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if Not Selling at the top means losing money, Not buying at the bottom means losing more money

Started by petrfitz
over 11 years ago
Posts: 2533
Member since: Mar 2008
Discussion about
The brilliance of the bearish morons like NYC10022 is based upon a "logic" that says if an owner did not sell at the peak market value, then the owner lost money. (this argument is made although the gain/loss is not realized until the property is actually sold, but these guys dont seem to think that is important). Therefore, applying that logic further would mean that if a renter does not buy a... [more]
Response by NYCMatt
over 11 years ago
Posts: 7523
Member since: May 2009

Indeed.

If you didn't buy a loft in TriBeCa back in 1980 for $15,000 and sell it in 2007 for $20 million, you're a total loser.

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Response by marco_m
over 11 years ago
Posts: 2481
Member since: Dec 2008

why do you even care if we time it wrong or right. I really dont have anything to lose either way. so maybe I have to pay up a bit. Rather that then get crushed. I really sense frustration and or desperation in your writing.

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Response by petrfitz
over 11 years ago
Posts: 2533
Member since: Mar 2008

lets isolate the thread to the next few weeks/months/days/years until the bottom of this downmarket. Afterall the bears say that their comments only apply to 2004 to current. So if and when the bottom hits in the next 3 years or less, then these guys have to buy or they lost money

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Response by aboutready
over 11 years ago
Posts: 16354
Member since: Oct 2007

i sold in 2004, and am comfortable with that. i never said nor do i think that anyone needs to buy at the bottom. i think a risk/benefit analysis tells me that there is little risk to waiting, and more risk to purchasing, at this time. but i don't mind renting, and it is financially better at least for now. your discussion is so superficial it's stunning, i don't recall anyone saying they are looking for the "lowest" price, which is virtually impossible to determine as there will always be properties that are outliers, just a price lower than those found today.

what can you point to that demonstrates that prices have any reasonable expectation of rising in the near or medium term? and since it is my target potential market, please be sure to include 2 bedroom/2+ baths units with an additional room or two, dining and/or maids/office, in your analysis. who knows, if you show your usual cogent thought processes i may hit the open houses this weekend and BUY. thanks. and btw, my comments don't only apply to 2004 to present.

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Response by divvie
over 11 years ago
Posts: 456
Member since: Mar 2007

Haha, too funny.

I've never agreed with you before perfitz but I did read that one by nyc10022 and, in this case, your logic makes sense vis a vis nyc10022's assertion that you had to sell at the top.

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Response by alanhart
over 11 years ago
Posts: 12397
Member since: Feb 2007

I heard a rumor that we're in a big, fat secular bear market.

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Response by petrfitz
over 11 years ago
Posts: 2533
Member since: Mar 2008

if 2009 is stabilization, then when a majority of the stimulous money hits in 2010 what could happen?????

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Response by aboutready
over 11 years ago
Posts: 16354
Member since: Oct 2007

you're the one assuming 2009 is stabilization. this is just seasonal demand juiced by lower prices. stimulus money? do you have any idea how much money was pumped out this year in stimulus thus far? after last year's tax rebate? the stimulus money is but a drop in the bucket, and its relationship to NYC housing prices is weak at best. go find NYC's budget projections for the fiscal year following this one.

alanhart, not that i listen to rumors, but how big, how fat?

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Response by notadmin
over 11 years ago
Posts: 3835
Member since: Jul 2008

guys, do you realize that it's not even possible for everybody to buy at the bottom? do we need to be so literal?

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Response by marco_m
over 11 years ago
Posts: 2481
Member since: Dec 2008

thing is by the time we get to 2010, apartments on the market today will be another 10- 20% lower and then I might feel comfortable buying. how long can the bulls hang on?? that recovery is just right around the corner..you hope

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Response by petrfitz
over 11 years ago
Posts: 2533
Member since: Mar 2008

aboutready - only 8% of the stimulous has been spent so far. I hear that 30-40% of it will be spent next year. This means that our economy will see a juicing of 4 to 8 X's next year what we are getting this year.

marco_m - you will see apartments up 10-15% YOY by mid fall. (1 caveat - if the swine flu doesnt take us down...)

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Response by notadmin
over 11 years ago
Posts: 3835
Member since: Jul 2008

stimulus in a nut shell: "hire construction workers while firing health and education workers". it's not mine of course, it comes from stiglitz.

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Response by aboutready
over 11 years ago
Posts: 16354
Member since: Oct 2007

never mind. your analysis is only surpassed by your math.

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Response by alanhart
over 11 years ago
Posts: 12397
Member since: Feb 2007

The other 92% is earmarked for the Federal Lower East Side Tenement Property Values Stimulus Program.

How do you pronounce FLESTPVSP?

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Response by notadmin
over 11 years ago
Posts: 3835
Member since: Jul 2008

you are wrong alan. there's a 5% set aside for the NAR to send the broker-signal (inspired on the bat-signal) to hint to prospect home buyers: "it's never been a better time to buy buy buy"...

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Response by petrfitz
over 11 years ago
Posts: 2533
Member since: Mar 2008

you guys get all pissy and bitter when your own moronic logic is used against your bitter renter market timer arguments

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Response by alanhart
over 11 years ago
Posts: 12397
Member since: Feb 2007

"you guys get all pissy and bitter when your own moronic logic is used against your bitter renter market timer arguments"

translation: "They're opening a Hooters!"

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Response by aboutready
over 11 years ago
Posts: 16354
Member since: Oct 2007

2% is being set aside for festerfitz's therapy so he can get that chip off his shoulder.

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Response by malthus
over 11 years ago
Posts: 1333
Member since: Feb 2009

Thanks for finally admitting that your logic is moronic, petrfitz. Now can we move on?

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Response by petrfitz
over 11 years ago
Posts: 2533
Member since: Mar 2008

so malthus - owners who did not sell at absolute peak dd not lose money?

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Response by marco_m
over 11 years ago
Posts: 2481
Member since: Dec 2008

I have feeling more stress is going to bang down the rental market all the way until next summer when maybe some hring picks up. maybe. developers wont be able to hold on till then

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Response by aboutready
over 11 years ago
Posts: 16354
Member since: Oct 2007

people who didn't buy in 2007-08 made money. clearly you're just anxious, wondering if you've missed the height of the market for your slums. don't worry, there will be another chance to sell in 10 years or so, and you've got that stellar rental roll to keep you warm until then.

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Response by marco_m
over 11 years ago
Posts: 2481
Member since: Dec 2008

"and you've got that stellar rental roll to keep you warm until then."

lol..you are hard core

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Response by bjw2103
over 11 years ago
Posts: 6235
Member since: Jul 2007

I have to ask - why are people still arguing with weinertitz (sorry, couldn't help myself)? Then again, it's like asking why do I keep drinking those damn spicy margaritas at Wilfie and Nell? The result is always the same, yet I keep going back.

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Response by JuiceMan
over 11 years ago
Posts: 3578
Member since: Aug 2007

I made a lot of money in 07 & 08, and also lost some. Did that have anything to do with the home in which I live? Nope. petrfitz is needling, but what he is saying is not incorrect if you agree with the bear point of view.

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Response by petrfitz
over 11 years ago
Posts: 2533
Member since: Mar 2008

aboutready i didnt buy in 2007-08 so I made money? can you clarify? was it people who bought prior to 2007-8 that made money or was it renters who didnt buy anything who made money?

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Response by notadmin
over 11 years ago
Posts: 3835
Member since: Jul 2008

"your bitter renter market timer arguments"

petrfitz, hope you don't mind, you sound like a bitter owner.

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Response by notadmin
over 11 years ago
Posts: 3835
Member since: Jul 2008

"bitter home-borrower" or "bitter renter from the bank" could be synonyms of "bitter home-owner" here.

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Response by petrfitz
over 11 years ago
Posts: 2533
Member since: Mar 2008

or "bitter mortgage being paid for by renters giving me 50% of their take home every month"

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Response by notadmin
over 11 years ago
Posts: 3835
Member since: Jul 2008

wow, an old blood sucker.

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Response by aboutready
over 11 years ago
Posts: 16354
Member since: Oct 2007

bjw, you answered your own question. usually avoided, occasionally irresistible.

festerfitz, did deep and figure it out yourself.

giving my landlord 50% of my take home? ha, that's a good one. sleep well, slumlord, because if you have renters who are handing over 50% of their take home, and those are your standards for accepting renters, that is what you are. no respectable landlord would do so.

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Response by Parkside
over 11 years ago
Posts: 27
Member since: Mar 2009

Petrfitz: If every one of your tenants is paying you 50% of their take home, you really are a slumlord. Congratulations. If those same tenants had lived in the city in 2001, perhaps they could have bought too.

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Response by petrfitz
over 11 years ago
Posts: 2533
Member since: Mar 2008

admin I am in my 30's how old are you?

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Response by The_President
over 11 years ago
Posts: 2412
Member since: Jun 2009

perfitz,

if your tenant pays you 50% of their pay, then you are a really dumb landlord. Why would you want a tenant who extends themselves like that? The larger the percentage of their income they pay, the greater the risk they will default. Does a tenant paying 50% of their income have a "rainy day" fund? I think not!

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Response by 30yrs_RE_20_in_REO
over 11 years ago
Posts: 8274
Member since: Mar 2009

%u201CDon%u2019t try to buy at the bottom and sell at the top. It can%u2019t be done except by liars.%u201D Bernard Baruch (1870-1965) financier & economist

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Response by anonymous
over 11 years ago

if Not Selling at the top means losing money, Not buying at the bottom means losing more money.

I would remove the word "more" and say, yes, if the first part of the sentence is true, then the second part of the sentence is true. As you are pointing out, it is silly, obviously.

You and nyc10022, both extremely smart. Main difference, you are smart and willing to put it to work and take a risk. nyc10022 is smart and scared. If I had money to put behind one or the other, it would be you.

So let's cut through the bull. The word "more" was intended to say that renters are throwing away money. I think we all know that's crap - you know it too if you'd stop for a moment needing to argue with nyc10022 - I'll give you this, I find him more annoying than anyone, the purposeless arguing, the need to constantly say the same smart-ass comment, the hall monitor comments, the need to constantly tell people how NYC's maps are drawn, and on and on.

Back to topic, owners are "throwing away" the equivalent portion of the rent that is taxes and maintenance. And they are "throwing away" the interest expense to the bank that you don't get back and/or the opportunity cost of the money.

Buying in 2000, 2001, 2002 great move. Smart or lucky is not a debate worth having.

Continuing to own a property bought in 00-02 that is still strongly cash flow positive, still smart. I suppose unless you have a sure alternative today for the investment money. NYC real estate fortunes have been made by those who bought right at good cap rates, enjoyed positive cash flow, and stuck with it for the long term.

Let's remove July 2009 from the equation and go back to July 2007. Would you have been a buyer at those cap rates?... and having had the benefit of comparing the July 2007 cap rates with the cap rates when you were buying earlier in the decade?

The point by several folks is that the cap rates were too low AND/or the monthly costs of ownership exceeded the costs of renting. So the interest (thrown away), plus maintenance and taxes (thrown away) exceeded that 50% benchmark you reference and the only way to make that work is by further appreciation from the July 2007 prices.

As to the President, think about it this way, Petrfitz' tenant base is probably near identical, the income is likely identical, if he's charging, say $1000 per month or $700 per month. Housing just cost more relative to income than in the past. So as a landlord, would you rather get $1000 or $700 from the same tenant?

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Response by anonymous
over 11 years ago

There is no logic to an argument such as this.

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Response by truthskr10
over 11 years ago
Posts: 3929
Member since: Jul 2009

Hardly Modus Tollens.....mo'dust on lens

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Response by somewhereelse
over 11 years ago
Posts: 7435
Member since: Oct 2009

oh, another hillarious one I came across...

"marco_m - you will see apartments up 10-15% YOY by mid fall."

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Response by marco_m
over 11 years ago
Posts: 2481
Member since: Dec 2008

"marco_m - you will see apartments up 10-15% YOY by mid fall."

whoa whoa whoa!!! I dont think my bearishness can be mistaken. I'm being misquoted!!

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Response by somewhereelse
over 11 years ago
Posts: 7435
Member since: Oct 2009

nah, perfitz is the moron... he was just addressing it to you.

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