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Old 04-02-2007, 12:59 AM
 
252 posts, read 1,127,540 times
Reputation: 197

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Most experienced "flippers" are already out and made money when there was money to be made. If you are not a flipper and just want to find a place to live in for the next 5-10 yrs, it is a market with possibilities. Like others said, many homes under or near distress with few buyers. Someone might bite even if you bid under their selling price significantly. Prices might come down but interest might rise but I doubt prices will drop to mid 90s level unless we have all of the following, most of which happened all @ once in the 90s:

firestorms (possible)
earthquakes (possible)
mass defense job cuts (already gone)
riots (possible)
major recession on local economy (possible)
mass entertainment industry job cuts (possible)
etc. (possible?)

but many of these all @ once? doubtful
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Old 04-02-2007, 01:49 AM
 
10 posts, read 39,142 times
Reputation: 16
Thanks Sorcerer!
I actually just got an accepted offer....40k below asking! I am so excited. I am in the 40% tax bracker with 50k savings etc...
He recommend a 100% loan..
I think I am going to do this as I think I got a crazy deal to find a home in LA proper for under 500k...that is cute etc
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Old 04-04-2007, 08:12 AM
 
Location: Cincinnati
1,749 posts, read 8,337,388 times
Reputation: 784
Quote:
Originally Posted by artichoke63 View Post
"I personally either pay nothing (at closing) or get money back at closing every time. I structure my deals that way."

Interesting investment scheme! The only reason someone would put nothing down on a home is if they had nothing to put down!

Artie
Um...no. Haven't you heard of leverage? Also, flipping is only one reason to buy property. I'm not looking to flip any property right now. I'm keeping everything I buy.
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Old 04-04-2007, 02:07 PM
 
Location: Charlotte, NC
523 posts, read 2,905,533 times
Reputation: 378
Hi myfirsthouse,

I am a former mortgage banker so I like to keep up to date on the real estate market/mortgage industry...why is the broker you're working with recommending a 100% loan? It would be best if you could put 10% down or at least 5% down since you do have savings. You will get more favorable terms on the mortgage and with a 100% loan, if the market value of the house drops at all, you would end up being upside-down on the house which is never a good place to be. (This is just one of the many types of subprime loans that are currently in the news--high foreclosure rates right now).

Also, are you planning on being in the house for at least 5-10 years? I'm not from LA but am considering moving here. I've been watching the real estate market and it seems to me that real estate prices will dip further before rising again (the rise will likely be over several years).

I hope I'm not coming across as too negative but I just want you to know what you are getting into. I know it's exciting to buy a house and $40k under asking sounds like a lot but it doesn't mean you just got yourself free equity.
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Old 04-04-2007, 04:04 PM
 
Location: Los Angeles
644 posts, read 3,320,759 times
Reputation: 338
Quote:
Originally Posted by Sorcerer68 View Post
Um...no. Haven't you heard of leverage? Also, flipping is only one reason to buy property. I'm not looking to flip any property right now. I'm keeping everything I buy.
Sorcerer,


No, actually, I have no idea what that means. What are you leveraging? If you're buying property with nothing down, you're renting it from the bank. The banks owns the property. You don't actually have any equity. You're living on pipe-dreams and peanut butter sandwiches. Property values in SoCal have been so out of touch with reality lately that people can't even rent them at a cost to cover upkeep and mortgage payments. Good luck with your investments. I'm sure you know what you're doing, but it does sound like a bit of a risky venture to me.

Artie

Last edited by artichoke63; 04-04-2007 at 04:17 PM..
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Old 04-04-2007, 04:27 PM
 
Location: Los Angeles
644 posts, read 3,320,759 times
Reputation: 338
Quote:
Originally Posted by Anu2 View Post
Hi myfirsthouse,

I am a former mortgage banker so I like to keep up to date on the real estate market/mortgage industry...why is the broker you're working with recommending a 100% loan? It would be best if you could put 10% down or at least 5% down since you do have savings. You will get more favorable terms on the mortgage and with a 100% loan, if the market value of the house drops at all, you would end up being upside-down on the house which is never a good place to be. (This is just one of the many types of subprime loans that are currently in the news--high foreclosure rates right now).

Also, are you planning on being in the house for at least 5-10 years? I'm not from LA but am considering moving here. I've been watching the real estate market and it seems to me that real estate prices will dip further before rising again (the rise will likely be over several years).

I hope I'm not coming across as too negative but I just want you to know what you are getting into. I know it's exciting to buy a house and $40k under asking sounds like a lot but it doesn't mean you just got yourself free equity.
Hi Anu,

Your comments make sense to me, but you often can't talk sense to people. People believe what they want. It's very sad to me the situation that many homeowners are finding themselves in today. I can't imagine taking out 100% loan on a $500K home only to find it valued at $400K a few years later when all you've done is made interest-only payments to the bank. How do you step out of a situation like that? But yet this scenario is becoming more and more common. All it takes is a little research to uncover the truth but again and again people want to believe in the propaganda spoon fed to them by real estate agents, mortgage companies, and the government. What can you do?

Artie
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Old 04-04-2007, 07:20 PM
 
6,459 posts, read 12,026,221 times
Reputation: 6396
Quote:
Originally Posted by myfirsthouse View Post

Is it a good time buy a first home in Los Angeles???
Absolutely not. Not just in Cali, but anywhere in the United States.

Here are a couple of links on why:

http://patrick.net/housing/crash.html

http://www.informationclearinghouse....ticle16164.htm
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Old 04-04-2007, 07:22 PM
 
6,459 posts, read 12,026,221 times
Reputation: 6396
Quote:
Originally Posted by artichoke63 View Post
Hi Anu,

Your comments make sense to me, but you often can't talk sense to people. People believe what they want. It's very sad to me the situation that many homeowners are finding themselves in today. I can't imagine taking out 100% loan on a $500K home only to find it valued at $400K a few years later when all you've done is made interest-only payments to the bank. How do you step out of a situation like that? But yet this scenario is becoming more and more common. All it takes is a little research to uncover the truth but again and again people want to believe in the propaganda spoon fed to them by real estate agents, mortgage companies, and the government. What can you do?

Artie
Yes Artie, most people can be convinced of anything if you repeat it often enough. Sad isn't it.
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Old 04-04-2007, 07:27 PM
 
6,459 posts, read 12,026,221 times
Reputation: 6396
Quote:
Originally Posted by myfirsthouse View Post
Thanks Sorcerer!
I actually just got an accepted offer....40k below asking! I am so excited. I am in the 40% tax bracker with 50k savings etc...
He recommend a 100% loan..
I think I am going to do this as I think I got a crazy deal to find a home in LA proper for under 500k...that is cute etc
Careful believing these so-called "crazy deals".

The following was taken from http://patrick.net/housing/crash.html :

Quote:
The house down the street sold for 25% over asking, and that proves the market is still hot.

FALSE. Realtors try to create the false impression of a hot market by deliberately "underpricing" a house. Say a seller's agent knows that house will probably go for $500,000. He places ads asking $400,000 instead. (Bait-and-switch is illegal when selling toasters, but apparently not when selling houses.) The goal is to first of all prevent buyers from knowing what a realistic price is, and secondly to get buyers to blindly bid against each other. There are four players in this game and three of them are against the buyer -- the seller, the seller's agent, and the buyer's agent. Yes, the buyer's own agent works against the buyer, because there is no commission if there is no sale. There's a saying in Las Vegas: "There's a patsy in every game, and if you don't know who the patsy is, you're it."
Unfortunately, Realtors are not looking out for your best interests.
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Old 04-04-2007, 10:25 PM
 
Location: Los Angeles
644 posts, read 3,320,759 times
Reputation: 338
Quote:
Originally Posted by marilyn220 View Post
Absolutely not. Not just in Cali, but anywhere in the United States.

Here are a couple of links on why:

http://patrick.net/housing/crash.html

http://www.informationclearinghouse....ticle16164.htm
Hi Marilyn,

I've been reading Patrick's website for years now. He's got some excellent articles posted on there. I also think Michael Hudson has written some good articles. You might want to check out his website. Good to hear from someone else who is plugged into reality.

Artie
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