[Dexter Morgan]

(05-18-2013 09:15 PM)WestCoast Wrote:  

Okay let me speak clear english for even retards.

I think you mean to say, "Okay, let me speak in clear English, that even retards will understand".

Why is this so hard?? Have they closed all the grammar schools the past 10 years??

[WestCoast]

(05-18-2013 09:17 PM)Dexter Morgan Wrote:  

(05-18-2013 09:15 PM)WestCoast Wrote:  

Okay let me speak clear english for even retards.

I think you mean to say, "Okay, let me speak in clear English, that even retards will understand".

Why is this so hard?? Have they closed all the grammar schools the past 10 years??

Do we have a bet now put your CAPS and !! and certainty on the line then. I am calling you out on this

May 18, 2014 - REM investment

[Dexter Morgan]

(05-18-2013 09:17 PM)WestCoast Wrote:  

So do we have a bet now?

May 18, 2014 put up or STFU.

(05-18-2013 09:15 PM)Dexter Morgan Wrote:  

(05-18-2013 09:09 PM)WestCoast Wrote:  

Yes find a better asset class correlated to single family homes.

Mortgage reits are about as good as it gets.

Then we take opposite investment positions on that stock/fund and see who is right over a NTM period... otherwise just GTFO

Sadly there aren't many investments that substitute for residential housing - I wish there were! Years ago, there was an ETN by Metro Markets that tracked residential housing prices, but it did not survive.

I will tell you this: I would NOT advise someone who wants to invest in real estate to buy a mortgage REIT as a substitute! The mortgage REIT could have all kinds of tranche repayment risk that a homeowner never has to contend with. Also, because it is so liquid, it tends to converge with equity prices in a downtown.

A BET ON WHAT?? I've just told you, I know of NO asset class that is highly correlated to single family homes, including mortgage reits. What do you want to "bet" on??

[WestCoast]

(05-18-2013 09:15 PM)Dexter Morgan Wrote:  

I would NOT advise someone who wants to invest in real estate to buy a mortgage REIT as a substitute! The mortgage REIT could have all kinds of tranche repayment risk that a homeowner never has to contend with. Also, because it is so liquid, it tends to converge with equity prices in a downtown.

So you're saying REITs are even more dangerous and yet you don't want to take the opposite side of the trade?

We can even bet on the average price of a single family home over a year. It's not that difficult you're just PMSing all over the keyboard now.

[Dexter Morgan]

(05-18-2013 09:14 PM)worldwidetraveler Wrote:  

You saying they did this because of the fed reserve requirements being relaxed? I know it contributed which is why I said loose credit contributed to the perfect storm.

Falsifying credit ratings doesn't really have anything to do with lending restrictions.

Banks had to do it in order to sell the shit loans.

Maybe I am missing something and you can explain to me.

Sorry, yes, I'll try my best: I think that credit ratings were a symptom of loose money, not an unrelated additional factor. Also, the credit agencies aren't the bad guys people make them out to be. There was more ineptitude here than malice. They genuinely thought that, as long as the loose credit spigot was turned on, these loans would get repaid. They weren't necessarily wrong in the end - the gov't DID nationalize the GSEs.

So, in my mind, it all comes back to loose credit. How did credit get so loose? Did the government really "turn on the printing presses"? Hardly - money in circulation went up a tiny bit, relatively speaking (about $300 billion - sound like a lot, but not in relation to all the money floating around out there. There is one other component of the monetary base, which the Fed manipulated: Banking reserves. That is to say, they let banks lend more, based on electronic credit from the Fed. That's pretty much it! And, because the short end of the curve was so low, they knew this new credit would find its way into other assets. Which would inflate. And drive prices up. (Now if you just stop here, you'll notice this is exactly what the OP is saying will happen! And he's exactly right - in the short run.

The problem is, most people don't get in and out of a house in the short run. They see prices going up, and they like that, and they leave their money there! Heck, even professionals can't time the market well.

All this extra credit sloshing around the markets bids up assets (stocks, houses, etc) to a value beyond what their true (cash-flow based) value is. And everything is sweet. Until the day of reckoning.

At some point, all this extra credit necessarily results in a credit crisis - always has, always will. You can't separate the two: You can't have housing being boosted by the Fed's quantitative easing and pretend you won't eventually have a credit crisis, because that's what quantitative easing is: The artificial loosening of credit.

Is this helpful?

[WestCoast]

Gotz me dem dere a keyboard jockey

[Dexter Morgan]

(05-18-2013 09:29 PM)WestCoast Wrote:  

We can even bet on the average price of a single family home over a year. It's not that difficult you're just PMSing all over the keyboard now.

Sure, we can bet. I'm not willing to bet you actual money because frankly I don't know you well enough to trust you. But if you want to have a bet for the pride of being correct, sure, we can that.

What shall we bet on? I don't have a good gauge what housing will be up in year, i'd need to do some research. Top of mind, i'd guess 4-5%, maybe. We'd need to use the Case-Shiller indexes as a benchmark. A better bet would be what is the "real" (that is, inflation adjusted) increase in housing. 1.5% max, i'd guess. But then, we'd need to agree on a measure of inflation.

[WestCoast]

K ex 1.5% inflation. Choose rem or average price of single family homes don't care.

[Dexter Morgan]

I choose the CoreLogic Case-Shiller index. The average for the year ended 2013 (so it will have to be a half a year bet). From that, we'll subtract Core CPI (i.e, CPI less food and energy, since energy prices are volatile and have an outsourced impact on CPI).

Agreeable?

[WestCoast]

Has to be ntm, you should agree 6 months is a trade it's a short term bet. I will look up what it is tomorrow and should be fine

Note must be US housing.

[Parlay44]

(05-18-2013 08:27 PM)Dexter Morgan Wrote:  

P.S. I think Cupcake deserves a nice hand for trying; hopefully the discussion will have been informative and useful to a few. Probably very few ...

P.P.S - he likes it when you call him "Cupcake", trust me.

Be careful dude. You're still new here so the guys will cut you some slack. Just don't wave your dick around too much or you're likely to get banned. I see you giving guys a hard time in other threads. Friendly warning.

[WestCoast]

Ps: I am drunk here now. So just put up the options will check tomorrow hungover.

[Dexter Morgan]

(05-18-2013 09:57 PM)WestCoast Wrote:  

Has to be ntm, you should agree 6 months is a trade it's a short term bet. I will look up what it is tomorrow and should be fine

Note must be US housing.

You could look up the most recent (March? April?) Case Shiller value (which is just US housing) and then compare it to the March 2014 value, so that way it can be a 12 month bet.

[Dexter Morgan]

(05-18-2013 10:00 PM)Parlay44 Wrote:  

(05-18-2013 08:27 PM)Dexter Morgan Wrote:  

P.S. I think Cupcake deserves a nice hand for trying; hopefully the discussion will have been informative and useful to a few. Probably very few ...

P.P.S - he likes it when you call him "Cupcake", trust me.

Be careful dude. You're still new here so the guys will cut you some slack. Just don't wave your dick around too much or you're likely to get banned. I see you giving guys a hard time in other threads. Friendly warning.

Well, I thought I was just being a dick when people deserved it - but of course I would feel that way! Use your judgment - BAN AWAY!, if you like. I think the forums would be infinitely worse off but, once again, of course I would feel that way.

[el mechanico]

Quote:

Well, I thought I was just being a dick when people deserved it

There's people on this board way more qualified to talk about this than either of you. Do you know why they don't start threads like this here?
Because they're here for something else we all know how where finance and body building forums are but we're here.

Chill out!

[el mechanico]

(05-18-2013 10:03 PM)WestCoast Wrote:  

Ps: I am drunk here now. So just put up the options will check tomorrow hungover.

You chill out too and go have some fun.

[el mechanico]

About houses..Investment aside it's nice to own a home especially when it's paid for. Scrambling from rental to rental in your golden years isn't going to be fun.

[worldwidetraveler]

(05-18-2013 11:14 PM)el mechanico Wrote:  

About houses..Investment aside it's nice to own a home especially when it's paid for. Scrambling from rental to rental in your golden years isn't going to be fun.

No kidding. I wouldn't mess with rentals not matter what age.

[Dexter Morgan]

(05-18-2013 11:09 PM)el mechanico Wrote:  

[There's people on this board way more qualified to talk about this than either of you.

You have no way of knowing that.

Seriously, this forum has become the typical sausage-fest of "mine is bigger than yours - everybody do what I say". Its dreary. If you have IDEAS you want to debate, by all means, do so. But making assertions when you have NO IDEA what the experience or success level of the other party is makes you sound like a dolt.

Will that get me banned, too??

[Dexter Morgan]

(05-18-2013 11:17 PM)worldwidetraveler Wrote:  

No kidding. I wouldn't mess with rentals not matter what age.

In 2004-2006, you'd have lost a bundle with that philosophy. I sold a beach house at the peak (everyone said I was nuts) while my friends bought condos they couldn't afford. Two years later, about half of them were in default, while I could've bought the same house back at a 20% discount.

Buying is fine - at the right price. I'd rather own a watch than ask people what time it is. But if there was a watch bubble and a plastic rolex cost $5,000, i'd ask people what time it is!

[el mechanico]

(05-18-2013 11:43 PM)Dexter Morgan Wrote:  

(05-18-2013 11:09 PM)el mechanico Wrote:  

[There's people on this board way more qualified to talk about this than either of you.

You have no way of knowing that.

Seriously, this forum has become the typical sausage-fest of "mine is bigger than yours - everybody do what I say". Its dreary. If you have IDEAS you want to debate, by all means, do so. But making assertions when you have NO IDEA what the experience or success level of the other party is makes you sound like a dolt.

Will that get me banned, too??

This anonymous forum is not as much as it seems. A lot of us know each other personally.

I don't want you to get banned that's why we're warning you.

If you want to get our respect talk about pulling tail. Nobody cares about this shit you're spouting here.

[worldwidetraveler]

(05-18-2013 11:46 PM)Dexter Morgan Wrote:  

In 2004-2006, you'd have lost a bundle with that philosophy. I sold a beach house at the peak (everyone said I was nuts) while my friends bought condos they couldn't afford. Two years later, about half of them were in default, while I could've bought the same house back at a 20% discount.

Buying is fine - at the right price. I'd rather own a watch than ask people what time it is. But if there was a watch bubble and a plastic rolex cost $5,000, i'd ask people what time it is!

Investment wise, I'm more interested in the financing aspect of real estate.

People make great money with rentals. I think the really successful ones gear it up enough to warrant hiring a team to maintain them.

I have known some guys that kill it in places you wouldn't want to walk around in. They just have their systems in place to handle all the bullshit. Those places cashflow like crazy.

[Dexter Morgan]

(05-18-2013 11:53 PM)worldwidetraveler Wrote:  

(05-18-2013 11:46 PM)Dexter Morgan Wrote:  

In 2004-2006, you'd have lost a bundle with that philosophy. I sold a beach house at the peak (everyone said I was nuts) while my friends bought condos they couldn't afford. Two years later, about half of them were in default, while I could've bought the same house back at a 20% discount.

Buying is fine - at the right price. I'd rather own a watch than ask people what time it is. But if there was a watch bubble and a plastic rolex cost $5,000, i'd ask people what time it is!

Investment wise, I'm more interested in the financing aspect of real estate.

People make great money with rentals. I think the really successful ones gear it up enough to warrant hiring a team to maintain them.

I have known some guys that kill it in places you wouldn't want to walk around in. They just have their systems in place to handle all the bullshit. Those places cashflow like crazy.

If you know the area well enough, you have an advantage that might pay off. I know guys who've made a killing speculating on neighborhoods that were about to "turn". Of course, the best example of that may be South Beach. Or Chelsea.

Still, i'd rather do it when cap rates are low. Now isn't a bad time. I think real estate will inflate into another bubble, but if you can get in and out quickly (couple of years), you may be OK.

[Dexter Morgan]

(05-18-2013 11:50 PM)el mechanico Wrote:  

If you want to get our respect talk about pulling tail. Nobody cares about this shit you're spouting here.

Zzzzz....again with the global, blanket statements. Look, YOU don't get to decide what thousands of forum members find interesting. I find finance interesting. Judging from the number of comments on these threads, so do a few others. You're not making yourself sound very bright. And no, I don't want to "get your respect" because haven't given me a reason to respect you. Leave me alone and post at someone who is interested in what you have to say. If you want to ask a mod to ban me, please do so, but don't bother ME with it.

[el mechanico]

(05-18-2013 11:53 PM)worldwidetraveler Wrote:  

(05-18-2013 11:46 PM)Dexter Morgan Wrote:  

In 2004-2006, you'd have lost a bundle with that philosophy. I sold a beach house at the peak (everyone said I was nuts) while my friends bought condos they couldn't afford. Two years later, about half of them were in default, while I could've bought the same house back at a 20% discount.

Buying is fine - at the right price. I'd rather own a watch than ask people what time it is. But if there was a watch bubble and a plastic rolex cost $5,000, i'd ask people what time it is!

Investment wise, I'm more interested in the financing aspect of real estate.

People make great money with rentals. I think the really successful ones gear it up enough to warrant hiring a team to maintain them.

I have known some guys that kill it in places you wouldn't want to walk around in. They just have their systems in place to handle all the bullshit. Those places cashflow like crazy.

Lot of factors come in to play there don't think it's easy.

Two tips..

If you can't afford the mortgage during an eviction over a few months you're not ready to be a landlord.

Buy in an area people are fighting to live in. Good schools etc..Makes for long term tenants.

Slumlording can make money but it will steal your soul