Home Loan / Lender Question (Mesa: rentals, HOA, mortgage)

[futbol]

The people buying with cash are not the cause of the crash. They are the solution.

The cause of the housing crash was over-leverage. Cash is no leverage/nothing borrowed.

[earlyretirement]

Originally Posted by shmoov_groovzsd

SD real estate over the long term will probably see higher gains or ROI than anything on the market right now. For one, the DOW has been cruising since the downturn and many stocks have/are hitting ceilings, even dropping a bit for some. Treasuries are paying close to nothing and Europe is shaky. So whats left for ROI? Real Estate in desirable corners of the globe.

I dont know percentages in SD, but its likely that international cash buyers are much higher than they were a decade ago. China is certainly a different place and has similarities to Japan in the 80s when they had their tech boom.

That's exactly right! San Diego will always be a very desirable place to live or visit. The demand for rentals will probably continue to strengthen. And owners are making decent returns compared to the horrible rates paid on savings/CD. I own many rental properties and I continue to believe that real estate in very well located areas over the long haul are great investments. The cash flow from them is something that I've always loved.

I've always believed that real estate by nature is a long-term investment and I'm confident over the long-term real estate prices in San Diego will do just fine. Of course capital appreciation is always nice but many people go into real estate investments not for the capital appreciation but more so the monthly cash flow. I always say any potential capital appreciation is just icing on the cake.

Originally Posted by futbol

The people buying with cash are not the cause of the crash. They are the solution.

The cause of the housing crash was over-leverage. Cash is no leverage/nothing borrowed.

BINGO! There are STILL some permabears out there that think real estate is going to go to next to nothing. It's been rebounding in most areas and in many areas you see cash buyers. What's going on is VERY different than when banks and lenders were giving anyone with a heartbeat a mortgage. Now lenders are actually stringent and many are buying with cash. No one can fault or blame these cash buyers out there who have been unfairly punished by the Federal Reserve.

[hitman619]

Originally Posted by earlyretirement

Nope. MANY people have liquidated and sold off stocks or bonds or other paper as they feel the stock market might be frothy. There is also a huge segment of the US population during the Great Recession that got scared and also cashed out (at entirely the wrong time) and have their cash sitting in savings accounts earning almost no interest.

Since the Federal Reserve has interest rates at almost nothing and probably will be until 2015, it's causing people to 'chase' other investments including real estate and the stock market.

I'm sure there is a segment out there that are the group you're talking about but lots and lots of cash on the sidelines right now.

Originally Posted by shmoov_groovzsd

SD real estate over the long term will probably see higher gains or ROI than anything on the market right now. For one, the DOW has been cruising since the downturn and many stocks have/are hitting ceilings, even dropping a bit for some. Treasuries are paying close to nothing and Europe is shaky. So whats left for ROI? Real Estate in desirable corners of the globe.

I dont know percentages in SD, but its likely that international cash buyers are much higher than they were a decade ago. China is certainly a different place and has similarities to Japan in the 80s when they had their tech boom.

Originally Posted by futbol

The people buying with cash are not the cause of the crash. They are the solution.

The cause of the housing crash was over-leverage. Cash is no leverage/nothing borrowed.

I hear what you guys are saying.
What i don't get is the stock market has done fantastic over the last 3 years(for me at least)
Why take That money and roll it into a house,when the stock market is giving some good returns?
Ill take my question to the economic forum
"and yes i know the Fed is pumping money into the market"

[NYSD1995]

Long term question for real estate - what will happen when 70 million boomers retire (if they retire)

only 35 million xers and they are deep in home / kids already, most up to their eyeballs

Millenials live with their parents and dont want cars because they are too much responsibility, single family home would blow their minds

IMO the answer is a LOT more renters in the future

[shmoov_groovzsd]

Originally Posted by hitman619

I hear what you guys are saying.
What i don't get is the stock market has done fantastic over the last 3 years(for me at least)
Why take That money and roll it into a house,when the stock market is giving some good returns?
Ill take my question to the economic forum
"and yes i know the Fed is pumping money into the market"

I know plenty of people that don't like investing in stocks but instead invest in hard assets. Dont forget, taxes for foreign investors on US indexes get clobbered from taxes. Upwards of 30% in some cases on capital gains.
Stocks might have been plowing but indicators (eg. VIX) are not looking hot. In other words you would have already had to have been in the game for the past 3 years to see the gains in the market, generally speaking. I think many stocks are overbought or overvalued right now and some people are trying to take cover from more volatility. Throw in the possible tax hikes that were put off for three months and real estate starts looking pretty good.

IMHO some camps are just waiting for that shot in the arm of bad news to jump out of the market.

[USDefault]

Originally Posted by Clevelandgal

When we rebid on our house, our realtor did something I thought at the time was so corny, I am embarrassed to admit I participated. She submitted a cover letter with a profile of us and then asked for a picture...she ended up using one of me on my scooter at the beach to drive home the point we were serious and our lifestyle meshed with this community. I have never heard of personalizing offers like that-definitely an interesting strategy.

These letters are a massive waste of time and are beyond ridiculous. Not criticizing you, but the tactic. When someone has their home for sale, it's no longer their home -- it's a product. It's a saleable product on the market with a price. Every time a seller will go with the offer that gets the most money in the seller's pocket in the shortest period of time. Most money, shortest time period: it's the only thing that matters.

Read carefully the articles about these stupid letters. 99.99% of the time they fail, because the seller went with the highest cash offer. Period. I know lots of people who have lost to all-cash offers. I don't know a single person who won a bank-financed low-bid because of some dopey letter.

It'll be a cold day in hell before I waste my time with some hackneyed infomercial for the "opportunity" to buy a home. If that's what it takes, they can keep their dump.

[Clevelandgal]

Ha ha! I don't blame you, I thought it was pretty goofy. But I can't help but think by your post you probably better just let the money do your talking and not your charm in a letter or pic

[kathygrl]

Wow, you all beat me to CaBound1 with your responses....read them all and valid points were made, shows me you are smart and informed consumers! Yes, all cash deals, especially the over 400k range (as once the $417k loan amount needed is surpassed, you are entering "Jumbo loan" land) definitely seem to trump the buyers who need financing.....so CaBound1, you will have an edge! Clevelandgal, the letter your agent drafted does work depending on the particular seller (most often, the ones that have a strong "emotional" attachment to their homes) and in your case it definitely was a positive. But all in all, the bottom line here is the bottom line....may the highest bidder with the cleanest offer win! Ruthless I tell you!

[tonyinsd]

This market is insane.

My father and I found a place this morning. I send an email of it to the realtor I'm working with -- one who actually, omigawd, takes the time to get back to me with information. He calls me back half an hour later and says, well, it would have been a great place to buy but they've already stopped showing it and all bids must be in by the close of business today. That means there's multiple bids and you'll have to come in above the offer price, which I know is at the top of your range.

He told me he'd write the offer for it if I wanted him to but I told him not to waste his time.

My father and I went looking on the Sandicor site, and we found a place that was listed right at the close of business today. We are not repeating the same mistake. I sent the realtor an email, and said, hey, I know you're working on the other places, but let's do this one first.

I am having my father fax the confirmation of the loan as well as proof that we have money to close. So as soon as the realtor gets in, he can submit the offer.

Hopefully this will do the trick.

We are looking at this as not something to flip, but something for me to live in and pay the rent to dad for a while. If I get married, I don't need to move out until I have kids. And even if I have kids, I have probably a year or two before I have to move into a place with a room for the child.

By that time, we should be able to sell at a profit or rent it out.

And if it doesn't work out, he does the backup offers, and we go above the offer price. We are willing to pay fair market value based on price per square foot on comparable properties. For example, there is one unit at Acqua Vista that's listed at $159K. That's bullcrap. They're not selling it for that price. They did it just to get people to go and look and people to bid.

The people involved in this are numbers people. My dad is a retired research chemist and I am in sales. So we determined an appropriate price to pay based on price per square foot of other sales in that building in the past three months, and we'll go up to around that price. If we get it, great. If not, on to the next one.

[futbol]

Seems like you have an awesome dad, Tony. Hope it all works for the best.

Home ownership is a personal investment in your community.