All Forum Posts by: Hersh M.

@Daniel Smith Yes, I am just looking at it from educational pov. Dont want to even try to predict the future :) 

And your point about global trends is very true. Last 5 years, tons of foreign money has come into US RE markets and is a big factor of major price rise. See my other active thread about 'loosening lending standards'. I think after foreign money, now more and more locals are jumping into RE due to reasons outlined in the other thread. 

On the cash flow point, how do you ensure your vacancy and evictions dont get worse during market downturns?

@Brent M. Since we have so many real estate folks here on BP, I was looking to see if anyone can confirm/negate the facts. 

So can other realtors, lenders confirm the facts in the above article? If true, I am thinking we might just be at the beginning of a big run up similar to 2004-05. Maybe ride the  wave up?! :) 

Source - http://themortgagereports.com/21442/low-down-payme...

"Housing starts have been fueled by rising rents, cheap mortgage rates, and an abundance of low- and no-downpayment mortgages.

The 80/10/10 piggyback loan has been in high demand of late, and buyers are finding the Fannie Mae HomeReady™ home loan to be a worthwhile alternative to FHA lending.

The math for "Should I rent or should I buy?" has shifted and this month's housing starts data reflects that.

It's an excellent time to shop for a home."

"The good news is that mortgage approvals are getting simpler.

In addition to reducing their loan approval standards, mortgage lenders have recently lowered minimum credit score requirements, made concessions for self-employed income, and granted leniency on loans which "make sense".

Furthermore, there are more low- and no-down payment loans available than during any period this decade.

In addition to the Conventional 97 program and HomeReady™ programs, which are backed by Fannie Mae and require just 3% down, demand for the FHA 96.5% LTV program is high, as are requests for "piggyback loans".

There are also the VA and USDA loan programs -- both of which allow 100% financing."

@Account Closed That is my point. You cannot say the cycle will happen every X number of years. 

Do you have any resources you can share for the cycles over the last 4 decades or last 4 centuries and what measures you used to identify them?  

@Ben Leybovich Does that also apply to residential or only commercial? I dont completely understand the underwriting risk part but you are saying as the spread gets narrower, things start to get bubbly, right? 

Hope the move to Arizona is going well :) 

@Jonathan Makovsky Yeah, thats my point, its not possible to predict cycles.

Thats why I am trying to get my hands on some resources to understand the causes of past bubbles. 

Recently while looking for resources on past real estate cycles, I came across below 2 articles.

1. http://www.businessinsider.com/the-economic-crash-...

This article has a lot of data but is missing the explanation for that data. If you have any resources like books, articles, podcasts that detail the causes of past real estate booms and busts, could you please share them with me? 

2. Also came across this interesting BP discussion from 2 years back - https://www.biggerpockets.com/forums/48/topics/152...

Looking at the data listed in the table itself, its difficult to see in spite of recent cycles happening at 6, 10, 17 years, etc, why would anyone think that 18 year cycle is correct. Last 4 cycles seem sporadic at best.

@Chris May Where are you seeing the layoffs, which companies? Software or hardware? Just curious. 

@Chris Watkins About mortgage rates, check this out. I find this graph very interesting.

https://fred.stlouisfed.org/series/MORTG

Rates have been in a strong downtrend since 1981. It frustrates me when I hear people say that 'rates wont go any lower, this is the best time to buy'. Who knows. And I am in a similar boat as yours in that I am analyzing deals but not pulling the trigger yet. 

Thank guys. 

@Chris Mason I see you are a lender. Are you dealing with low downpayment financing these days? Less than 15% DP. Or is 20-25% minimum? Because recently i am hearing of big banks allowing very low DPs which wasnt the case last year.