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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (15838)	3/23/2007 11:04:58 AM
From: Ilaine	Read Replies (3) \| Respond to of 218167

We aren't planning on selling either because we both work and plan to continue working for 15-20 years. And we bought at almost market bottom, so have equity and a lowish note. Here's the local problem. A. Crazy builders. Local builders are building what are called McMansions, 6000 square feet minimum, 10,000 sq. foot very common, on tiny lots. $600K minimum, $800K average, $1 million not unheard of. Ordinary middle class and lower middle class are priced completely out of this market, so they depend on an ever-increasing supply of wealthy buyers. When the economy slows, they keep building and sell for whatever they can get just to keep the company active, pay their fixed costs and make the payroll. B. Crazy lenders. Desperate or unscrupulous lenders are willing to lend mortage money with almost no money down, because they are going to package the loans and sell them ASAP, so they won't be stuck when the borrower defaults. C. Crazy buyers. Like the people who chase after stock prices like chasing rabbits, assuming that if they went up in the past they will go up in the future, crazy buyers assume that housing prices will go up forever, so it doesn't really matter what they pay, they can always sell for more, and it doesn't really matter what they borrow, when the equity increases they can always refinance. As always, A+B+C="sell to whom?" phenomenon, and also "borrow from whom?" when the loan is upside down (owe more than property is worth). If you don't have a mortgage, renting out has all the advantages you list, plus a really great tax break if you manage the property actively. If you can't rent for as much as the mortgage (positive cash flow) and on-paper tax depreciation (reduces tax liability, ergo positive cash flow), then you're screwed. PS, re gold: if you really are thinking about it, try a small amount, say 16 troy ounces. After you've actually paid the premium to buy it and tried to find a safe place to keep it, and found out what safe deposit boxes cost per month, my bet is that you'll start thinking of it as an albatross. You have to keep it safe when you travel, for example. One of my old friends in New Orleans had some hidden in a built in hiding place in the structure of his basement somewhere. When the storm hit and the basement flooded, he was a very nervous man, but was on higher ground so no real problem there. Next big storm he might not be so lucky. He refused to evacuate, I think because he felt he needed to keep an eye on his gold in case it became exposed due to water damage to the structure, and the house was looted. Spend many days with no electricity, no running water, no fresh food, sitting in the dark with his guns.

To: Maurice Winn who wrote (15838)	3/23/2007 11:50:18 AM
From: TobagoJack	Read Replies (2) \| Respond to of 218167

hello maurice, you have quite a problem <<Maybe I won't sell the house after all. I still need somewhere to live. Return on shares = rotten Return on cash = rotten Return on property = rotten Return on farms = rotten Gold? Silver? Hmmmm.... >> the house that earns not enough is not worth what the market believes, and will drop in valuation when financial gravite gets done with it. just like I-net shares, the houses will give up all its unrealized gains when the bubble goes flat. there are stuff one can invests in, always - remember that platinum equation of time machine I got in 2000? it has tripled in worth by indication of latest auction. platinum metal also tripled. gold/silver? they are cheap, and better still, they have no correct price on the upside and they have beaten shares, no contest, over the past 5 years cb's take of the situation is wrong, because her starting premise was faulty - debt is no problem, exchange rate is no worries, the government is honest, and greenspan is good, bernanke is even better no need to fuss with buying 16 oz of gold ... can go for etf of gold, affordable storage cost, and no r&d risk it is not too late to seek salvation