Here's recent history of the Fed’s policy committee and its Fed Funds rate. Next Fed decision is June 24/25.
Apartments’ investment outlook ‘very strong’
March 12th, 2008, 12:00 am · 86 Comments · posted by Mary Ann Milbourn
The National Multi Housing Council says it’s about demographics. Apartments look like the place to be for real estate investors thanks to a growing demand for rentals, says the organization representing the industry’s largest firms.
“The outlook for the apartment industry going forward is very strong,” said Mark Obrinsky, HMHC chief economist. “The nation’s 75 million echo boomers are already entering the housing market, and most begin as renters. … Strong immigration levels add even more demand for rental housing.”
Obrinsky said apartment owners are benefiting from restraint during the housing boom, which kept them from overbuilding. “As a result, they have escaped the oversupply problems plaguing the single-family sector,” Obrinsky said.
Renters nationwide are expected to increase by nearly 4 million households over the next 10 years, with half of those likely to rent apartments, according to the council. In recent years, construction has only met two-thirds of the apartment demand. With the vacancy rates little changed over the last five quarters, apartment owners continue to be able to get modest rent increases.
“Apartments continue to be an investor favorite,” said Obrinsky. “And rightly so. ‘Real’ returns (that is, returns over and above the rate of inflation) to privately held apartments have averaged almost 11 percent over the last five years.”
March 12th, 2008 at 6:53 am
Of course, with a declining housing market, who in his right mind is going to buy a house right now just to see the price drop another 10% in a year or two? It is a much better deal to rent and let somebody take the depreciation.
Even Realtors expect a very weak spring housing season.
http://www.nationalbubble.com/even-realtors-expect-a-weak-spring-housing-season/
March 12th, 2008 at 7:01 am
‘Real’ returns (that is, returns over and above the rate of inflation) to privately held apartments have averaged almost 11 percent over the last five years.”
Past performance is no guarantee of future performance. In this case it is almost a guarantee of the opposite. Larry Yun has a doppleganger. Even at today’s lower purchase prices rents are nowhere close to cashflowing in most of the country. The “real returns” spoken of were capital appreciation. Second 4 million new renters in the next 10 years is trivial and so far out as to have no value. These guys all have a string in their back. Pull it and hear: “Now is a good time to buy what I’m selling.”
March 12th, 2008 at 7:02 am
“The nation’s 75 million echo boomers are already entering the housing market, and most begin as renters”
They are already entering the housing market? Where?
March 12th, 2008 at 7:52 am
While I have seldom “dabbled” in multi-unit rental properties - one 4-plex and one duplex - that has been more a question of location than any other factor. ( Most multi-unit buildings in South O.C. are in neighborhoods that I personally would never have wanted to live in - a vital component of my personal criteria.)
I have always had a preference for 3 to 5 bedroom houses, which I have usually been fortunate to rent primarily to families. Most have been in transistion, moving on in a year or two, but a few have stayed with me for more than 5 years.
Since I see today’s South O.C. real estate market as being either at the bottom, or pretty close to it, I am once again actively looking for a property - just one - to add to my portfolio.
As I mentioned, I prefer a 3 to 5 br. house, in a nice neighborhood of So. O.C., ( I prefer to be able to drive by, once in a while - that’s why I don’t look in Texas or Sacramento.) preferably in a non Mello/Roos tax area, ( meaning 20-25 yrs old.) in excellent condition, ( usually one that has been refurbished extensively in the past 5 years - new roof, new kitchen, etc.) that I can buy with 25% down and have close to a break even, or even positive cash flow.
Rental properties have always done well for me, especially since I’ve developed the criteria above. In 35 years of renting properties I cannot think of one vacancy longer than a month, and most have been less than two weeks. ( I typically charge a little less than the going rate for a neighborhood, and my annual increases, if any, are usually lower, as well. My tenants usually like my property, and me, and stay longer.
I have been stiffed by a bad tenant only twice in all that time, and so my gains have FAR exceeded my losses. In most cases, within 5 to 10 years, I have been able to pull enough cash out, through a refinance, to enable me to purchase another, similar property, in effect, adding to my portfolio, without additional outlay from savings - while still maintaining a positive cash flow on each “unit”.
There are some on this blog who prefer units, some even in blighted areas. Personally, I’ve never had the stomach for that. As I mentioned, if I couldn’t be comfortable living in a certain neighborhood, I couldn’t imagine my prospective tenants being comfortable either.
I highly recommend that if you presently own a house or two, when it comes time to move up - whenever that is - that you try to hold onto the property you’re moving out of. That policy has worked beautifully for me for over 35 years. Good luck to you.
March 12th, 2008 at 8:36 am
ANNOUNCEMENT: There is a new effort by frequent bloggers on this respected website to stop a particular blogger (known as “the Troll”) from using multiple blog names for his postings. Nobody is trying to stop anyone from expressing his or her personal opinions whatever that might be. Rather, it’s the Troll’s deceptive and conniving multiple names that have been at issue for an intolerable amount of time. At stake is the PRINCIPLE of “one person – one opinion per blog post”, which should be taken seriously. This effort merely includes the suggestion to all bloggers to IGNORE this deceptive person and to NOT RESPOND to his multi-name blog posts. The best way to stop this deliberate deception is to ostracize and shun this person. This announcement will be posted daily and often until “the Troll” uses only one blog name just like everyone else, which he is entitled to. Your cooperation is greatly appreciated. Thanks.
List of 14 –“Troll” Names: (More names will be added)
Troll
Daddy Warbucks
Thoughtful
I hate Lansner
Roger Rabbit
James Carter
Sick of Bears
Sighburrdood
Authur Jensen
Voice of Reason
Jimmy
Mulliganville
Scott A
DonS
March 12th, 2008 at 8:36 am
Sighbur - What kind of down payment are you talking about to be able to make the rental rate pencil out right now?
March 12th, 2008 at 8:39 am
Should we buy houses with cheap credits to buy small & medium size houses and rent them out.?
They will become equipty and huge gains.
March 12th, 2008 at 8:41 am
A lot of the people that I know that are young adults actually are choosing to live with there parents longer. The funny money loans being gone will help the rental market probably. God I hope this does not turn into a sausage fest when Scott A shows up and starts beating it to his rental properties.
March 12th, 2008 at 8:43 am
Mary,
You are right about the fact that investing in apartments it’s a very lucrative way of investing know days.
Where will all the million of people who are loosing their homes going to live?????
The obvious answer:
They will start renting…..
Renting what?
Duh!!! Apartments.
Mary, thank you for such valuable info.
Jerry
March 12th, 2008 at 8:44 am
Thanks Jeff for bringing back sanity to this blog. Let’s focus out attention on the housing crisis in Orange County instead.
Too many people are losing their homes in the OC right now for us to be wasting our time responding to personal attacks.
Knowledge is king and it will prevent other people from losing their homes in the future.
March 12th, 2008 at 8:50 am
National Bubble (comment at 8:44)
Many of us have had it “up to here” with the cheating Troll. He thinks he is better than everyone else and doesn’t have to play by the same rules as the rest of us bloggers. I say the “game is over”.
March 12th, 2008 at 8:55 am
Yo Dutch trader…… why dont you go back under your rock ??
What is it you trade anyway mr renter ??
Jeff from seal beach……You are a 6th grader looking for attention.
I Got a song for you trolls out there…….
Its called the Inflation song…..
You will love to hate it…..and it goes like this………
A raising rents we will go…..
A raising rents we will go …..
Hi Ho a marry O
A raising rents we will go…….
The Fed is cutting rates
The Fed is cutting rates
Hi Ho a marry O
The dollar goes to sh!@
The dollar went to Sh!@
The dollar went to Sh!@
Hi Ho a marry O
Time to use the pesso !!
Gold is through the roof
Gold is through the roof
Hi Ho a marry O
Commodities are the proof !!!
Four dollar gas
Four dollar gas
Hi ho a marry O
Trade in that hummer fast !!
ahahahahhahaahhahahahahahahahah
lol lol lol lol lol lol lol lol lol llol lol RIBSPLITER
March 12th, 2008 at 9:00 am
Bubble says: “Thanks Jeff for bringing back sanity to this blog”
Aaaaaaaaa…………………..yeah, right.
March 12th, 2008 at 9:02 am
National Bubble and other blogges,
Please consider merely ignoring the Troll / Scott A / Sighburrdood / or any of his many aliases. Cheaters and connivers have rendered themselves to be non-entities. I don’t even bother to read his blog posts anymore. Please IGNORE him henceforth, and he will slowly atrophy away.
March 12th, 2008 at 9:07 am
The DOOD Says:
“”After purchasing a property and renting it out……
Within 5 to 10 years……
I have been able enough cash out through a re-fi…..
To add another property to my portfolio ( of homes )
And still be cash flow possitive on the initial rentals..”"
All the while never touching my savings or other investments !!
Most of these renters will never have the… insight…. or discipline….
Or the….. willingness……. to….. sacrafice…. in the short term……
To see those….. long term….. goals………. realized.
Sighburrdood…….You are the man !!!!
And I am certain a MULTI MILLIONAIR…..
Who by your own addmission……
You do not work….
Just collect checks!!!!
ANYONE WITH A BRAIN OUT THERE IN BLOG LAND ????
THAT IS THE FORMULA FOR GETTING WEALTHY. !!!!!
CASHED OUT AT 60 !!!
Just one thing…..
YOU HAVE TO WORK YOUR AS@@ OFF
At a day job for 30 years so you dont digg into the equity!!
March 12th, 2008 at 9:11 am
Jeff & Bubble head:
Stick to the toppic at hand.
You are the only two trolls blogging off topic….
Get a life….. or a apt complex / rentals so……
You posts will actually be on point……..
Right now you are off in LA LA LA L AL AL AL AL LA Land
March 12th, 2008 at 9:19 am
Jeff,
I appreciate your effort to expose the troll and bring the blog back to
a discussion of market trends. I use to enjoy when bulls came on to discuss their opinions. But they essentially all went away as their case became increasingly difficult to defend. I still welcome their comments, but I do not welcome the efforts of one person to destroy discussion on this blog. I think you are receiving support from many frequent posters to this blog. I also think the troll is going to become increasingly frustrated will pick up his activity and then flame out.
Of course this is like speculating on any market trend and is difficult to do.
March 12th, 2008 at 9:28 am
Hi Jake,
Yes. The Troll and his many aliases has been like a “computer virus” to this respected website blog. His cheating degrades this website. Ignoring and shunning him is long overdue. I don’t care what the Troll does, as long as he uses just one blog name in the future.
March 12th, 2008 at 9:32 am
JEFF & JAKE:
Hey guys…….
You want me to prove something in front of everyone here
http://www.sda4property@gmail.com
I am calling both of you out !!!
Post your emails……………..
AND PROVE YOU ARE NOT THE TROLLS !!!!
You are the only ones talking / bloging about it ?????
March 12th, 2008 at 9:33 am
jeff,
Right one man one name. Once he starts following this policy whether the name is Scott A or voice of reason or another of his choosing his comments will be welcome.
March 12th, 2008 at 9:44 am
Jake:
Still waiting…………………………………….
Still waiting……………………………………
As for now….. and what happens next………………
Stop calling me a troll…………….!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Stop including my name in your list……..!!!!!!!!!!!!!!!!!!!!!!!! !!
I would love to call you a few names righ now.
I will take the higher ground and not go down that road…
March 12th, 2008 at 9:47 am
No wonder Just Wright….AKA Wright for life left this fools board.
Patricio, Kim, Justin,
I wish you guys were still around…….
I dont blame you……..all this produces…. about as much as……..
A cup of warm Pis@@@
March 12th, 2008 at 9:49 am
So much for the “toxic” loans never coming back. Check out the new FreddieMac jumbo loan guidelines:
- 90% LTV’s
- interest-only loans
- no-doc loans
- 45% DTI
- 40 year loans
http://www.freddiemac.com/singlefamily/increased_limits.html
These guidelines are looser than FannieMae, which means Fannie will have to undercut these guidelines to get business.
By the end of the year, we will return to the old lending ways - only this time the taxpayers will be guaranteeing the losses.
March 12th, 2008 at 9:50 am
This is a classic troll rant in which he complements his aliases arthur jensen, sighburrhood,thoughtful,mulliganville. Why he choose to be so obvious is beyond me. I think he is losing it and cannot remember to stay in character. He is flaming out. I hope he does not start beating up his cubicle.
But I am sure more of his made up characters will come to his support!
Scott A Says:
March 12th, 2008 at 9:27 am
Arthur Jensen:
You are awesome……
Your book suggestions were perfect
I dont think 6th grade children can either
Read & comprehend your posts
Or the material you have suggested
Anyone can tell how bright and intellegent you are..
Just by reading your posts.
I have stated the same thing to JAKE & JEFF as well
Compare writing styles
Look for miss-spellings
Look for how the person forms a paragraph or……
Lack there of…..
BILL:
You have never called me out
PDU:
Need for attention ???
How about…..
Seeks alot of advise !!
Rants:
No-one can mistake your writing style.
One big BLOCK with no commas or perriods.
Thoughtful:
Keep it up
Sighburrdood:
I want to be just like you….
Cashed out at 60 collecting checks.
Mulligan Ville:
Good luck on the Million Dollar condos in Maui
I wish I could buy one and rent it out
Scott:
Which Scott are you ??
Scott H ??
The agent I spoke to ??
March 12th, 2008 at 10:01 am
Can it be we can post our comments without having to tolerate the usual taunts that this “respectable” blog is infamous for? Sign me up, pronto. Thanks JJ, that sounds fantastic! Ignore awayyyyyyyyyyyyyyy.
March 12th, 2008 at 10:02 am
Sick_Of_Bears Says:
“So much for the “toxic” loans never coming back.”
Well, I don’t see that they will provide loans for subprime borrowers
However, I do see the following paragraph:
“Freddie Mac’s Declining Markets requirements apply. If the appraiser or Seller has determined that a property is located in a declining market, maximum financing must be reduced. Section 23.5 of the Guide provides that a lender must not offer financing to the maximum LTV/TLTV ratio in any instance in which property values are declining. ”
FYI. Orange County is one of those “declining markets”
March 12th, 2008 at 10:03 am
Thanks for the Freddie Mac update, Sick_Of_Bears. Those guidelines are going to help many creditworthy people.
March 12th, 2008 at 10:05 am
Subprimers go to FHA. Something for everyone, folks.
March 12th, 2008 at 10:10 am
Since I’ve been reading this blog, which has been well over a year now, Jake has been accusing people of posting under multiple names. Last year, he used to use the equal sign to link names together. Now, he appears to be increasingly paranoid and is compiling a list (and I won’t be surprised to see my name added to it next).
I know that it is POSSIBLE that one person is posting under all of the names that you mentioned, but I don’t think it is plausible. I think it is harder to believe that one person has so much time and so little life that he/she could allocate the time that would be required to achieve such a feat. It is actually much easier to believe that not everyone has the same opinion(s) that you do and that at least most, if not all, are separate people.
I fully expect some slanderous and inaccurate comments about me to follow this post. I’m sure I will be discounted as a bull, although I doubt that someone bullish on the market would change professions and come back into real estate just to sell REO properties; I think that would imply a bearish attitude about the market.
By the way, how do we know that Jake and Jeff from Seal Beach aren’t the same person. Answer–we don’t. Just like we don’t know whether everybody who disagrees with Jake and Jeff and post on this blog are one person.
How about getting back to discussing issues? If you don’t agree with what someone posts, either skip reading their posts in the future or post back a dissenting opinion. What is comical is that you do both–you say that you won’t respond to those who fall under your list of troll names and then you do.
March 12th, 2008 at 10:11 am
jake and jeff
you two are paranoid mental.
i am watching both of you from space with a telescope that can look right through your roof.
March 12th, 2008 at 10:17 am
Just sounds like to me that half the people here just want to cry a river.
March 12th, 2008 at 10:17 am
OC NATIVE: That was way to reasonable !!! Perfect solution !! lol
Chicken Little: That is about right…..they are.. all… watching us !!! lol
Agreed…..Just stick to the topic at hand..
March 12th, 2008 at 10:43 am
Scott A:
Since you congratulated me, I’m now sure I will be added to “the list.”
March 12th, 2008 at 10:52 am
OCNATIVE:
That is just the way it goes………
Were u at ?? == city in OC
OC NATIVE ??
March 12th, 2008 at 10:57 am
Someone remind me why I should care about this article since I can’t even afford a small condo in OC because of this crazy bubble.
I’m sure the few millionaires in here care, the rest of the county would probably just be happy to comfortably afford A mortgage payment.
March 12th, 2008 at 11:04 am
Dave:
Its all good brotha….
Pick up your 1st prop for as close to the national median average as possible
If that is in murreitta its all good.
In five years rent it out and buy your house.
You will have 2 homes in CA
by the time you are 40…
NOT BAD AT ALL
Pay those down / off…..rent them out.
Retire well.
March 12th, 2008 at 11:07 am
REPEAT ANNOUNCEMENT: There is a new effort by frequent bloggers on this respected website to stop a particular blogger (known as “the Troll”) from using multiple blog names for his postings. Nobody is trying to stop anyone from expressing his or her personal opinions whatever that might be. Rather, it’s the Troll’s deceptive and conniving multiple names that have been at issue for an intolerable amount of time. At stake is the PRINCIPLE of “one person – one opinion per blog post”, which should be taken seriously. This effort merely includes the suggestion to all bloggers to IGNORE this deceptive person and to NOT RESPOND to his multi-name blog posts. The best way to stop this deliberate deception is to ostracize and shun this person. This announcement will be posted daily and often until “the Troll” uses only one blog name just like everyone else, which he is entitled to. Your cooperation is greatly appreciated. Thanks.
New List of 17 “Troll” Names: (Bizarre, but true. More names to come)
Troll
Crystal Balls / Daddy Warbucks
Thoughtful / I hate Lansner
Roger Rabbit / James Carter
Sick of Bears / Sighburrdood
Authur Jensen / Voice of Reason
Jimmy / Mulliganville / Scott A
DonS / Chicken Little / OC Native
March 12th, 2008 at 11:15 am
Jeff, you’re pathetic.
I doubt apts are the way to go in Irvine. Way to much new product coming online with the Jamboree Corridor and TIC’s Village. Wouldn’t be surprised to occupany rates in the low 80%
March 12th, 2008 at 11:16 am
Sorry OC….
Now I know why you did not respond….
Afraid of the Troll Lable….
This is too much….
March 12th, 2008 at 11:23 am
Thanks for the update Jeff,
The troll is indeed starting to flame out. I think he is finely providing his worth in entertainment. And I suspect soon he will disappear.
But markets are hard to judge.
It is instructive to consider what the troll is trying to do and how.
His goal is to make real estate as attractive as possible(note that may not be very attractive) and to seek revenge on those that brought it down in his opinion.
He tries to persuade by fabricating evidence at many levels.
He selects evidence from sources that themselves are often fabricated. Then to increase cred he uses multiple names to create an echo chamber.
Then he creates multiple view points which are reasons that making buying a wise idea.
Jimmy- do it because of inflation
Scott- do it as investment
many others-do it for your family
many others-do it to maintain social status
many others -do it to build equity
But he tries to use different characters to express the different views.
He evens adds some doubt in the characters to improve his credibility.
He manufactures emails to give him cred.
Then besides fabricating evidence he uses threats to protect his cred in fabricating evidence. He tries to make people have doubt as to what he is doing. He insults hoping he will drive people from the blog. And then he complains about the low level of discussion trying to drive people from the blog.
So in general he fabricates evidence to promote real estate and he tries to insult and annoy his foes to seek revenge.
It looks as though his time may be limited, but markets are hard to guess.
March 12th, 2008 at 11:28 am
Scott A or Sighburr; Can you briefly explain the basic loan qualification for investment (rental-condo) property. (dn, ratio, count rent payments?)
Jeff, thanks for that important news flash. I feel warm and fuzzy now.
March 12th, 2008 at 11:34 am
Jake,
I don’t personally give the Troll the ounce of credit you might afford him. Though I don’t read his blog posts anymore, I do simply observe that he has a dozen consecutive conversations with no one but himself. It’s simply bizarre behavior, which may (no joking intended) call for medical assistence. This is “Sibil” behavior, if you know who I am referring to.
March 12th, 2008 at 11:44 am
jeff,
Actually I think it is a form of compulsion and addiction. I got involved with some day trading and thankfully i did not do anything really stupid.
For instance I bought the yen at say 96.61 and sold 97.27. But I was going to hold out for 97.81. I could have done even better and it just annoyed me so I kept watching it while doing other things. So I think if something upsets you and you have no other way of resolving the conflict you can start to obsess or worry. I think blogs while good can also cause this obsessive behavior. The troll is just a bad case of that . He is an all too powerful warning to all of us.
March 12th, 2008 at 11:51 am
What’s the matter, boys. Slow day on WoW?
March 12th, 2008 at 11:55 am
I’m just happy that I’m buying pretty much the same place my girl owns, yet I’ll be getting it for about 45% off since I never listened to any of the bulls here. If I were going to buy in OC, I’d wait a minimum of another year. I don’t believe OC values have anywhere to go but down over the next 12-months.
March 12th, 2008 at 11:59 am
Jake (referring to comment at 11:44),
In the Troll’s past replies to others on this blog, he often says to other bloggers things like - “are you off your meds”. I speculate that this guy may have had a past record of psychological assistence (a good thing for those in need of it) but unfortunately may not be taking HIS meds.
I don’t know. But as I previously said, his multi-personality behavior is especially abnormal and bizarre - well beyond merely having a real estate “bull” ajenda that he would like to communicate. It’s a lot worst than that.
March 12th, 2008 at 12:03 pm
draconian measures to try and save the housing market
from imploding ala japan… same story different country…
http://www.fool.com/investing/general/2008/03/11/another-plan-to-destroy-the-economy.aspx
March 12th, 2008 at 12:04 pm
I made the paranoid twins’ troll list. My life is now complete.
I know Jake is a long-time poster. I don’t know if Jeff is a relatively new poster (past six months or so) or just a new personality coming out of Jake; I’m guessing the latter. Either way, you two (or one) should really get a life.
For all of your condemnation of others for posting so much, you two (or one) seem to have an extraordinary amount of time on your hands given your heavy volume of posting. I don’t. I’ve got business to attend to and a life to lead. You might want to consider at least buying a notebook so you can sit outside while you are consumed with this blog. You might also want to consider professional help to deal with your addiction. You are absolutely right in your previous post. Your obsession with this blog is a compulsion and an addiction. The first step toward recovery is to admit you have a problem. Have you two (or one) thought about how much time you could save by just sitting in front of your computer and actually just thinking about what you were going to post; the thought still reaches both of you and it would be much quicker than having to type it out under the guise that you are actually two people.
Lastly, if you are really doing the archive analysis you have eluded to regarding contrasting styles, check back about a year ago when I used to blast Scott for his statements that 30,000 new units were going to come onto the market in Orange County over the next two years. Funny, Jake (the original personality of the paranoid twins) didn’t accuse me of posting under two names back then.
Well, I’ve got to get on to more productive things, or I might turn out like you two (definitely one). Reading this blog is something I do from time to time; it’s not the full-time job for me that it is for you.
March 12th, 2008 at 12:07 pm
Jeff,
I think you can take someone with any behavior you don’t like and give them the right medication(sedative) and he’ll stop doing it. He will go comatose.
But I think the troll needs an environment in which he can apply his skills. Absent this environment he is creating his own fantasy. I think this is becoming all too common. For instance he could get interested in sports say.
My guess is that he does work at the computer on a real estate related job and has become obsessed defending real estate from what he considers unfair practice.
In fact blogs are all about the belief that the current press is not doing its job so the public needs to take information into its own hands. We kind of believe that. The troll kind of believes that , but with a far different take on what to do about it.
March 12th, 2008 at 12:07 pm
Good article Rants !
March 12th, 2008 at 12:17 pm
Jake,
I speculate that the Troll works no specific job, stays at home all day, and obsessively sits at the computer in his boxer shorts, T-shirt and slippers - immersed in his own solitary world. Day after Day after Day after Day……. Slowly losing his grip and humanity.
March 12th, 2008 at 12:17 pm
Hey Jeff, thanks for trying to bring relevance back to this blog. I used to come here often. I work in the RE business, I wish things would turn around so I could make money again. But it doesn’t look like that will happen for a while. I stopped commenting on this blog because it stopped being a discussion and became a mud slinging contest.
March 12th, 2008 at 12:25 pm
BTD,
Many of us express the same sentiments as you do. The Troll hasn’t left yet. However, he is being ignored and ostracized. And bloggers are seeing the bizarre repeated conversations he has with himself.
Thanks, because making a stand on principles is never easy.