Current events discussion

[ThxOne Premium Member]

@RobGMN 4 syllables.

diaclinal​

[¦dī·ə¦klīn·əl]
(geology)
Pertaining to a stream crossing a fold, perpendicular to the strike of the underlying strata it traverses.

 

[Jimi77 Premium Member]

What do you think is pushing the insane deposit requirements?
Are there a lot of seller-financed sales happening? Contracts for deed?
Or is it a lender-driven situation?

It's not a deposit requirement. It's the amount of cash I calculated one would need to put down so the property would be cash flow neutral after you purchased it. IOW, IF you put down ~40% on these properties, you would have a cashflow neutral property; OTOH, if you put 20% down, the property would be cash flow negative.

What do I think is driving it? I think (know?) that prices were driven up by artificially low interest rates, so the property might be cashflow neutral with 20% down at 4% interest, but at 8% it's cashflow negative. If you understand how bonds are discounted, this is a similar situation except except the property would need to be discounted. So now because of the of the underlying finance these properties are kinda frozen off the market. I can't imagine there are lots of people with ~$4-700k to put down on these properties and of that cohort, how many would be willing to put down that much when properties are no longer quickly appreciating and deal with the headaches that come with property management. It would make more sense to put that money into a dividend paying stock that may not appreciate quickly, but gives you cash flow and no headaches.

 

[Jimi77 Premium Member]

I don't have much faith that some kind of rent control at a won't be passed at the Fed level within the next 10 years...

If we get 10 years of Trump then Vance, it won't happen until Dems take control. Rent control has wonders for affordability in NYC.

 

[spokey9 5,000+ posts]

If we get 10 years of Trump then Vance, it won't happen until Dems take control. Rent control has wonders for affordability in NYC.

With people like Rob gobbling up the narrative...once dems retake power we're fck'd

 

[Jimi77 Premium Member]

What, now Trump didn't get shot? Didn't we all see it? Even MSNBC "thinks" Trump got shot.

 

[spokey9 5,000+ posts]

What, now Trump didn't get shot? Didn't we all see it? Even MSNBC "thinks" Trump got shot.

He pretended to get shot...factboy said said so

Msnbc is pure maga propaganda anyways...

 

[RobGMN Premium Member]

You seem to have no problem coming up with your own uses for words... you tell me what it means. I know what the word means, I picked the word for you.

Oh so now he didn't get shot? There was no shooter? No shooter was killed? No shots were fired?

No, he didn't get shot.
Maybe shot AT, but most definitely not SHOT.

Why you immediately think that means there was no shooter, I'm not sure.

The Trump hotel in Vegas didn't collapse. Does that mean to you there wasn't a green beret Trump supporter that blew up a Cybertruck and himself in front of the hotel?
That would be the same logic train.

Sooooo...you were thinking about my needle stream crossing a fold, perpendicular to the strike of the underlying strata it traverses?
And you specifically wanted to describe a stream, and not a valley?

So, what exactly is "The only point you have is that needle diaclinal." supposed to mean? Some type of nonsensical insult using consecutive adjectives, or maybe were you having a mild seizure when you typed it?

 

[spokey9 5,000+ posts]

No, he didn't get shot.

He was grazed on the ear...even a graze is considered being shot ffs...You're are so deep in the syndrome that you're delusional...

 

[RobGMN Premium Member]

It's not a deposit requirement. It's the amount of cash I calculated one would need to put down so the property would be cash flow neutral after you purchased it. IOW, IF you put down ~40% on these properties, you would have a cashflow neutral property; OTOH, if you put 20% down, the property would be cash flow negative.

What do I think is driving it? I think (know?) that prices were driven up by artificially low interest rates, so the property might be cashflow neutral with 20% down at 4% interest, but at 8% it's cashflow negative. If you understand how bonds are discounted, this is a similar situation except except the property would need to be discounted. So now because of the of the underlying finance these properties are kinda frozen off the market. I can't imagine there are lots of people with ~$4-700k to put down on these properties and of that cohort, how many would be willing to put down that much when properties are no longer quickly appreciating and deal with the headaches that come with property management. It would make more sense to put that money into a dividend paying stock that may not appreciate quickly, but gives you cash flow and no headaches.

I gotcha' 100% with that perspective. I was approaching it from the seller side, not the buyer-to-be-landlord side.

Our region is a bit slower to react to real estate changes, but we still saw a reasonable jump in prices when the rates were knocked down by the Fed in response to recession. And desirable houses were on and off the market in the snap of a finger.
I'd say the lowest down I could do around here right now on another rental property would be in the 25% range. Not much income per month, but a nice equity builder as it'd be paid off in 15 years.

Old friends sold their house 4 months ago and the wife admitted to me she actually felt they were being offered too much and felt guilty taking it, even though it was right in line with the comps in the area. Stuck in the mindset of what they paid 25 years ago.

 

[Jimi77 Premium Member]

I gotcha' 100% with that perspective. I was approaching it from the seller side, not the buyer-to-be-landlord side.

Our region is a bit slower to react to real estate changes, but we still saw a reasonable jump in prices when the rates were knocked down by the Fed in response to recession. And desirable houses were on and off the market in the snap of a finger.
I'd say the lowest down I could do around here right now on another rental property would be in the 25% range. Not much income per month, but a nice equity builder as it'd be paid off in 15 years.

Old friends sold their house 4 months ago and the wife admitted to me she actually felt they were being offered too much and felt guilty taking it, even though it was right in line with the comps in the area. Stuck in the mindset of what they paid 25 years ago.

Keep on mind in Denver, which looks a less extreme version of some of the California markets. We also had a lot of cash buyers come in from Cali during the pandemic and they weren't very price conscious because our home prices were much lower than what they were accustomed to seeing.

 

[RobGMN Premium Member]

Keep on mind in Denver, which looks a less extreme version of some of the California markets. We also had a lot of cash buyers come in from Cali during the pandemic and they weren't very price conscious because our home prices were much lower than what they were accustomed to seeing.

Double whammy.

The funny thing about the friends I mentioned is that they actually met the buyers and it ended up they were essentially trading places (by only a few miles difference) in the case of the city my friends moved to (and had lived in at one point).

 

[Buck 5,000+ posts]

 

[RobGMN Premium Member]

How long before Trump, MT Greene, et al, start whipping their followers into a frenzy, blaming this on illegal immigrants?

 

[Eggs 5,000+ posts]

 

[spokey9 5,000+ posts]

There was that shooter at fort Bragg a few years back too