For the Real Estate Drop in sales and price Naysayers HOLD ONTO YOUR HATS

[Heylam]

I would think for a person that either doesn’t have the money or can’t qualify for a 30 year loan, buying with a 40 year loan and getting a fixed monthly payment would still be better then renting and facing increased payments in the future without the tax write off of a mortgage. Always the possibility of a refi if rates came down and could then choose a 30 year.

 

[DMF]

I didn’t mean it to be a negative. Almost the opposite.

It's amazing, no matter what is said, someone will make it a negative!

 

[LargeOrangeFont]

The problem messing with the housing markets right now is all the 3% mortgages that no one wants to give up. I'll probably die with mine. Everything is fine weather heating up finally.

The people with low rates and equity are going to prop the housing market for another decade at least for better or worse.

 

[Orange Juice]

The people with low rates and equity are going to prop the housing market for another decade at least for better or worse.

I’m watching a couple homes in my neighborhood, that need a lot of work. These are the homeowners that we need to watch.

 

[Buddy]

I would think for a person that either doesn’t have the money or can’t qualify for a 30 year loan, buying with a 40 year loan and getting a fixed monthly payment would still be better then renting and facing increased payments in the future without the tax write off of a mortgage. Always the possibility of a refi if rates came down and could then choose a 30 year.

You'll only be able to refi your house IF it appraises!

 

[Gonefishin5555]

I don’t think there is anything wrong with a 40yr loan except for the fact that for a few bucks more a month you can do a 30yr loan. It’s just a poor financial decision like doing an 84 month car loan on a used car

 

[Gonefishin5555]

Blackstone Sells SoCal Offices for a Loss

In the face of rising headwinds in the office market, Blackstone has unloaded two 13-story buildings at a big discount.

commercialobserver.com

That popped into my feed this morning. I worked in one of those towers back in the 90s. Can’t believe how big a loss they are taking and the time frame.

 

[mbrown2]

More info on the 40yr loan or non loan

https://www.mortgagenewsdaily.com/markets/mortgage-rates-04112023

 

[Cole Trickle]

I don’t think there is anything wrong with a 40yr loan except for the fact that for a few bucks more a month you can do a 30yr loan. It’s just a poor financial decision like doing an 84 month car loan on a used car

Lets be real how many people do we all know that have lived in there house for 20 years and are on the 4th 30 year mortgage. Most people will never pay there house off they want to cash out buy dumb shit and keep the payment low.

You have to be dedicated to stay the course and not mortgage the future.

 

[mesquito_creek]

Lets be real how many people do we all know that have lived in there house for 20 years and are on the 4th 30 year mortgage. Most people will never pay there house off they want to cash out buy dumb shit and keep the payment low.

You have to be dedicated to stay the course and not mortgage the future.

About 37% nationally own their homes with no mortgage… it’s actually doable if you buy your first home, improve and maintain it without loans, then stay in it until it’s paid off.
We bought our first home at 7.25% and still live in it free and clear 26 years later.

P.S. it’s a ranch style, slump block house with 8 foot ceilings that few people here would lower their standards to live in, but the payment kicks ass.

 

[Havasu blue label]

We have lived and raised my kids 22 years in this home

 

[ChumpChange]

Lets be real how many people do we all know that have lived in there house for 20 years and are on the 4th 30 year mortgage. Most people will never pay there house off they want to cash out buy dumb shit and keep the payment low.

You have to be dedicated to stay the course and not mortgage the future.

Or get a 2.375% 30yr fixed mortgage and get 5% in a Money Market. Wish I mortgaged more of my future.

 

[LargeOrangeFont]

Or get a 2.375% 30yr fixed mortgage and get 5% in a Money Market. Wish I mortgaged more of my future.

What dumb shit would you buy?

 

[brgrcru]

Guess I’m not normal.

 

[DrunkenSailor]

Big day tomorrow with CPI numbers hitting. There is no liquidity in the secondary market. The securitization market is eerily quiet. We have lost a point in treasuries but haven't seen a corresponding increase in prices on the loan sale side. Originators are barely breaking even on the loan sale side but are losing money if they are hedging. Originators who aren't well capitalized are gonna fail and that's never good news for the industry.

 

[pronstar]

The amortization schedule on a 40 year mortgage has got to be eye-opening to say the least.

5+ year auto loans are subprime.
30+ year mortgages have got to be subprime as well?
Which means these buyers aren’t qualifying for rock-bottom interest rates.

 

[hallett21]

The amortization schedule on a 40 year mortgage has got to be eye-opening to say the least.

5+ year auto loans are subprime.
30+ year mortgages have got to be subprime as well?
Which means these buyers aren’t qualifying for rock-bottom interest rates.

I think the tricky part is what are they paying for rent.

Take SoCal for instance. If todays rent is 3400 a month, what’s the issue with paying 3,500 a month on a 40 year?

Agreed it’s not a good idea. But there is a reality about paying a mortgage vs paying rent. Paying a bad mortgage rate is still better than paying rent.

Of course this assumes costs are only going up.

 

[pronstar]

I think the tricky part is what are they paying for rent.

Take SoCal for instance. If todays rent is 3400 a month, what’s the issue with paying 3,500 a month on a 40 year?

Agreed it’s not a good idea. But there is a reality about paying a mortgage vs paying rent. Paying a bad mortgage rate is still better than paying rent.

Of course this assumes costs are only going up.

For sure.

What gets me - and I was once in this boat early in my career - institutions prey on the folks who have little financial education.

A 40 year note at high interest could make things affordable, but there’s always a cost.

And that cost is never building significant equity for 25 years, and a total loan cost that’s 5x the purchase price of the house.

It sucked ass being poor.
And it lit a fire under my ass to get out of that situation.

 

[pronstar]

What could possibly go wrong?
(Oh and it’s out of money already)

'California Dream For All' Home Loan Requires Zero Down Payment for Future Appreciation - The Truth About Mortgage

The California Housing Finance Agency has launched a new shared appreciation loan for home buyers. The program, known as the “Dream For All Shared

www.thetruthaboutmortgage.com

 

[LargeOrangeFont]

For sure.

What gets me - and I was once in this boat early in my career - institutions prey on the folks who have little financial education.

A 40 year note at high interest could make things affordable, but there’s always a cost.

And that cost is never building significant equity for 25 years, and a total loan cost that’s 5x the purchase price of the house.

It sucked ass being poor.
And it lit a fire under my ass to get out of that situation.

Yes, 100%. But the amount of poors with nee phones, new cars, with 84 month financing… or worse leases is staggering. You shouldn’t need financial education to know you that’s a bad idea.. but when you are poor and have nothing to lose and no credit… why not.

40 year mortgages are the only way they will continue to sell entry level homes at volume in places like So Cal.

 

[ChumpChange]

What dumb shit would you buy?

Plenty of options.

 

[hallett21]

Yes, 100%. But the amount of poors with nee phones, new cars, with 84 month financing… or worse leases is staggering. You shouldn’t need financial education to know you that’s a bad idea.. but when you are poor and have nothing to lose and no credit… why not.

40 year mortgages are the only way they will continue to sell entry level homes at volume in places like So Cal.

From what I see at work, we have an education epidemic when it comes to finances.

I’m talking men in their 30s who cannot see how $1,000 a month on a truck payment while making $2,000 a month is a bad idea.

 

[pronstar]

Our system is designed to produce consumers who fall in line and:

• Get good grades in school so you can get into an expensive college
• Go in debt to get a college degree
• Hope your degree pays more than student loan payments
• Go in debt buying crap to drive the economy
• Endless monthly payments
• Set aside retirement money, put it in investments that allow Wall Street to gamble your money
• Pray you have enough to retire
• Work until you die in reality

 

[copterzach]

I wish I had a few more ranches to sell. No inventory. Everything that is listed is just that. Listed. Brokers are telling land owners that they can get X for their ranch and it sits for a year or longer. My broker and I are honest with sellers and that has cost us quite a few listings....but heir ranch is still listed with someone else who over promised.

 

[pronstar]

From what I see at work, we have an education epidemic when it comes to finances.

I’m talking men in their 30s who cannot see how $1,000 a month on a truck payment while making $2,000 a month is a bad idea.

10000000%
People don’t buy based on price.
They buy based on payment.

 

[LargeOrangeFont]

Our system is designed to produce consumers who fall in line and:

• Get good grades in school so you can get into an expensive college
• Go in debt to get a college degree
• Hope your degree pays more than student loan payments
• Go in debt buying crap to drive the economy
• Endless monthly payments
• Set aside retirement money, put it in investments that allow Wall Street to gamble your money
• Pray you have enough to retire
• Work until you die in reality

Translation - own nothing and like it.

 

[Cole Trickle]

About 37% nationally own their homes with no mortgage… it’s actually doable if you buy your first home, improve and maintain it without loans, then stay in it until it’s paid off.
We bought our first home at 7.25% and still live in it free and clear 26 years later.

P.S. it’s a ranch style, slump block house with 8 foot ceilings that few people here would lower their standards to live in, but the payment kicks ass.

37% of homeowners or population?

Sooner you can get into that last "family" house the better and never ever take $$$ out for toys. Don't rack up CC debt so you need to cash out to get out of debt that you will rack up again.

throw extra at it every month consistently.

Easy formula but hard for people to stick to.

 

[HNL2LHC]

37% of homeowners or population?

Sooner you can get into that last "family" house the better and never ever take $$$ out for toys. Don't rack up CC debt so you need to cash out to get out of debt that you will rack up again.

throw extra at it every month consistently.

Easy formula but hard for people to stick to.

We did it and it works. Buy a second, third as soon as you can. Rent them out and 20+ years later the renters pay your mortgages including the house YOU live in.

 

[Cole Trickle]

We did it and it works. Buy a second, third as soon as you can. Rent them out and 20+ years later the renters pay your mortgages including the house YOU live in.

If it pencils out its a great plan. Tons of people tried and went BK when the market crashed in 08. I keep hoping for a market crash so i can grab a duplex to rent.

I could never make CA real-estate work when i was at the financial point to buy a second home and then you throw in the covid no pay bs I would have been ruined.

I would like a couple doors by retirement age but i don't want to refi out of a great rate to do it. There were a couple years it absolutely made sense.

 

[LargeOrangeFont]

We did it and it works. Buy a second, third as soon as you can. Rent them out and 20+ years later the renters pay your mortgages including the house YOU live in.

My plan there was the renters pay for my kids college tuition.

 

[pronstar]

Simple plan for illustration:
Buy one rental per year, 15 year note.

Year 16, the first house you bought is paid for, pull out all equity and live on it.

Year 16-30, lather, rinse, repeat.

Your job is now cashing checks.

 

[pronstar]

My plan there was the renters pay for my kids college tuition.

Yup, a legacy of assets that puts money into a family trust is what we’re doing.

 

[Havasu Rehab]

Simple plan for illustration:
Buy one rental per year, 15 year note.

Year 16, the first house you bought is paid for, pull out all equity and live on it.

Year 16-30, lather, rinse, repeat.

Your job is now cashing checks.

The magic question is how do you come up with the cash to buy one a year?

 

[pronstar]

The magic question is how do you come up with the cash to buy one a year?

OPM is the only way for us with limited resources to scale-up.
My pile of money is only so big (or small).

Buy distressed.
Rehab to build equity/raise value.
Upon completion, refi to put it on a mortgage and pull your initial investment out.

Lather, rinse, repeat.

 

[pkrrvr619]

OPM is the only way for us with limited resources to scale-up.
My pile of money is only so big (or small).

Buy distressed.
Rehab to build equity/raise value.
Upon completion, refi to put it on a mortgage and pull your initial investment out.

Lather, rinse, repeat.

What markets do you like? Dallas area if i remember correctly?

Ive searched tons of markets and can't make the rental income cash flow work at the 1% rule in this landscape. maybe i am missing something.

 

[pronstar]

What markets do you like? Dallas area if i remember correctly?

Ive searched tons of markets and can't make the rental income cash flow work at the 1% rule in this landscape. maybe i am missing something.

It’s not easy to find properties that can be cash flow positive.

My RE mentor is a wholeseller, and he freely admits that most distressed homes bought thru wholesellers are sucker deals at best.

I’m still focusing on Dallas, but I’m no longer a flipper. I’m small potatoes, and want the ability to knock on doors if necessary so I like local.

I’m currently not in any deals right now, the RE and financial markets are too volatile for my tastes currently, and I can’t afford to be left holding the bag on a property that I can’t mortgage.

 

[mesquito_creek]

37% of homeowners or population?

Sooner you can get into that last "family" house the better and never ever take $$$ out for toys. Don't rack up CC debt so you need to cash out to get out of debt that you will rack up again.

throw extra at it every month consistently.

Easy formula but hard for people to stick to.

I read the statistic as 37 of homeowners not population…

I see lots of first time buyers wanting unrealistic homes with more want than need.

 

[LargeOrangeFont]

I read the statistic as 37 of homeowners not population…

I see lots of first time buyers wanting unrealistic homes with more want than need.

Lots of that, yes.

 

[mesquito_creek]

It’s not easy to find properties that can be cash flow positive.

My RE mentor is a wholeseller, and he freely admits that most distressed homes bought thru wholesellers are sucker deals at best.

I’m still focusing on Dallas, but I’m no longer a flipper. I’m small potatoes, and want the ability to knock on doors if necessary so I like local.

I’m currently not in any deals right now, the RE and financial markets are too volatile for my tastes currently, and I can’t afford to be left holding the bag on a property that I can’t mortgage.

Real estate has always been hyper competitive which is why it’s not easy. It’s a bizarre environment and the only one I can think of where the average joe retail investor thinks they can just randomly jump in and out perform the entire industry of professionals.

Anyone with a pulse who conservatively saved and invested in anything since 2009 is sitting on piles of cash at the ready…

 

[RiverDave]

7.6M views · 181K reactions | “Rent Forever” | Eric D'Alessandro

“Rent Forever”.

www.facebook.com

 

[pronstar]

Fed is walking back the “robust economy”…no significant market reaction because the market already knows.

Fed Expects 'Mild Recession' This Year After Banking Crisis Rattles Markets

The Fed hiked interest rates to their highest levels since 2007 at its latest meeting.

www.forbes.com

 

[77charger]

10000000%
People don’t buy based on price.
They buy based on payment.

Good point I remember buying my truck years ago sales guy ask how much am I willing to pay a month. Gave an answer lower than I was looking for comes back with a 7 year loan lol. I said nope back and forth all day but ended up where I wanted for a 5 year loan.

Today some don’t care the length of term just the number at end of month.

 

[pronstar]

Today some don’t care the length of term just the number at end of month.

Yeah it’s really a shame that we want folks to be on never-ending payment plans.

Great if you’re a manufacturer of a product.

Not really good for the consumer or the greater economy long-term.
It just scratches a short-term itch at the expense of a yoke around your neck for the payment term.

 

[LargeOrangeFont]

Yeah it’s really a shame that we want folks to be on never-ending payment plans.

Great if you’re a manufacturer of a product.

Not really good for the consumer or the greater economy long-term.
It just scratches a short-term itch at the expense of a yoke around your neck for the payment term.

I find it more of a shame that consumers don’t have any impulse control.

 

[Justin Seman]

Glad I'm neither a buyer nor seller. It's fixen to get ugly real soon , I'd guess. Sorry OSB...

Luckily I'm in the same boat.. Looking to buy another investment property but I'm waiting to see everything come down... Living within my means has paid off for the 2nd time in my life.. lol

 

[pronstar]

I find it more of a shame that consumers don’t have any impulse control.

I’m so torn when it comes to stuff like this, maybe I’m getting soft in my old age.

On the one hand, I completely agree.

On the other hand, we as a society literally dumb-down our education to intentionally produce clueless sheep.

 

[bonesfab]

I’m so torn when it comes to stuff like this, maybe I’m getting soft in my old age.

On the one hand, I completely agree.

On the other hand, we as a society literally dumb-down our education to intentionally produce clueless sheep.

Why do you think there is no "life or finance" classes in high school??? If the sheep were even semi educated on the pitfalls of financing the system would collapse

 

[LargeOrangeFont]

I’m so torn when it comes to stuff like this, maybe I’m getting soft in my old age.

On the one hand, I completely agree.

On the other hand, we as a society literally dumb-down our education to intentionally produce clueless sheep.

Agreed.
But wait until your kids get older and you realize they have an opportunity to go out and kill it without even trying.

 

[LargeOrangeFont]

Why do you think there is no "life or finance" classes in high school??? If the sheep were even semi educated on the pitfalls of financing the system would collapse

Those are the boomers and Gen X ers today with no money. You will never fix people’s dumb decisions.

 

[pronstar]

Why do you think there is no "life or finance" classes in high school??? If the sheep were even semi educated on the pitfalls of financing the system would collapse

Yeah I think I posted the Henry Ford quote elsewhere, he basically said if people could peek behind the financial curtain, they’d revolt.

Here’s a good vid that illustrates the point pretty well