also increases in value as you use it. Long term doesn't take much effort for a return. Just live your life in it. Short term takes effort or risk for a return. Think fixer upper or market timing. Even if you broke even after 30 years it's still better to break even and own a home instead of paying rent for 30 years and not owning a home.

I’ve got 1 good debt
1 bad debt (Jeep)
And I’m on track to go broke safely.

 

[monkeyswrench]

I don't feel bad, it is part of life. Some are good with money and some aren't. Those people that aren't will find away to live. Some people like going from boom to bust over and over in their lives. At the end of the day, no one was dying in the streets during the last recession. They won't in this one.

There is always some death in the streets...ChiTown comes to mind

After doing the boom and bust once, can't see how anyone would intentionally do it. Honestly, I just hope it's not much worse this time.

 

[boatnam2]

Lots of people who don't even know what bad debt is, as pretty much everything that has been bought in the last 2-3 years you could recoup including probably interest.

 

[BingerFang]

There is a 35% chance of a recession in 2 years: Goldman Sachs

Goldman Sachs joins the chorus of big banks predicting a recession is looming.

finance.yahoo.com

 

[BingerFang]

6.875% mortgage rates today.

I closed last year at 2.875%.

Let’s go Brandon!

 

[Done-it-again]

6.875% mortgage rates today.

I closed last year at 2.875%.

Let’s go Brandon!

I'm not seeing rates that high yet.... I'm seeing 4.9 to 5.5 with no points...

 

[BHC Vic]

Googled it just out of curiosity

 

[Done-it-again]

Compare Today's 30-Year Mortgage Rates | Bankrate

Find and compare 30-year mortgage rates and choose your preferred lender. Check rates today to learn more about the latest 30-year mortgage rates.

www.bankrate.com

 

[BingerFang]

Compare Today's 30-Year Mortgage Rates | Bankrate

Find and compare 30-year mortgage rates and choose your preferred lender. Check rates today to learn more about the latest 30-year mortgage rates.

www.bankrate.com

Today's Mortgage Rates Soar to Nearly 7% | April 18, 2022

The average rate for a 30-year fixed-rate mortgage has jumped by more than one percentage point since Friday.

money.com

Sorry it was yesterday they were 6.875%.

 

[COCA COLA COWBOY]

Today's Mortgage Rates Soar to Nearly 7% | April 18, 2022

The average rate for a 30-year fixed-rate mortgage has jumped by more than one percentage point since Friday.

money.com

Sorry it was yesterday they were 6.875%.

Something is very funny with those rates. I'm seeing more consistency for conventional around 5.00-5.25%. Those rates are astronomical and I can't even fathom why.

 

[Done-it-again]

Googled it just out of curiosity View attachment 1107981

Today's Mortgage Rates Soar to Nearly 7% | April 18, 2022

The average rate for a 30-year fixed-rate mortgage has jumped by more than one percentage point since Friday.

money.com

Sorry it was yesterday they were 6.875%.

Well if you got shit credit then sure you are paying that.....change the fico score to 740 then you are seeing what I see.

 

[HNL2LHC]

Well if you got shit credit then sure you are paying that.....change the fico score to 740 then you are seeing what I see.

What does 815 get you?

 

[Done-it-again]

What does 815 get you?

From the google page they are using 5.625%

rates are still not that I high if dealing with a broker, but we are heading that way i do believe.

Google Search

 

[traquer]

I just closed at 4.99% in TX. Those Bankrate numbers are average numbers, so that includes shit credit loans etc.

 

[c_land]

Today's Mortgage Rates Soar to Nearly 7% | April 18, 2022

The average rate for a 30-year fixed-rate mortgage has jumped by more than one percentage point since Friday.

money.com

Sorry it was yesterday they were 6.875%.

This is a pretty good source for rates.

https://www.mortgagenewsdaily.com/mortgage-rates

5.35% from their daily survey today. The highest reading since 2009 according to them.

 

[Go-Fly]

Remember when these started going up in 2008. Saw a new one today.

 

[530RL]

Economy shrinks 1.4% in first quarter, GDP shows, but mainly due to record U.S. trade deficit

The U.S. economy shrank 1.4% in the first quarter to mark the first drop since the onset of the pandemic, but the decline mostly stemmed from a record trade...

www.marketwatch.com

 

[thetub]

haha

economy is shrinking but expanding huh


to be or not to be that is the question...

 

[pronstar]

Government spending comprises way too much of our GDP.
When GDP shrinks despite record government spending, how healthy is the economy?

Fact is, we’ve been trundling along for decades with slower growth than we had during the Great Depression, and we’ve just gotten used to it.

 

[regor]

"Our economy is not failing, we're just importing even more goods than we're exporting.....................cause we're a service sector economy now!!!"

 

[regor]

"We're not failing, we're just offshoring"

 

[jet496]

I'm not seeing rates that high yet.... I'm seeing 4.9 to 5.5 with no points...

Is that with the APR and everything?

 

[Done-it-again]

Is that with the APR and everything?

Was no points at that time. It’s gone up 15 basis point in a week though.

 

[c_land]

Rates are getting cranked next Wednesday.

https://twitter.com/i/web/status/1520019584870494210