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Old 05-17-2014, 05:54 AM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,950,422 times
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Quote:
Originally Posted by Travelassie View Post
I'm not sure one can assume that most of these cash buyers are American boomers. The article states that in California, and coastal cities in Florida, and the NE ( Miami, Boston), those cash buyers are foreign visitors. It's well known in Miami, for instance, that many of the cash buyers for properties are the well-heeled from Latin and South America, and the article states that as well. In CA, it's Chinese nationals buying up those properties and paying cash.
Based on what I've read - one can assume that the majority of these buyers - especially in Florida - ARE NOT US boomers.

Real Estate Tourism: Who's Really Buying America's Homes? - Forbes

Robyn
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Old 05-17-2014, 06:18 AM
 
Location: in the miseries
3,302 posts, read 3,584,621 times
Reputation: 3810
Quote:
Originally Posted by TheShadow View Post
I think I had the easiest loan I've ever received 6 months ago. It was approved in less than 2 weeks through a local bank that does a lot of loans in our neighborhood. With solid income/ assets and decent credit it is no harder than in the past. If you don't have your ducks in a row, well then it will be harder than in the "liar loan" days.

Guanda...I hear you. It is so easy to lie with statistics, or just stir up the hornet nest by creating alarming-looking stats.
A big problem today with people needing a mortgage is: the appraisal of the property because of not much inventory prices are higher. As you know appraisals are based on comps.
So if you need a mortgage it puts you at a distinct disadvantage.
I know of several purchasers who were not approved because the property didn't appraise out.
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Old 05-17-2014, 06:41 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,652 posts, read 40,029,981 times
Reputation: 23810
Quote:
Originally Posted by mathjak107 View Post
folks have cash to spend for many reasons. inheritances .... usually starting out is when you need a mortgage.
or IRA's...(that are (were) returning 3-4% as stable income...) STRICT rules apply.

I had always been under the impression I needed to use Pensco or similar IRA custodian... but I met a financially astute retiree friend (ex-CEO of large US bank) that has done it for yrs herself... just split off a separate IRA acct, and use it as a checkbook to buy it's own properties. (Properties must be registered to that IRA, and you must follow the rules (no co-mingle, or personal contribution / expense- OR the whole IRA will become taxable). Be sure you have enough in that IRA to cover downturns / roofs / expenses...

On the non-retiree side... I got really PO'd in the late 1980's when I thought I needed a bridge loan to finish a house. I made my LAST trip to a bank asking for a home loan. And I went through with it and spent a bundle. THEN... I found out I could just use my margin acct to buy properties and later refinance (if I chose) on my own terms.

Thus... every property since (~20) have been cash deals. Most were later financed at favorable terms.

You have so much more buying power, and the transaction is FAST and flawless. (usually).

I also try to find elderly sellers who would like to carry a note for a decent rate. I offer them 5 yr deals with 120 day call, and auto payments so they never have to stew, call or wonder when the funds will arrive. So far they have been very happy with the conditions and terms.

Doubt if I will ever pay off "Casa Grande'... 2.7% 30 yr. It is my BANK for investment props. I have a rule with RE dollars, that they can only fund RE investments. I keep a few cheaper joints paid off if TSHTF, or the hospital has to take Casa Grande to pay off an unexpected medical co-payment.

My mom was impressed that @ age 80, she got a 30yr mortgage on her home. She immediately went out and bought and sold an investment home for cash, and has done 2 more in 2 yrs. She is happy with $20k per turn, and it helps fund her travels and next projects (and pays the mortgage). She made $300k on one turn, but put a ton of work into that one.

For those who consider it fun, and are successful (and skilled / used to the risk) ... cash home buying is good. It have about 50 : 50 luck; home vs markets... but I feel a lot more confident with my RE 'wins' / exposure.

YMMV
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Old 05-17-2014, 06:43 AM
 
29,813 posts, read 34,900,894 times
Reputation: 11730
Quote:
Originally Posted by Robyn55 View Post
Based on what I've read - one can assume that the majority of these buyers - especially in Florida - ARE NOT US boomers.

Real Estate Tourism: Who's Really Buying America's Homes? - Forbes

Robyn
All cash purchases in large part are investors foreign and domestic. Hedge funds and other investment groups are buying blocks of houses for rental purposes. Much of what gets sold to them is driven by location. Places like NYC, San Fran and Miami are driven by wealthy foreigners wanting secondary homes there along with wealthy Anericans. Other places in Florida which are popular retirement locations will see equity rich retiree's transplant with all cash purchases. Perhaps a place like the villages. I suspect Del Webb communities would see more cash purposes than surrounding areas. It really is cool to go all cash with minimal settlement costs and a very quick settlement.
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Old 05-17-2014, 06:49 AM
 
29,813 posts, read 34,900,894 times
Reputation: 11730
Quote:
Originally Posted by luvmyhoss View Post
A big problem today with people needing a mortgage is: the appraisal of the property because of not much inventory prices are higher. As you know appraisals are based on comps.
So if you need a mortgage it puts you at a distinct disadvantage.
I know of several purchasers who were not approved because the property didn't appraise out.
That is very true and on the shoulders of the seller wanting more than it can be appraised for. Unfortunately with so many under water they need a selling price above the appraisal price and unless a cash deal comes along. It is often boomers in the most advantageous position to sell if they have owned for awhile (lots of equity) and have the cash to make up any difference. It is all so much easier to go from a high COLA area to one much less expensive.
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Old 05-17-2014, 06:56 AM
 
Location: Loudon, TN
5,806 posts, read 4,854,199 times
Reputation: 19517
Quote:
Originally Posted by luvmyhoss View Post
A big problem today with people needing a mortgage is: the appraisal of the property because of not much inventory prices are higher. As you know appraisals are based on comps.
So if you need a mortgage it puts you at a distinct disadvantage.
I know of several purchasers who were not approved because the property didn't appraise out.
Well that's not unusual. Lenders don't lend for more than a property is worth per the appraisal, and they never have. If it doesn't appraise I would try to deal with the seller at the appraised price or walk away from a bad deal. It doesn't make a mortgage harder to get, you just need to make the right deal for the right house.
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Old 05-17-2014, 07:19 AM
 
Location: Great State of Texas
86,093 posts, read 72,575,594 times
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There's not many places left to invest your "cash" for a decent return.
And then there's taxes to contend with as more countries want to place higher taxes on wealthy people.
But RE equalizes all. Property taxes are not based on income are they ?

And the areas that have the bulk of these cash purchases have stood the test of time for appreciation.
Sure you get a blip of a downturn but the always bounce back higher than before.
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Old 05-17-2014, 07:38 AM
 
29,813 posts, read 34,900,894 times
Reputation: 11730
Quote:
Originally Posted by HappyTexan View Post
There's not many places left to invest your "cash" for a decent return.
And then there's taxes to contend with as more countries want to place higher taxes on wealthy people.
But RE equalizes all. Property taxes are not based on income are they ?

And the areas that have the bulk of these cash purchases have stood the test of time for appreciation.
Sure you get a blip of a downturn but the always bounce back higher than before.
Very true and that's why folks money wise seek them out.
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Old 05-17-2014, 09:42 AM
 
Location: Toronto, Ottawa Valley & Dunedin FL
1,409 posts, read 2,357,372 times
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I suspect it's because of the huge wave of large investors entering the housing market in the U.S.

We did pay cash for our condo in Florida in 2011, in the midst of the downturn, and yes, I'm a boomer. It wasn't a big deal, since the cost of our condo was, as we like to say, about the price of a garage back home in Toronto.
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Old 05-17-2014, 09:48 AM
 
Location: Great State of Texas
86,093 posts, read 72,575,594 times
Reputation: 27566
Quote:
Originally Posted by Wwanderer View Post
I suspect it's because of the huge wave of large investors entering the housing market in the U.S.

We did pay cash for our condo in Florida in 2011, in the midst of the downturn, and yes, I'm a boomer. It wasn't a big deal, since the cost of our condo was, as we like to say, about the price of a garage back home in Toronto.
Oh it's not just housing but farmland is being bought up as well for cash.
People with money to spend are getting rid of their cash in favor of tangible assets.
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