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As per the Washington Post, there is still a long way down for the housing market to go. The heads of Fannie Mae and Freddie Mac say they contributed to the current crisis by encouraging too many people to buy houses:
"Fannie Mae and Freddie Mac contributed to the problem by spreading the message that everybody should own a house, he said. In fact, many people who should not have owned houses bought them, he said. Next year, the nation will have to come to terms with the big political challenge of converting much of that real estate into rental housing, Syron said."
How is that? Some people will turn to renting after being bitten, hard, by the escalating monthly payments, and need a rest before diving back into the pool. But for others, it's a great wealth building opportunity.
So Fannie, and soon followed probably by Freddie, will require a 5% or more down payment in certain areas, or a reasonable justification of why this property/borrower is different.
There is opportunity everywhere. Private note holders, seller carry 2nds, new lease option or lease purchase agreements. Not every market is going to flounder.
How is that? Some people will turn to renting after being bitten, hard, by the escalating monthly payments, and need a rest before diving back into the pool. But for others, it's a great wealth building opportunity.
So Fannie, and soon followed probably by Freddie, will require a 5% or more down payment in certain areas, or a reasonable justification of why this property/borrower is different.
There is opportunity everywhere. Private note holders, seller carry 2nds, new lease option or lease purchase agreements. Not every market is going to flounder.
It just might be an investor's dream come true.
Just don't catch a falling knife!
Seriously, calling home ownership a wealth building opportunity is EXACTLY why we're here. How many other homebuilders, economists and mortgage leaders have to say it before the majority of realtors agree?
Say it some more. Sky is falling, doom and gloom. I'm hoping there'll be some more catch phrases because my bumper sticker business depends on it I need some ideas please.
Last edited by Frudy McRomson; 12-12-2007 at 07:15 PM..
Seriously, calling home ownership a wealth building opportunity is EXACTLY why we're here. How many other homebuilders, economists and mortgage leaders have to say it before the majority of realtors agree?
Say it some more. Sky is falling, doom and gloom. I'm hoping there'll be some more catch phrases because my bumper sticker business depends on it I need some ideas please.
Then again, many millionaires were made by "catching the falling knife" in CA and other bubble markets at the right time. 2 sides to every coins. We must run if different circles because the professionals I know don't agree with your statement either.
Then again, many millionaires were made by "catching the falling knife" in CA and other bubble markets at the right time. 2 sides to every coins. We must run if different circles because the professionals I know don't agree with your statement either.
A better analogy: many millionaires were made by playing musical chairs. That is, until the music stopped. Those without a chair after the others were seated are known as the ones who bought more recently.
For every millionaire made in RE, there are many more made in the stock market or a business start-up. People like Don Lapre were millionaires too. It's a lot easier to be rich than people make it out to be. It all depends on your "moral flexibility" and how much you want to sacrifice on actually living life. I've worked on a derivatives trading floor with some who were making seven figure bonuses. Some put in 100 hour work weeks and burned out in a couple of years. Very nice chunk of change, but I really didn't want to live that way.
The scenario you described is commonly referred to as a Ponzi scheme. The early investors make money through the money that future investors contribute, until the system eventually breaks down because there is no new sucker to pass the buck to. There are many Ponzi schemes that disguise themselves as legitimate investments such as our Social Security contributions.
Also, I realize that the article mentions what is NOT a Ponzi scheme (and a housing bubble is included). I would agree with this statement IF the asset was purchased all cash all the time. The machine that has facilitated the concept of homeownership as a get rich quick scheme (EZ credit in the form of no doc liar loans, neg am, extending terms out to 40 or 50 years, the Federal Reserve, fraudulent appraisals etc) absolutely creates a Ponzi scheme like atmosphere. REITs, careers in the mortgage industry, fly by night RE agents, etc etc. are all a part of the grand Ponzi scheme that is currently unraveling itself.
I expect very few millionaires to be made in RE the next couple of years.
Last edited by Frudy McRomson; 12-13-2007 at 08:12 AM..
How is that? Some people will turn to renting after being bitten, hard, by the escalating monthly payments, and need a rest before diving back into the pool. But for others, it's a great wealth building opportunity.
So Fannie, and soon followed probably by Freddie, will require a 5% or more down payment in certain areas, or a reasonable justification of why this property/borrower is different.
There is opportunity everywhere. Private note holders, seller carry 2nds, new lease option or lease purchase agreements. Not every market is going to flounder.
It just might be an investor's dream come true.
Thats an understatement. These people who have/are losing their homes have to live somewhere. They will not be able to qualify for a home of there own no time soon. It will take a few years for them to rebuild their credit and not to mention come up with a decent down payment afterwards. Investors who are smart will see or already see that this is NOT going to be a get rich quick scenario. it's a long term money generator. Buy and hold will be the key. Holding property and renting them, tax write offs, and appreciation.
Here is a new one for that bumper sticker;
MoT = Money over Time....... and a house symbol next to it.
Thats an understatement. These people who have/are losing their homes have to live somewhere. They will not be able to qualify for a home of there own no time soon. It will take a few years for them to rebuild their credit and not to mention come up with a decent down payment afterwards. Investors who are smart will see or already see that this is NOT going to be a get rich quick scenario. it's a long term money generator. Buy and hold will be the key. Holding property and renting them, tax write offs, and appreciation.
Here is a new one for that bumper sticker;
MoT = Money over Time....... and a house symbol next to it.
There will be PLENTY of unoccupied homes to rent out for these people. If done appropriately, no one really has to be homeless.
A better analogy: many millionaires were made by playing musical chairs. That is, until the music stopped. Those without a chair after the others were seated are known as the ones who bought more recently.
For every millionaire made in RE, there are many more made in the stock market or a business start-up. People like Don Lapre were millionaires too. It's a lot easier to be rich than people make it out to be. It all depends on your "moral flexibility" and how much you want to sacrifice on actually living life. I've worked on a derivatives trading floor with some who were making seven figure bonuses. Some put in 100 hour work weeks and burned out in a couple of years. Very nice chunk of change, but I really didn't want to live that way.
The scenario you described is commonly referred to as a Ponzi scheme. The early investors make money through the money that future investors contribute, until the system eventually breaks down because there is no new sucker to pass the buck to. There are many Ponzi schemes that disguise themselves as legitimate investments such as our Social Security contributions.
Also, I realize that the article mentions what is NOT a Ponzi scheme (and a housing bubble is included). I would agree with this statement IF the asset was purchased all cash all the time. The machine that has facilitated the concept of homeownership as a get rich quick scheme (EZ credit in the form of no doc liar loans, neg am, extending terms out to 40 or 50 years, the Federal Reserve, fraudulent appraisals etc) absolutely creates a Ponzi scheme like atmosphere. REITs, careers in the mortgage industry, fly by night RE agents, etc etc. are all a part of the grand Ponzi scheme that is currently unraveling itself.
I expect very few millionaires to be made in RE the next couple of years.
First of all, at one time in the 90's something like 78% of the self made millionaires in the US made it in real estate. If they were smart they diversified. Now about 37% of millionaire's did it with stocks and it is most common. However, not everyone can flip homes or be a stock trader and there are many ways to create wealth. Secondly, I never described or mentioned any methods so please don't put words in my mouth.
And next time you pop me a negative point for a comment I make, have the balls to sign your name. I can look at the time I got it, which correlates exactly to your response, and know you did it. Or better yet, don't pop me a negative point at all or call me a liar again.
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The sky is not falling
I need some ideas please.
