More Government Intervention Coming?

[Hoosier4life2005]

Sure, there are deals everywhere, but our Government is still successfully keeping the prices of homes SOMEWHAT inflated.  Im talking about a CRASH, not just a decline. (not trying to play word games.)

[rookieNYC]

Hoosier,
 A few weeks ago I posted that I bought 2- 3 bedroom condo units in Florida for 30k for BOTH (fwiw I PM'd Fdjake the EXACT listing,price,address for proof in case I was called BS by someone here..He was amazed)..They sold in 2007 for 149k..And I paid %10 of that price...In my world I call that a crash,a massive crash at that..Im perplexed at what you constitute a crash as if these type of deals are going on?..Maybe you are waiting for the Detroit scenario to play out across the country,which will NEVER happen..The day that houses are selling *far* below rebuild cost is here NOW...Does that mean they wont get slightly cheaper,maybe..But who can call a bottom?..I cant ..Dont forget interest rates will be most likely soaring in the years to come which will make financing for deals more expensive..But Im sure you factored that into your crash scenario...Inflation is the next shoe to drop...

[allagash]

Dont forget interest rates will be most likely soaring in the years to come which will make financing for deals more expensive..But Im sure you factored that into your crash scenario...Inflation is the next shoe to drop...

a few weeks ago....while working on my 35 cents on the dollar rehab....I was ripping up underlayment in a room.

between the hardwood flooring and sub-floor, the previous owner had used newspaper to do shimming.

the year was 1969.....

found an article about where people were griping about the recent interest rate hike to 8.5%....

little did they know it would march up to the 20% neighborhood.

and here we are in alice in wonderland....with hugh monetization and zero rates.

the time is now to build wealth!

-Mike
btw…a used pickup truck would probably get you to that first 30k a lot quicker than you think….just be sure to use gloves…you don’t want tar under your fingernails at the daytime job…

[fdjake]

I not only checked out the condo's Rookie mentioned, I even talked to the realtor handling the sale.....100% TRUE and an absolute STEAL!

Hoosier,

The BUST has happened.....When you can BUY a COMPLETE home, with working heating system, plumbing, roof, electrical, that you can LIVE in it for LESS than what the  L U M B E R   cost to build that home.....

THAT'S A REAL ESTATE CRASH!!!!

Rookie's condo buy is a perfect example.....These weren't BOMBED OUT  units that had been gutted to the studs....They were in good condition with modern, updated kitchens, 2 floors, 2 bedrooms, and 1 1/2 baths.
You can't buy a new CAR for $15,000.....They sold originally for almost $150K......How much LOWER do you think they could possible go????

The CRASH has happened....

BUT......The deals people here get are NOT what MOST people buy....Rookies situation worked because the BANKS won't go NEAR condos right now especially if the project is less than 50% occupied...The condo Rookie purchased fell into that catagory....So what did he do????

HE BECAME THE BANK!!!   He became the bank to another investor, that will deal with all the BS....He gets paid every month.....Water heater goes????  Not Roookies problem (ever call your BANK because your heat doesn't work?)  You don't because it's not THEIR PROBLEM.

It all comes down to this......Take what you are given and REWORK IT in a way that makes you MONEY!!!

[John_in_NC]

Out of curiosity what are you going to do with these condos rookie???

How do you guys find these? Surely they aren't on the MLS for that price.

[rookieNYC]

John in NC,
 To tell you the truth I found out about the property through one of my HML customers..I funded a 4 unit buy from this one borrower and he went %50 down so I did the loan and looked for myself..After seeing what he bought for the price I looked for myself..I found 2 units *cheaper* than what my client paid..So I snapped them both up...I sold both (abt 30k a piece,%25 down) with low double digit % mortgages with 10 year paper with call options in at year 5....On paper its a great deal but I wish I could have bought more....Dont get me wrong Im making a heavy % profit but because its just such a small deal I didnt get too excited..I just had to buy them after thinking about it for a good 10 minutes...The price was ridiculous and after I had my contact in FL look at them he gave me the green light to close..Its not in war zone riddled with drugs,there arent bullet holes in the building,the HOA fees are fair,the taxes are less than my dunkin donuts bill per year,and I could present it to income based investors and capture the % on the mortgages as well..It was a win win..Had to do it..Ive been pulling the trigger all year long..

[robdedgar]

Rookie, I am looking into purchasing a Subway franchise, and I noticed you said you own Dunkin Donuts restaraunts.  In the the information brochure it states that 200,000 is the most you would be looking to spend to start a venture with Subway.  Does this sound correct?  I thought it would be more.

[rookieNYC]

I do franchise funding/flipping on occassion if there is a huge arb to make but I dont own any Dunkin Donuts presently...My last post was a joke that the taxes were less than my dunkin donuts annual bill..Sorry for not being more specific...As for Subway and build out costs,the franchise makes a tremendous amount of profit when a new *fish* opens a *new* store..You pay all kinds of franchise fees,opening costs,build out costs,permits,stocking fees,rep fees...Have you researched the location and the business enough?...I highly recommend you work along side an owner *BEFORE* you committ any of your own dollars..Franchises charge a fortune for their goods,and yes I know the success rate is higher for franchises etc..But make sure you are buying near a college or lower to middle class high volume area..Not everyone eats Subway but its a decent franchise but IMHO $200k is alot of wood to spend on a store with no real equipment...Many of the past owners of Cold Stone Creamery were hit with 450k in buildout costs for stores that ultimately failed..Who came out the winner????...The franchise,bigtime...Loan to own baby...The franchise sets you up for failure in some cases imo...Cold Stone Creamery is a perfect example...Be careful...A large % of new small business buyers get buyers remorse after they see the real net numbers on the business they just bought..By that time its too late..I would do as much due diligence as possible before you do this...

[allagash]

the taxes are less than my dunkin donuts bill

I like the toasted onion with cream cheese....

-Mike

[robdedgar]

I see, thanks for your reply.  I am looking to talk to some of the local Subway business owners and have left voicemails.  Don't want to pester them too much.

Now the real question; how do you buy multiple condo units, in Fl none the less, and pay less in taxes than you spend all year at Dunkin? lol

[rookieNYC]

Robedgar,
 I meant per unit..Per unit the property taxes are like $900 per year..I spend probably $10 per day in Dunkin Donuts...x 365 days per year thats like $3650 per year in coffee alone..Yes I have 3 large coffees per day and never take the change...So closer to $9 per day,then plus getting coffee for my wife and all the crazy crap she drinks you may be able to add the mortgage into it also..

[allagash]

Speaking of which...I'm clear out of coffee filters here...
Time to get creative with the Brawny paper towels....

Can't stand wasting my time on onesy-twosey runs to the store.

-Mike

[robdedgar]

Wow, if you were to skip your coffee forever, you might be sleepier during the day, but your net worth would increase $4000 extra per year.  I am sure Warren Buffet, Donald Trump and Robert Kiyosaki would do it.  lol

[propertymanager]

The Dow is below 10,400 as I am writing this.  When will the government announce the next bailout to keep the markets up?  I'm betting at about Dow 10,000.  It's all manipulation, you know!

Yep!  Just as I thought, a mysterious buyer came in yesterday afternoon to prop the market up above Dow 10,000.  Was that the Fed putting in those buy orders?  The government this week has also announced a $23 Billion bailout for teachers, proposed $165 Billion to bail out union pensions, and tax-cheat Tim Geithner is in Europe explaining to them how to get the printing presses running at the European Central Bank!  And GE is doing their part, as always, pumping up the market on CNBC!

Can you say PONZI SCHEME?
 

[allagash]

Action is the key to all success

                                       -Benjamin Franklin

Mike,

with all due respect....here's another way to look at it:

you piggybacked the last ponzi boom scheme....

you were able to walk into banks....and walk away with near zero down mortgages in building up your rental business.

that type of lax lending has now been clamped down upon.

sure you have stellar credit and still may be able to get away with it....but you get my point.

this is the next piggyback opportunity.

ride it.

then ride it down.

just some food for thought.

email me for some thoughts.

-Mike
http://www.youtube.com/watch?v=S4cD8eyWpwQ