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The Real Employment Picture?
- Thread starter coolhand
- Start date
coolhand
Well-known member
teknobucks
Active member
imported post
coolhand wrote:
vp's home state right??
wy. not hawaii....LOL
coolhand wrote:
vp's home state right??
wy. not hawaii....LOL
G
Guest
Guest
imported post
What to know why HI and WY had job growth....drum roll please.......................service jobs....us poor Americans can not travel overseas anymore so we go to HI.....and the Asians and Euros are going to HI with their us one of ours get two of theirs currency deal....you should see the UKs shop in HI...everything is a blue light special....
WY - people are going there because of no state tax and low property take for example (where I own a ton of land :^4,800 acres - the MT be no dummy
- I only play one on this board) Casper, Jackson Hole are booming with constructions jobs for rich americans to retire too in their 15M log cabins.
Mystery solved on that....
Now moving forward...all this M&A....SBC is cutting 12% of their job force...etc, etc....M&A is horrible for the economy...that is the strongest sign of a market top....the only way I can make it anymore clear is to go into your living room and smack you in the face with a snow shovel....when you see record M&A and record insider selling WE ARE AT A FREAKING MARKET TOP.
I will be on deck watching the blood bath...saying OHHHHHH THAT GOT TO HURT.
MT
What to know why HI and WY had job growth....drum roll please.......................service jobs....us poor Americans can not travel overseas anymore so we go to HI.....and the Asians and Euros are going to HI with their us one of ours get two of theirs currency deal....you should see the UKs shop in HI...everything is a blue light special....
WY - people are going there because of no state tax and low property take for example (where I own a ton of land :^4,800 acres - the MT be no dummy
- I only play one on this board) Casper, Jackson Hole are booming with constructions jobs for rich americans to retire too in their 15M log cabins.Mystery solved on that....
Now moving forward...all this M&A....SBC is cutting 12% of their job force...etc, etc....M&A is horrible for the economy...that is the strongest sign of a market top....the only way I can make it anymore clear is to go into your living room and smack you in the face with a snow shovel....when you see record M&A and record insider selling WE ARE AT A FREAKING MARKET TOP.
I will be on deck watching the blood bath...saying OHHHHHH THAT GOT TO HURT.MT
G
Guest
Guest
imported post
Ya would of thought NV would of been on this list....NO NO NO....there are super casinos opening up in Latin America, China and Philippines, Indonesia, etc, etc...and they are doing well...or I guess I should say the stocks I own of the companies are SCREAMING.........darn we will not even be the superpower of sin anymore...
draughts we were good at something....tear in eye...
Ya would of thought NV would of been on this list....NO NO NO....there are super casinos opening up in Latin America, China and Philippines, Indonesia, etc, etc...and they are doing well...or I guess I should say the stocks I own of the companies are SCREAMING.........darn we will not even be the superpower of sin anymore...
draughts we were good at something....tear in eye...
Mike
Active member
imported post
This is a structural shift in the economy. Manufacturing will hold on for awhile longer, but I think it is on the long-term decline. Other nations have the know-how and can do it cheaper, so let them. This makes the world economy more efficient overall.
The US economy will continue to transition into what it does best, which in my estimation, would be anything related to innovation/research/technological advancement. Most new drugs/treatments/technological innovations come from this country. Part of this stems from the extensive college/university system that we have, and part of it is related to the fact that we are one of the few nations in the world with the money to spend on it.
China's economy has been running hot, but it has been plagued by boom-bust cycles in the past. I don't know if they've escaped that problem yet. They also have a long-term demographic problem - their one child policy is terrible, and families obviously strongly prefer to have male children. This will come back and bite them in the ass down the line.
India has a huge population but is a very poor nation. They have a long way to go before they will become competitive economically. When people complain about being poor in this country, they have no idea what poor really is. Indian slums on the other hand... yikes. :shock:
This is a structural shift in the economy. Manufacturing will hold on for awhile longer, but I think it is on the long-term decline. Other nations have the know-how and can do it cheaper, so let them. This makes the world economy more efficient overall.
The US economy will continue to transition into what it does best, which in my estimation, would be anything related to innovation/research/technological advancement. Most new drugs/treatments/technological innovations come from this country. Part of this stems from the extensive college/university system that we have, and part of it is related to the fact that we are one of the few nations in the world with the money to spend on it.
China's economy has been running hot, but it has been plagued by boom-bust cycles in the past. I don't know if they've escaped that problem yet. They also have a long-term demographic problem - their one child policy is terrible, and families obviously strongly prefer to have male children. This will come back and bite them in the ass down the line.
India has a huge population but is a very poor nation. They have a long way to go before they will become competitive economically. When people complain about being poor in this country, they have no idea what poor really is. Indian slums on the other hand... yikes. :shock:
G
Guest
Guest
imported post
Do you want fries with that, Sir?
That will be your childrens future....
Do you want fries with that, Sir?
That will be your childrens future....
imported post
MarketTimer wrote:
YES! and isn't that sad? I believe the smart money is out of the stocks aleady. They have already bought the real estate and if you buy now your buying inflation. I don't care how low interest is, it just raised the price of land or house. I would not borrow and buy right now as I think it will just pinch you 2 to 3 years down the road. Lenders are making low interest loans but watch out for variable interest and if you do buy lock in the rate, if you can't afford the locked rate do not buy.
MarketTimer wrote:
YES! and isn't that sad? I believe the smart money is out of the stocks aleady. They have already bought the real estate and if you buy now your buying inflation. I don't care how low interest is, it just raised the price of land or house. I would not borrow and buy right now as I think it will just pinch you 2 to 3 years down the road. Lenders are making low interest loans but watch out for variable interest and if you do buy lock in the rate, if you can't afford the locked rate do not buy.
G
Guest
Guest
imported post
cowboy wrote:
Interest rates are rising...variable rates are not the way to go.
BTW, I tend to agree with 95% of what MT is telling you, but I don't think teaching is necessarily his forte...and hecould also use a six month vacation from the markets.
cowboy wrote:
Unfortunately, we've had a huge runup in real estate also..that will likely come crashing down as well.
Interest rates are rising...variable rates are not the way to go.
BTW, I tend to agree with 95% of what MT is telling you, but I don't think teaching is necessarily his forte...and hecould also use a six month vacation from the markets.
pyriel
Active member
imported post
saraho wrote:
BTW, variable rates are good for those real estate investors that are flippers or remortgage every 5-7 years. In fact, I would recommend them over fixed rate if you are into passive income. If you own a home, you are better off with fixed rate.
Asfor youGrandpa MT, I don't know what to dowith you...One day you are ok, then the following day you are "out there." Are you forgetting to take your meds again???
saraho wrote:
There are still money to be had with real estate but you really have to know what you are doing. Right now,talk of the town is a real estate bust in 2007 and maybe even as early as 2006 based on my conversations with alot of realtors, appraisers and loan officers. I am currently on hold on buying any property at this time unless they are supercheap and can expect no less than 40-50% cash on cash return for my investment every year. I will use this time to raise cash so that I can buy property when real estate crash.Funny I am saying this but I can't wait till they crash again... This time, I will useall available cash including 50% of the TSP moneyto jump into that dip. Did well the last time butI wascash short so Ididn't really get as much profit as I wanted to.Unfortunately, we've had a huge runup in real estate also..that will likely come crashing down as well.
Interest rates are rising...variable rates are not the way to go.
BTW, I tend to agree with 95% of what MT is telling you, but I don't think teaching is necessarily his forte...and hecould also use a six month vacation from the markets.
BTW, variable rates are good for those real estate investors that are flippers or remortgage every 5-7 years. In fact, I would recommend them over fixed rate if you are into passive income. If you own a home, you are better off with fixed rate.
Asfor youGrandpa MT, I don't know what to dowith you...One day you are ok, then the following day you are "out there." Are you forgetting to take your meds again???
pyriel
Active member
imported post
cowboy wrote:
Additionally, your logic concerning fixed rate vs. variable is flawed. Again, amateur real estate investor (especially those who only own their house or are renting) will probably agree with you. However for a real estate investor, variable rateis the way to go. Mind you, real estate investor will always try to get a fixed rate but will not hesitate to get a variable if the deal is good. A variable rate with a 5-7 fixed and it becomes ARMS later and mortgage for 30 years is just one example that you can do well with variable rate. Also, a good real estate investor plans to remortgage every now and then and 3-7 years is a good year to plan them. Why? Because they are free money and you never have to pay taxes for them. If you are a passive income investor, your tenant will be paying for the monthly mortgage and you get a deduction for your tax.
Pyriel
WY - people are going there because of no state tax and low property take for example (where I own a ton of land :^4,800 acres - the MT be no dummy- I only play one on this board) Casper, Jackson Hole are booming with constructions jobs for rich americans to retire too in their 15M log cabins.
cowboy wrote:
Now, I really have to step in because I know that you are going out of your boundary with what you really know with real estate. I think that you are a savvy investor in stock market but an amateur (at best) when it comes down to real estate. You mentioned that you own 4,800 acres in WY. Now tell me, is your acreage a liability or an asset. They are a liability because it is not putting money into your pocket. You can talk about appreciation but until that time that you start receiving money from it by either selling it or developing them, your acreage is a liability that is creating expenses for your year after year. In real estate, you don't buy property with hope. A real estate investor will buy acreage of property with a plan to either develop them or sell them straight out of profit (as soon as possible). In real estate, you only keep property if you decide that you want to get passive income from it.
Additionally, your logic concerning fixed rate vs. variable is flawed. Again, amateur real estate investor (especially those who only own their house or are renting) will probably agree with you. However for a real estate investor, variable rateis the way to go. Mind you, real estate investor will always try to get a fixed rate but will not hesitate to get a variable if the deal is good. A variable rate with a 5-7 fixed and it becomes ARMS later and mortgage for 30 years is just one example that you can do well with variable rate. Also, a good real estate investor plans to remortgage every now and then and 3-7 years is a good year to plan them. Why? Because they are free money and you never have to pay taxes for them. If you are a passive income investor, your tenant will be paying for the monthly mortgage and you get a deduction for your tax.
Pyriel
WY - people are going there because of no state tax and low property take for example (where I own a ton of land :^4,800 acres - the MT be no dummy
- I only play one on this board) Casper, Jackson Hole are booming with constructions jobs for rich americans to retire too in their 15M log cabins.imported post
Basicially Pyriel, as far as your response I feel the top paragraph is for MT to answer. Yes, you could go to Wyoming and buy land but you better have cash in your pocket. One is I know moreabout lending then you think. You also make several points that I have been trying to pointout too. One is interest is tax deductable so why not fix it and collect it. Two is if you feel you have property that is good enough that Joe Blow will keep renting as you keep raising his rent your fine. But if MT is right and were going to a service type countrymore Americans will be on lessincome. Your strategy will not work will it. It all comes down to what the little man can afford and if your little man can't afford it he wont rent. He will go accross the street and rent from someone that has his building paid for as he won't be passing on the interest fees because he is his own banker. Basically if you have a product, you have to keep your customer happy.Most people have the same thinking as you do Pyriel that you can just pass it on and smile,I think that time has passed and if you want to keep your customer in 2 -5 years you need to kiss major butt. Right now, a lot of people are buying houses why?The interest rate is down and they can own for whattheir rent is costing them. This is why houses have went up in price.
Basicially Pyriel, as far as your response I feel the top paragraph is for MT to answer. Yes, you could go to Wyoming and buy land but you better have cash in your pocket. One is I know moreabout lending then you think. You also make several points that I have been trying to pointout too. One is interest is tax deductable so why not fix it and collect it. Two is if you feel you have property that is good enough that Joe Blow will keep renting as you keep raising his rent your fine. But if MT is right and were going to a service type countrymore Americans will be on lessincome. Your strategy will not work will it. It all comes down to what the little man can afford and if your little man can't afford it he wont rent. He will go accross the street and rent from someone that has his building paid for as he won't be passing on the interest fees because he is his own banker. Basically if you have a product, you have to keep your customer happy.Most people have the same thinking as you do Pyriel that you can just pass it on and smile,I think that time has passed and if you want to keep your customer in 2 -5 years you need to kiss major butt. Right now, a lot of people are buying houses why?The interest rate is down and they can own for whattheir rent is costing them. This is why houses have went up in price.
imported post
MarketTimer wrote:
MarketTimer wrote:
Is there ever a time when someone is not saying that?
[line]
My tid bit on homebuying: Still not everyone can afford a house. Yes, rates are low, but prices are higher and you have to look at supply. Here, supply is very low and for a while it was very low nationwide, which also drives up prices (and leaves only the more expensive houses available).
Additionally, most early-twenty-year-olds are not in a financial position to buy a home and there are plenty of those.
I've been wondering about a real-estate bubble for a while now. Until now, I've always heard "Oh noooOOOoooo". I dunno. We'll see. In the meantime, I gotsta buy a lotta furniture and things for this new house.
MarketTimer wrote:
hahaha LOL...good one
MarketTimer wrote:
Is there ever a time when someone is not saying that?
[line]
My tid bit on homebuying: Still not everyone can afford a house. Yes, rates are low, but prices are higher and you have to look at supply. Here, supply is very low and for a while it was very low nationwide, which also drives up prices (and leaves only the more expensive houses available).
Additionally, most early-twenty-year-olds are not in a financial position to buy a home and there are plenty of those.
I've been wondering about a real-estate bubble for a while now. Until now, I've always heard "Oh noooOOOoooo". I dunno. We'll see. In the meantime, I gotsta buy a lotta furniture and things for this new house.
pyriel
Active member
imported post
cowboy wrote:
We do this projection (attached) on every single property that weplan tobuying. I also would like to apologize if I had misled you to believe that we remortgage for 100% value of the property. We never ever do that because we end up not having any room for leverage. 80-90% isa good number for remortgaging. Everytime you remortgage, your holding pattern before you can remortgage again increases. So if your first remortgage is on the 5th year, the second one will be on the 15th year. Now, of course, if you haveenough passive income you candefer your remortgaging factor till later. Which iswhat is ending up happening. The longer you defer, themore leverage youwill have from your property.
BTW, we ended up not buying this property eventhough it would have given us more than a 100%cash on cash return for our money within 6 years without remortgaging.
cowboy wrote:
Cowboy, Have you ever had coffee with redbull? That is what I am having now and they both seem to be doing their job since it's only 0500 hours here in Hawaii. You got one part right but you didn't get the other part. When you remortgage a rental property (after it appreciated in value which your tenant had paid for) you need to take that money and buy more property. Eventually, you have to raise rent if the market calls for it. I'm attaching a worksheet on how we look at properties before we buy and before we remortgage. I'm sure you'll see what I am talking about. Also, your way of thinking that your competitor will lower his rent is just not happening. If the market calls for it, everyone raises rent (even those who has no mortgage) I have a friend who bought three fourplexes with cash (total of about more than$500k)within the last two years and he is regretting it because it is killing him with the tax (no mortgage brought him to the highest tax bracket). So what is he doing now? He is remortgaging and taking the nontaxable money to buy a day care business. You see, and I am sure that you've heard this before, you have to use OPM to make money. As for the comment about people buying their houses, I think that its great. However, if I knew then what I know now, I would have bought a 4 plex which is considered a residential home loan. I would have lived on one and rent the others. Tenant pays my mortgage andI have a free place to stay and still get tax deductible on it. I will then use my money (saved) to increase my net worth. So that I can buy that house free and clear.
We do this projection (attached) on every single property that weplan tobuying. I also would like to apologize if I had misled you to believe that we remortgage for 100% value of the property. We never ever do that because we end up not having any room for leverage. 80-90% isa good number for remortgaging. Everytime you remortgage, your holding pattern before you can remortgage again increases. So if your first remortgage is on the 5th year, the second one will be on the 15th year. Now, of course, if you haveenough passive income you candefer your remortgaging factor till later. Which iswhat is ending up happening. The longer you defer, themore leverage youwill have from your property.
BTW, we ended up not buying this property eventhough it would have given us more than a 100%cash on cash return for our money within 6 years without remortgaging.
imported post
Hi Pyriel! First I would like to commend you for putting something like this out to download for others to view. In an appreciating market this works fine. I also figure that you may be somewhat more savy then other investors I have worked with. One thing I would like to say is it takes all types of people to make the world go around and one thing I have learned is we all have different jobs and different interests.
I down loaded your worksheet last night and it took me the time to read the first page to decide if I would invest in this or not and I decided like you did that I would not. Your initial investment is $32000, your passively yearly income is $1970.76. This is a .0651% return for the money invested.
The rest is just an assumption that the property is going to appreciate and your going to make money on the sale in the future. The money to be made is not in the operation of the property but in the resale of the property itself. If I was invested in this property I would put it on the market immediatly and sell it as soon as possible. Why? The annual profit deteriates annually in every year of ownership. In other words every year you hold the property it makes you less profit. I could beat this with a stick all day but Im not going to.
I did notice something else and thats depreciation and captial gains. I notice you straight lined the depreciation. THis possibly is a good thing. If you did what this is showing and sold this real estate at the shown value, the depreciation would, or a portion of it could become considered ordinary income and the $15,000 made on the sale would immediatly become capital gains and have a 10% minimum tax in the year sold or higher depending on where you set in the tax bracket. This possibly explains why you would be wanting to repurchase other property and also remortgage. This all works fine until you decide that you don't want to buy anymore.
This is only a perspective of my view and others may be looking at it differently. Lets look at it from other perspectives. I am the lender and Pyriel comes in and submits this plan would I do it? You bet I would, investment $88,000. money made in 5 years $31972.80 a return = 36%. Plus I have the mortgage on the property.
Lets look at another prospective, the real estate agent, this is a good one, buyer meets seller in my office and $110,000. sale at 7% for being a middle man = $7700.00. No investment. Sweet! Right off the top!
I am an investor I have $32,000 and throw it in my TSP and take a chance, it averages 8.5% for 5 years, no worries and not much effort annual return = $2720 per year end of 5 years $45,600. Interest rates rise price of house deteriates to $100,000. Suddenly the property looks inticing.
I could keep going here but I do want to point out another thing about your spread sheet. The annual 36, 48, & 60 month profits are all wrong in my opinion as you forgot to subtract the initial investment of $32,000 to purchase the property.
Oh by the way! Coffee and Redbull in the morning wow! Just a thought but maybe you need to read Tekno's little ditty about the class and the jar, it makes a lot of sense.
Pyriel, please do not take offense to this. I am just trying to give you my prospective of what Isee. Don't get me wrong here that I am totally against people doing what they enjoy. The Real Estate business is a dog eat dogenvironment and some people love it.
Have a good day in the markets everyone!
Hi Pyriel! First I would like to commend you for putting something like this out to download for others to view. In an appreciating market this works fine. I also figure that you may be somewhat more savy then other investors I have worked with. One thing I would like to say is it takes all types of people to make the world go around and one thing I have learned is we all have different jobs and different interests.
I down loaded your worksheet last night and it took me the time to read the first page to decide if I would invest in this or not and I decided like you did that I would not. Your initial investment is $32000, your passively yearly income is $1970.76. This is a .0651% return for the money invested.
The rest is just an assumption that the property is going to appreciate and your going to make money on the sale in the future. The money to be made is not in the operation of the property but in the resale of the property itself. If I was invested in this property I would put it on the market immediatly and sell it as soon as possible. Why? The annual profit deteriates annually in every year of ownership. In other words every year you hold the property it makes you less profit. I could beat this with a stick all day but Im not going to.
I did notice something else and thats depreciation and captial gains. I notice you straight lined the depreciation. THis possibly is a good thing. If you did what this is showing and sold this real estate at the shown value, the depreciation would, or a portion of it could become considered ordinary income and the $15,000 made on the sale would immediatly become capital gains and have a 10% minimum tax in the year sold or higher depending on where you set in the tax bracket. This possibly explains why you would be wanting to repurchase other property and also remortgage. This all works fine until you decide that you don't want to buy anymore.
This is only a perspective of my view and others may be looking at it differently. Lets look at it from other perspectives. I am the lender and Pyriel comes in and submits this plan would I do it? You bet I would, investment $88,000. money made in 5 years $31972.80 a return = 36%. Plus I have the mortgage on the property.
Lets look at another prospective, the real estate agent, this is a good one, buyer meets seller in my office and $110,000. sale at 7% for being a middle man = $7700.00. No investment. Sweet! Right off the top!
I am an investor I have $32,000 and throw it in my TSP and take a chance, it averages 8.5% for 5 years, no worries and not much effort annual return = $2720 per year end of 5 years $45,600. Interest rates rise price of house deteriates to $100,000. Suddenly the property looks inticing.
I could keep going here but I do want to point out another thing about your spread sheet. The annual 36, 48, & 60 month profits are all wrong in my opinion as you forgot to subtract the initial investment of $32,000 to purchase the property.
Oh by the way! Coffee and Redbull in the morning wow! Just a thought but maybe you need to read Tekno's little ditty about the class and the jar, it makes a lot of sense.
Pyriel, please do not take offense to this. I am just trying to give you my prospective of what Isee. Don't get me wrong here that I am totally against people doing what they enjoy. The Real Estate business is a dog eat dogenvironment and some people love it.
Have a good day in the markets everyone!
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