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Old 03-29-2011, 01:01 AM
 
33,046 posts, read 20,745,900 times
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Quote:
Originally Posted by Ultrarunner

You are correct... in just about every instance the buyer needs to have "Skin" in the game and most of the time that requires money.

I set up 30 yard dumpster at the cost of $450 each and it took 6 of them to haul away 35 years of debris... and this is at a Residential home.

At one time, my city would sell tax lien homes for $1 if the first-time buyer lived in the home for 3 years and spent $3500 on repairs... some of those dollar homes I walked by on the way to school were later selling in the mid $300's during the boom and now as low as 80k from Bank Foreclosure Sales.

There were also other programs for teachers and public safety where the city would provide a no interest loan to be used for down payment.

The statistics just came in and almost 50% of sales in my county are Short Sales or Foreclosures and 50% of the sales are cash sales... this leads me to think people with money see the current downtrend in Real Estate as temporary.


Depends on how you define "skin in the game". I've been renting for almost 40 years and I've paid somewhere around $150K-$200K over those years. And I've seen people buying homes with $10K or $5K or $3K or even nothing down. They got skin in the game and I don't?

There is ALWAYS money to be made in a down market. There is a massive upward transfer of wealth happening right now. When the liberals eventually figure this out, they will be screaming bloody murder.

Come to think of it, some of them already are screaming bloody murder.

Along with the down economy, we have massive upward transfer of wealth plus new housing construction in the tank.

You may have heard some people refer to a never-ending "affordable housing crisis." These people don't know what a real affordable housing crisis is, and we are heard for a crisis of unprecedented proportions. I figure it's maybe 3 to 5 years down the road.
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Old 03-29-2011, 01:20 AM
 
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Quote:
Originally Posted by Ultrarunner View Post
Didn't the Renter's Tax Credit come into being to offset the Home Owner's Exemption?

As far as interest deductions... I know many that purposely refied and took out HELOCS just so they could deduct interest... many of the PBS finance guys/gals encouraged this when Consumer Credit Interest was no longer deductible.

It's no secret the US economy and government policy is geared toward Home Ownership...

Even with policies to encourage ownership... the US lags many countries in terms of the percent of owners vs. renters.

Sliverbox... have you noticed that 50% of the sales in our county are short sales or foreclosures and what I found fascinating is about the same number are sold for all CASH... evidently, there are people with money that believe now is a buy opportunity for Real Estate in the Bay Area.

There is no federal renter's tax credit, but some states have one.

These state tax credits were created originally to protect homeowners from excessive property tax burdens, usually a portion of a homeowner's property tax above a certain percentage of income is rebated through an income tax credit. These are often called 'circuit breaker' tax credits.

Some states have extended these tax credits to renters, usually through a formula applying some percentage or rent as a proxy for property taxes paid by a renter.

Countries with higher rates of home ownership usually have flatter (i.e. less unequal) income distributions, as a result low-wage workers elsewhere are more able to buy homes than are American low-wage workers. In general, burger flippers here do not buy homes.

Cash is King, especially in a down economy where credit is tight. Many upcoming millionaires are being created right now.
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Old 03-29-2011, 01:23 AM
 
2,110 posts, read 4,052,715 times
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Quote:
Originally Posted by ndfmnlf View Post
Or, renters should also be given a tax deduction for renting. After all, mortgage interest and rent are functionally the same. Getting a mortgage is simply renting money from a bank to live in a house.
California occasionally has what they call a renters credit.
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Old 03-29-2011, 01:42 AM
 
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Originally Posted by stan4 View Post
There are a lot of countries in which this is *exactly* what they do.

This is true and this WAS true here for a long time. I think the baby boomers changed everything.
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Old 03-29-2011, 02:07 AM
 
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just do away with the deductions and raise the rents to compensate for higher expenses. see if renters like that idea?
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Old 03-29-2011, 08:29 AM
 
2,060 posts, read 5,008,264 times
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Quote:
Sliverbox... have you noticed that 50% of the sales in our county are short sales or foreclosures and what I found fascinating is about the same number are sold for all CASH... evidently, there are people with money that believe now is a buy opportunity for Real Estate in the Bay Area.
Yes- I've also noticed a lot of foreclosure sales are occurring here, but mostly in some of the lesser desirable areas- areas that should have never even come close to the crazy prices they were during the bubble because local incomes couldn't even come close to matching those prices. Of course that was true everywhere but even more so in these areas.

The way I see it, prices in a lot of those areas are starting to come down to levels they should be anyway. Its not like those houses are real steals at this point. Its just that people are still in this belief that somehow the market that existed in 2003-2006 will "come back" and they are surely clever for buying at the bottom. I'm afraid a lot of those people are going to be in for some disappointment. Besides- so much of the sales in our area are foreclosures that this in turn is basically keeping the entire market down.

I personally don't think RE is that great of an investment. But if I were to invest in it I would do so in areas that are showing real solid, progressive economic growth like perhaps Raleigh, NC, Austin TX, or a lot of the Southeast for that matter where houses are still affordable and the overall economy is generally healthier. Its way easier to not only buy good quality RE, but also get a monthly income from it. My parents owned 2 small houses in TN. One was $45k, the other $70k. The houses were cash flow positive from day one.

In the end if anyone ever asks me what they think about investing, I tell em' to open a 401k and maybe a couple of mutual funds. Simple as that.
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Old 03-29-2011, 10:18 AM
 
25,866 posts, read 49,775,165 times
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Quote:
Originally Posted by sliverbox View Post
Yes- I've also noticed a lot of foreclosure sales are occurring here, but mostly in some of the lesser desirable areas- areas that should have never even come close to the crazy prices they were during the bubble because local incomes couldn't even come close to matching those prices. Of course that was true everywhere but even more so in these areas.

The way I see it, prices in a lot of those areas are starting to come down to levels they should be anyway. Its not like those houses are real steals at this point. Its just that people are still in this belief that somehow the market that existed in 2003-2006 will "come back" and they are surely clever for buying at the bottom. I'm afraid a lot of those people are going to be in for some disappointment. Besides- so much of the sales in our area are foreclosures that this in turn is basically keeping the entire market down.

I personally don't think RE is that great of an investment. But if I were to invest in it I would do so in areas that are showing real solid, progressive economic growth like perhaps Raleigh, NC, Austin TX, or a lot of the Southeast for that matter where houses are still affordable and the overall economy is generally healthier. Its way easier to not only buy good quality RE, but also get a monthly income from it. My parents owned 2 small houses in TN. One was $45k, the other $70k. The houses were cash flow positive from day one.

In the end if anyone ever asks me what they think about investing, I tell em' to open a 401k and maybe a couple of mutual funds. Simple as that.
I know what you mean...

There are foreclosures in every neighborhood but we know entire neighborhoods with several on each block in Oakland... these were homes that people paid 500k+ at the height of the market... one of these sold as a foreclosure for 80k in 2009 and it was not trashed... the investor that bought it in the Fruitvale district spent 6 weeks on it... new paint, refinish the matchstick hardwood, sod lawns, sprinklers new hardware, etc and resold it for 165k... the 80k prices is what that home sold for in the early 90's... it was like 20 years of appreciation evaporated.

Last I looked, there were over 100 homes for sale in Oakland on the MLS under 100k... many had sold for 3x this a few years ago.

So, I guess we have already seen a slight up-tick.

My biggest problem is the Alameda County Assessor says the market value of my 2005 home has rebounded to what I paid for it and the 25% reduction I proved is no longer justified for my East Oakland Home...
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Old 03-29-2011, 12:22 PM
 
22,770 posts, read 25,213,574 times
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Quote:
Originally Posted by mathjak107 View Post
just do away with the deductions and raise the rents to compensate for higher expenses. see if renters like that idea?
sorry mathjak, but you're in la-la-land if you think that.

a landlord's needs have no more impact on the rental prices than what a buyer can afford.

the place I rent, for example, never had a mortgage to begin with. The owner bought the land in the late 1970's, cash. Then he built a house on the land in 1998, cash.
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Old 03-29-2011, 02:16 PM
 
64,752 posts, read 66,247,630 times
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not always true. its all about what your competition does in the area. if most landlords had to raise rents then its a done deal unless the markets say other wise then things will level off like water somewhere at what the market will allow and it may very well be higher. people need to live somewhere .
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Old 03-29-2011, 02:17 PM
 
64,752 posts, read 66,247,630 times
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rental markets are set by many things including the cost associated with a given area. higher buying costs ,taxes and other costs already are factored in rents. if they rise there is a good chance rents will rise as well. its not usually a dollar for a dollar but rise they do. we have been owners of rental real estate in nyc for many many years, at one point our family holding company held 35 co-op apartments.... expenses do get passed on most of the time to the non rent stabilized buildings . its all supply and demand and as long as people need good quality apartments in good locations you can get your price.

Last edited by mathjak107; 03-29-2011 at 02:26 PM..
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