Current Update on the Real Estate Market -- Part II (Las Vegas: mortgage, credit)

[vegas_4u]

Originally Posted by Daddys///M3

I will concede that it is harder to get a loan now than it used to be. However, I will guarantee you that the minot technicality that kept your friend from getting a loan, most likely a judgement or a mortgage late, would have kept him from getting a loan before, regardless of credit score or money down.

FWIW, I've been here since 1993. When I first arrived I was pouring house slabs off of Rampart and Lake Mead. I'm also in the mortgage business. You can continue to act like you are the end all authority on RE in the valley, but your posts show that you do have some learning to do.

Well you might have me beat on time. I have been here since 2001. But I have invested in multiple properties, purchased and sold, and have my broker of 30 years in the business who has educated me on how loans work, and every loan I received, I know all the details, about the rebates, point analysis, buydown, programs, etc. We found some amazing loan programs over the course of the last few years...... wholesaler. I bet you don't believe me, but I got a 10% down investor loan in January - yep. It was like the last one that went through, literally..

It could be I was not clear enough in my post that you quoted from earlier, in that I made too much of a generic blanket comment, so I looked like a novice, since you are in the mortgage business. I apologize. Don't confuse that for lack of experience.... I'll try to be more specific and detailed in my posts...

[vegas_4u]

Originally Posted by airics

so if i understand this correctly, i buy home 150k (ready to rent), rent it out for 900 i take 900x12/150000 = 7.2% roi - how do you feel about the north, since that is where i see a lot of lower priced nicer units (eg.. losee and centennial)

North Las Vegas makes good rentals, but there are alot of properties for sale in the burbs, distressed sales and foreclosures in every location really, Summerlin, NW, SW, Henderon. I would say, if the numbers work, you are good to go, while waiting out the real estate storm. I have found, overall, rents are slightly lower in North Las Vegas than say SW, NW, Summerlin... but that is a general statement. Rents can vary significantly from neighborhood to neighborhood, based on many factors such as gated, location, etc. etc..

The only thing I would be careful on is your rental analysis - do a thorough search on the rental comps within the area. With so many investors trying to rent homes out that they can't sell, and so many vacant homes, you might find a saturation and you might have to lower your rent a little bit from what used to be market rent, so that it doesn't sit vacant too long. But if your investment is clean, and has good curb appeal, and doesn't have any negatives (negatives might be backing to a major boulevard, for example), then you should be ok, and it will rent. With so much competition out there, and so much inventory for tenants to choose from, you want to avoid any negatives with the property.....

[Daddys///M3]

Originally Posted by vegas_4u

Well you might have me beat on time. I have been here since 2001. But I have invested in multiple properties, purchased and sold, and have my broker of 30 years in the business who has educated me on how loans work, and every loan I received, I know all the details, about the rebates, point analysis, buydown, programs, etc. We found some amazing loan programs over the course of the last few years...... wholesaler. I bet you don't believe me, but I got a 10% down investor loan in January - yep. It was like the last one that went through, literally..

It could be I was not clear enough in my post that you quoted from earlier, in that I made too much of a generic blanket comment, so I looked like a novice, since you are in the mortgage business. I apologize. Don't confuse that for lack of experience.... I'll try to be more specific and detailed in my posts...

Actually, I do believe that you got a 90% LTV NOO loan in January. I closed one of the last 100% O/O purchases around the end of January as well. Unfortunately, guidelines are changing weekly and it is becoming exceedingly difficult to stay on top of these changes, even for someone in the business. I apologize if I came off as rude earlier, as it seems it was a simple misunderstanding.

[jpk]

I'm wondering what happened to Sheriff, he was so happy to poo-poo our buy low mentality and seems to have run away once we made our case for long term investing. Seems that the few of us buying now aren't alone in the contrarian thinking:

TheStreet.com : Video

The idiots are those that paid $1mil for four bedroom Mcmansions that should be only $500K and that took out loans on property they couldn't afford. I'm kinda baffled by how he could think those now buying at reduced prices and low long term rates are the fools. But I'm happy to be a rich fool.

Anyways, the tone on the thread seems to have corrected and it seems that the balance of opinions has moderated and folks are agreeing there's two sides to the issue.

Cheers!

[dude66]

Okay so let me get this straight? The entire US financial system is in the worst crisis it has seen since the Great Depression (an opinion expressed by a growing number of experts), and the problem itself is entirely predicated on housing going bust.

The Fed just had to do a last-minute miracle save to rescue Bears Stearns, lest the whole stock market crash today when vast sums of derivatives would have defaulted.

There are still TRILLIONS of dollars in bad loans out there that have yet to be marked-to-market -- but all is well? We naysayers don't know what we're talking about?

HUH? Pass me the Kool-Aid!

[jpk]

Yep, it's the absolute pits out there. Which is fantastic for those who waited iwth cash or other investments on the sidelines during the whole housing craze of the past four years.

If you have to sell now, it sucks for you. Now is the worst time to have to sell. But a great time to buy. Folks seem to have those two sides of the bargain completely backwards.

I can't imagine you're actually promoting selling right now?

[olecapt]

Originally Posted by dude66

Okay so let me get this straight? The entire US financial system is in the worst crisis it has seen since the Great Depression (an opinion expressed by a growing number of experts), and the problem itself is entirely predicated on housing going bust.

The Fed just had to do a last-minute miracle save to rescue Bears Stearns, lest the whole stock market crash today when vast sums of derivatives would have defaulted.

There are still TRILLIONS of dollars in bad loans out there that have yet to be marked-to-market -- but all is well? We naysayers don't know what we're talking about?

HUH? Pass me the Kool-Aid!

The Sun has gone super nova!! In a mere 27 minutes earth is a fried chicken leg.

But if it does not happen one might still buy or sell RE in Las Vegas.

Galatic happenings may change the face of everything. But they are so momentous that it does little good to plain, at least until after the fact,

Actually, short of running out and putting all your assets in Kruger Rands...what are you going to do?

And I hear even the Rands may melt.

[vegas_4u]

Originally Posted by dude66

Okay so let me get this straight? The entire US financial system is in the worst crisis it has seen since the Great Depression (an opinion expressed by a growing number of experts), and the problem itself is entirely predicated on housing going bust.

The Fed just had to do a last-minute miracle save to rescue Bears Stearns, lest the whole stock market crash today when vast sums of derivatives would have defaulted.

There are still TRILLIONS of dollars in bad loans out there that have yet to be marked-to-market -- but all is well? We naysayers don't know what we're talking about?

HUH? Pass me the Kool-Aid!

Whoa --- the pessimisim is getting overwhelming again! It's ok to buy into the media, because doom and gloom sells. But I will repeat myself again: No economy is immune to a downturn, but SOME economies will do better than others!!! Period!!

Now is the time to buy real estate, maybe some stocks too. Forget about timing the exact bottom.. you're either getting in the game at some point, or you are letting it pass you by....

As with the great depression, and all recessions in history, global and all, it will turn around! It will run its course, along with monetary policy assistance. You BUY during the blood bath..... you BUY when it looks like it's all over.....

This is exactly why only a few make money, and the masses do not..... I luv it! Not everyone can stomache buying when there is "chaos" in the markets and wait for the turnaround.... but those that can, will be rewarded.... high risk = high return....

Patience my friends......

[SHEPNYC]

[quote=vegas_4u;3173383]As with the great depression, and all recessions in history, global and all, it will turn around! It will run its course, along with monetary policy assistance. You BUY during the blood bath..... you BUY when it looks like it's all over./QUOTE]

Great Depression ran 15 years and took World War II to get us out of it!

Are you old enough to remember the Great Depression?

[ClarkGrisowld]

Originally Posted by jpk

Yep, it's the absolute pits out there. Which is fantastic for those who waited iwth cash or other investments on the sidelines during the whole housing craze of the past four years.

From an investment standpoint, perhaps. But, especially from the perspective of a renter, you've still missed out on some gains had you bought 5 years ago. The only smart people in this were the ones who cashed out before the collapse. There's something to be said for converting your equivalent rent to a pre-tax mortgage payment and upgrading your quality of living. You may not time the absolute bottom but, in theory, that only matters in the end game when you downsize. Buy an equivalent or bigger replacement and any loss or gain on your sale is offset on the purchase, unless you choose to rent temporarily to mitigate that effect.

I still think we are maybe 12-18 months from a bottom. It varies regionally, but what is being priced in the mark-downs of derivatives is the EXPECTED default rate. Actual defaults are, to-date (from a national perspective), relatively low. I say the real pain starts if we slip further into recession and/or don't pull out relatively soon. That's when people lose jobs (and, nationally, only a few sectors have been hard hit so far) and that's when real default rates skyrocket. The million dollar question is if expected default rates have peaked, or if actual defaults will eventually outpace what is currently priced in.