By cw1900

September 4, 2007 10:53 AM | Link to this

Good morning,

As usual, too many people wasting their time on this blog on a beautiful, long weekend, and also, one realtor trying to advertise his website. How many times do we have to tell you? If you try to advertise on this blog, you only come across as desperate, and nobody will take you seriously, so you’re wasting your time. Take it over to the websites that Fink apparently spends so much time. Mike, I have to ask you, how do get any work done with all this posting you do on all these multiple blogs? It’s a valid question.

Max, I have a question for you. You said, “There are people I disagree with here, but I have to admit this about some of them: the ones with property, like Rich R., have money. Invariably the ones who are poor have no property (or nothing but some vacation cottage on some Southern lake somewhere).”

Is the “some vacation cottage” comment meant to be a subtle dig towards me? Just checking.

I do like the Buffet quote you told, “I would rather buy a great asset at a fair price, than buy a fair asset at a great price.” Very true, but you can’t get mad a people for wanting to find a great deal on a great asset. It happens, and I still contend there is nothing wrong with lowballing.

Ahh, a new topic up my alley.

Second homes, and/or investment real estate, are not just for the rich, however, they are for people who can actually afford them. For all of you out there thinking about a second home or an investment property, let me give a public service announcement so as you don’t get hurt in the process. Before anybody considers taking on a second piece of real estate, simple logic would dictate that your financial house is in order first. That sounds obvious and simple enough, but we all know there are countless morons out there who take on a second piece of RE and they can’t even afford the place they sleep at night. Why let something that was meant to be fun and/or a good investment, turn into a nightmare? People, never consider this type of investment unless you can actually afford it. How do you know if you can afford it? Well, read on….

If you currently have one or more of the following, you should not buy any kind of investment property just yet….

Heloc on your primary residence: Pay that thing down first. Paying off a 9% loan is the same thing as making 9%.

Car loan(s) balance that equals more than 1/4 of your yearly income. If your household yearly income is $100k, and you have a car loan or two totalling more than $25k, you are fooling yourself. Pay those things off first, and never do the car loan game ever again. Trust me.

Boat loan: see above.

Credit card balances of any kind: If you carry a balance on one or more credit cards that you make small monthly payments, don’t even think of buying an investment property until you prove to yourself that you aren’t an idiot with your money. If you carry a credit card balance and you do not pay it in full every month, you are an idiot with your money.

The above are all financial drains on your cash flow and need to be gotten rid of asap.

Next, after you’ve done that, now you need to make sure, you have put something aside for kiddie’s college education, and have agressively been putting money aside for retirement.

Also, do not forget your little rainy day fund every household needs to have. This is cash that just sits there in a simple money market and does nothing but make your wife happy knowing that it’s there, just in case. This is not money you have in the stock market, it is cash just sitting there earning a meager rate of return, but it’s there nonetheless. Remember the old ridiculous statement doom and gloomers said for years, “…Everybody is just one paycheck away from being homeless.” ?? No, I’m not. Not if I have money in the bank. Do it, and make it a decent amount.

After that is all done, then have at it. Just do your homework, and lowball away, you people. You see, when you have money and very little debt, and know that your financial house is in order, you have power and confidence. Both of those things are needed in negotiating and can help you find that great deal for a great asset.

You think I’m wrong? Just look at all the people who bought full price, retail condos recently and did not plan accordingly, and did not plan for a worse case scenario. Those people have problems and they brought them all on themselves, and no, I do not want the federal government to help any of them out. Let them learn a hard, valuable lesson.

cw

By funny

September 4, 2007 11:42 AM | Link to this

another funny commentary by easya.

Funniest is him ragging others for multiple user id use.

Kind of like those reformed drunks lecturing someone still imbibing.

By tellmaxi

September 4, 2007 12:05 PM | Link to this

Having read maxis take on 99 SE Mizner, it appears his clients in there didn’t listen when he said do not bother listing to sell yet.

There are almost 30 units now listed. Also, 1 BR prices no longer 399,000. More like 340-360K IF you can find a buyer.

Don’t know if maxi locked in to this bldg big time, but tracking it does give snapshot of Boca condo situation.

It has some ego priced units that will sit still more months.

It has bank-owned (#215 sold Jan ‘05 $715,000,Countrywide took Oct 2006)

It has pre-forclosure(#503 2/2 450K)

It has many owners ready to deal.

What it is short of is enough qualified buyers interested in buying.

By fetishes

September 4, 2007 12:15 PM | Link to this

Some guys have foot fetishes, others like to prance around in women’s underwear.

“tellmaxi“‘s fetish is 99 SE Mizner.

I think I’d rather parade around in women’s underwear.

By tofetish

September 4, 2007 12:46 PM | Link to this

Whatever turns you on.

Specific local locations , current prices versus last selling price, time on mkt, number of comparables, etc, are more interesting to some of us than long personal histories, opinions and philosophies.

Whether you realize it or not, you are in the middle of a historic time in SoFl real estate.

There will be much money lost, and much money made.

But, if you prefer ladies dainties, go for it.

By Giddy-up

September 4, 2007 12:47 PM | Link to this

DelR6 #12 Briny m/l 6-1

By Giddy-up

September 4, 2007 12:59 PM | Link to this

Scr

By Curious

September 4, 2007 4:02 PM | Link to this

If you are financially secure with all important things paid for, and you don’t have much of anything else to do in the next few minutes, this is a nice light enjoyable read – “In the Name of Love”:

http://www.huffingtonpost.com/james-d-scurlock/in-the-name-of-loveb62398.html

By toooquiet

September 4, 2007 4:02 PM | Link to this

This spot usually has more comments. So much quiet, cheerleaders must be all out buying homes. Or too stunned looking at growing inventory.

By As We Speak.....

September 4, 2007 4:29 PM | Link to this

Yet, another chapter of….”As We Speak”……

As we speak….Rent is up 4.1% according to the NRA (National Realtors Association)

As we speak….median price is up 2% in Miami-Ft. Lauderdale area to $384,400

As we speak….Linda Rawls is still trying to figure out the July median price for Palm Beach County.

As we speak….Southern California home prices has a median price of $727,000.

As we speak…..I-95 construction is still going on.

As we speak….another corrupt county official has left office…..Broward County Sheriff Jenne.

As we speak….everyone should pay their taxes.

As we speak…..we will have more “have nots” talk about a condo price falling at SE Mizner.

As we speak….some dead lady’s dog has more money than most of us.

As we speak….we are only two days away of the NFL season to begin…..Are you ready for some Football?

As we speak…..some of the “have nots”, like Steve, believe if they win enough football pools this season, they will be able to buy a home here.

As we speak…..slot machines in Broward has become a losing issue.

As we speak…..Average Guy is getting hired by an average illegal mexican to pick the fall crop up in the Carolinas.

As we speak…..my mail is loaded with great real estate land deal buys in Arkansas, Tennessee and Alabama……YEE-HAW.

As we speak….more americans die in this country every year by drunk drivers than americans getting killed in Iraq.

As we speak….more americans die from second hand smoke than americans getting killed in Iraq.

As we speak….some hair stylist is unknowing killing more Linda Rawls brain cells as Linda gets a new hair dye job today.

As we speak…..Curious’s old man is dreading going home from his ditch digging job and have to look at that ugly b***h while he eats his tv dinner.

As we speak…..Jeff just finished cleaning out Frank Cerabino’s pool….and without Frank looking…Jeff pissed in it !

As we speak…..RCA is tapping mens shoes at the public restrooms along Lauderdale beach….and asking if they know any cheap rentals in the area.

As we speak….Credit Card companies will be asking higher minimum payments for those who are lacking behind credit payments.

As we speak….I beleive people who drive SUV’s and other gas hauling vehicles, and talk on the cell phone while driving, should die of gonorrhea and rot in hell.

As we speak…..Jeb Bush’s name will show up on a ballot for the next presidential election……God help us all.

As we speak…..the Atlantic Ocean looks very good….keep your fingers cross.

As we speak…..the poor people in Honduras, just became more poor with Hurricane Felix hitting them.

As we speak…all the renters out there better have their rent checks in the mail for all of us landlords.

easyasabc

By 99bugsmaxi

September 4, 2007 5:19 PM | Link to this

Anybody know why comments on 99 SE mizner upsets maxi so much he rants about transvestites ? Where the H does that come from ?

Nothing special about price trends in 99 mizner.

Condos dying. In some cases a long slow death. In others quick bailout by taking the smaller loss now rather than carry costs longer and sell even lower eventually.

Read em and weep, move on.

transvestites ?????

By FL Renaissance

September 4, 2007 5:36 PM | Link to this

Good post as usual cw. As a second, third and fourth vacation home owner myself, I fully agree with the “common wisdom” of cw1900 whose shared more than I ever would. Those of you who are ready to take the the second home investment plunge (because you are fiscally prudent and cash ready, go for it)…now’s a great time if it’s in a desirable leisure-oriented area. An extra word of advice though, be sure to rent it out for at least part year. It therefore qualifies as an investment property and you will be better off at tax time! All you struggling others, please keep getting your rent checks in to me on time or else I will raise the late fee from $75 to 5% of your monthly rent. I will also impose a onetime mandatory lease exiting house cleaning fee of $150. Best line of the weekend ” I would rather be an “average looking guy” at Home Depot or Lowes who is actually a “rich guy”…instead of being a “rich looking guy” who is without an asset base and is actually a “poor guy”. Aloha (yes easy, I’m on Kauai now, beautiful trades..much to hot in FL or CA this month).

By Greg Block

September 4, 2007 9:05 PM | Link to this

cw1900. it’s refreshing to read such excellent advice! I would take it a step further, and say that one should put their financial house in order (no HELOC, auto, boat or credit card debt) even if they are NOT buying a vacation property. It’s just all-around good advice. I’d also throw in student loan debt as well. Debt is debt, no matter what you owe it on.

By Milburn Drysdale

September 4, 2007 9:05 PM | Link to this

As we speak, inventories are rising above and beyond flood stage.

What was that? You say RENT IS DUE? Oh oh…I guess that also means your MORTGAGE PAYMENT is due…as well as your INSURANCE PAYMENT, TAX PAYMENT, WATER BILL, etc….oh oh…washer broke down, and flooded your family room and guest bedroom…too bad you cant just call the landlord to come fix it for you. Oh oh…interest rates just jumped again…I guess you will owe even MORE to your lender next month. Interest rates can rise through out the year…tax rates can rise…insurance rates can rise…all thw while, your home’s value could be dropping the entire time! Gosh you owners are so smart, and have it so much better than us renters! What will your taxes be next year? Your interest rates? Who knows?

My rent will not change. Interest rates, taxes, and plunging home values have no effect on me. You say rents are rising? where? tell me where. All I know is that if at the end of my lease, my landlord tries to raise my rent, I will simply say “no thanks” and walk down the street to any of a dozen other places for rent, and find a better deal. Trust me, when you have been sitting on an empty property for two years, ANY ammount is better than NOTHING.

I thought you ‘haves’ were better informed than that. Surely you understand the most basic elementary truth of economics. When supply far exceeds demand, prices can only move DOWN, NOT UP. Man, I cant wait to see what kind of deals will be out there next Spring. Sparkly new condo, never lived in, stainless steal appliances, granite countertops, on site fitness center, been sitting empty since property opened in 2006…I will offer $850/mo, which beats the heck out of $0/mo! Two years of paying a mortgage on an empty condo, desperation will ensue. Its called taking advantage of the remnants of greed based investments backfiring.

Hey Easy/Max…soon the realtor business will be reduced to flat rate fees. No more commissions. Perhaps you guys should go back to Day trading. Its the same principle. Get paid for doing nothing but buying and selling stuff that isnt yours, while using other people’s money. Either way its a scam.

By Greg Block

September 4, 2007 9:13 PM | Link to this

Re: rent versus mortgage payment - in the last 6 months, according to my calculations, the house I am leasing has dropped about $60K in value (based on resales). That’s about $10K a month. It’s good to rent! When my lease is up I expect to rent my next house for around $800 less per month than I am renting now, since there are so many vacant homes in my neighborhood and the rental prices have dropped precipitiously.

By Jane Hathaway

September 4, 2007 9:58 PM | Link to this

Chief! The Clampett Mansion has been on the market for 3 years now, and no interest. We have lowered the price from $3.5 million down to $1.8 million, still no interest. We have no choice but to rent it. We did have an offer of $1800. a month. In this market, we better take what we can get!

By Curious

September 4, 2007 10:41 PM | Link to this

Re Greg Block.

No doubt about it.

As things stand now most renters are in the catbird seat and may continue to save money and enjoy living in great newer houses for 30 to 70% less than their stuck landlords are paying to allow them that privilege.

New desperate sales ads bray rent with option to buy or something like that – even a better deal possibly. Ignore the option price unless all rents are applied; rent cheap now and have the option to determine the price in a year or two. If not to your liking, move on to the hundreds of other properties probably available and much lower priced at that time. The landlord already knows you pay the rent on time and have given him no hassles. He will probably go to church on the day of closing to offer thanks for getting him out of the continuing costly mess he was into.

Only better deal than that I have made recently was buying a dealer-owned car with less than 5,000 miles on it, never registered, discounted as 1-year used, and with factory 5-year financing AT ZERO %. Since I just happen to like the minor luxury of new cars, I will take that purchase price and financing deal any day of the week.

Cheers!

By Trying to convince themselves

September 4, 2007 11:00 PM | Link to this

To the Curious and Greg Blocks of the blog. I hope your reverse psychology is working for you guys. You’re really in drivers seat. Boy, I have some much envy. How did you people become such a success story? Please, Let us know.

By Curous

September 4, 2007 11:30 PM | Link to this

To: Trying to convince themselves

By your comments, do not think you will ever understand.

HOWEVER, if you want to change your luck, have some properties in western NC which are currently rapidly appreciating and which we may be convinced to sell to the right person?

Let me know, ya hear?

:-)

By Doctor Melfi

September 4, 2007 11:36 PM | Link to this

How do the renters convince themselves? It is called “Couch Therapy” every Tuesdays and Thursdays.

By Greg Block

September 5, 2007 8:27 AM | Link to this

Actually, I agree with you guys - I made a blanket statement that renting is good and home ownership is not. That was quite foolish. I agree with your insinuations that being a homeowner, and a landlord, is a great strategy long-term. In fact, I was recently both, and profited well from it. However, I didn’t parse the difference between long-term and short-term in my earlier observations.

Long-term, real estate is a great investment strategy for those who can afford it.

I guess I was too mindful of the friends I know who own several properties each. Their properties are so cashflow-negative that they cannot even afford to rent them out. They bought their real estate during the market peak, and cannot afford to carry them or take the loss to sell them. They are “renters-in-waiting”.

Do you have any advice for them?

By To FL Ren

September 5, 2007 8:58 AM | Link to this

Make sure you hit that brew pub on the west side of the island.

And, do you go unclog the toilets of your rentals when your tenant gives you a call, or does your wife do that?

By Max Laughs and Laughs

September 5, 2007 11:45 AM | Link to this

…at the renters who have nothing, and somehow convince themselves they are making a killing.

Will you people stop taking drugs for just one day? Look around! The people who have something in this society own appreciating assets, whether it’s a pocketfull of diamonds or a bunch of rental properties.

Renters are too stupid to understand that wealth is not based on what you could pawn your property off for TODAY. They can not see past today. Like my dog, they can not understand the concept of tomorrow.

If you are in the process of building wealth through real estate, you are in it. If you lose a house, tough luck. You can then either decide you’re done, and resign yourself to a horrible life like the renters, or you can decide nothing will stop you in life, learn from your mistakes, and go on.

Only a fool does not understand that dollars lose their value as you watch, they must be turned into something productive. Even THAT is unnecessary though to buy houses these days, and I think it is not quite right that the atmosphere in of hysteria in the media allows anybody to walk away from a house now, having lost not a dime of their own money. We all need a tougher training ground than that.

I feel the pain and the envy of people who look at Palmetto Place, and say to themselves “I can never afford that” instead of “I will work to afford that.” The problem is not in the real estate market. The problem is in their lack of character.

Since the beginning of our society in Feudal England, wealth has been based on who owned land. Little has changed.

Wealth is not what your appraiser tells you this month as opposed to next month. Wealth is who you are.

Renters are forever serfs — because it’s what they choose.