All Forum Posts by: Will Barnett

There is always going to be a market reconcilation after a period of growth. Even more so right now due to the sub prime meltdown and stagnant builder inventories of spec homes. The economy in general is headed for a hopefully brief downturn.

I don't think terrorism is a huge factor, even though that's what some people would want you to believe. Was there a huge correction after 911? Sure, but that happened to coincide with the dot com bubble bursting as well as corporate cooking of the books.

These things as well as a peaking economy in 2000 caused a recession until the end of 2002. From that point there has been huge growth until now. The market always cycles.

In Dallas there is a lot of speculation whether their new development project to make the Trinity River kind of like the Riverwalk in San Antonio will increase local market values. I've been thinking maybe I should get in the game with luxury townhomes and even commercial property.

There is a lot more risk involved than I am normally used to. The market around there right now is really depressed, almost ghetto-like. If one had the money to play with, however, it could be something really big.

I found a guy named Eugene Ju-Pierre who helped John organize a London REI club. I sent him an email expressing our concern.
This is his reply:

Hi Will,

John is fine. He is our chairman of the group, www.meetup.com. Log on to the website (Will prompt you to create "email and password"). Go to London Real Estate Buying & Investing Meetup Group. We have a meeting tonight at 7pm.
I hope this helps

Cheers
Eugene

So it looks like John might just be trying to focus his attention on things locally and taking a hopefully brief hiatus from Bigger Pockets.

AKA REI

I haven't seem his posts for a while. I consider him a valuable member of the forum. Hope all is well.

If I understand you correctly, do you mean you can defer taxes until the end of your life, without your kids inheriting that amount? I've had colleagues allude to something similar but I always blew it off as some shady tax fraud scheme.

I used to make the mistake of accepting partial payments with the tenant promising to pay the rest in a week or 2. I eventually got tired of this routine and filed for eviction only to find out that if you accept any amount of payment that month, you cannot evict.

Accept only the full rental amount or none at all.

This happened about a month ago but I added it for those who might have missed it.

Citigroup Inc., the biggest U.S. bank by assets, will receive a $7.5 billion cash infusion from Abu Dhabi to replenish capital after record mortgage losses.
Citigroup rose 5.7 percent in German trading after acting Chief Executive Officer Win Bischoff said in a statement late yesterday that Abu Dhabi Investment Authority will help "strengthen our capital base.''

Abu Dhabi will buy securities that convert into stock and yield 11 percent a year, almost double the interest Citigroup offers bond investors, underscoring the New York-based company's need for cash. Citigroup's fourth-quarter profit will be reduced by as much as $7 billion because of losses from subprime mortgages, which led to the departure of CEO Charles O. "Chuck'' Prince III and a 45 percent slump in the company's stock.

"Clearly, Citi has a problem with capital adequacy after the subprime crisis,'' said Giyas Gokkent, head of research at National Bank of Abu Dhabi PJSC, Abu Dhabi's biggest bank by market value. "ADIA has seen an opportunity to get cheaply into a blue-chip stock.''

With the purchase of a 4.9 percent stake, Abu Dhabi, the largest emirate in the United Arab Emirates, would rank as Citigroup's largest shareholder ahead of Los Angeles-based Capital Group Cos. and Saudi billionaire Prince Alwaleed bin Talal, data compiled by Bloomberg show.

The investment follows purchases by U.A.E. fund Dubai International Capital LLC in companies including London-based HSBC Holdings Plc, Europe's biggest bank by market value, and New York-based hedge fund Och-Ziff Capital Management LLC. In Abu Dhabi, state-backed Mubadala Development Co. agreed to buy 7.5 percent of Washington-based buyout firm Carlyle Group. ADIA also owns a stake in Leon Black's New York-based buyout firm Apollo Management LP.

One other thing to consider is that this will create a giant bureacracy. Each lender would need at least one federal compliance officer to freeze and unfreeze each loan. Guess who pays for all that.

What is your opinion?

Personally I think it is a terrible idea. It's just gonna slow the bleeding, at least until rates adjust again and we are back in the same situation. I swear, when I hear Bush promoting it I get a chill up my spine like I'm living in Brazil or Venezuela. What really irks me is it's not for homeowners in peril of losing their homes,the way Bush promotes it. It's for lenders near insolvency.

It honestly doesn't make sense to me. This type of mortgage rate freeze means that the Fed will have to raise rates after cutting them 3 times in 6 months. It appears that instead of letting those that incurred these huge losses cover them, the plan is to spread the cost to new borrowers.

Losing your home is terrible and attempts should be made to avoid it on a case by case basis, not some huge federal mandate.

I'm in the early stages of my REI career where I have to use conventional and hard money. I still work full time and really don't have the money to play with.
However I want to get to the point where I can use all cash to purchase because generally the discounts are steeper and it makes the process smoother and less time consuming.

You mentioned whether all cash or financing would make or break a deal. If it is a good deal, it really shouldn't matter. I think purchase price and feasibility are the most important factors.