Irvine Housing Blog

It’s not a question of what should be done with the properties - let the highest bidder take it.  What the banks need to stop doing is loaning ridiculous amounts of Ponzi scheme cash to people.  Interest rates need to go back to 8% or higher.  California should also be taxing the hell out of these flipper’s profits to prick the speculative demand that has the market running amok and on course for another crisis.

I just take exception with equating asset speculation with investing.  The capital beiing invested by these people is a malinvestment being used to pay for an unproductive activity like house swapping.  Once the flip is complete, the house’s intrinsic value remains unchanged. It may have a brand new sparkly counter in the kitchen but it’s intrinsic ability to provide shelter remains unchanged.

Releasing inventory does not bring prices down in and of itself.  Restricting credit and requiring down payments does a way better job of that.  The problem is they have created a mini bubble with the low interest rates and FHA to enable a new mutation of subprime lending which is what your investors are taking advantage of.  Without the loose credit these trustee sales would be selling for pennies on the dollar.

Wow, unbelievable…two times in one day I totally agree with your posts David…is that really you posting?

I do not believe flippers help the market, they only hurt it…unless they are taking a haircut on every home…and they aren’t, they are making moeny because the inventory is being controlled by the banksters.

The law should be followed. If you can’t pay….6 months and out you go, and shortly after that, the home should be back on the market, but that isn’t happening. Instead the banksters leak a few homes, which are bought for CASH, and then held cranked up a few thousand (sometimes 100+) so the “investor” makes money simply by buying and flipping. Speculative buying causes huge problems, and to this day, still are.

Well and let’s not forget about the unfair rules that the banks live by.  They can just bid endlessly at the courthouse steps and clawback all these properties using money that they don’t have.  We all know that these institutions are insolvent - they have no business setting the minimum bids.

What should be happening is that some family picks up the house at auction for a cheap price and the bank gets to take a bath and go out of business.

It makes no sense to allow these insolvent entities stockpile houses that are being bought with other people’s money, take bailouts, withhold inventory, and ignore squatters in the high end houses.

The flippers are just acting as middlemen - using their ill-gotten gains from the bubble to rip off their neighbors some more during the downturn.  They are no more noble than ticket scalpers.  I don’t care what you call it wholesale, retail, whatever.

No, what I’m saying is that you may lose 5%, but it’s impossible to lose all your money which is what you are suggesting in your ridiculous traunch 3 comment.

You are right.  You will probably not go to Zero.  That should make our investors feel better.  Tell them they only lost 10% of their money - beats losing 100%. PlanetReality is in charge of customer service.

You may also gain 10-20%.  It’s much easier to make money when you have lots of money.  Welcome to the world of non leveraged investments.  Your alternative is a 0.5% money market that loses you money over the next 5 years. 

If someone with cash can turn over 5 properties a year you are looking at a 30 - 100% return.  The risk are low but of course you need to have a lot of money to begin with to do this.

No need for a 0.5% money market account. I got an email from American Express encouraging me to take advantage of their HIGH YIELD SAVINGS ACCOUNT that pays 1.28%! Amazing what they can call ‘high yield’ these days.

A local bank was advertising municipal and corporate bonds paying anywhere from 3 to 15%. I’m curious to find out what is paying 15% right now.

See, PlanetReality, you’re playing the game wrong.

You’re not supposed to go all cash and minimize risk on your own money.

You’re supposed to go all in with some OPM of some kind.

100% loss of OPM is better than 5% loss of your cash is it not?

Nah, they’ll print a sh!t load of paper money instead.

While the Euro Central Bank could print money the way our Federal Reserve Bank did, the fact that the European Union is not a one nation makes printing money harder for the benefit of one little country such as Greece. While there was a strict requirement on deficit spending that countries had to agree to in order to join the Euro currency regime, the Union appears to have lacked the means to enforce such requirement. Germany is reluctant to bail out Greece at the expense of Germans…etc. Heck West Germans were reluctant to even help the former East Germans.

I agree, this is yet another reason why the US is in such good shape despite what any inward looking chump wants to b!tch about.

It’s all relative, the US is the safe haven of the world and has near unlimited ability to keep the game going.