The next housing bubble burst?

[tre]

How many think that there will be another housing bubble burst BEFORE the big collapse that most of us foresee coming in the future in the USA? Or, do you think the big collapse is next in line?

I am struggling with the idea of rental properties as a springboard abroad. It is just one of a few strategies that I like somewhat, but it has it's risks of course. Housing prices are rising again right now, at least on the West coast. My gut tells me that now is not a good time to buy and I don't have the funds anyway. What I HOPE will happen is that there will be another housing bubble burst within 2-3 years. My goal would be to save and snatch up property once that happens. I'd target college areas. I know college kids are a pain to deal with and many will damage my property, but at least they will LEAVE to go home in the event of a collapse. I can always do maintenance to an empty property, better than trying to kick a non-paying family out. I really don't want to risk my life to clear out non-paying occupants, that is probably my biggest concern long-term.

Anyone have any thoughts on this?

[Devil Dog]

How many think that there will be another housing bubble burst BEFORE the big collapse that most of us foresee coming in the future in the USA? Or, do you think the big collapse is next in line?

I am struggling with the idea of rental properties as a springboard abroad. It is just one of a few strategies that I like somewhat, but it has it's risks of course. Housing prices are rising again right now, at least on the West coast. My gut tells me that now is not a good time to buy and I don't have the funds anyway. What I HOPE will happen is that there will be another housing bubble burst within 2-3 years. My goal would be to save and snatch up property once that happens. I'd target college areas. I know college kids are a pain to deal with and many will damage my property, but at least they will LEAVE to go home in the event of a collapse. I can always do maintenance to an empty property, better than trying to kick a non-paying family out. I really don't want to risk my life to clear out non-paying occupants, that is probably my biggest concern long-term.

Anyone have any thoughts on this?

I would minimize my use of leverage in investment real estate now. And I would not buy and hold. Too much risk for not enough return. I have owned a property management company. There is a huge difference between the income you expect in theory and the actual income you will receive.

In real estate I recommend finding a steal deal on a fixer upper, buying it, moving in, fix it, sell it. Rinse, repeat. That is the least risky way to work this current real estate market, and it is certainly not without risk.

[gsjackson]

[

There is a huge difference between the income you expect in theory and the actual income you will receive.

Yeah, like the property management company I had in Detroit that didn't give me a penny of about $5K they collected in rent. Just dared me to come to Detroit and do anything about it. They knew I was hurting financially from the last half dozen "fiduciaries" in Detroit who had screwed me, and that I couldn't afford to go after them.

Being a landlord comes with major hassles, and college students are among the worst tenants. I just sold a rental property at a substantial loss, just to get out of the business altogether, even though as a rental it made me about 7 percent ROI, which I can't get anywhere else.

And I don't really think prices are going up enough in most places to expect a bubble burst in the next few years. Speculators are getting out of the market now, which means prices may well come back down, since banks still aren't writing many loans to potential resident owners.

I agree with DD that frugal flipping would be the best way to try to make money in American real estate right now. Try to find a run down foreclosure in a decent neighborhood. Since the American middle class essentially functions like a bunch of heroin addicts now, it shouldn't be too hard to locate these blighted properties in middle class neighborhoods.

[momopi]

How many think that there will be another housing bubble burst BEFORE the big collapse that most of us foresee coming in the future in the USA? Or, do you think the big collapse is next in line?

The US is a big country and "house bubbles" vary by region. For example, the house bubble tends to be bigger in California, and flatter in Texas.

So if you're worried about the RE bubble, that really depends on WHERE you intend to invest.

http://www.motherjones.com/kevin-drum/2 ... as-mystery

[zacb]

How many think that there will be another housing bubble burst BEFORE the big collapse that most of us foresee coming in the future in the USA? Or, do you think the big collapse is next in line?

The US is a big country and "house bubbles" vary by region. For example, the house bubble tends to be bigger in California, and flatter in Texas.

So if you're worried about the RE bubble, that really depends on WHERE you intend to invest.

http://www.motherjones.com/kevin-drum/2 ... as-mystery

This. I am in Michigan, and there are some areas even within cities tha thave anchors like colleges or hospitals, and this is what I am thinking of doing to a fix up as soon as I get cash. As for a bubble, I think it will b ein materials.

[djfourmoney]

There is no bubble here. Because what has happen was designed to happen. Its call transfer of wealth. African-Americans, some Whites and some Latinos are victims of this system.

So they got foreclosed on, investors then would go to auctions for these homes and pay for these homes with cash, something normal home flippers and potential home owners can't do.

This has driven up home prices as hedge funds and foreign investors invaded into Southern California.

That is not a bubble that's forcing working class and blue collar workers out of the housing market in some areas.

Those people are leaving LA, while those with White collar or high skilled labor are moving into LA and don't care about paying $500,000 for a 1500-1700 sq foot home.

LA has basically become un-affordable to anybody making under $50K a year.

I can't find the pdf but Stony Broke Univ did a study about incomes and what it takes to live here, its about $30K to live unstressed.

For real estate as vehicle to make money quickly (less than 10 years) it needs to be rental property in a place where people want to live.

Sunny climates, College Campuses, Popular Suburbs.

I would not buy and flip in this climate, too many risk.

[momopi]

Folks in Vegas have the same complaints about Californians buying up their homes...

http://www.doctorhousingbubble.com/las- ... alifornia/


California RE markets goes through boom-bust cycles every decade or so. We joke that in CA there are 2 coasts, the left (west) coast to the Ocean, and the right (east) coast to inland. Whenever the RE bubble pops, areas to the right becomes much more affordable for several years. Riverside, Inland Empire, etc. Palm Springs also go through very large swings.

I invested in SFR's priced around $100k-$150k along the I-15 in the past few years. One time, my RE agent told me that there was a vacant but formally crack house in Riverside for $2,000. Whoever buys it will need to demolish, pay for the (toxic) cleanup and rebuild. Not for me, hehehehe.

http://www.doctorhousingbubble.com/oxym ... investors/

In Los Angeles it's possible to score undervalued properties in certain areas during windows of opportunity. Bellflower, Norwalk, Downey, El Monte, etc. By undervalued, I mean it was possible to buy and rent it out at cash flow. It was even possible to buy new-ish SFR's in Chino and break even on rental income (not easy, considering HOA fee and property tax). But that window of opportunity largely closed last year in this cycle.

[Teal Lantern]

I would minimize my use of leverage in investment real estate now. And I would not buy and hold. Too much risk for not enough return. I have owned a property management company. There is a huge difference between the income you expect in theory and the actual income you will receive.

In real estate I recommend finding a steal deal on a fixer upper, buying it, moving in, fix it, sell it. Rinse, repeat. That is the least risky way to work this current real estate market, and it is certainly not without risk.

Where I live, people can't be evicted or face utility shut-off for non-payment during the coldest months.

For a while, there were a few properties nearby, plagued each year by families that would move in a month or two before that, then on the last day of the non-shutoff, non-eviction month, there'd be the moving truck outside the house.
The landlord would still be on the hook for any unpaid utilities, and good luck trying to get any back rent.
Some years, the owners just leave the houses vacant for the winter.

[SilverEnergy]

How many think that there will be another housing bubble burst BEFORE the big collapse that most of us foresee coming in the future in the USA? Or, do you think the big collapse is next in line?

I am struggling with the idea of rental properties as a springboard abroad. It is just one of a few strategies that I like somewhat, but it has it's risks of course. Housing prices are rising again right now, at least on the West coast. My gut tells me that now is not a good time to buy and I don't have the funds anyway. What I HOPE will happen is that there will be another housing bubble burst within 2-3 years. My goal would be to save and snatch up property once that happens. I'd target college areas. I know college kids are a pain to deal with and many will damage my property, but at least they will LEAVE to go home in the event of a collapse. I can always do maintenance to an empty property, better than trying to kick a non-paying family out. I really don't want to risk my life to clear out non-paying occupants, that is probably my biggest concern long-term.

Anyone have any thoughts on this?

I would minimize my use of leverage in investment real estate now. And I would not buy and hold. Too much risk for not enough return. I have owned a property management company. There is a huge difference between the income you expect in theory and the actual income you will receive.

In real estate I recommend finding a steal deal on a fixer upper, buying it, moving in, fix it, sell it. Rinse, repeat. That is the least risky way to work this current real estate market, and it is certainly not without risk.

You mean simply flipping?

Investing in real estate for cash flow will put money in your pocket if the economy is in good or bad shape.

Too many people think of real estate in terms of how much money they will get for selling their property instead of relying on a consistent monthly cash flow.

[zacb]

How many think that there will be another housing bubble burst BEFORE the big collapse that most of us foresee coming in the future in the USA? Or, do you think the big collapse is next in line?

I am struggling with the idea of rental properties as a springboard abroad. It is just one of a few strategies that I like somewhat, but it has it's risks of course. Housing prices are rising again right now, at least on the West coast. My gut tells me that now is not a good time to buy and I don't have the funds anyway. What I HOPE will happen is that there will be another housing bubble burst within 2-3 years. My goal would be to save and snatch up property once that happens. I'd target college areas. I know college kids are a pain to deal with and many will damage my property, but at least they will LEAVE to go home in the event of a collapse. I can always do maintenance to an empty property, better than trying to kick a non-paying family out. I really don't want to risk my life to clear out non-paying occupants, that is probably my biggest concern long-term.

Anyone have any thoughts on this?

I would minimize my use of leverage in investment real estate now. And I would not buy and hold. Too much risk for not enough return. I have owned a property management company. There is a huge difference between the income you expect in theory and the actual income you will receive.

In real estate I recommend finding a steal deal on a fixer upper, buying it, moving in, fix it, sell it. Rinse, repeat. That is the least risky way to work this current real estate market, and it is certainly not without risk.

You mean simply flipping?

Investing in real estate for cash flow will put money in your pocket if the economy is in good or bad shape.

This. As of late, I have been interested in hard assets, which seems to be how many people get rich.

Too many people think of real estate in terms of how much money they will get for selling their property instead of relying on a consistent monthly cash flow.