All Forum Posts by: Jason S.

It's all in the numbers and Bernanke was talking 8% cap rates without a discount to buyers given Freddie's ability to achieve 94%+ of BPO on REO sales.

Jake Kucheck - you and I should talk though just to touch bases on efforts.

Rusty Thompson The link to the spreadsheet FHFA provided with their RFI showing July 2011 inventory in markets is:

http://www.fhfa.gov/webfiles/22504/Reo_StateMSA_081011.xls

As for your standing with or against it- Bloomberg came out for WSJ against - though I cannot locate the article links.

Goldman came out againd HuffPost (of all places) article.
http://www.huffingtonpost.com/2012/01/06/reo-to-rental_n_1189392.html

Rusty Thompson You mentioned a previous thread, I thought there was one, but I could not find it.

I think your speculation could be exactly how it comes to pass, all dependent upon the restrictions on re-sale. You are also correct,the more they spread the homes into the hands of smaller investors, the more it will mitigate mass movements in the market as each will have their own "plan".

What is interesting in reading FHFA findings is that they are pushing for public/private money partnerships, no doubt making Uncle Sam the partial landlord in some grand socialist move.

Though Carrington/OakTree just announced $415MM raised & dedicated toward the program.

According to FHFA Pheonix MSA has 4401 homes subject to this program - how would you like an additional 4400 homes coming to market competing against your rentals - and that's a rolling inventory - so assume it is 12000 homes total per year.

You do not think that will have an impact?

Though I had thought I had seen already discussed I could not find the thread. Is anyone thinking about the impact of the FHFA/Fannie/Freddie plans to sell Bulk REO to be used as rentals?

How about the depression of rents? They are literally discussing selling hundreds and hundreds to a single buyer/landlord in specific markets. Will this not steal wealth from landlords already in these areas?

What about the impact on the markets overall? How about the severe reduction fix/flips available? This could have a major impact on all of us, anyone talking about it? Maybe it's in a different thread?

There are 92,000+ Fannie / Freddie homes at any given time in the pipeline (July 2011 stat) these homes have a 120 day turn time with a constant set coming in and leaving.

Anyone concerned?

It will be interesting to see how long this thread lasts before it disappears.

1. A safety net is fine in a wealthy society. I do not care if those that do not work are given a 1 bedroom apt, a tv, food stamps and a buss pass as long as it is revocable when convicted of a violent crime.

2. The mentally ill must be cared for in a humane and good way, letting them choose to walk the streets e most inhumane thing we have ever done.

3. Decentralize infrastructure. No more big cities, they are a thing of the past, people do not need to be within walking distance of their lawyer, accountant, and banker. This will lead to many benefits.

4. Simplify the tax code but people still must pay taxes. It's the price you pay for living in wealthy society.

5. Keep a ridiculously strong military, those of you that are advocating t it need to read more history.

6. Govt needs to be in markets to ensure theft, fraud, and other gross mismanagement does not occur.

7. The FED - we need it and in reality it has served us well. It is much better than the non independent central banks found in other countries.

8. Prisons. Anyone that thinks prison is a joke never visited one. Prison should be humane, free from violence and free from rape etc. If you think otherwise you are not thinking. Most prisoners are not animals and should not be treated as such. 4 prisoner high bunks in CA with nothing to do all day and no health care - that is a shameful situation. Prisons should be educational for all prisonoers. Serving 30 years and coming out without being able to read is another shame.

9. Schools - accountability, choice, introduction of market system.

10. I could go on and on and on but it is already more than most probably even read.

To be honest the article sounded ridiculous. I like how his big advice is to sell direct to consumers, then mentions consumer goods which is one of the most competitive niches in which to compete.

His number for rich is $7.5MM.

He makes it sound like the American Dream was to get rich, I thought it was to have a home and a high standard of living. Which by the way, can currently be had even by those on minimum wage. All this talk of the spread between rich and poor is ridiculous, the working poor can live very well, as for the rich, let them have it all, as long as the poor are better off also. I remember M. Thatcher debating this in Parliament, she made it clear, let the gap get bigger as long as the poor are doing better also because the alternative is a smaller gap with the poor being worse off.

Either way, compared to the rest of the world, the Dream is very real and easily obtainable. As for getting your $7.5MM, that can be had also using leverage, interest spreads, etc all of which we learn in RE. It's hardly impossible.

To be honest, standard financial advice would say that you should 3-4 months expenses in cash. This guards against more than the car repair, it guards against loss of employment.

Having a substantial cash reserve is also a psychological benefit - knowing you are "OK" no matter what hits you is important.

I can assure you, this number will change.

Jon Holdman that was a good chart on median prices relative to inflation. What would an overlay of monthly payments, or even inflation adjusted monthly payments look like?

For example,

shows that even though, say a market has houses at 2002 levels, it may in fact be that your market has gone beyond that on the basis of affordability by 15%. I have looked for such a chart. I think it would help in understanding markets.