That is a nigerian scam. I had a buddy who tried to sell his hang glider in a "hang glider" magazine. He called with the same deal about senting a check with excess money to wire to a 3th party. We recognized it immediately as a Nigerian scam. We really messed with him. He sent us a check we deposited it. It bounced. We told him we never got it. He sent another. We told him that we deposited it and was waiting for it to clear. Then we told him were had changed our mind about selling and never mentioned the check. Then we told him we didn't know what he was talking about. That he had the wrong party. LOL You have to understand that the nigerians work at being crooks like normal people work at normal jobs. It is a business to them. John
I placed this guy one time into a CFO job at a large company, publically traded company about 10 years ago. He was an x big 8 partner. Really sharp. The job I got him out of required him to go to Nigeria to negotiate a contract. He was held for ransom at the airport when he tried to leave. The company had to wire $25k before they would let him leave the country. Needless to say, he told his employer that he was not going back. John
That's some scary shit. Reminds me of Lords of War which I just watched. Can't a straight up guy go to a third world shit hole anymore? Hell no! Even in Russia the big execs have well-trained armend body guards to escort them everywhere.
Nah. Depends on how he has them financed. Rents are going up. Its a national trend that you can verify anecdotally or through HUD numbers. If your properties are locked into fixed mortgages, it will only get better from here. Right now, I have 4 rentals and am in the process of buying 2 more. All on fixed notes, of course. I've even found that if you tap equity to borrow a down payment, it makes sense to use some to pay points to bring the interest rates down to improve your cash flow situation. Answer these questions to yourself. If people who finance their own homes with ARMS lose their house, will they look for rental property, or immediately buy another house? With interest rates higher, and property values still high, are new entrants into the housing market (i.e., college grads, high school grads, etc.) more inclined to rent, or less? Is it possible to sell a previously purchased rental home for a profit? (yes) Can you easily buy a rental property, rent it out and make it cash flow? (no...not at these prices and rates). In light of these two answers, would you say the number of houses held by small-time landlords is decreasing or increasing? (decreasing over time). With higher demand for rental housing, and a decreasing pool of non-institutional landlords (the guys buying houses), what does the supply and demand curve tell you about price? The ratio of rents to the price of housing is out of whack. That ratio is now (finally) starting to swing in the direction of its historical average. that means that housing prices have to decrease, rents have to increase, or both. Housing prices have an inherent "stickiness" to them because many people do not want, or can not afford, to sell at a loss. You can expect to see rents rise. I see rental rates increasing 5% to 7% per year for the next 3 to 5 years at least, IMHO. SM
Rents are going nowwhere in Carlsbad Ca. I pass a house from time to time that has been for rent now for 6 months. No takers. Being offered for rent because the Real Estate agent who owns it can't get what he wants for it. Not sure what they are going to do about it. He wanted $3500 per month for a 2500 sq foot house fully renovated in a nice neigborhood. House have sold for $850k in the past in this neighborhood. John
US housing boom or doom? research with lots of charts enjoy. http://danskeresearch.danskebank.com/link/FocusUKUS20022006/$file/housingboomdoom.pdf Edit: looks like you have to copy and paste the link
Depends on what you mean by losing their house, but I'm guessing that you mean a distressed sale and/or foreclosure. If that is the case, the answer is definately that they will rent. I'm faced with this issue myself, and I can tell you that the current answer to your question is rent. Rents are likely to increase over the coming years, but I think that the majority of the gap you are referring to will be narrowed due to falling housing prices. Also, I think these rental increases will be primarily in multi-family units (apartment buildings), not necessarily houses. One could probably argue that rents for single family homes are currently inflated somewhat by the size of the financing required by the owner of the property. If housing prices drop, some consumers will stop renting and choose to buy instead. Have you considered that housing rent may be higher than equilibrium due to inflated property values? I'm personally enjoying reading some of these articles that are now stating that while housing market appears to be cooling, a plunge in prices is unlikely, instead we will be seeing a nice, cozy, "soft" landing. Why? Apparently the answer is based on wishful thinking, because I doubt that many people want to consider what will happen when prices do fall significantly.
The current condition has opened the door in certain markets to the creative conditions also. I have a live/work loft in both Chicago and Dallas. In Chicago I have a 3,500 net square foot duplex unit in the western loop that I have had for three years now. It's in an area that has become one of the hottest new rebirth spots. When I took this place I got a four year lease with an option for four more at an unbelievable rate for residential space. The money that I have saved has gone into my business and my other investments. I took $20,000 and made modifications to the Chicago unit when I moved in. My friends and associates who laughed when I first moved in here, are now seriously contemplating doing the same thing. Housing and its equity didn't matter to me as it did my parents generation. I didn't buy into the home equity argument. And my cash position is great for it all. I duplicated the condition in Dallas a few years ago and I am loving the setups. I have no worry of moving interest rates, property maintenance, upkeep or any other ownership issues. And in doing this I feel that I am in a much better capital position than many of my peers. The Dallas position is about to change though. I have a great opportunity to purchase an acre land tract near downtown (another upcoming type area) at a great price that I can do construction on. I am looking at putting up a unique mixed use building on the site that will be in keeping with the true "midwestern style" loft property. It will be energy efficient and have a major solar component. I won't be maxing out any borrowing (max 50% of value) nor will I be doing any ARM's. I'm building with the intent of at least 20 years of ownership. I'm looking to get some value out in the next five to seven years when I cut the parcel into two additional buildable lots.