All Forum Posts by: Juan Pardo

I am far from a permabull, but how many mortgages in forbearance are underwater? How far have prices dropped? Why would you not just sell? We are not out of buyers, so where are the foreclosures going to come from?

Juan, have you ever heard of a little thing called the Dodd Frank Act? 

Your talking about the mechanics of the 08/09 crash, which you got wrong but hit the toilet seat so 1/2 credit as most on here are out peeing in the hallway with there info on the crash. Point is, literally everything was changed, everything, to prevent any repeat. 

Now on derivatives, any half wit or better in the financial investment sector will ALWAYS speak to the significant risk factor and volatility to ANY derivatives investing, ANY. Take your pick, from pork bellies too mortgages, so to speak of the risk factor there is like saying it's headline news that starring into the sun can harm your eyes. 

If you want to get into the details of the ignition point for the 08-09 crash it was the rating system of CDO's, rating A when they were packed to the gills with just crap, literally ticking time bombs. All other aspects was simply the mechanisms on how that inevitable "boom" rippled through every part of financial sector and was amplified to maximal power. At end of day if a CDO rated AAA was loaded with AAA, all would be just fine. It was the fraud in how the securities were built and conveyed, and everyone participating or just ignoring to ever look. 

If your arguing that is again happening, please tell us where, not "I feel" because feelings mean NOTHING, I could "FEEL" like I can fly, does that mean I will lift off the ground and zoom across the sky any time soon? This whole "I feel" BS is exhausting........ maybe I need to just start telling tenants I "FEEL" like their rents should be 4X market rates because that's as good as actual facts and data of market rates right???

@Juan Pardo

All 4 links that you posted hit a paywall. Are they paying you a commission to sign up new members?

Anyways, I doubt that these articles show a solution on how to create more housing. I just saw an article this morning that we have a record number of adult children still living with their parents, more than ever before. We need millions of new housing units asap! As I said before, a foreclosure wave would not create more housing that we need so badly. It would just turn owners into renters = another transfer of wealth to the rich (and me).

@Dan DiFilippo

“You realize the banks actually have reserves on their balance sheets that aren't doing anything, right?”

That’s not true, these reserves are doing something! These reserves are preventing a repeat of a 2008 style banking system meltdown.

@Dan DiFilippo

“You realize the banks actually have reserves on their balance sheets that aren't doing anything, right?”

That’s not true, these reserves are doing something! These reserves are preventing a repeat of a 2008 style banking system meltdown.

@James Hamling

That's right James Hamling, if even a little guy like me can profit from foreclosures, then for sure banks can make a lot more money off foreclosures. The 2008 housing collapse was just a huge transfer of wealth from the poor to the rich, lol. If it repeats I would add a lot more rentals to my portfolio, for cheap! Unfortunately, it is unlikely.

The problem with these threads is that the words people respond with, i.e. their "opinions," don't reflect their real beliefs. What people believe is revealed in what they do. 

I'd like to hear what people are doing. Who here is currently buying properties? Who is currently selling properties. Who is sitting on cash? 

@Juan Pardo

Things make total sense now. You're getting bankguarantees in Spain and so you think it's normal to get that everywhere. But it's not and you're lucky to have that in Spain. Mind you, the Spanish banks shouldn't be doing this as it's way too risky for them. The Spanish banks seem to have forgotten that their over involvement in the real estate business led to their collapse and bailout during the financial crisis.

As to the situation in Mexico, buyers will only advance significant funds to developers if they get a significant advantage for doing it, which has to be at least a large pre-construction discount. Then, I have to weigh that advantage against the risk. The developers I buy from have a perfect long-dated track record, I got to know them personally and they're very wealthy already so they won't take my money and flee to South America. So the risk is totally acceptable for me to take, especially given what I get out of it. A bank guarantee wouldn't add much added value and Mexican banks aren't into that business. And, if they were, it'd be very expensive and the developers would include the cost in their sale prices. I wouldn't want to have to pay for that if it isn't clearly necessary. I wouldn't do that with any developer though.

Like you, I try to minimize my risks whenever possible but, at the end of the day, investing in real estate implies risk taking. And, let's not forget that no risk = no return. It's all about knowing what you do and taking calculated risks. And, of course, different people will have different risk threshholds so maybe you'd prefer to buy at a higher price when construction is finished.

@Juan Pardo

Your rationale for wanting a bank guarantee is totally legitimate but it doesn't make sense for a developer to give it to you in most places. And any transaction will work only it is a win-win.

A developer providing a bank guarantee is not standard in many countries, except maybe in some European countries.

It's useless in the US and Canada since the buyer only needs to advance 5% of the funds before delivery of the property. It might make sense for a developer to do it in Europe since it'd cost a developer less money to pay the bank for a bank guarantee than to pay the bank for a loan and so it's cheaper for him to use the buyers' monies.

No developer in an emerging market country will provide a bank guarantee and they are the ones asking for prepayments because they need them. This thread was about investing in Tulum, Mexico; not about investing in Spain or Portugal.

However, if you're able to negotiate a bank guarantee for a Mexican developer, please let me know because, if you're successful, I'll do it too! :-)

@Juan Pardo

Your rationale for wanting a bank guarantee is totally legitimate but it doesn't make sense for a developer to give it to you in most places. And any transaction will work only it is a win-win.

A developer providing a bank guarantee is not standard in many countries, except maybe in some European countries.

It's useless in the US and Canada since the buyer only needs to advance 5% of the funds before delivery of the property. It might make sense for a developer to do it in Europe since it'd cost a developer less money to pay the bank for a bank guarantee than to pay the bank for a loan and so it's cheaper for him to use the buyers' monies.

No developer in an emerging market country will provide a bank guarantee and they are the ones asking for prepayments because they need them. This thread was about investing in Tulum, Mexico; not about investing in Spain or Portugal.

However, if you're able to negotiate a bank guarantee for a Mexican developer, please let me know because, if you're successful, I'll do it too! :-)