All Forum Posts by: Toby Munk

I am looking to develop 300 acres I own near Breckenridge, Colorado. It is high mountain terrain with beautiful vistas. Power is to the lot line and a old forest road meanders through the land.

My question is how much will it cost to improve the road? I am contemplating making it really nice like a cobble stone surface or pavers.

I have about 1 mile of road to improve, which might give me some economies of scale. I plan to visit a stone trade fair in Orlando in April to speak to stone manufacturers about pricing.

Any thoughts?

HI Jessica, welcome to BP.

Lots of things to learn in these forums. Almost as much fun as browsing the MLS.

Have fun and see you around in the forums.

Yup, cant agree more REI.

Somebody please also show me the no risk fast rewards lane.

Also wanted to add that if you do not have the staying power to weather a storm when things do not go as planned then real estate investing might not be the right thing for you.

Unlike stocks, real estate is not a liquid asset. You can not always get out when you want to.

Who cares if we are in a recession or not? The difference between zero growth and 0.5% negative growth is marginal.

The fact is that the economy is not growing as it used to and that has consequences. The question whether it is called a rescission or not is beside the point.

Here my thoughts. As more and more home owners find themselves in negative equity territory banks have every motivation to negotiate.

I also think that a large percentage of the home owner population would rather avoid foreclosure even if that means hanging on to a home that is worth less than the outstanding mortgage for some time.

So if somebody is willing to pay a mortgage for a place with negative equity the bank has every incentive to keep that person in the house. Otherwise it will have to take the hit on negative equity.

So I would think that we will be seeing a lot more flexibility of the mortgage holders in the near future to keep people in their homes.

Are you guys seeing any of this happening yet?

It is all a question of money. The only way to make it work is in the luxury sector. That kind of clientele demands top notch infrastructure.

The island would have to have a private jet airport, a marina, golf course, beaches etc...

It quickly gets to become a major project and very few islands are suitable for this kind of project.

I guess there could be a market for lots in a low key development, but getting there will always be key. If it is a second home I want to use it once in a while, if I can not get there it is worthless.

I always thought the most effective way to do that is the robots.txt file.

I think we might have highjacked the thread. But exactly these things are important to understand to not get taken advantage of.

Yes, the good old taxes. Colorado has very low taxes. In Aspen you can expect to pay about $10k for a $10m property.

I am not familiar with the California tax landscape.

What returns do you consider worth while. Obviously changes depending on market outlook. Must be higher in a down market than in an up market?

Trying to learn and understand from you guys, so don't take my above calculations wrong.

Here one thing I learned in trading. Once a newspaper prints an extreme quote that is accepted conventional wisdom, we have seen the bottom.

I lived in London in 1994. They had just gone through a complete real estate meltdown in 1988. The Financial Times printed on the front page that real estate values would not rise for the next 10 years. I knew there and then that we hit rock bottom.

Property prices went up 300% in the next 10 years.

So watch out that you are not caught in accepting the mantras you hear in the mass media. The sub-prime debacle and all that goes with it will take over the news wires for months to come. It easy to get lulled into the mainstream acceptance of inevitable outcomes.

It will clearly get worse before it gets better. The trend is your friend. But you will be surprised how quickly the market will turn when things are done.

The loan portfolios are Marked To Market. Meaning they are priced at a value that the market would pay for them right now. Even though the income stream lies in the future. So the loan portfolios are priced according to the market expectation of future defaults.

With the current sentiment in the toilet and pricing of default swaps sky high, I can not see that the actual defaults can exceed the current expected defaults.

Here is where the new CEO comes in. He has the power to take write downs. As correctly mentioned, the new CEO will be super aggressive. If he is overly aggressive then it will come back as profits.

I would be watching Citi Bank's next earnings announcement to judge the whole industry.