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All Forum Posts by: Kyle Gregory

Kyle Gregory has started 13 posts and replied 146 times.

Post: Sub Prime

Kyle GregoryPosted
  • Real Estate Investor
  • liberty township, OH
  • Posts 149
  • Votes 6

ahhhhh welcome to a presidential election year!!! My friend i think you have hit the nail square on the head. And it is politicians that need to be driven into the ground.

Originally posted by "builda":
There are some that believe that it is good government policy to have your population living in fear, particularly financial fear. To have a population trapped in employment that they don't like, doing jobs they don't like or that conflict with their values - all because they have to pay the mortgage is a way to pacify even the most independently minded population.

There will be winners out of sub-prime and it won't generally be the ordinary citizen!

Clearly, a new model is required in the US and/or to start in another country first. We in Australia are suffering now from your sub-prime meltdown and it is starting to cause a lot of pain, but from what I read not quite as much as in your country.

As property investors we are conflicted aren't we? We look for the foreclosure for the great deal, but unless we can do some good then really we are simply part of the problem.

We are starting to do deals in Australia that have been around since Adam was a boy and they don't involve bank finance but offer a means of structuring a sale and a purchase to give the seller what they desperately need, while at the same time giving a buyer what they need and can't get - a house!

Post: Mortgage Bailout Insanity

Kyle GregoryPosted
  • Real Estate Investor
  • liberty township, OH
  • Posts 149
  • Votes 6

i recall some radio talk show host (so i will take it with a grain of salt) saying that years ago, during clinton era, the feds loosened the lending rules and asked banks (sub prime) to lend out more money. So anyway here are some of my thoughts/questions..

1) why would any lender lend money to someone with poor credit and no money down?

2) why would anyone borrow 110% of a homes value?
3) why did the feds keep upping the interest rates, knowing all along that it was just about time for all those sub prime loans to re-adjust?

4) why didnt all those people with ARMS refi ?

Post: Downward Spiral

Kyle GregoryPosted
  • Real Estate Investor
  • liberty township, OH
  • Posts 149
  • Votes 6

wheatie your stats show that as of 4/7/08 there were 20,575 homes for sale, and they were selling just over 3000 per month. Just like any other stats these number can be taken in a number of ways...
1) You need to look at the length those 20,000 homes were on the market.
2) how many new home sales are being sold vs. used home sales.
Now this is where my questioning comes in... are the builders building too many new homes? building them too fast?

I guess it is a supply and demand issue that i am trying to ask (and these are just some hypothesis that i am throwing out)

Is there a point in time where the builders have built enough new homes? Or possibly there are too many builders building new homes, while people are buying existing homes?

Originally posted by "Wheatie":
I'm not sure that's a meaningful question. I guess you could look at the total for-sale inventory 10 years ago vs. right now. The difference would be the answer. My guess is that the difference is small, compared to the number of sales that took place in the last 10 years.

If you're asking a supply/demand question over time, that's much easier to answer. Real estate agent groups track that data very carefully. Home sales rate and inventory are carefully recorded. Agents often talk about "months of inventory", meaning the number of homes currently for sale divided by the number of sales per month. Getting this data isn't always easy, though. I'm on one of the local agents mailing list, and he often includes this data. As of 4/7/08, in the Denver area, there were 20,575 homes for sale, with 3,187 sales per month. That's 6.5 months inventory, which this guys shows at being right at top edge of a neutral market. Any higher, it would be a buyers market. At lower prices, there is less inventory while at higher prices, there is more. Its a buyers market over about $400K and a sellers market under $200K.

So, if you mean was the inventory low or high over the last 10 years, I think I can be pretty confident in saying the inventory was low, maybe very low, from about 2001 to about 2006 in some areas. Now its high, and getting higher. Demand exceeded supply in the early 00's, and that's what pushed prices up.

Post: Downward Spiral

Kyle GregoryPosted
  • Real Estate Investor
  • liberty township, OH
  • Posts 149
  • Votes 6

here is a question.... DO you think that over the past decade the production of new homes and resale of existing homes has out paced the rate of those looking for homes?

Post: dont get it..

Kyle GregoryPosted
  • Real Estate Investor
  • liberty township, OH
  • Posts 149
  • Votes 6

not that i like the area i am, it is a great area to raise kid and for a just under $170k i have a 4 bedroom 2 1/2 bath on just under an acre of land... and too boot in a very good school district. Now, we will be buying a condo in florida and one in ohio as soon as the youngest graduates high school .. Now, here in Ohio, just like in california, we have PLENTY of people that make nice salaries that will OVERPAY for their house just to keep up with jones'. This can easily be seen by the foreclosure rate here in Ohio..... I guess i will stick with gas under $4 a gallon and having a nice home for well under $200k.....

Originally posted by "Bohemiana":
kygregor,

It sounds like you really like where you live and you don't see the value of living in California or other high priced markets, which has absolutely nothing to do with whether or not those areas are good investments. (By the way, there are great investment properties on the "left coast" because 50% of all adults are renters paying off our mortgages.)

Post: 50% Rule for Lease Options

Kyle GregoryPosted
  • Real Estate Investor
  • liberty township, OH
  • Posts 149
  • Votes 6

no i may be wrong but i do believe that doing lease options (and from all that i have heard/read the tenant/buyer rarely ends up buying the house) but they are required for all upkeep and all utilities on the property i.e if water heater goes out they are to replace it

If this is the case then why not charge a certain percentage of what it costs for the mortgage? i.e if the mortgage is $1200 a month why not charge $1400 or so?

Post: How to roll rep. cost into rental property loan?

Kyle GregoryPosted
  • Real Estate Investor
  • liberty township, OH
  • Posts 149
  • Votes 6

just a suggestion here... I was looking at a REO that had been on market for several months. The asking price at that time as about $47.5 (and btw it was the ONLY house we looked at that had all the copper pipe remaining) Anyway after looking at a few more 2 families and about another month or so passing they dropped the price dramatically. To $37K... My realtor friend said lets see how low they will go and we offered $27K ... ended up settling for $34K....

Why not knock off a few more grand for those repairs?

Post: Help me understand this deal and 50%, 2% rule

Kyle GregoryPosted
  • Real Estate Investor
  • liberty township, OH
  • Posts 149
  • Votes 6

just making sure.. and sorry i was going with a 2 family, but still same concept

Post: How To Borrow Money From The Bank To Get Started?

Kyle GregoryPosted
  • Real Estate Investor
  • liberty township, OH
  • Posts 149
  • Votes 6

chris why not just jump into while you are working full time.. and when the time comes that you can afford to retire on the rental/rehab/flipping business you can just go ahead and do that?

Post: Help me understand this deal and 50%, 2% rule

Kyle GregoryPosted
  • Real Estate Investor
  • liberty township, OH
  • Posts 149
  • Votes 6

mike why doesnt the "50% rule" tell you what price you can pay?

for simplicity here... if you know you are going to be getting $1000 per month in rent then why not say 50% of that is $500 and you want $100 cash flow per door so that is $700 so that will give you $300 per month in loan payments. So really all you have to do is work your formual backwards or sideway?

kyle

Originally posted by "MikeOH":
Matthew,

The 50% rule doesn't tell you what price to pay, all it says is that operating expenses are 50% of the gross rents. That's it.