Have you Noticed...

[fdjake]

OUR CREDIT MARKETS COMPLETELY FROZE 

THAT..... has more to do with LESS people investing in Real estate than ANYTHING I will EVER write on this site.

The bottom line is this.....

If you can't get your END USER FINANCING.........You have no END USER!!!

This is EXACTLY the scenerio that we  (Mike & I) predicted over 2 years ago.  We said over and over that very soon the day would come when almost NO ONE wanted to even HEAR the term ....REAL ESTATE INVESTMENT.

The next shoe to drop is COMMERCIAL REAL ESTATE.  That will be CLOSELY followed by major US banks PULLING credit card lines from individuals as defaults on those lines increase due to JOB LOSSES.

This IS REAL.....NONE of it is opinion at this point.  JOB LOSSES...create MORE job losses.

Meredith Whitley called this disaster 4 years ago....Here's her take on where we are headed......

Cover your eyes Roger......Your not going to like this one bit......

http://money.cnn.com/news/newsfeeds/articles/djf500/200812021452DOWJONESDJONLINE000586_FORTUNE5.htm

Now.......after reading this little GEM.....ask yourself a simple question????

Do I think the economy will get worse from here or better????  If worse is your answer there are some very simple things you can do RIGHT NOW to actually make money from that opinion. 
The bottom line is this........You can sit and wonder why posts are lower than before, OR you can sit and think about HOW YOU MAKE MONEY from a economy that contunues to weaken BY THE DAY!!!!

Sorry for the Hijack Roger.....But HONESTLY......This is an opportunity of a LIFE TIME.  Wall Street thinks we have hit BOTTOM......

WE HAVEN'T.....NOT EVEN CLOSE......Being SHORT this market could be THE MOST profitable investment you make in the next 10 years. 

[propertymanager]

FDJake,

I agree with you that shorting is the way to go.  However, I still haven't seen the bear market rally that should occur.  The 18% rally last week didn't seem to be sufficient to me and I am expecting that we need to get to AT LEAST 9,500 on the DOW to have a big rally that will fake everyone out and bring in the bulls (to be slaughtered).  Do you agree or are you shorting from here?

Mike

[Roger J]

With all due respect, Jake, you act like I'm trying to flame you in this thread.  I'm not.  I'm just merely pointing out the effect and POSSIBLE causes, that's all.

Yes, credit is frozen, in most cases, right now.  That's actually the FIRST other possible reason given so far, which is why I started this thread in the first place.  Also, if it's coming that no one is going to want to hear the term "real estate investment" then what is to come of the RE investing community and sites like this?  Will they have to change to continue, hold fast for the die-hards, or simply die out?

And again, no offense to anybody here, but Jake, you might need to review the posts of the past, as 2 years ago Mike was NOT on your side of this story.  It has only been in the last six months or so that Mike has made your D&G posts of the past look rosy by comparison.  I mean hey, you were just saying watch out for the upcoming recession/possible depression.  Mike is now talking about the impending collapse of the U.S. government.  Yep, I'd say that is a little D&G for you.

Raj

[fdjake]

Mike,

I'm holding a short position (as you know) in the June 09 QQQQ's.

My thinking is that trying to pick tops and bottoms in this insane market is pointless.  If the market rallies to 9500 I'll still be short because I see NOTHING in this economy that bodes well for stocks. .  If, on the other hand, we get more and more realization that this is INDEED the mother of all recessions, those that are left in the market will soon see that getting out at 8500 on the dow is a lot better than getting out at 5000.

Again.....the BIGGEST REAL ESTATE BUST IN HISTORY will lead to the biggest economic fall we have ever seen.  Notice I said WE.  Whether this turns into a depression really doesn't matter at this point.  The BUST is going to be GIGANTIC in every sense.  I fully expect to see unemployment at WELL OVER 10% within the next year.  At that point we just GRIND LOWER.  

This is going to be beyond many people's expectations.   SHORT this market but give yourself TIME to be wrong.  1000 point rallies here can occur on any given day.....BUT.....That DOES NOT change the down trend,  it only makes BUYING more PUTS an easier trade.  I can't tell you WHEN the market will have a 1000 point run UP......But I can EASILY take the other side of that rally the SAME DAY and consistantly make money on the inevitable sell off!!!!!

Roger,

I understand what your doing....no offense taken....But honestly.....do you REALLY need to ask why less people are HERE?????????

When you have NONE FUNCTIONING CREDIT MARKETS it tends to make purchasing an asset like Real Estate, which is purchased with 80%-90% of the total investment with CREDIT....... VERY DIFFICULT!!!!  In all honesty, I'm a little surprised that you didn't see that.

Have you ever noticed the almost complete lack of COMMERCIAL REAL ESTATE INVESTORS on this site???  I'm not talking about the guy who owns an 8 unit apartment building.  I mean the people who own SHOPPING CENTERS, DUNKIN DONUT franchises, ect....   The reason they aren't here is.... this site is set up primarily for NEW/SMALL INVESTORS.   I'm not saying experienced investors aren't here, they are....But when things were BOOMING there must have been a 1000 posts a day from people who didn't  understand how to write a P&S agreement.  THEY'RE GONE because NO ONE will go NEAR these people in this enviroment.  Would you loan a NEW GUY money today????  EXPERIENCED investors with TRACK RECORDS are being told NO by their banks.  NOT EVEN Private money lenders will touch a new investor today.  The PML's GOT KILLED on Wall St.....  Those guy's got their heads caved in.  The other side of all that Private money lending is this.....

Who do you think now OWNS the buildings those loans were made on????
THE PRIVATE MONEY LENDERS..remember.....THEY were the BANK!!!!!!  The original BUYERS just walked away when the numbers didn't work.  So know we have PML's who got KILLED on Wall St. and to ADD to it....THEY OWN THE OVERPRICED HOMES THEY FINANCED!!!!!

I knew a mortgage broker that used to call me every week wanting me to get into this Private Money loan BS...He talked about how the money was secured by REAL ESTATE and I could EASILY make 15%......I talked about how all the real estate being PURCHASED with that money was OVERPRICED by 2 to 3 times it's REAL VALUE.  He told me I DIDN'T UNDERSTAND real estate ....

Care to guess what that very Mortgage Broker is doing right now??????

HE WASHED MY CAR LAST WEEK at a local full service car wash

HE...like a whole bunch of other people.....DO NOT want to even HEAR the term REAL ESTATE INVESTMENT.....

The bright side??????   We are VERY CLOSE to a point were BUYING real estate will be the bargain of a lifetime.  We are NOT there yet....but we are close.....The BIGGEST INDICATOR??????????

A LACK OF NEW POSTS ON REAL ESTATE WEB SITES!!!!!!!!!

See Roger.....I can be postive

[Roger J]

BINGO!!!!  Finally, the point I was trying to get across comes through!

You asked why ask why?  And you answered.  Yes, REI websites are geared to the new/wannabee investors.  Yes, experienced investors come to them for a variety of reasons, but they aren't really made for them.

Why ask why is simply that.  Now that the real estate investment craze is over (or soon to be), what happens with sites like these?  Again, do they stay the same, change, or simply die out?

Let's face it, the experienced investors aren't going to stay here long if there is no reason for them to be here.  Again, reasons vary, but almost all of them have to do with the fact that new investors are here.  If they're not here, then what happens?

My opinion, it must change to stay viable.  This site is a perfect example, even if it changed due to the nature of the posts rather than some change in style.  I come because I'm still learning something here as well.  That wouldn't be the case if it was RE everytime, all the time.

Raj

[John_in_NC]

I have a question for the stock guys on here.

What would you suggest for someone with a small 401K that is getting smaller every month? I only have about 15K in it.

do nothing and watch the money vanish?

Pull it out and take a hit, then invest the 10K into gold for the next few years?

Contribute more money because the stocks are cheaper? (yeah right?!)

I have always thought of my 401K as drinking money for retirement. I don't plan on staying an airline employee much longer anyways.

Thanks guys!

John

[fdjake]

I think  it's changing in front of your eyes Roger.

TRUE ENTREPRENEURS will always find ways to make money.
In my opnion NOW is a perfect time to take advantage of the obviously weakening U.S. and Global economies.  By using some leverage and some knowledge money can be made.

If NOTHING ELSE.......At least LISTEN to what we are trying to teach you guy's.   Watch the options in the QQQQ's. (June 2009 $16 PUTS)  Pay attention to the price movements over the LONG TERM.  This market can rally 1000 points in an HOUR.  That DOES NOT change the economic reality of this recession/depression.  Eventually.....EVERYONE will come to realize that the Real Estate BOOM/BUST wasn't a PART of our economic history......It was an EARLY WARNING SIGN of a NEW economic  REALITY.    

That reality is..........IT'S NOW TIME TO PAY FOR THE PARTY, and pay we will!!!!!!!

The only question then becomes.......

WHO'S GONNA COLLECT???????

I'm doing everything I can to ensure I'M THE ONE COLLECTING.....not WATCHING on the sidelines as events unfold that I could see as clear as this page.  Missing these events is what you want to avoid.  They are OBVIOUS, they are HAPPENING, and they can make you a TON of money.  In my experience most people think that it's too EASY.  If it was THIS EASY why isn't everyone seeing it????

The answer is........most people literally SLEEP WALK through life.  Their moving around, their walking and talking, but they MISS chances because they're afraid of BEING WRONG!!!!!

When I look at our economy shedding jobs (todays number was 250,000 PLUS lost) it's as clear as day....This market is a JOKE.  The "Pro's" have gotten HAMMERED, those same professionals are NOW telling people to BUY, BUY, BUY......
It's the same indicator your seeing here Roger.....If you looked at the number of posts here 2 years ago and seen the RECORD NUMBER...took that info, and SOLD EVERTHING YOU OWNED.....Today you'd be considered a GENIUS.
The inverse is also true.......When EVERYONE is telling you HOW CHEAP STOCKS ARE..................

RUN AWAY.....or GO SHORT!!!!!!!!!!!!!!!!




JOHN.....

FORD, FORD, FORD!!!!!

Your buying a company that is about to be BACK STOPPED by the GOVERMENT.   Is the GOVERMENT back stopping the companies you own in your 401K??????  NO...they aren't.

Then why not take every penny of that "drinking money" and simply buy FORD.

Recessions are the single greatest thing ever invented for car companies....No I have not lost my mind.....This is what happens in EVERY RECESSION...... sales of NEW cars PLUMET....the numbers released yesterday prove this......HONDA down 40%....Ford down 35%......This creates FUTURE DEMAND.........You can BANK ON IT!!!!!  People in every single recession in history DO THIS.....they hold onto their old clunker because they DO NOT want a CAR LOAN when their JOB may be GONE.....
The BEAUIFUL part of this comes a few years later.......The consumer see's his company HIRING, or adding OVERTIME, they regain confidence......the VERY FIRST thing these people by, in EVERY POST RECESSION PERIOD IN HISTORY is...................

A NEW CAR!!!!!!!!!!!!!!!!!!!!!!

Go to yahoo.........look at a chart of FORD going back as far as you can....It should take you back to the 80's.......Are you old enough to remember that recession????  FORD stock price then??????

$1.25/share!!!!!

Move on ahead to the 1990's

FORD STOCK PRICE 10 years later????

$25/share!!!!!

Now THAT is what a 401K SHOULD be doing!!!

You asked for it....I GAVE IT to you......It makes NO DIFFERENCE if YOU personally like FORD'S products.....I've said this here before...Ford DOES NOT have to beat TOYOTA......Alll Ford has to do is BEAT the Ford motor company of 2008-2009......In 2012 if they sell MORE cars than they did during an EPIC RECESSION........Wall St. will throw money at this stock like YOU WILL NOT BELIEVE.

I've done this before........Chrysler in 1992.......$8/share.....on the VERGE of bankruptcy.......GOVERMENT steps in and GUARANTEES LOANS for them....In other words....the U.S. BACK STOPPED Chrysler in 1992.

So what happened???...................... By 1996

Chrysler stock was $85/share!!!!!!!!!!!!!!  Mutual funds, Pensions, Private equity, Wall St. Pro's...ALL OF THEM....COULD NOT BUY ENOUGH OF THIS STOCK....

When did the "PRO'S" rate Chrysler as a "BUY"???????

When it hit $65/share!!!!!!!

[propertymanager]

And again, no offense to anybody here, but Jake, you might need to review the posts of the past, as 2 years ago Mike was NOT on your side of this story.

You're right!  I haven't been on FDJake's side for two years, it's been well over 3 years.  Here's part of one of my posts from August 2005:

In areas where there is a bubble, there could be (will be) a depreciation of house prices that will last for many years.

Of course, the housing market could keep appreciating at double digits forever and then I'd be the fool for not betting on inflation.

As I recall, I was getting attacked regularly for saying that the real estate bubble was going to burst.  I seem to remember hearing that things were different this time and that I simply didn't understand that new reality. 

Mike

[Funder]

I agree that the constant study of real estate can get a bit dry.  I like the random ramblings section.
I was in the local book store the other day.  I hadn’t visited in a while.  I was surprised to see that the “real estate” section is 10% the size that it was 2 years ago.  The ironic thing is that now is a much better time to try to make money in real estate.  The easy money is gone, but the money to be made is much less speculative, and the preservation of principal is certain.
We have not seen gross rent multipliers like this in Northern California….ever!  The potential to cash flow, right off of the MLS, using the 2% rule looks just like Tennessee or Texas.
I have no idea why.  I suppose some folks “don’t want to be a landlord” and “don’t want to fix toilets at 3:00 in the morning.”  It could also be that folks are so upside down and ridiculously leveraged, or maybe they are unemployed.
I have been challenged for saying that California is different, but California is quite different. 
On the downside, our legislators are holding the entire state hostage because we have two factions of ideologues that refuse to compromise.  Democans want to raise taxes, and Republicrats refuse to raise taxes.  They both want to spend, spend, spend.  After all, it’s popular.  Mark my words, government debt is the next bubble, and it will be monetized.  Inflation is the only way out.
On the upside, California has agriculture, construction, mining, banking, technology, entertainment, food processing, automotive manufacturing; the list goes on and on.
Further, our population is exploding, and with two “sanctuary cities” (cities which do not deport illegal aliens), and a HUGE demand for illegal workers.  Consider agriculture (how many Americans want to work for half of minimum wage or less to pick fruits or vegetables, spray pesticide and fertilizer, and pull weeds?), or construction (once again, how many Americans want to work for $5-10/hour to dig trenches, mow lawns, remove the old roof from a building…ect).  Also the industry here is attracting people from other states.
This is a trend which has been going on for some time; our population grows to the tune of around one million people per year.  This isn’t happening in most states, but in the Sunbelt, it seems to be. 
Now is a great time to be a contrarian investor.

[phlemboy]

When its all said & done, it's about JOBS!! There are very few good deals in my local market. But there's also A LOT of people unemployed. Instead of renting an apartment by themselves, people are shacking up together to save money. There are a TON of vacancies. People are either moving out of town or doubling & tripling up in one apt. I've decided to step back until our unemployment improves.. I'm taking this time to educate myself on the stock market. This is MUCH harder to learn than RE. But I can see where people can make money whether the market is up or down. I'm also noticing that the money I need to get started is much smaller than what would be required in this lending climate. My local banks are requiring 15 - 20% down. The cheapest properties are in the $75k - $90k range. I can start investing (when I learn how to do it correctly) with as little as $500 - $1000. Granted the gains would be small but its all about adjusting investment stategies to be a successful investor, regardless of asset class.