Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Yup, the Kiyosaki wannabes are back and that's exactly what they are doing. They are buying shacks for cash to rent out and then plan to dump them in 10 years for profit. Regular folks can't buy these homes and the market is being flooded with these rentals.
Tens of thousands of regular folks cannot buy these properties because they have unfortunately ruined their credit. Therefore they are renting homes from people who bought them. It is what it is.
If I needed to finance a home for under <$200K and was giving my kids advice, I'd overbid knowing that it is pointless to think you are going to compete with cash. I'd make an offer with $20K down and write it up non-refundable (still have an inspection clause) and exclude the need for it to appraise at any price. I'd work with someone who knew the market very well so that I didn't "overpay". But the reality is cash is king so you want to have an offer look as attractive as possible.
People need to get over the fact that they are not winning houses as the same price as cash with a quick close. Sellers are nervous when the buyer needs to sell their home 1st, don't have financing lined up, have a low down payment and can walk from it, have so-so credit etc.
My main home is going for sale in MN soon. I will take less money if I knew for sure the deal was going to happen. The sellers are simply logical and don't care to be "fair". That seller could be a bank or an individual. All they want to know is the deal will be solid. As I have said all along, people should have bought in Phoenix in early 2011. The writing was on the wall if they were listening to people who study the market. In fairness, if they listened to you in early 2011, you were telling them their was no sense of urgency. Tell that to the guy you now feel sorry for.
Yup, the Kiyosaki wannabes are back and that's exactly what they are doing. They are buying shacks for cash to rent out and then plan to dump them in 10 years for profit. It's pretty obvious. Regular folks can't buy these homes and the market is being flooded with these rentals. Listen to the stories on this forum. When people are saying "I can't get a house because there were 4 bids on it" guess who the winning bid went to....the investor who paid cash.
Sounds like the investors are doing the "regular folks" a favor. Because those sub-100 homes are "shacks" and "POS".
Tens of thousands of regular folks cannot buy these properties because they have unfortunately ruined their credit. Therefore they are renting homes from people who bought them. It is what it is.
lol. I like this assumption. It couldn't be because there isn't really any entry level jobs out there besides temp and contracts? Who the hell wants to buy a house with one of those kind of jobs?
Quote:
Originally Posted by Newporttom
Sounds like the investors are doing the "regular folks" a favor. Because those sub-100 homes are "shacks" and "POS".
Love it. I need to buy everyone in this thread a beer. There is a nice place for 30K i would LOVE to buy, its not a fixer upper or tiny, it's my job situation.
I am seeing it here in Arizona city too. Did not think I would, but we are. The cheap 50k homes have been bought up. There are a few, but they are short sales, or really small damaged homes. People are buying out here at 85k again, considering average was 45 a few months ago.
I noticed that too. Arizona City was one of the areas I was watching closely, as there were lots of homes between 35k- 45k a year or two ago. I had planned on buying there even though the area wasn't ideal, but now they've gone up as high as other areas, so if I'm going to spend over 80k, I'd rather buy in a better area instead.
The nice thing about that though, is I have also noticed the crime rate going down here. The younger trouble makers are moving out, and more retired are moving back in again. This has been the most peaceful it has been here on my street in the 5 years I have been here.
I watch the crime report every week. A year ago there were 15 robberies a week here. It was insane. I am actually enjoying it here now Been so quiet (knock on wood)
The nice thing about that though, is I have also noticed the crime rate going down here. The younger trouble makers are moving out, and more retired are moving back in again. This has been the most peaceful it has been here on my street in the 5 years I have been here.
I'm so glad to hear it's improving. When I was there in 2005, it seemed like an ok place, then it went downhill a couple of years ago. Very glad it's getting better again.
lol. I like this assumption. It couldn't be because there isn't really any entry level jobs out there besides temp and contracts? Who the hell wants to buy a house with one of those kind of jobs?
I was addressing azriverfan's statement that these evil "investors" were making it impossible for regular buyers to purchase a home. What you are saying is either you cannot get a mortgage or you don't want a mortgage in your current situation. I don't understand what your point is because it is a fact that tens of thousands of folks unfortunately have bruised credit. That's not an "assumption", it is a reality.
AzRiverFan, thanks for your OP. Yep it's beginning to look like the majority of buyers are trying the ol' Pump and Dump deal. I wonder if "Rich Dad Poor Dad" Kiyosaki is back buying up $80,000 POS shacks in Phoenix and turning them around at $110,000?
Investor owned- Ha! I prefer living in an apartment complex with same day maintenance, not week later maintenance. It's going to be like a Chinese laundry - the Chinese in business to do each others laundry - when it comes to turning houses into rentals. In other words, it will flood the market again and keep apartment rent prices low...
First we had the infamous "Shadow Inventory theory" that was supposed to flood the market and drive prices down even further.
Now we have the "Shadow Rental Inventory theory" that will magically in 10 years have millions of homes dumped on the market and drive it down again. And in the interim the theory is that the "rentals" are flooding the market, and that will cause landlords to have vacant houses they will have to dump.
It's interesting to see the name calling that people resort to when the market is doing the opposite from what they would like to believe it to be.
Rich Dad Poor Dad Kiyosaki
Kiyosaki wannabees
POS shacks
Chinese laundry
Come on guys; why not have a realistic discussion of the market instead of resorting to 3rd grade tactics of name calling. I think you are above all that.
We know that several years ago the rehab investors saved the market from crashing further by buying up the homes that were a blight on the neighborhood, fixing them up and selling them to people who needed a home.
.
We also know that for the past few years the supply was declining, while sales were increasing; and the law of supply and demand was telling us that if this keeps up, the prices will follow. I was showing that graphically, and was criticized by some people who did not have an understanding of real estate (but thought they did). People wanted to equate real estate supply/demand changes with commodity changes where the price change is immediate. As I stated, and as happened in 2005/2006, in real estate there is a time lag between supply/demand change and price change.
.
Then the landlord investors saw the bargains, and began to buy properties. Their percentage grew to around 26% of all sales (not 60% as has been reported in an article).
.
Then the national press began to pick up on our improving market.
.
Then the buying public in the lower price ranges began buying because they realized that things were changing; but by this time the pickings were slim; now they are almost non-existent, consequently prices are being bid up, and those increases will probably trickle up.
.
There is an extremely low inventory level of REO's and Short Sales, and still declining.
.
Now we're seeing, in March, a greater volume of traditional sales than has been seen since 2007; and that is a very positive signal.
.
It was discussed long ago that the general public would not know the bottom was here until it passed. All indications are that it has passed.
.
It was also discussed that when the general public rushed in, there would be price increases. Seems that is what is happening now.
.
One poster seems to have thought that the luxury market would continue decreasing. Well, while there is still a decent supply of luxury homes, every price range has now seen an annual percentage increase in price except the <$25k and the >$2mil range.
Whether one likes it or not, the Phoenix real estate market has changed, and all indications are that the turnaround is here.
First we had the infamous "Shadow Inventory theory" that was supposed to flood the market and drive prices down even further.
Now we have the "Shadow Rental Inventory theory" that will magically in 10 years have millions of homes dumped on the market and drive it down again. And in the interim the theory is that the "rentals" are flooding the market, and that will cause landlords to have vacant houses they will have to dump.
It's interesting to see the name calling that people resort to when the market is doing the opposite from what they would like to believe it to be.
Rich Dad Poor Dad Kiyosaki
Kiyosaki wannabees
POS shacks
Chinese laundry
Come on guys; why not have a realistic discussion of the market instead of resorting to 3rd grade tactics of name calling. I think you are above all that.
We know that several years ago the rehab investors saved the market from crashing further by buying up the homes that were a blight on the neighborhood, fixing them up and selling them to people who needed a home.
.
We also know that for the past few years the supply was declining, while sales were increasing; and the law of supply and demand was telling us that if this keeps up, the prices will follow. I was showing that graphically, and was criticized by some people who did not have an understanding of real estate (but thought they did). People wanted to equate real estate supply/demand changes with commodity changes where the price change is immediate. As I stated, and as happened in 2005/2006, in real estate there is a time lag between supply/demand change and price change.
.
Then the landlord investors saw the bargains, and began to buy properties. Their percentage grew to around 26% of all sales (not 60% as has been reported in an article).
.
Then the national press began to pick up on our improving market.
.
Then the buying public in the lower price ranges began buying because they realized that things were changing; but by this time the pickings were slim; now they are almost non-existent, consequently prices are being bid up, and those increases will probably trickle up.
.
There is an extremely low inventory level of REO's and Short Sales, and still declining.
.
Now we're seeing, in March, a greater volume of traditional sales than has been seen since 2007; and that is a very positive signal.
.
It was discussed long ago that the general public would not know the bottom was here until it passed. All indications are that it has passed.
.
It was also discussed that when the general public rushed in, there would be price increases. Seems that is what is happening now.
.
One poster seems to have thought that the luxury market would continue decreasing. Well, while there is still a decent supply of luxury homes, every price range has now seen an annual percentage increase in price except the <$25k and the >$2mil range.
Whether one likes it or not, the Phoenix real estate market has changed, and all indications are that the turnaround is here.
Capt'n Bill-
What would be your best advice for someone looking to become a small investor in this market? Obviously you know this market well and I trust your opinion.
What areas would one look to for a solid investment? Obviously some point out cheaper yet farther out areas such as Buckeye or Goodyear offer the greatest return for investment because of the relatively inexpensive market while I've heard others say it's better to buy into a moderately priced area in a more established community such as Gilbert/Chandler/Tempe. What's your take? What price range and areas offer the greatest bang for the buck and best return for the dollar?
Is it ever a good idea to invest in an expensive market with the rationale that the market will never truly "bottom out" because of the implied value of a certain community i.e. Scottsdale/Fountain Hills? With the Phoenix area starting to grow again, do you think that growth will boost the number of buyers for more luxury-type properties? Is there a "sweet spot" which maximizes revenue and minimizes cost?
What would be your best advice for someone looking to become a small investor in this market? Obviously you know this market well and I trust your opinion.
What areas would one look to for a solid investment? Obviously some point out cheaper yet farther out areas such as Buckeye or Goodyear offer the greatest return for investment because of the relatively inexpensive market while I've heard others say it's better to buy into a moderately priced area in a more established community such as Gilbert/Chandler/Tempe. What's your take? What price range and areas offer the greatest bang for the buck and best return for the dollar?
Is it ever a good idea to invest in an expensive market with the rationale that the market will never truly "bottom out" because of the implied value of a certain community i.e. Scottsdale/Fountain Hills? With the Phoenix area starting to grow again, do you think that growth will boost the number of buyers for more luxury-type properties? Is there a "sweet spot" which maximizes revenue and minimizes cost?
That's a very complicated question, and not easy to answer. If you'll send me a DM, I can discuss it with you.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Been so quiet (knock on wood)
What you are saying is either you cannot get a mortgage or you don't want a mortgage in your current situation. I don't understand what your point is because it is a fact that tens of thousands of folks unfortunately have bruised credit. That's not an "assumption", it is a reality. 
I think you are above all that. 
