All Forum Posts by: Mike McKinzie

Eddie

Things I liked about President W Bush:
1. No attacks on US Soil after 9/11/01
2. Dow Jones broke 14,000 under W.
3. Real Estate set all time price highs under W
4. Attacked Iraq
5. Attacked Afghanistan
6. Mortgage Rates were at long time lows
The bad thing he did was to spend too much.

For those that were against attacking Iraq, I learned something a long, LONG time ago. When you have a bully on the play ground, no amount of talking takes care if him, you have to kick his A$$. If the US had of kicked Hitler's A$$ in 1939, WWII would never have happened. As it has been said, BAD things happen when GOOD people DO NOTHING.

Even Jesus, in the Bible, knew there were times you needed to use violence:
John 2:14-15
And found in the temple those that sold oxen and sheep and doves, and the changers of money sitting :
And when he had made a scourge of small cords, he drove them all out of the temple, and the sheep, and the oxen; and poured out the changers' money, and overthrew the tables;

War is inevitable. War is necessary. As long as you have bad people who are greedy for power, money and land, you must have war.

Eddie, there is a big difference between "hoping for other peoples misery" and "taking advantage of the situation". For instance, if you see a hundred dollar bill laying on the ground, do you sit there feeling sorry for the person who dropped it or do you pick it up quickly? Also, you don't really wish for anyone to lose a hundred dollar bill, but if they do, I bet you would like to be the one who finds it.

The things I like about Obama: I have to agree with the Credit Card issue. Credit Card companies are right there with lawyers and used car salesmen.

Beyond that, I just get a head ache because I am thinking so hard.

Just a quick update. We have an offer for leasing the property, but won't have an answer till February or March of next year. It is someone applying for a Grant to provide post secondary adult education. They want a 30 month lease with an option for an additional 30 months. Our counter offer does stipulate that if we lease it before then, they are out, so we are still marketing to the property.

The best idea may be to let it go through the foreclosure process and once the bank has clear title, make them an offer. Real Estate is like Poker. Rule number 2 in poker is to NEVER FALL IN LOVE WITH YOUR HAND. (Rule number 1 is to leave your emotions at home, LOL)

I just received a postcard from a Realtor in the Riverside area of Southern California. This Realtor used to work for me and even managed one of my offices for a few years. Here is the post card:

What a crazy real estate world we live in. In the price range of $350,000 and below, 68% of all closed escrows in Riverside occur at a price equal to or greater than the original list price. Why? Supply and demand...lots of buyers, and few sellers (the State moratorium on foreclosures is still in effect.)

This should lead to rising home prices, but it's not. Again, why? Because for the past 12-18 months the appraisal industry has been handcuffed by new requirements (Federal and State laws intended to "help") that have effectively made it impossible for prices to rise in red-line markets like ours in Riverside. Hopefully, common sense will prevail soon. Until then, we will continue to do the best we can with whatever regulations we have.
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So my question to the BP members is this, "Is it good that banks are releasing foreclosures slowly or should they flood the market and let the market settle where it may?" My personal feeling is that the sooner houses get into the hands of owners and investors, the better all around for everyone. The banks may gain a few bucks, but the risk of damage and destruction of the asset increases the longer it sits vacant and unmonitored. It takes longer for neighborhoods to recover if the vacancies are filled over years instead of months. Artificial market manipulations seem to cause more problems than they solve.

Is that a $30K purchase price or a $30K Down Payment?

My last two purchases were in Texas, Fort Worth and Arlington. I am also seriously looking at the Phoenix and Las Vegas market. These are NOT the best cash flow markets, but will provide fair cash flow with better than fair appreciation. Some people have posted here about the 2% rule, but they also post what kind of sidearm they carry to collect rent and make repairs.

I am a little different type of investor in that I NEVER want to see the house, NEVER want to talk to a tenant, NEVER want to make a repair. I figure if I can pay $100K for a house, get $1,000 a month and have a strong chance for good appreciation, I have a winner.

I have never had an issue with a tenant doing "work" on a property, but I think we need to define what "work" is. Just last month, one of my tenants asked if he could buy some grass seed for a bare spot on the lawn and deduct it from the rent. $15.00 for grass seed. So I let him. You post to not let the tenant do the work, so does that mean you mow the grass, take out the trash, change every burned out light bulb, clean the unit once a week, etc...? If the tenant sweeps the kitchen floor, they are "working" on the property. What if the tenant does the damage, say a broken window, and replaces it?

On the other hand, I would never let a tenant do plumbing, electrical, roofing, etc.. repair. Like any normal landlord, I spent this weekend replacing a light fixture and a faucet, I would not let the tenant do it.

The thing I hate the worse is "unapproved" "improvements". How many of us have seen hideous wallpaper, paint, window coverings, etc... that the tenants felt were an improvement?

Banks like comps and without comps, it is pretty difficult. When I refinanced my construction loan 4 years ago, they took comps from 10 miles away, not exactly a "comp." If you have financials for the property for at least 3 years, you may have some ammunition, but banks LOVE comps. If they need to sell the property, they like to know there are other recent sales nearby. The fact that there are no recent comps makes the bank believe it would be difficult to sell the property should they have to take it back. You may need to search for other financing.