So I guess you're saying that you'd rather have the unemployment rate lower, and the vacancy rate down? When you get everything to line up, let me know. In the meantime, in my area, I can buy houses where the mortgage payment (PITI) is half the rent. Personally I think that is a pretty good deal. OldTrader
I had a friend that did that back in the day.. he would get a quit claim deed, give them enough money to move with, and then go to the lender and start talking about how his now abandoned property was in danger of fire from transients.. he claimed that he could pay them off for ten to fifteen cents on the dollar but the lenders got to know him and they just kept making it worse for him over time... he said furniture was thrown during one negotiation.. the lenders want the people to just leave, they don't want a middle guy messing up the works... and, that was decades ago, who knows if such negotiations are possible nowadays.. it seems like lenders just don't respond to much of anything.. Financial instruments are so much more liquid that RE.. I had RE, I had renters I couldn't stand, I had headaches, and then I needed money and had to sell a house right before the prices tripled in the 90's.. $215k to $700k in a few years... never again... shoot, I had nearly accomplished complete amnesia in regard to that but the memories are flooding me.. noooooo !!! :eek:
here in Sydney rents are still 1/2 of the cost of owning. How can be sooo different but economies more or less the same
Well, with all due respect to OldTrader, there are rarely properties for sale that pay for themselves as he says. Once in a while you find something, every few years, at the "perfect time" you'll get such an opportunity, but rarely. For example, in California, most 3bd/2ba houses still rent for 1/2 to 3/4 of cost of ownership as you say. There are some good deals out there in foreclosure auctions but they're usually fixer-uppers. Sometimes you get lucky & find a bargain, but it's the exception, not the rule.
Its much harder to close on a short sale as usually it it bank owned. Now at a small bank there can be opportunity. I was looking at some condos in San Diego in the "Gaslamp" quarter which is the downtown area. There were some listings where the higher floor was being sold for about $30,000 less than the lower floor. I surmised the reason was the higher floor listing was a short sale meaning you had to offer to the bank and wait for the bank to respond in their own sweet time, they will alot of times reject a reasonable offer, why? because many running these depts don't know anything. You can spend a year and still not get the property. Many realtors will not involve a buyer in this due to the aggravation. I don't want to generalize as every situation is different but that is my limited understanding of "short sales" By the way, banks are notorious for losing a ton of money with bank owned properties.
A "short sale" by definition is NOT bank owned. By definition, it is a property owned by the borrower, who wants to sell for a price less than the balance of the mortgage. The bank would have to approve such a sale, but they do not own the property. OldTrader
Hey Risktaker: I just told you they are all over the Midwest. You seem to be citing California as an example, so I'll assume you're from California. Trust me, the California market is nothing like the Midwest market. So if I were you, I would not generalize the California market. So that you know, I was active in the So California market at one time, mostly Orange County and the Inland Empire. I haven't been there for a while, so I've purposely stayed away from making any direct comments. But when I was there, the rent was well less than a mortgage payment would have been as you stated. So at that time I bought properties at a discount to their market value, and then resold them. I never rented a property. However, as I mentioned earlier, a friend now tells me he can buy properties in the Inland Empire and rent for positive cash flow. This guy has been in the real estate business for about 40 years, so I suspect he knows what he's talking about. Think about it, the interest rates are very low, property prices have come way down, and you don't think that just maybe you could make a deal that might be covered by the rent? My friend in CA tells me that there are deals to be had at the auctions there, and that he can hold them by renting them out. He's a pro. I'm not sure what your qualifications are. But I definitely know you don't know what you're talking about when it comes to rents in the Midwest. OldTrader
You're right. I *don't* know the MidWest. I was under the impression from one of you posts a while back you were in CA though?
When I say it's like daytrading was in 1999, I'm not talking about the risk of losing money. I'm simply saying that everyone and their grandmother's dog seems to be getting into it right now, and it's easy money for the time being..and I don't see it lasting.
that's my point you are dealing with the bank, they are making the decision not the homeowner. This is why it is like pulling teeth. Ask a realtor who is mainly a buyer broker and ask them what they think of getting involved with short sales. I have an inlaw who had a client looking to buy a short sale condo listed for $150,000, an offer was made for like $140,000 which was rejected by the bank. That same property is still owned by the bank and relisted at $100,000 and has not closed. Maybe the banks need to write down these loans. http://homebuying.about.com/od/4closureshortsales/qt/112707_QualSS.htm