All Forum Posts by: Edward Kanive

I don’t think it’s that simple. The equities markets roll into it what it predicts will happen. The two coming 0.75 percent spikes are already baked in.

There is never a bad time to invest in equities. I know this is a RE website but I actually max out 401k for me, my wife and max an HSA prior to doing anything else. Every single year. I think trying to out think the commodity Va equity is silly. Just do dollar cost averaging into an sp500 or total stock market Index. Add some bonds if you’d like. In my scenario, investing 48,000 yearly plus company match for 30 years will leave me with 8,000,000-14,000,000 at 60 vs 65 depending on the return . This assumes about 7-8 percent. So long story short, don’t overthink it.

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Dallas, Texas

Quote from @Ron Hollingsworth:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Real Estate has, for eons, stood as the #1 hedge against inflation. It is and will stand true again through this test, yet again. Wait and see.

Only temporary deflation, eventually fed will realize the only thing to do is reinflate. I don’t think anybody on BP thinks RE is a bad inflation hedge long term. Fed is giving everyone a massive gift now to just wait for 12-18 months.

Fed has to reinflate, it's just impossible to stop QE forever. The Fed already losing money in October after they're paying interest rate. You don't want Fed to file Chapter 11 LOL Another reason is the typical buyer of US gov like Japan and China gov. already thrown away their US bond, hence Fed plan to buy bond again lol

Yeah, I do want the FED to go bankrupt. The Fed should be shut down. We should go back on the gold standard.

Fed going to the gold standard would mean everything would be flipped and broken. Would be horrendous.

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Dallas, Texas

Quote from @John Carbone:

Quote from @Bruce Woodruff:

Quote from @John Carbone:

What is your opinion of people who are waiting for this new 'bottom' to buy? Who will then purchase and plan to refi once rates go down again in a couple years, so capitalizing on lower prices and eventually get lower rates as well...? A double win?

That's kinda my plan, and is certainly 'gambling'.....

People buying now are gambling that rents will stay high and prices won’t drop , everyone is theoretically gambling. The idea is, if you make smarter decisions based on the odds, you end up better off. It’s clear with momentum shifting downward, that someone who waits a year will not regret not buying right now. All of the rating agencies are expecting declines, fed wants lower prices….buying now is gambling with odds stacked against you with a lot of downside risk.

I only buy what I can pay for if no one is renting them. As a physician if I work 1.5 extra shifts, it covers a months expenses for my rental properties.

Once I have less debt, I’d inflate that more given my properties as a group would never be a total loss.

I just need to eliminate my student debt and maybe my 4000:month home mortgage payment before I feel comfortable with taking on more in a climate like this.

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Dallas, Texas

Quote from @John Carbone:

Quote from @Michael Wooldridge:

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Quote from @Alex Hochberger:

Quote from @Carlos Ptriawan:

Quote from @Alex Hochberger:

Yes. If one person times the bond market fantastically and then the housing market by 15%, they will start out about 25% ahead and do well.

That said, attempting to catch a falling knife and time the market is seen as generally foolhardy.

Yea one big mistake that I see from any newbie investors is whatever the asset class is they only see from short-term price movement, valuation,etc.

While the actual bullish market is created when there's economic growth. The economic growth is pre-mediated by Fed.

Ultra-long cycle bullish investment is created when economic growth is moved from a negative move back past zero.

In 2022 we know now it's negative economic growth, 2023 too perhaps. We will see if 2024 has positive economic growth.

A few wall street adages:

Saying 1:

Bulls make money.

Bears make money.

Hogs get slaughtered.

Trying to time Ibonds exactly and teh housing market exactly is being a hog.

Move your capital to the asset class you think will give you the best return right now. Distribute your capital in a way that gives you the portfolio you desire.

Gaming out scenarios makes sense, but nobody KNOWS what the market is going to do, we're all predicting/guessing.

Saying 2:

Never fight the Fed.

The Fed is open that they are aiming for a housing correction. A correction is a 10% - 19.9% reduction. Nominal prices appear to be down 6% from peak. Inflation is up 8% in that time. That's a 14% correction. Expecting another 15%-30% from here "a crash" is NOT what the Fed is aiming for. That means the Fed will likely reverse course if that is happening.

Could prices drop another 15%? Of course. Could they stay flat? Also of course. Allocate your capital appropriately. But assuming you're going to time a market perfectly is crazy. Assuming you are going to time two markets perfectly is insane.

Timing the market is a fools errand. Time IN the market is an investors journey.

If curious of proof, 2008. Thousands upon thousands across the entire globe, in assorted markets from NY too Taipei, Ireland, Tokyo and beyond, of the great masses roughly 8 people timed the market. Hundreds of thousands missing it, 8 nailing it. Your odd's of picking the winning Powerball are greater then of timing the market.

@James Hamling @Alex Hochberger. All I know is I’m glad I didn’t fight the fed earlier this year in equities. I got out at spx 4650 in early January when was widely expected fed was going to do rate hikes… I didn’t catch the peak (impossible to perfectly time it), but it was obvious equities were overpriced and fed guidance of starting to tighten. It’s amazing because I know so many people who did what I did, I don’t think we feel like mega million lottery winners. We just used a basic calculator and didn’t fight the Fed. I’ve started my DCA yesterday and will be fully back in before we take out 4000 again. It’s amazing stocks are down massively from all time highs 20-30 percent with all this inflation! Who could have predicted such a mega millions lotto ticket! Just follow the fed and their guidance and print.

I guess thats why I'm surprised. I got my in-laws out of stocks December partially, and January in total for same reason. They are retiring (well retired now) so it was obvious like you said. Me? I left my 401k in but I'm young and want to keep buying because it will bounce and there is no need to time everyting. So I agree you could see where it was going bear market after the longest most profitable bull run ever.

Housing though has never really retracted to the same degree as stocks for the same reason. So I'm just not seeing the big crash you see. And more importantly as Carlos just showed inventory in September continues to trend down....

Rates are up but $300 on a $500k loan is nothing. 4,000 on a 1.5million loan is a lot. So it will be the west coast losing but that isn't the whole national market.

You expect housing to drop up to 15 percent, my minimum is 20, we aren’t far off. My yang illustration was based off of a 15 percent drop. I think 20-30 more in line and that would make my example even more profound. If anything, momentum is to downside and that doesn’t reverse quickly unless fed pivots which seems remote. People who have been buying real estate last few months are the ones GAMBLING

Why is buying real estate gambling? I’m a buy and hold. Who cares what you buy at now? Understanding my portfolio is small.

as a 32 year old, I cheer when things go south. Better buying opportunities.

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Dallas, Texas

Quote from @Chris John:

I think the issue is the magnitude of a crash as much as whether there's a crash or not. In 2009, there were cheap houses EVERYWHERE. The number of cheap houses changing hands was IMMENSE.

Even if the market crashes now, I can't fathom it will be nearly the same. If prices drop, it will still be on a very small pool of available houses. If people's portfolios go upside down, they won't care as long as they can cashflow it every month. And, since most of us are locked in under 4%, that's a lot of houses that will NOT be hitting the market.

So, even if there is a "crash", it won't be anything like 2009 because:

1. The sheer number of houses will be minuscule in comparison.

2. There are a ton of buyers champing at the bit to get into this "crash". If/as prices drop, the new, lower prices will be met with more and more buyers.

Definitely seeing the prices decline and expect to continue to see that continue, but not holding my breathe on buying $60k houses in Cali again anytime soon...

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Dallas, Texas

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @James Hamling:

Quote from @Mike DeKuiper:

@Greg R. There’s a lot of people commenting for/against, and as a lender, I have to say I’m seeing both sides. There is going to be a market “correction.” That’s pretty well inevitable. People want to spend money right now. There are more millennials right now capable of buying a house. The govt is trying to slow inflation and put us in a recession to stop it by increasing rates. Rising rates ar pushing people out of the market, and having houses stay on the market longer. Many people are getting offers accepted below asking price. But they all have equity and almost all are looking to buy another home.

Now picture this. Rates are currently averaging around 7% or higher most of the time right now (insert disclosures about creditworthiness, etc. here). The most renown bankers are expecting to see 8% at the highest by the end of the year. It should slow the market down enough as people cannot afford what they could last year. Rates should then start to come down, and most people are expecting to see high 4’s to low 5’s by 2024-ish. All of the sudden, the people that got pushed out of the market due to rates are back in. I won’t say a bidding war will happen, but people will start buying houses again, and we will continue to see home prices rise as the competition gets a little tougher.

Housing market correction? Yes. Crash? No. Rebound? Most likely. Still worth it to stick with it. Look at historical rate and home prices, take into consideration all of the lending laws and practices that make it harder to write a bad loan, and we can assume that everything should be okay.

Should. Probably. Maybe. All of the above.

As a Lender, question:

What would you see happening if Fannie/Freddie "normalized" 40/50yr mortgages?

Have you seen anywhere stating that fannie and freddie would do that?

I know people have speculated but I've not seen anything official anywhere even hinting at it. It would be a god damn nightmare in terms of rebuilding everything out again from debt ratios to risk factors. Literally it would push prices up further which is scary given how it happened with cars.

And actually as I think about it. You could in theory help push markets to further heights because an investor could leverage more cash flow faster, in theory anyway depending on if rates changes. But as they generate more cash flow to generate more properties they could end up with a scenario that allows them to appear to leverage higher ( but then pay off in 10-15 years with that extra cash flow. Just the benefit to investors alone could drive markets insane.

Yes, I have, it's currently "the" thing being talked about in the finance realm at high levels. Some say it's just chatter, others say planning in motion. High level chatter and I gotta say, it was rather detailed, almost too detailed. including the how's as to it all going down, via executive powers, as a kind of "rescue" item, etc etc. And, it makes a lot of sense. Politically speaking that is, which really when does politics ever make sense with the real world fundamentals right. And yes, I see it facilitating a bull-run of all bull-runs, pressing leverage to astronomical heights.

But remember DAVOS "you will own nothing, and be happy". Well, how better can one define a 50yr mortgage then exactly that, right.

Do you just hate math? I already showed you the difference in payments, it is not significant. Please understand math and interest rates.

And yeah, when will we have the 50 year treasury anyway 😂 you going to buy those 50 year notes James? I think the people you are hearing this from are the same clowns from early 2000s that came up with the teaser rates, only atleast then it actually temporarily lowered payments significantly.

Also, how are those stock purchases you made after the obvious bear market rally last week? I recall you touting what great buys you made when SPX was near 3800. Last I checked it’s barely holding 3600. Please continue to telegraph your investment decisions so I can easily continue to fade them.

I think buying any stock right now is a wonderful investment. The best time to buy is when it’s coming down!

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Dallas, Texas

Quote from @John Carbone:

@James Hamling

https://thehill.com/policy/fin...

already seeing some “official” price drops in some markets. I thought there was no inventory? I thought nobody will sell?

Also, here is an interesting quote from the article

“Hale noted that home prices “cool off as we move from the heat of the summer into the fall. But this reflects more than seasonal cooling in prices.”

Next month, there will be more places on the list and the amounts larger.

Anyone else hoping there’s a crash? Buying opportunity?

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Dallas, Texas

I think the fed is hell bent on a recession and once housing market stops, it might take time to wake up.

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Dallas, Texas

future question. Nocturnist jobs pay us to work 7 12 hour nights, then give us off 2 weeks. Could we still conceivably be a full time RP in that gig?

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All Forum Posts by: Edward Kanive

Edward Kanive has started 3 posts and replied 22 times.

Post: Housing crash deniers ???

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Post: Real estate professional status