Phoenix Investments
I’ve mentioned in the past that my brother has been involved in creating a company to purchase properties in the US. For anyone interested in that sort of thing they are holding a presentation this weekend. Here are the details:
REICorp Capital Inc. is a company whose mission is to buy distressed real estate in the United States during the best buying opportunity of our lifetime. We are doing presentations to the public this Saturday at :
Hotel Royale – Ramada
19267 Lougheed Highway Pitt Meadows BC
Corner of Lougheed Highway and Harris Road
Session 1 – 1:00 PM
Session 2 – 3:00 PM
********************************************
Here is an example of the first property that they bought, which is now rented, and here is an earlier post where I discussed this opportunity.
148 comments
It’s never a good time to buy real estate. Just because the rents can cover the mortgage doesn’t necessarily mean it will stay that way. Are rents actually going to be stable going forward, or will it get worse? It’s about as paradoxical as what is happening in Vancouver. How do we know that the future will follow a certain historical pattern? Because the world is entirely deterministic? This business idea is good since the money is made no matter what happens, like an investment bank or fund. OPM.
Hi Rob,
Is there any written material your brother distributes? Can he post it on the web somewhere?
I think that buying a fixer-upper house in Phoenix is a great 10-year investment, especially if you can get a good 30-yr fixed mortgage on it.
My concerns would be
- That was maybe a $200K house — if you have a “corporation” that owns and manages it, operating costs for your corporation are going to swallow up a fair bit relative to the rent on the house. If you get 40 houses, then you’re fine.
- How does it work for a Canadian-owned company to get a US mortgage for an investment property? Seems that even if that costs you 1/4 of a percentage point, it’s going to eat into your profits big time.
As for Doubtful, house prices in the American West are historically roller-coasteresque. If you can buy a place and it basically pays for itself, you can figure that at some point in the next 5-15 years you can sell it close to the top of one boom or another and make a 50% profit on your investment. Same with Western Canada — buy in a natural resource town in the slump, and at some point that resource will boom (gold, oil, coal, forest products) and you can sell it.
As for long-term holding, I’m not convinces that owning a house in a far-off location is all that great of an investment, except for the forced savings. But I’ll let you know in about 30 years how mine worked out…
As always,
Whybuywhenucanrent’til’13?
Phoenix<water=bad long term investment
caveat emptor!
it will be 10-20 years before US real estate booms again, and may not ever be as lucrative as it was from 2000-2006. You are better to wait for the inevitable correction that is coming here in Canada, and buy close to home. Real Estate “WAS” a good investment for about 10 years, but that doesn’t mean the trend will continue. I believe in the next ten years you will see great strides in technology, and most of the Blue Chip companys will do well.
Look toward Taiwan tech companys, Asian Growth in India and China, Oil will always be a good investment, but buy a house to live in, and enjoy, at a good price you can afford.
Sorry to burst your brothers get rich quick scheme Rob… but i do hope it works out all the same…
PS announced today via email, layoff notices for BC Gov employeess
http://www.timescolonist.com/business/government+lays+forests+citizens+services+ministries/2463900/story.html
I am a public servant in Victoria, and the mood here is not good. We have layoff notices in our ministry for 127 union positions, and 82 Excluded positions. These people found out this morning, they do not have a job. And the Gov is not done yet, we expect more in a couple of months.
Do you think this may affect purchasing decisions in Victoria? Hmmmmmm.
Rob,
in the earlier post you mentioned your brother was looking at phoenix and las vegas. why did he choose phoenix?
Whybuy:
You can go to http://www.reicorpcap.com/ and see what they’ve got. It might answer some questions. Financing is the challenge. I believe they have a US subsidiary to a Canadian company (don’t quote me) which solves a lot of tax issues for Canadians who want to invest in the US.
It was, at peak, a $200k house. They bought for $65k and spent $9k cleaning it up. I’ve heard that people who have been foreclosed on can’t buy for 5 years, and so must rent.
“As for long-term holding, I’m not convinces that owning a house in a far-off location is all that great of an investment, except for the forced savings.”
What forced savings? Where is it far away from? Its close to a tenant who pays your mortgage, and is cash flow positive. How bad can that be?
I think he choose Phoenix because that was where he first cemented relations with a good realtor and a good property manager.
Spaceman:
“You are better to wait for the inevitable correction that is coming here in Canada, and buy close to home”
There’s an old saying that the best real estate is real estate that you can see, however I manage real estate here for lots of smart guys who are far, far away from here. If you go to where they are Vancouver is far from home. There’s probably someone there telling them what you’re telling us here. The fact is that proximity of the subject property to the investor’s home address has no direct impact on the value of the subject property. Buying far from home has challenges, but they can be addressed.
“Sorry to burst your brothers get rich quick scheme Rob…” Funny choice of words. Its actually a get rich slow scheme, but buying on metrics always is. For it to be a get rich quick scheme we’d need immediate capital appreciation in double digits, and I don’t think anyone expects that. You don’t need a boom to make money in real estate. You need good metrics, leverage and a solid tenant. If you have all three you’re in business. (I know leverage is a scary word for some, but before you hit the keyboard look at the three things required and remember that my brother, like me, has a lot of experience collecting rents).
Government layoffs can’t be a surprise. The public sector appears insulated and well compensated (or at least you can hear claims to the effect) but it has to be paid for and the cupboard is bare. I didn’t expect them this soon, but as soon as we started cutting Special Olympics you had to know this was coming.
Blueskies, the water issue is a very good one to raise. When it rains in BC, you can be sure that our aquifers are lakes are being recharged. Water is quickly becoming a very valuable commodity and there isn’t enough of it to go around in the Western states. Maybe one day people will see our rain for what it really is… liquid gold.
I think there is still a lot of room to downsize our Provincial government. How many people do we need to work in ‘policy development’. The government is loaded with all sorts of internal ‘think tanks’ that are completely detached from reality.
That said, health care and education take up the bulk of the Provincial budget and nobody dares to re-think those services.
A Manhattan apartment for the price of a car?
Yes, that’s right, $28,000 for an apartment in a pristine Upper West Side co-op building across from the Museum of Natural History. By comparison, a similar studio in the 100 West 81st Street building sold for $460,000 in 2005, the most recent comparable sale.
http://tinyurl.com/yc42qsl
…..coming soon to a neighborhood near you……
10, you seem to be missing half the story… at least
Here is a link of someone’s experience with property management in the phoenix area.
http://www.realphoenixliving.com/
Not sure how accurate his assertions are, but can be given some thought on the expenses that a property management company may have to deal with in the near future
IT ALL COMES DOWN TO MOI – IF ITS DOWN THE MARKET IS HEATING IF ITS UP ITS COOLING…LATELY IT HAS BEEN SURGING BUT AGENT WILL SAYS SALES ARE BRISK SO I EXPECT SELL/LIST OVER 100% THIS WEEK AND PLUNGING MOI AND INVENTORY COUNT.
WhyBuy – Intrawest. Good question – probably less than its debt (just a general view on distressed assets, they usually (often?) knock the equity down to zero and haircut the debt.
Its getting a lot of attention locally now, locals are shocked that “Whistler” is bankrupt and going up for auction.
Vancouver School Board laying off 800, North Van closing 3 schools, BC gov’t doing another round of layoffs. Truly, if this does not start to shake the local ‘confidence’, I’m not sure what will.
China is putting water on their market for a while, I suspect Asia buyers will be coming in less strength (just a guess). Local buying power should be pretty much tapped out.
Sorry AC, nothing more concrete, but a few thoughts that hopefully are of interest.
Sheet looks bad to me folks. Wonder if listings are surging and if MOI is rising or falling – look forward to this week’s stats.
Enjoy the balmy weather folks.
I think there are great deals in Phoenix. Especially in the multifamily appartment buildings. I have seen deals for such properties with 1 bed apaprt going between 17k to 28k. And they were not in bad shape. The problem I find is how to evaluate those properties. Cap rate is useless because those properties have more than 50% vacancy rate, most of them are short sales (it takes long time to get all the lenders agree) . Also buying such property and managing it by distance through a property manager is not the best option unless you know someone you can really trust to take care of things. You also need to know the area where you buy in Phoenix, so someone with local expertise can be of great help, but truth is, there are GOOD deals in Phoenix, 2.5 million can buy you a building with more than 100 aparts, think what does that buy you in vancouver?
http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=16512509&SRID=730461749&StepID=101
“I manage real estate here for lots of smart guys who are far, far away from here. ”
Nobody holding investment RE at the present time in Vancouver is “smart”.
You pretty well summed up the reason yourself in the next paragraph – it’s all about the numbers. There’s a good case (not airtight, it never is) that the numbers work in Phoenix, but they certainly don’t here.
GG: 50% vacancy rate? Ouch! That’s gotta hurt the cashflow.
Deals to be had for sure, perhaps not quite yet. A second larger wave of foreclosure yet to hit. They are mostly through the subprime wave, although a huge number of those that should have been foreclosed on are hung up in moratoria, doomed-to-fail trial modification and that really odd phenomena where the “owner” has stopped making payments two years ago, is living rent-free, and yet the bank hasn’t done a thing. Some of that reluctance has to do with second liens. Everyone knows that 25% of US owners owe more than the house is worth, that figure is first mortgages only! HELOCS and second, third mortgages are on top of that. That is where a lot of the most blatant excesses took place.* Once the bank forecloses, those second liens becomes officially worthless, with no hope of recovery.
The “alt-A” and “option-arm” wave is just starting to crest.
http://tinyurl.com/yzavqmq
If rates manage to stay low the alt-A impact won’t be as bad as feared, but the option-arm will still double the payments. Those are the ones where you could “choose” to pay less than the interest for the initial term, then the loan resets and you have to make fully amortizing payment on the new, larger than initial balance. All that not-paid interest was added to the loan balance and, get this, booked as current quarter income by the banks! Of course, the plan was that you would sell the house for immense profits before the day of reckoning came, pay off the loan in full and be rich.
*Perhaps similar to some automotive incentives being loudly pushed today right here? “Cash-back rebates” Essentially you agree to vastly overpay for a new car, you get a no-money down, no payments for 6 months loan, plus a big wad of cash! Paid for courtesy of the Canadian auto bailout money, or at least guaranteed by the taxpayer. What could possibly go wrong with that idea? Also a program where they pay off your credit cards and roll the balance into your auto loan.
This morning’s best RE piece… courtesy WSJ. DejaVu for YVR denizens?…
[WSJ] China’s Housing Boom Fuels Growth but Bubble Worries Emerge
http://tinyurl.com/ygy3z6h
“Recovery to pick up, Bank of Canada says”
http://www.cbc.ca/money/story/2010/01/21/monetary-policy.html
http://www.bankofcanada.ca/en/fixed-dates/2010/rate_190110.html
Many now are predicting rates unchanged in 2010 due to low inflation.
FTB
Any luck on the battle front? Winning any bidding wars? How are things on the front lines?
I understand that there are more listings for the fewer buyers to sift through – hope all is going well.
does REI have a website link we can go to Rob ?
http://fishyre.blogspot.com/
Worth a read FTB. Read the prior post and the 9 comments as well. Sounds like WVan has slowed to a crawl – perhaps set up your embattlements there and fire a few test shots?
Looks like the listings surge and increase in MOI is continuing – from what I hear anecdotally – look forward to the raw stats.
Could anybody satisfy my curiosity about something which appears to be a slight contradiction to me? Many comments/posts I see on various blogs which are long the lines of “prices too high, I’m waiting a while longer” are quite often suffixed with “I’ve got half a million in the bank” (I’ve seen figures of anywhere from 100K all the way to a million, with many just saying “six figures”). These same posters will often claim that BC has no industry to speak of, save for tourism and logging, and that other buyers are leveraged to the eyeballs and will be up to their necks in it if rates rise by a percentage point. There seem to be an awful lot of wealthy individuals for a place with such a supposedly dire economy, and if so many have such healthy bank accounts is it any wonder that prices here are high?
FTB
We have lots of wealth sitting around, and perhaps the Intrawest/Whistler bankruptcy is designed to sell the company for 5x’s what it was bought for as wealthy locals line up and engage in an all out bidding war.
Ya.
And lots of money, that’s why BC has the highest level of debt to income ratio in Canada, because everyone is so rich. I mean, all of the layoffs we are seeing is because people don’t need to work not because there is no money, they are independently wealthy and have asked their employers to give them their walking papers so they can spend more time bidding on RE and with their bankers and realtors.
Don’t you get it? Go buy a place already.
anyone know of any bidding wars FTB can engage in this evening? he’s armed to the teeth and ready for battle.
Does anybody have any serious responses to my question?
FTB
We are all rooting for you.
It is a competition and we want you to win.
Question response:
A lot of folk who are good with their $ and know how to assess value (relative and absolute) and are careful and prudent with their savings amass a bunch of dough – whether they make a lot or not, they squirrel some away and risk a bit for gain. When things crash they buy, when they soar they sell some.
They don’t go to the bank to borrow oodooles of moodels so that they can impress their friends and family with how ‘rich they are’, along with the leased car and 5,000 sq ft mcmansion.
Get it now?
Jeez, just go buy a place already – someone has to lose a bunch of dough, might as well be you.
FTB
Folk who make a combined income of, say, $120k (that’s not a ton, but decent middle class plus dough, let’s say) can actually save 30-40k per year. Assume a 7% rate of return (why not) and by your mid to late 30’s you have a bunch of dough. And lots of folks make way more than that. I know this for a fact.
Shake that sand out of your ears and have a look around. Not all is as it seems.
FTB keep your powder dry.
I will let you know when it is time.
Catalyst Paper said today it is indefinitely curtailing a Crofton paper machine and the recycled newsprint facility in Coquitlam that feeds it, laying off 70 workers.
http://tinyurl.com/y98vz8j
Puuullleeeze, does ANYONE have any MOOSE PASTURE FTB can bid on without competition. That Dude needs some help.
BS this is getting scary (the amount of layoffs, etc.).
I don’t like it (honestly, jeez, this is really not great for the these folks and I truly feel for them).
HOW CAN THE RE OPTIMISM/CONFIDENCE SCAM CONTINUE? Sincere question – do you think the recent listings/MOI surge is just seasonal/technical or is fear starting to supplant greed?
What say you?
Jack, I agree, FTB needs to buy something – anything!
30, “Folk who make a combined income of, say, $120k (that’s not a ton, but decent middle class plus dough, let’s say) can actually save 30-40k per year.”
OK, so by your reckoning that’s 2 median salaries who combined can afford to put 5% down on a decent downtown condo, with a mortgage which is a decent multiple of income, after only a year of saving?
“can afford to put 5% down”
5% down is totally inadequate
try 25% down and not paying full asking (buy at a discount)
that way in any downturn in the market
there is a better chance of not being underwater…….
FTB – In response to your query…
I agree that there are no real high paying industries here, with the exception of the junior mining sector (which is subject to extreme booms and busts). The next best sector, in my humble opinion, is the M.U.S.H. sector , as well as employment with the provincial and federal government. Of course, maybe that’s because I am in government relations.
I am one of those individuals which does have a “six figure” downpayment, great salary, and relative job security. My DP comes from years of savings and deferring gratification in my early 20s; conservative investing which rode the bull market of the 2000s; some very high risk investing – 10 to 15% of net worth; a focus on keeping to a budget and negotiating discounts where possible; always assessing needs vs wants; and living debt free whenever possible. That being said, I now travel overseas a couple of times a year, eat out regularly at a range of restaurants, and buy shiny toys and sports cars (with cash though). I also know that I am extremely fortunate and extremely grateful for what I have and can do.
Life is about choices – I believe in deferral of gratification, especially when you are younger, so that you can enjoy life more when you get older. Of course, that mentality is so “old school” with today’s entitlement and instant gratification generation that wants what their parents have yesterday.
Just my 2 cents..
FTB, anyone who is bearish on RE and previously owned RE but sold when they figured the going was good will have a bunch of money ready for the next buy. If person X bought a $400k place in 2000 and sold near market peak, they would have gotten $500k out of the deal so it’s not out of the ordinary.
FTB… here’s a short popular treatment of a topic which may help to address your queries….
http://tinyurl.com/5ngbwa
alternatively, here’s a more robust theoretical explanation….
http://tinyurl.com/2p3t66
and finally, if you found that interesting – you should get your hands on a copy of this…
http://tinyurl.com/yby7325
FTB,
I have a decent amount of cash in the bank / mutual funds. Not quite 6 figures but I only finished school 18 months ago.
How? I make a decent salary 50K+ and I live like a student. This is easy because most of my friends still are students. I dont have a car and a share a 2 bedroom with a friend. I easily save 1500 a month plus the overtime I make, which has been good recently as we all scramble to prepare for the big party next month.
The main difference between me and most people is I am naturally cheap (my dad is an accountant and taught me the difference between need and want), I got lucky with my job (hired right out of school along with 75% of my graduating class, in demand industry right now), and I have no kids or dependants.
If I wasnt so sure prices were coming down at some point I could easily jump on the buying train and get a shoebox in the sky (though not downtown or the west side). The thing is I may want to live elsewhere for a year or two to see what it’s like and I really dont want to be stuck in a 30+ year payment plan.
C-Note
You are right. Having six figures from RE sales is nothing. Having it from saving is something. Very few in this town have it from saving.
davers, great going keep it up.
but don’t stop FTB from doing what he wants, which is winning a bidding war. He wants it badly. why take that from him?
FTB -
You are probably 22/23 and if you have tens of thousands in savings you are doing great.
You are perfectly positioned to reap the rewards of patience, and purchase a home before you are 30, unlike many bears that have been waiting and waiting for years.
German Guy,
I heard someone bought a 26 unit apartment building in phoenix for $450,ooo.00. Any deals like this in vegas.
Rob,
Have you invested in any bigger properties in phoenix (eg. 20, 30, 40 units)?
WOW will like this.
Main and west houses under 1 million.
inventory; date
53; July 3
59; July 21
63; Aug 7
54; Aug 28
71; Sept 24
63; Oct 21
61; Nov 5
65; Nov 23
47; Dec 23
37; Jan 04
52; Jan 21
So in July there were 53 houses for sale and now there are 52 houses for sale. All under 1 million and in the same area. Yet in the overall market prices have risen more than 10% and the total inventory has fallen more than 20 %.
Roughly speaking that should lead to a 30% drop in the number of houses in this search or about 38 houses should be for sale right now. With 52 houses for sale it does not look like I will be priced out any time soon and in the meantime my investments have grown.
The way I see it, this year is the year of Russian roulete for the housing market. 1 Home reno tax credit, 2 Olympics, 3 Budget, 4 HST, 5 BOC interest rates, 6 Mid term elections with typical stock market crash. Each has a chance of trigering the crash but simple exhaustion could also do it. Given my inventory numbers above and that my investments are growing why should I not wait for these 6 items to be in the rear view mirror before I act?
Rob,
$65K for a livable house in a major metro area sounds like a great deal. Even if it ends up being vacant for a year or two, that’s only maybe $3000/yr opportunity cost on the down payment (+ taxes, utilities, insurance, management).
I see it’s rented for $750/mo, $9000/yr. That would give a pretty good revenue stream — cost $80K (I included $5K for travel costs, search time, closing costs, etc), if it’s financed at 5.5% interest that’s only $4400/yr. Throw in another $2K/yr for taxes, management fees, insurance, etc., and you’re cash-flow positive $3K/yr.
Location looks fine on paper.
http://www.bloodhoundrealty.com/11453_West_Virginia_Avenue,_Avondale,_AZ_85392/
http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=11453+West+Virginia+Avenue,+Avondale,+AZ+85392&sll=37.0625,-95.677068&sspn=52.285401,133.857422&ie=UTF8&hq=&hnear=11453+W+Virginia+Ave,+Avondale,+Maricopa,+Arizona+85392&ll=33.473887,-112.305293&spn=0.434721,1.045761&z=11
WBWUCR’t'13? (in Vancouver BC, anyway…)
Of course, $65K purchase + $10K renos might not be all that hot of a deal, since Zillow estimates it’s worth $87K on the open market.
http://www.zillow.com/homes/11453-West-Virginia-Avenue,-Avondale,-AZ_rb/
But still, $87K must be way below replacement cost (from bare land to suburban home), so if you figure population in Phoenix will eventually rise to fill all the existing housing stock, prices will bump up to construction cost minus deterioration, which should be pretty easy to calculate. At least $120, I’d guess, based on pre-bubble pricing in the American Southwest.
WBWUCR’t'13?
Yup, was worth 100 – 150K in the 2000 – 2004 range, then bubbled up to 220K in 2006, and has now fallen down to $90K. With sales all along to confirm those values.
http://www.zillow.com/homedetails/charts/7472751_zpid,10years_chartDuration/
So if you figure that $140 + inflation is a good “recovery” target, and if you’re $3000/yr cash-flow positive (4% ROI) along the way, it’s a pretty fine investment. And if it bubbles up to $180K in the next hot economy and you’re willing to sell, then all the better.
What do ya’all think? Who has a war-chest and wants to invest it in the 5-10 yr horizon while they rent in Van waiting for prices her to go down to fundamentals and prices in Phoenix to go up to fundamentals? AC? WoW? RJ? davers? C-Note? $froma$ia?
WBWUCR’t'13?
Dygule,
THANKS!
Can you either keep us posted on this metric, or tell me how to set up an autosearch or something on mls site?
I’d like to know if/when it cracks 60 (and 70….etc.)
WBWYCR, how could you forget me in the list?
I think Phoenix is a no brainer. It’s a huge metropolitan centre and it isn’t a bad place to live. It’s flat and easy to build the City out, but buying real estate at below replacement cost is an easy decision. My only issue with investing out of country is keeping on top of your investment.
These same posters will often claim that BC has no industry to speak of, save for tourism and logging, and that other buyers are leveraged to the eyeballs and will be up to their necks in it if rates rise by a percentage point. There seem to be an awful lot of wealthy individuals for a place with such a supposedly dire economy, and if so many have such healthy bank accounts is it any wonder that prices here are high?
Most of your wealth in BC is probably brought to the region from migration. If you can’t find work in BC and the pay is less than other places…well…this isn’t rocket science…the people who are from BC are left behind by the people who come in with money.
WhyBuy etc:
I think we will be attending the 1:00 pm presentation on Saturday. Unless enough blog denizens are interested to setup a private meeting elsewhen/where?
PS. Since watching Coraline I can’t help but have a mental picture every time I see a posting from WhyBuy….
Davers 40:
Can you help me with the math here? If you save 1.5K/month for 18 months, that should give you about 27K. Where does the rest of the “not quite six figures” come from?
Dave wrote:
>>> WBWYCR, how could you forget me in the list?
Sorry, I didn’t know you had a war chest and were waiting for a good buyers market in Vancouver.
Are you going to invest in Chipman jr’s Phoenix Buying Club?
AC, I’m in Portland OR, otherwise I’d go on Saturday just to see what the deal was all about. I can see it working if you have 15 or 20 places, and they seem to have done a bang-up job on the first on if it really is rented for $750/mo. I just like to buy investment properties in cities I *like*, and none of my target cities are suitably distressed just yet…
WBWUCR’t'13?
Rob, have you invested in your brother’s buying club?
WBWUCR’t'13?
Rob –
How about having your brother do a guest post here, then answer questions on the blog in real-time? Post his spiel or fliers a day or two ahead of time, then have a Q&A on a Tuesday from 8-9 pm or something?
— WBWUCR’t'13?
WhyBuy
I’m hearing that the local population is very bery nervous about the economy/local RE market.
Can anyone comment on sales/list this week?
WBWYCR, actually my war chest is already fully deployed. Brother, can you spare a dime?
I am
Sensing
Greed
Turn to
Fear
Can you smell it?
“Can you smell it?”
I not only smell it, I see it.
Look at the recent layout announcements:
BC govt
Teachers in Richmond, Vancouver
Coquitlam recycling plant
sniff!
is that fear?
i thought it was hubris turned rancid…… but i could be wrong
let FTB buy first, before the meltdown
let that happen
let him WIN
poor fella
he’s been so hard done by
the loser
Let the FTB fool buy.
Give him his due. A big fat mortgage on a place that pummels downward in value.
That is what he wants anyhow. Give it to him.
eye
ran into a # of folks today wh0 are starting to doubt what they see locally. they feel nervous.
ya, i think this is it. capitulation.
will rob’s weekly numbers show a return to 100% plus sale/list and decling MOI. or not? any guesses?
First Time Homebuyer
Buy.
Don’t say I did not warn you. In plain language.
I did my best.
Richmond Renter – call me.
this market is going to get asswiped.
#65 rj?
that you man?!
didn’t recognize the swagger
and where’s xoxoxo?
I buy because I am.
I am because I buy.
The world is in balance.
I exist.
My condo went up in price.
I am wise.
Beyond
Reproach.
I know because I am.
A Condo buyer.
Smart in my ways.
Buyer not a renter.
So I am.
You asswipes.
Stop razzing me. I bought a place today because I was freaking out. I thought I might be the last dummy standing if I did not jump in. My friends and family all thought I was a total loser for renting.
Now the love me.
At last.
Ahh, finally he buys. We all know that is the signal the market was waiting for before plummeting.
PS: I don’t think that actually is FTB. In his heart of hearts he knows better.
AC
It is me, FTB. I bought a condo. Now I feel complete. A whole human being. I felt like such a loser, writing out that rent cheque every month. It just killed me. My Mother would wail at night and call me on the telephone, telling me how all of her friends children had bought home with big mortgages and were now ‘HOMEOWNERS” with big mortgages (well, she does not talk much about the mortgages, but how they are now not throwing away their money and how they are now respectible).
AC, I was tired. Tired of losing. All of those bidding wars left me scarred. I was hurt. Deep down. I thought I was nothing. But now that I won (I only paid $177,050 above asking, that’s nothing) I can hold my head high in civilized society. Who cares if the Warmlympics flop – I have my own place, my own furniture, and only 95% of it is on debt.
Your the loser now AC, its you. My Mom may be calling you next.
Ah, it feels good to win. At last.
AC, you are welcome to visit me in my condo that I own (5% of so far). It is 379 square feet of homeowner bliss.
My payments are only $2,700 a month, and I only need to borrow part of that each month to make ends meet. But it does not matter, now that I am building equity.
Not like you loser renters.
I don’t think that is FTB.
He’s too chickenshat to outbid anyone on anything. Bet he’s single, 50 years old, with a pot belly and a bag of KFC.
He’s the loser.
buying an overpriced condo
to feel better is like
pissing your pants …..
it only feels good for the first 3 or 4 seconds…..
FTB:
So you bought because you felt guilty. Now that’s a very good reason to buy.
UDI lunch was today………wellwood scored a goal
Does anyone recall what a 1 bed/1 bath ~600 sq.ft., 4th/top flr Concert Properties condo at Joyce Skytrain Station would have cost in the early 90s? What min. % downpayment was req’d back then?
WoW (57) wrote
> WhyBuy
> I’m hearing that the local population is very bery nervous about the
> economy/local RE market.
> Can anyone comment on sales/list this week?
Yup. Sales this week are meaningless, as will sales every week until about March 15. Then we can start looking at monthly trends.
And, if I’m wrong, we’ll know it because the changing numbers will be so plain and obvious that nobody will be asking.
WBWUCR’t'13? (& park your cash in Vegas/Phoenix in the meantime?)
More falling rents down, rising vacancies and bigger incentives down south… Phoenix down 8.7 %
http://tinyurl.com/ybqtj53
Be careful with projections and cushions in Phoenix! I think a touch early for the best deals… let the second wave of foreclosures hit in earnest (that’s written in stone, unavoidable) and a new wave of market meltdown, credit freeze-up and public fear to hit. (I think.)
??? (77) wrote
> Does anyone recall what a…
In 1996 I heard a presentation by the developers of the first set of condos there, the entire development was owned by the union retirement fund (or something along those lines) so their profit margin could be a couple percentage points below the capital costs of outside funding. They said the typical condo buyer was a 24 yr old food service industry person.
At the same time there were ads in the Skytrain stations with two women in their early 20s, and the one saying to the other “no way, you bought at Joyce Station?!?”
They did other creative things to get the busboy crowd into the market, like instead of a lump sum down payment, they would just start charging the monthly mortgage fee (say $400?) at closing, and buyers would just have to skimp for the next couple months (paying both rent and mortgage) until the move-in date, but then they’d be all paid up, and paying a mortgage that was probably less than their previous rent.
I’m thinking that purchase price (for a lower level, small unit) would have been $60 or $70K…
WBWUCR’t'13?
Looks like the same unit would run $250K now.
http://vancouver.en.craigslist.ca/van/reb/1547506981.html
The last umpteen posts have been anon having a conversation with himself under different names….dude why do that?
And why impersonate FTB – leave the guy alone…he will buy when he wants
53 Newcomer
After finishing school I actually had about 10K in the bank because I worked in high school and through college, and live for free with the folks. Your also forgetting the overtime. A fair amount of weekends and 10 hour days were worked last year. My gross income for last year was just a shade below 70K and 40K for the 7 month year before that.
I dont expect this to continue as things have slowed down a bit leading up to the olympics, but I am happy with usual hours.
Oh and I also lived with my folks for the first 10 or so months of having this job, and they only charged me 350 for rent instead of the 600 I pay now.
Davers
what sector are you in – sounds like construction with the overtime bit
FTB – you are so funny, you made my friday.
me, I like to be different, I stayed in a low paying job when all the others jumped for bigger paycheques in the dot com boom. Most of them changed jobs 3 or 4 times, one I know is out of work, and not even in his field, told me he envys me now for taking the slow path.
I watched a lot more pump money into RE just before the 82 bust, and all of them lost it all, that is a lesson I cannot forget, and it looks too much like right now.
I too have been saving since getting married in 96, have watched my pay increase, my savings increase, and the housing market increase at the same pace. As Rob has pointed out, the Metrics have to work, and right now they still don’t. I can still rent far below what I would will pay in Mortgage payments. (and 99% of that will go straight to the bank for the 1st 5 years…)
Nobody has to do anything they don’t want to do… it is called Peer pressure…
Ignore it… and think for yourself
Oh and by the way… You didn’t really buy anything … did you….
Happy Friday everyone….
^^^^
Dude,
FTB did not buy…just an impersonator…probably our infamous “anon”
There is no 379 square foot place anywhere in Vancouver that would require a payment of 2700 even with a 5% down mortgage …
85
It aint construction I assure you. Otherwise I would be shaking in my boots right now as the olympics wrap up. Closer to technology, but that is a bit misleading. I really cant say much more without revealing the company itself, which I would rather not do.
It is a pretty secure job as my department is actually looking to hire another person like myself in the near future rather than lay anyone off. There have been layoffs in the company, just not my department.
Isnt it obvious that 69, 71 and 72 are not the same person as 35? They dont even have the same name. One is FTBuyer and one is FTB. That should be your first clue.
Hmmm, who’s the troll?
FTB:
you are famous enough to attract impostors … kudos
i remember when rj had a few of those wanna-be alpha male poseurs……
73, I must confess that I’m partial to the occassional KFC, but at least I don’t work there.
Off topic Friday night ‘recreational’….
Ever wonder what happened to Paco [Serpico]?… HP often has. Now we know…
http://tinyurl.com/yhurw6d
http://tinyurl.com/y99omgd
PS – Senor Caballero, HP’s story isn’t so very different, they don’t call me ’SevenScars’ for nothing… still got my shield, too… (very handy when ‘FloutingTheLaw/CheatingDeath’)… Sorry, All… it’s the Whiskey… (Irish tonight)…
re# anon 59:
City of Vancouver issues 44 layoff notices.
http://www.vancouversun.com/business/Vancouver+city+workers+layoff+notices/2474403/story.html
Interesting post by Jonathon Tonge
http://tinyurl.com/ydp9w3b
“According to the latest release by the Bank of Canada, the outstanding balances of various credit types held by Chartered Banks (only) have expanded by the following amounts during the period of February 2008 – November 2009 (1 year, 9 months):
personal loans have increased 19%
balances on credit cards have increased 14%
‘other’ types of loans have expanded by 14%.
personal lines of credit have grown 39%
In the period of April 2008-October 2009 (1 year , 6 months)
NHA securtized loans (government insured and securitized mortgages) has increased by 67%.
total household credit (consumer credit and residential mortgages) grew 14% or by $165 billion.”
Please not that does NOT include deficits by various levels of government.
So I maintain that I am absolutely correct about the deflation that will ensue when the credit ceases to grow, but freely admit it hasn’t happened yet. Soon though, this is an unsustainable state of affairs, it is a very shaky house of cards and there is a storm blowing. The US IS seeing total private credit decline, and that is with all stops pulled, all hands on deck, full speed ahead and damn the torpedoes efforts to get it growing again.
Also a humungous PDF on what a deflationary credit bubble deleveraging cycle might look like. I haven’t read it yet, just a brief skim, it’s my assignment for the weekend.
http://tinyurl.com/yjdkrcz
Lots of meat in there. If peak credit is true, be very careful where assets are parked.
(Hint: Highly levered, illiquid, high maintenance immobile assets, dependent on new purchasers for their value to increase, currently priced far over the level at which rational investors will touch them and owned by people of whom a large fraction are planning to liquidate to support retirement just possibly may be a tad risky.)
AC — If you go to the Chipman Buying Club presentation today, take good notes!
Anyone else going? 1 & 3 pm in Pitt Meadows. WoW? Dave? (you could liquidate some underperforming assets & reinvest in Phoenix), German Guy? hippos? davers?
If not, why not? Its potentially a very lucrative 10-yr investment (assuming its reasonably liquid), and where else are you going to put your warchest?
WBWUCR’t'13?
Rob? Which session are you going to?
this local market is heating up again
hot
hot
hot
look for sell/list over 100% this week.
declining inventory
declining MOI (yes, plunging)
market is getting hotter folks get in before its too late
its time
to buy
FTBuyer
Buy before the hot deals go byby
Why wait when you can buy now?
Don’t you see value when its right before your eyes. Agent Will says sales are brisk! You know what that means? bidding wars!
I’m gonna git mine.
FTBuyer
Going to 1:00, susceptible to a decent reason why it should be the 3:00 instead.
Can’t happen here:
http://www.financialpost.com/news-sectors/story.html?id=2474052
McLovin
dont buy! wait for the 80% crash!
SaintAC/multiple…. fascinating!
WhyBuy/97… sadly HP is confined to the HillBilly Riviera this weekend – otherwise, notwithstanding an inherent reluctance to go ‘long’ on anything LosEstadosUnidas at the moment, I would definitely attend… I think the Caballero’s venture has merit – especially with the cost of acquisitions likely to decline further and for the same reason that the pool of Arizonans seeking rental accomodation is likely to expand… That said, I do have grave misgivings about American political stability (at all levels of the Yanqui polity) going forward… Basically, we’re talking about a bankrupt nation of extremely pissed off people in a place with over 200M firearms in circulation – so naturally, HP is more than a little ‘concerned’ about how that’s going to work out…
In that vein, the following NYT OpEd pieces may entertain/prove instructive…
[NYT] Mobs Rule
http://tinyurl.com/yj3uzz5
[NYT] They Still Don’t Get It
http://tinyurl.com/ydnckz7
Meanwhile, back in ‘Blighty’…
[UK Guardian] UK terror threat raised to ’severe’
http://tinyurl.com/ycqf76r
Which is certainly good ‘cover’ for regional British Police Authorities who are apparently contemplating the acquisition and domestic deployment of UAV surveillance drones. I swear – sometimes, you just can’t write this stuff; but Canucks ought not to feel too smug/complacent as our ingenious Yanqui neighbours have already deployed similar technology on our shared border(unarmed Predator drones)… Brief aside - following conclusion of the games whether/when the YVR Olympic CCTV surveillance net is dismantled will be quite telling…
[UK Guardian] CCTV in the sky: police plan to use military-style spy drones
http://tinyurl.com/yj9gmm5
After that one, I simply couldn’t resist including this (In Blighty, what’s good for the gander is apparently not so good for the goose)…
[BBC] Photographers protest over UK terror search laws
http://tinyurl.com/yh8by4k
and last up – a pot pourri of geo-strategic GlobalMacro for all you other ‘dot connectors’… (the last/Chalmers’ piece is a few months old but adds crucial context to both preceding pieces)…
[UK Independent] Robert Fisk: The tree-lined bunkers that could change the face of the Middle East
http://tinyurl.com/yl64odp
[BBC] Venezuela oil ‘may double Saudi Arabia’
http://tinyurl.com/yccjjxv
[TomDispatch] Tomgram: Chalmers Johnson, Baseless Expenditures
http://tinyurl.com/momk4z
junius on 01.23.10 at 9:40 pm
#64 Onemorething,
Too late. Vancouver is already past the tipping point. Lots of new listings and few sales. Looks like November into early December was the top of the market. Unless, of course, lots of Olympians sell their gold for condos!
AC — you gonna park your warchest in Phoenix? Rob? Anyone else?
WBWUCR’t'13?
WhyBuy:
Not sure.. studying the prospectus. Some big questions are popping up for me. I think I will email Rob with some comments, be sure he is comfortable legally and ethically with having them up here. It does NOT feel in any way like a scam, (not surprised) not quite sure yet if the business case is as strong as they’d like to think. Bit too much belief and planning for a recovery similar to the ’80s, and ’90s housing market. As you know, for many reasons I think that is the wrong “history rhymes” period. Yes, most certainly, history repeats, there is nothing new under the sun, but a very tricky part is correctly guessing (in advance!) WHICH bit of history will repeat.
Híppos:
You’re famous!
http://tinyurl.com/yagdt4o
Yikes!
and that’s why HP always publishes under a pseudonym!!!!
Agent Will has highlighted a number of significant sales over asking price with “oh wow” implications.
Given this, I assume this week we will have a sales/list in the 80%+ range and a sizeable average over asking price sales #.
If not, then what he’s doing is typical rah rah realtor talk. Let’s see what the stats have to say. He says sales are “brisk” I assume this means January will finish with a flourish and perhaps set new records on price and volume.
Folks, mark your calendars – March 4th, new budget – any thoughts for what’s in store? Changes to 5/35?
99/100 – get a grip, please.
FTBuyer – go buy.
Just get it over and done with.
FTBuyer
Great weather for ‘house hunting’, bet the woods were full of first time virgin’s looking to bag their first nest, and build instant equity and social status.
Hope you fared well my friend – you deserve to win. NOW is YOUR time to shine – go for the gold, you are a natural born winner.
AC –
I’d be curious about
* Exit strategy — about how many years until they’d liquidate?
* Management costs — how much per month per house is it going to cost just to run the business?
* Liquidity — if you wanted to pull your investment before the “peak of the next bubble” point, how hard would it be?
* Dividends — any? Seems that for a $12K down payment you might take home $3K/yr, if management costs were really really low.
* Planned business size — do they figure to be a 10-30 property “buying club” or a 200 property “corporation?” Or something in between?
I’d hope Rob would be fine with discussing such things here — it’s not like he’s promoting it to any degree, and it’s a RE discussion forum…
WBWUCR’t'13?
If I lived in Phoenix, Vegas or Miami myself and wanted a 10-15 yr investment, it would be a no-brainer. But if I’m paying for the operation of a small corporation and I’m 2000 km away, there’s a couple levels where things could go wrong. For instance
* someone with the skill-set to manage 3 rental properties might not be an effective manager of 20 properties.
* someone with the skill-set to manage a 200-property corporation isn’t going to sit tight running 15 properties and not getting paid the big bucks.
* someone who is a bit of a bear to work with is going to have a tough time effectively managing tenants, handymen, contractors. They might be good with the numbers and able to shark the hot deals, but not manage.
* just because someone is clever enough to “buy low” doesn’t necessarily mean they’re clever enough to willingly “sell high.”
WBWUCR’t'13?
whybuy:
salient points!
due diligence would suggest walking away
Phoenix has long term downside as does Las Vegas
WhyBuy: (Also Rob)
Go up to comment 7, click the link there, discover it is a bad link (for shame ,Rob! Do you have a long history of subtly sabotaging your brother?) delete the obviously wrong characters to get to the correct address, click the appropriate link to get the prospectus and read it.
Here’s the site. http://www.reicorpcap.com/
I don’t mind the idea of a longer-than-five year period as long as cashflow is positive, but parts of the offering uses a five year term, I badly want to know what happens if after five the properties are cashflowing nicely but the market value hasn’t increased. I think we could be in for an extended period of Japanese doldrums. Again, you can’t go badly wrong with positive cashflow, unless you are forced to liquidate.
My second major concern lies around timing. I believe that with the second wave of foreclosures due to option ARMs and alt-As resetting, plus a rather enormous amount of shadow inventory hanging over the market, the bottom is clearly NOT in, if too much is purchased in the first wave of financing will a second offering (with me involved) be overly diluted by the previous one. Also will a second one take place if the first one is sitting on paper losses?
Rents are another major factor. If population growth in Phoenix reverses, a distinct possibility with the end of the construction boom, rents and vacancy rates could easily move in the wrong directions. In the one initial purchase there is not as much cushion for major repairs and rent pressure/vacancies as I’d like to see in the perfect world. Given my belief in deleveraging/deflation/K-wave/ whatever name you prefer I think one should look at it almost as a cap rate thing, and assume no capital appreciation for at least five years.
Another 20-25% off due to more foreclosure and a second leg of meltdown and then we are far enough below fundamentals that some return up should be expected. Looking at the chart on the website I’d say we have returned to trendline or just above, but certainly not dipped below it. I think one should assume a lower angle on the trendline as well moving forward.
After seeing that the prospectus is on the website, I feel OK going this far at least discussing the internals of the offer.
I’d love Rob’s take on these issues.
Hi AC,
Thanks, I found a 76 page pdf document in there, is that the one you’re referring to? I’ll give it a closer peruse later. At first glance, it looks like they’re trying to start a large corporation with properties in multiple cities. An ambitious project for a group that only bought a single house before going to press. Possibly doable, possibly a great deal (contrary to blueskies’s comment), but they’d really need to get a lot of investors to have enough rent to cover the salaries of folks to run and manage such a corporation.
In response to your concerns –
* Phoenix, in the decade of baby boomer retirement, shouldn’t have any trouble attracting population, especially if RE is cheap.
* re: 2nd wave of foreclosures, how much lower would properties in Phoenix go? The place they bought was $75K for a $140K replacement value property (assuming there’s no glut of building lots for sale for $0.50 on the dollar (!)), it won’t take too many geniuses to see that the biggest wave of retirements in US history is just around the corner, and you can pick up sunbelt properties for $0.55 on the dollar, that it might be a good time to stock up.
I suppose you’d want to know how many empty housing units there are in Phoenix and what the historic growth rate has been. Even if there’s a ton of empty units, it’s been one of the fastest growing regions in the US for a long time (unlike, say, Vancouver BC), and probably won’t take many years to flesh out the glut.
WBWUCR’t'13?
Yeah, I’d think the optimal size would be 20 units in a single city. One person manages, one person handymans. Cost, about $100K/yr in salaries and operating costs. If it costs $15K to get into each property, that’s $300K up front. If each one produces, say, $3K in revenue each year, that’s $60K. Only losing $40K/yr. Well, maybe it’s not the best model, or maybe it just needs a .5 FTE manager, then it would break even…
WBWUCYR’t'13?
The first babyboomers turn 65 in June, 2011, right?
20 houses would still need a lot of work. I’m about to put in a work order to my landlord for
* leaky tub drain seal
* leaky kitchen sink trap
* nonfunctional outdoor outlet
* squirrel in the attic
* clogged gutter downspouts.
The house they bought was built in 1999 and didn’t look like top quality materials. Decent, but houses always need a little love.
“nuf of this,
WBWUCR, signing out
WhyBuy: Their one property is being managed by an existing property manager. I think the plan is to continue that arrangement.
Tell me more, I am seriously considering this and appreciate the input.
AC,
I totally agree that the graph on the site shows phoenix has just about returned to the trendline. I drew a line trying to keep half above and half below (excluding the current bubble) and it ended up just below where the graph sits now. There is still a fair amount of room to fall.
That being said I really dont think that a place can really fall much lower than 65K. Sure it could fall to 40K but when it costs more than that to build a new place on free land it will likely come back up in reasonable time. In theory it could fall to zero, but I dont really see that happening to a city the size of phoenix.
I would be worried about the tax implications of any profits made. I am sure they covered this in the presentation though. If they didnt I would be a bit worried.
AC,
I totally agree that the graph on the site shows phoenix has just about returned to the trendline. I drew a line trying to keep half above and half below (excluding the current bubble) and it ended up just below where the graph sits now. There is still a fair amount of room to fall.
That being said I really dont think that a place can really fall much lower than 65K. Sure it could fall to 40K but when it costs more than that to build a new place on free land it will likely come back up in reasonable time. In theory it could fall to zero, but I dont really see that happening to a city the size of phoenix.
I would be worried about the tax implications of any profits made. I am sure they covered this in the presentation though. If they didnt I would be a bit worried.
11o
Stats for last week from Agent Will’s site
1142 new listings
31% sell list ratio
don’t know about this high sell-list ratio you are citing…
sorry – 39% sell list ratio
Agent Will stats
Have to take a closer look – but that means MOI went up, yes?
Looks to me like sales for Jan are going to be slooooow and listings very very rapid – although inventory still rather low, overall.
But, as the experts here say, all is moot until March 15…or is it – could these stats be the harbinger of a new trend?
http://agentwill.com/weekly-stats/
Will “sales brisk”….maybe, relative to mid-December. But check out the trend on the sales/list over the past few months. Yes, perhaps still seasonal, and total listings low relative to this time last year. But they are surging. Guess we’ll have to see what next week (and so on and so on) bring, but this is interesting (telling? only time will tell…).
Look forward to Rob’s stats and his take on things.
While still a week to go (and anything can happen), I wonder how the REBGV spins this month…that said, YoY comparisons will be very favorable for bulls…but that said, I think there MAY be a trend building…
MoM and comparison’s to a few months back could be interesting…wonder what the valley looks like…is it cooling (or not) from the outside in?
AC–
How much of a cut on the $750/mo rent does the property manager get? That’s a problem with low-cost properties — it doesn’t cost any less to manage a $750/mo 2 bedroomhouse in Phoenix as it does a $2000/mo 2 bedroom house in Hollywood.
One way to learn more about the outfit would be to throw in $5K and then see things from the inside for a couple months…
WBWUCR’t'13?
Like AC said…
http://www.huffingtonpost.com/2010/01/25/december-home-sales-take-_n_435368.html
I wonder at what level inventory has to go to make the increase in For Sale signs a visible fact (ie. one that the masses start to comment upon).
We’ve added almost 2,000 more listings in the past month. But, I think we’ll need a few thousand more before we start tripping over the Open House signs again…will we get this…or not?
Davers:
“That being said I really dont think that a place can really fall much lower than 65K. ”
Supply and demand. There was so much overbuilding during the boom, if the excess is forced onto the market without enough buyers prices will drop below the level that makes sense. Just as they can and did go far above that level during the frenzy of a boom. With the damage done to American’s wealth I’m not sure there will be a lineup to buy even at 40K. Remember, it’s not just Phoenix, there is a huge shadow inventory in scores of sunbelt cities to compete for future retirees and investors money.
If the current practice of withholding inventory continues there may not be the glut to drive prices that low, but then the banks are sitting on empty, deteriorating assets and paying property taxes on them. They aren’t supposed to be property managers or RE speculators. It’s a very tough call. At least in the climate of Phoenix empty houses don’t turn into a toxic mouldy mess in a year, like Florida. Talk about depreciation! You still have to deal with squatters, scavengers and vandals though.
Future water supply may not be as much of a factor as some think. Green lawns, golf courses and swimming pools would have to go, but with those changes, more waste-water cleaning and recycling for non potable water uses a little can go a long way. Just like gasoline, raise the price enough and demand WILL adjust. In much of Mexico the water that comes from the tap is not for drinking or cooking, that’s what the 20L bottles are for. It doesn’t really make sense to flush toilets with drinking-quality water in a desert.
132
Anon/Fish Taco/Rational Observer/ insert any number of other names used
Don’t you follow your own agent will updates. There have been 3000 new listings in three weeks, not two thousand…
134 – net? nope.
I’m looking for net increase, but thanks.
yes, I agree with your thoughts, listings are rushing higher…but off a very very low base, so will need a lot more to make them a visible majority (For Sale signs).
that said, what strikes me is the low sales volume…i know folk attribute this to seasonality, but given the unusual times all bears watching…(pun intended)
AC 107:
“I will email Rob with some comments, be sure he is comfortable legally and ethically with having them up here.”
You can post/ask anything. If I don’t have the answer I won’t provide it, but it will be easy to get it from the people involved.
Anonymous 110:
“Agent Will has highlighted a number of significant sales …Given this, I assume this week we will have a sales/list in the 80%+ range …If not, then what he’s doing is typical rah rah realtor talk…”
Did you really write that? If your assumption turns out to be wrong them Agent Will is at fault?
Whybuy:
The value added by the corporation is that they allow a small, large and non-US residents (or whatever combination) to invest in Phoenix. That’s tough to do as a non-US resident.
Immigration laws mean that all PM work is done by US citizens, which translates into local expertise that is already established in the market. Fees are competitive and a percentage of rent (same as we do here).
Exit strategy is based on metrics -I don’t remember exactly when they kick in, mind you, but they are determined at the time of the purchase.
“At first glance, it looks like they’re trying to start a large corporation with properties in multiple cities. An ambitious project for a group that only bought a single house before going to press. ”
That is correct, on both counts. If you knew my brother you’d know that ambitious isn’t a challenge for him. He began this exercise (JMHO) because a) he wanted to retire from the daily grind and do something enjoyable and b) he couldn’t find investments for our clients here – looking south gave him a chance to be creative, do some travelling, and still do business with our current investors.
As things (the events of the past 18-24 months) unfolded and he climbed the learning curve he ended up changing his approach considerably. Taking the corporate route involved a lot of learning about all the proper disclosures and whatnot – he’s not the kind of guy who regularly takes companies public; he’s a realtor and property manager. With that in mind, your comment about going to press early is probably spot on, but he’s the kind of guy to just keep plowing ahead with his ideas until they finally pay off. (I hope that sounded positive – its tough to remain objective about a sibling!
)
Re: Baby boomers and Phoenix. I agree with you. If you’re retiring from the rust belt you can now afford a place in the Sunbelt, whether to buy or rent.
Re: further price drops. Scares me a tad, but that’s why we use metrics. Worst case is dollar cost averaging? Fair comment?
Davers:
“I would be worried about the tax implications of any profits made. I am sure they covered this in the presentation though. If they didn’t I would be a bit worried.” I’m not an accountant, so confirm any of this with your own professional tax authority, but I think the corporate structure is the tax advantage for non-US residents. Similar (I’m sure its somewhat different, mind you) , I think, to owning stock in a US company.
I’ll get the stats up later. Busy weekend. (BTW, Steve Earl and Joel Plaskett at the Orpheum? Awesome. I like Steve Earl, but Joel Plaskett was super. Good Canadian kid!)
http://www.vancouversun.com/business/Vancouver+severely+unaffordable+study+shows/2482163/story.html
Not only that, it is “unprecedented in modern history,” the group said.
Rob: That legal/ethical comment was before I saw that the full prospectus was up for public viewing on the website. I may be having some email exchanges with your brother, those I will clear with you before posting.
Any further comment on the issues I raised in 117?
> Not only that, it is “unprecedented in modern history,” the group said. <
It would be interesting to compare birth-rates by homeowners in Vancouver, Toronto, Montreal, Windsor, and Abbotrford
Copied from yattermatters – Larry’s take on Kits stats the past 4 weeks, fyi:
What to Make of It
Understanding this change in all things Detached Kitsilano, might best be explained as night terrors. Taking many forms, one might be VISA® bills arriving with the totals for the holiday spending spree. That all expense paid trip to Hawaii has a different tone when it’s your expense – oh happy day! Then again, another could be that the market could be melting as fast as the Olympic snow on Cypress Mountain.
Either way, it’s too early to suggest that real estate market drama is unfolding in Kitsilano. Fortunately, we will soon have the games afoot to help us forget thoughts of such woes. Who knows – by the time the games end, it’s entirely possible that we’ll discover that B.C. really is supernatural and with any luck, boarding competitors will find gold amongst the rocks of Cypress Mountain and begin a land rush unseen before.
http://www.vancouversun.com/news/news/2474576/story.html?tab=PHOT
Will is trumpeting about how, wow, 33% of sales today went over list. Wow.
I wonder if FTBuyer was one of the winners?
I wonder if all of that sales activity reduced the total listing count. Its demand and supply after all.
RJ bought
so will ftb
Have to agree with 144 about RJ. The “trend is my friend” guy disappeared at the same time the market was clearly demonstrating that the “trend was not his friend.” I guess it will take another downward trend for him to reappear…
way OT but somehow relevant:
http://tinyurl.com/yehvgg2
Drugs brings more money to Mexico than oil
Sometimes the daily ‘harvest’ is just so absurd that laughter is the only logical response…
Beginning with the serious… (hint: in what respect will the 2010 NorteAmericano economy resemble a good ice cream cone?)…
[NYT] Obama to Seek Spending Freeze to Trim Deficits (Translation: We’re basically broke)
http://tinyurl.com/ya7gegy
[FT] McChrystal sees Taliban role (Translation: WTF? - Actually, we’re REALLY broke)
http://tinyurl.com/y86ft5y
Accordingly, in the vein of ‘you can fool all of the people some of the time or some of the people all of the time but you can’t fool all of the people all of the time’ HP has selected the following OpEds as today’s best. First up, BobHerbert’s moderate rebuke of all things BarryO…
[NYT] Obama’s Credibility Gap
http://tinyurl.com/y94py8h
Somewhat less ‘measured’ in tone but arguably closer to the progressive Yanqui ZeitGeist, DaveLindorff’s piece… (alternatively, see ChrisHedges’ latest piece on TruthDig – too gloomy by far to link here)…
[TPB] The 2010 Double Whammy and the Incredible Shrinking Obama
http://tinyurl.com/ycfpeeg
Methodologically speaking – these things wouldn’t be important to us if the MapleSyrupRepublic’s economy weren’t irretrievably shackled to LosEstadosUnidas’… and as all politics are ineluctably about ‘who gets what’ – path dependent economic outcomes are currently best illuminated by developments in the body politic…
Enough of the serious. Time for some well earned ZenMoments…
[HuffPo] Search For Aliens Should Start On Earth Not Outer Space, Says Scientist
http://tinyurl.com/yb8kkmf
[UK Guardian] Chinese legal experts call for ban on eating cats and dogs
http://tinyurl.com/ybkbrut
[BBC] Schwarzenegger proposes Mexican jails take US inmates
http://tinyurl.com/ybl4waz
The last three seem like pretty obvious routes to go, as far as I’m concerned. Outsource inmates, adopt Chinese pets, and keep an eye out for anyone with six fingers.