At times like these when the opportunities to flip properties at trustee sale are available, it is a great way to make superior returns with limited risk. Today we will take a careful look at how it is accomplished.
Irvine Home Address … 2 Elderglen 60, Irvine, CA 92604
T-sale Home Price …… $387,294
{book1}
Millionaire! Billionaire! Trillionaire!
Hardly surprising, you might consider
Loyalties go to the highest of bidders
What's my opinion? I'd give you ten to one
Give me a million, a franchise on fun
But there are millions who often get nowhere
And there's just one secret I think you should share
Tell me! tell me! How to be a millionaire
Tell me! tell me! How to be a millionaire!
Millionaire! Billionaire! Zillionaire!
ABC — How to Be a Millionaire
Trustee Sales
Back in January, I went through the basics of Trustee Sales:
Foreclosure 101: Vesting Title
Foreclosure 101: Non-Judicial Foreclosure
Foreclosure 101: Mechanics of a Trustee Sale
Next we are going to explore the various ways you can participate in the clean up from the Great Housing Bubble:
Foreclosure 201: Buying a Trustee Sale Property as a Primary Residence
Foreclosure 201: Buying a Rental at Trustee Sale
Foreclosure 201: Flipping Trustee Sale Houses on Speculation
Foreclosure 201: Flipping Trustee Sale Houses to a Buyer in Escrow
Foreclosure 201: Buying Trustee Sale Properties Using Conventional Financing
Rental Returns
As I discussed in Buying a Rental at Trustee Sale, capitalization rates of 5% to 6% are common today, particularly in Riverside County or other areas were the bubble has deflated. The real benefit of cashflow investing in real estate is that the income stream is perpetual, and it generally increases over time with local wages. However, 5% to 6% a year is small compared to the short-term returns investors can obtain through flipping trustee sale properties.
Current returns favor flipping
So why not flip the property and make more than 5% in 120 days? Why not take that capital and flip in and out of four properties a year and make more than a 20% rate of return? Cashflow properties rarely offer investors rates of return exceeding 20%.
The only reason is lack of opportunity, and for the next three to five years, there will be no shortage of flip opportunities as California turns over a significant percentage of its housing stock. Perhaps after this debacle is truly behind us and we have mopped up the foreclosures, keeping money tied up in long-term hold properties is warranted, but until the foreclosure wave recedes, investors with the cash to play in this market should consider doing so.
Measuring returns from flipping
How great are the returns from trustee sale flipping and how are returns measured? The answer is: It depends. Returns are tremendous for those who have the time to do their own research, go to the auctions, manage renovations, market the property, and perform a host of related tasks. As these tasks are delegated, the various players take a cut and returns decline. If a flipper wants to delegate all tasks to third parties including management of the entire process, about half the profit goes to the management team, depending on the operator and the deals they offer.
Calculating the return on investment for trustee sale flipping involves two simple formulas we explore below:
Trustee Sale Flipping Annual Rate of Return = Individual property Investment Return X Number of Investments per year
For example, if each property flip returns 6%, and if that money can be flipped three times, the annual rate of return is about 18%. Both the individual property investment return and the number of investments per year can be managed to optimize the annual rate of return. The remainder of this post explores how this is accomplished.
Number of investments per year
Calculating the number of investments per year is as follows:
The goal of investment management with trustee sale flips is to minimize both Days Invested and Days Idle.
Days invested
There are three main tasks that must be accomplished between the date of acquisition and the date of disposition:
Preparing the property for sale involves renovation and clean up. Many flippers concentrate on turn-key properties to reduce preparation time to less than one week, but this also raises bids on those properties.
Offering a property for sale and negotiating offers generally cannot overlap with preparations for sale. If the property is a wreck, it will not photograph or show well. If old photos are on the MLS or available from other sources, some marketing can occur, but it is difficult to prepare and market at the same time. A future post on flipping to a buyer in escrow discusses how this step can be removed entirely.
The opening of escrow to a closing and obtaining the cash from closing usually takes around 45 days. Lender processing time is usually the limiting factor, and lenders will not start that process until the property is in escrow.
The amateur identifier: high resale asking prices
High asking prices are a sign of an amateur flipper who has not considered the time value of money. Fools try to hit home runs; pros try to hit many singles. Flippers swinging for the fences invariably spend too much time marketing the property often spending 90 days fantasizing before they lower their price enough to make a sale. Even if the sale nets more money, the opportunity cost of missing another turn negates the gain.
Idle days and the minimum investment return
The most important financial variable under complete control of the investor is the minimum investment return. Most investors react by declaring their desire to make 20%-30% on the transaction because they see the resale discounts at auction. They forget about sales commissions, back taxes, closing costs, carry costs, renovation costs, transfer taxes and other expenses. The actual profit per deal is substantial, but not as substantial as some believe.
For an investor to make a large minimum investment return, the bid must be very low relative to comps. Other investors examining the same opportunity settle for lesser returns, and the result is higher competing bids. The greedy investor rarely succeeds at auction.
Jousting with Windmills
The desire of investors to obtain outsized returns creates activity with no results, and it sends people to auctions with little or no chance of success. Perhaps attending auctions is entertaining for some, but without results little value is garnered.
Idle money
If the required minimum investment return is too high, finding a deal that matches investment parameters becomes increasingly difficult, and such deals may not be present in the market for long periods of time. Each day money sits idle lowers the rate of return. If it takes two or three months to acquire a property, an investor missed a potential flip. In short, it is wiser to target three turns per year at 6% than a single turn at 18% because the home run investment may never materialize.
The desire to maximize profit on each transaction must be tempered by the desire to put money to work and obtain a superior overall return through increased velocity.
How low should you go?
Few investors demand returns that are too low. The return demanded impacts how long money is idle, but it has no influence on how long money is tied up in the various transactions. it is practically impossible to obtain more than five turns in a single year; three is more reasonable. Lowering the required return minimizes idle time, but once idle time is at its practical minimum, continued lowering of the investment threshold simply increases risk and lowers returns.
Minimum returns versus actual returns
So far the focus has been on establishing a threshold for minimum return. This figure is critical because the minimum return in concert with other costs determine the maximum bid price at auction. Bidding at trustee sale is very similar to bidding on Ebay. When you bid on Ebay, you can establish a maximum bid, and the system will automatically outbid competing bidders by a small increment until your maximum bid amount is reached. Trustee sale bidding works the same.
In the real world, properties rarely sell at the maximum bid amount; either the property is bid higher than the maximum, or the property is acquired at a discount, and on occasion, this discount is quite significant. A minimum acceptable return may be 6%, but it is realistic to obtain 10%, 12% even 15% or more net of costs and fees. The possibility of outsized returns on bargain properties is the allure of trustee sale flipping. Also, since any property may become a bargain (it all depends on other bidders), each transaction has random upside potential. The incentive is to be involved in as many transactions as possible and turn money over as quickly as possible.
IHB Trustee Sale Investor Reports
Today's featured property is a trustee sale flip active in the market. It is a great example of the type of opportunity available today.
Prior to the sale, the published opening bid was $505,449. It was dropped just before the sale, and an investor purchased the property for $290,000. If we had been there, we would have pushed this investor up to $300,000 before we would have walked away. It is likely this would have been a successful acquisition.
Our report contains the same basic information as the other reports, but with a flip, the only items of concern to investors is how much they will have to spend and how much they will make.
The capitalization rate is presented for reference, and on this property it is very good by Irvine standards assuming this could be rented for $2,150 per month. That seems reasonable for an updated 3/2. But it really doesn't matter because this will not be held for rental.
Page 2
The second page details the costs. The trustee sale fees are based on the acquisition price plus any current or back taxes owned on the property. This tax number can be quite significant on an abandoned property or one where the owner has squatted for a long time.
The real estate improvements are often quite significant as well. Most often, these properties will be purchased without seeing the conditions inside. It is wise to budget for a complete cosmetic restoration. There is always the risk of more extensive damage due to water leaks, mold, or damage caused by the foreclosed owner.
The back taxes are easily obtained from the OC tax collector's website.
Carry costs are often overlooked by flippers, but the expenses of taxes, insurance and HOA fees are not suspended during the brief period of ownership. The carry costs depend completely on how long the property is owned by the investor. The shorter the holding time the better.
Many properties only require minor clean up or perhaps a cash-for-keys arrangement with an existing tenant.
Based on comparable sales, the IHB projected this property would sell for about $380,000. With our constricted inventory, this investor has managed to find a buyer willing to pay almost $400,000. That would turn a 6% profit into a 12% profit. The flipper must be very happy.
If the IHB had purchased this for a buyer waiting in escrow, we would have sold the property for $372,106. The property would have been sold in 45 days instead of 105, but the profit would have been only 6%. That is the way it works out some time. The buyer would be very happy, and the investor would have the funds back to turn another flip. The assurance of a quick sale for a known price is worth it for the investor. It really is a win-win.
The investor that purchased today's featured property is going to make a very nice return. This is better than average, but not unreasonable or unusual. The main limiting factor today is the lender's willingness to foreclose. The amend-pretend-extend dance is not over, and although more properties are coming to market, most lenders are prefering denial to action. That will change.
Irvine Home Address … 2 Elderglen 60, Irvine, CA 92604 
Resale Home Price … $387,294
Home Purchase Price … $300,000
Home Purchase Date …. 3/3/2010
Net Gain (Loss) ………. $64,056
Percent Change ………. 29.1%
Annual Appreciation … 106.6%
Cost of Ownership
————————————————-
$387,294 ………. Asking Price
$13,555 ………. 3.5% Down FHA Financing
5.19% …………… Mortgage Interest Rate
$373,739 ………. 30-Year Mortgage
$81,937 ………. Income Requirement
$2,050 ………. Monthly Mortgage Payment
$336 ………. Property Tax
$8 ………. Special Taxes and Levies (Mello Roos)
$32 ………. Homeowners Insurance
$209 ………. Homeowners Association Fees
============================================= 
$2,634 ………. Monthly Cash Outlays
-$342 ………. Tax Savings (% of Interest and Property Tax)
-$434 ………. Equity Hidden in Payment
$28 ………. Lost Income to Down Payment (net of taxes)
$48 ………. Maintenance and Replacement Reserves
=============================================
$1,935 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————–
$3,873 ………. Furnishing and Move In @1%
$3,873 ………. Closing Costs @1%
$3,737 ………… Interest Points
$13,555 ………. Down Payment
=============================================
$25,039 ………. Total Cash Costs
$29,600 ………… Emergency Cash Reserves
=============================================
$54,639 ………. Total Savings Needed
Property Details for 2 Elderglen 60, Irvine, CA 92604
——————————————————————————–
Beds: 3
Baths: 2 baths
Home size: 1,165 sq ft
($343 / sq ft)
Lot Size: n/a
Year Built: 1978
Days on Market: 8
MLS Number: S612589
Property Type: Condominium, Residential
Community: Woodbridge
Tract: Gl
——————————————————————————–
This property is in backup or contingent offer status.
RARE TRUE SINGLE STORY TOWNHOME WITH NO ONE ABOVE OR BELOW; END UNIT; HUGE YARD WITH CONCRETE PATIO AND GRASSY AREA; GREAT OPEN FLOORPLAN: LIVING ROOM WITH FIREPLACE OPEN TO OFFICE WITH DOUBLE DOORS AND TO DINING ROOM; NICE KITCHEN WITH WHITE CABINETS AND GRANITE COUNTERTOPS; LARGE PANTRY, BREAKFAST BAR AND GARDEN WINDOW. NEW PAINT, LAMINATE FLOORING THROUGHOUT, MIRROR CLOSET DOORS IN ALL 3 BEDROOMS. FULL SIZE LAUNDRY CLOSET. 2-CAR CARPORT RIGHT NEXT TO THE UNIT. READY TO MOVE IN.
Former owner
I am surprised by the number of divorcees who spent their houses. Perhaps I shouldn't be. The stereotype of the irresponsible, entitled, spendthrift ex-wife is based on observation (from shows like Real OC Housewives), and the property records provide plenty of anecdotes. It is what it is.
- On 12/4/2003 it appears the wife bought out the husband by purchasing the property for $380,000. Of course, she used 100% financing with a $304,000 first mortgage and a $76,000 second.
- On 10/18/2004 she needed some spending money, so she opened a $90,000 HELOC.
-
On 1/31/2006 she refinanced with a $467,455 first mortgage.
- One 5/12/2006 she obtained a $27,000 HELOC.
- Total property debt is $494,455.
- Total mortgage equity withdrawal is $114,455.
The lender didn't waste any time once they decided to foreclose.
Prior Transfer
Recording Date: 03/03/2010 Sales Price: $290,000
Foreclosure Record
Recording Date: 02/02/2010
Document Type: Notice of Sale
Foreclosure Record
Recording Date: 10/29/2009
Document Type: Notice of Default
The All-Cash Problem
The reason more people don't get involved with flipping houses is that it requires so much money. The market is all cash. The number of people with available liquid reserves to participate in this market is small.
Over the last several weeks, we have been contacted by several buyers who would like to purchase high-end properties at auction. They have large down payments and stellar credit, but they don't have enough cash to close the deal. We have also been contacted by many people wanting to invest in this market, but individually, they either don't have enough to participate in more expensive markets like Irvine or they don't want to put all their money in one property bear the property risk alone.
Perhaps it would be beneficial to pool investor funds to spread risk and service the buyers we know want high-end properties and perhaps get involved with flips like today's featured property. We are not soliciting investors for such a venture as that would be against SEC regulations, but I do wonder, do you think a blind-pool investment fund is a good idea?
The scheme can be named something like “The Irvine Housing Lotto”
http://www.crackthecode.us/images/play_here.jpg
Why only budget $500 for cash for keys? As a former tenant in a foreclosed property, I would have laughed at that offer and stayed the 90 days allowed by Federal law. This would have pushed your timeline back 90 days. When our rental was on the auction block, we had many investors come by to find out as much info about our lease and the house as they could. The bank ended up taking the property back at auction and paid us $10,000 + non-payment of rent for 6 weeks to move out.
The budget in that line item is for clean up or cash-for-keys. In this particular instance it was only for clean up. Most tenants will move out for $1,000 to $1,500. All tenants are liable for rent during any waiting period, so there is compensation to the new owner. The bank seemed pretty anxious to have you out if they made you that deal. It would have been more cost effective to wait you out, evict you, then sue you for the rent you didn’t pay.
There is a huge difference between having money owed to you and being able to collect.
True, but the tenant is probably more solvent than the former owner. At least the tenant was used to making the payment, the squatting former owner was not.
I got $4000 for move-out, i’ve seen friends get $2500-$3500, this seems to be average on the foreclosure forums.
$10k is like a jackpot, congrats on that one.
A couple grand seems typical-ten grand is way above average methinks. Congratulations on hitting the jackpot.
First you get the money, then you get the power, then…
I would like to see some Trustee Flips profiled that have not exactly gone as planned. Or are the venture capitalist investors (not speculators – investors) supposed to conclude that this is a can’t lose proposition?
As far as the spreading of the risk goes, one could take this pool of Irvine venture capital and split it up into something called “traunches” where each traunch gets a different interest rate depending on the risk. We’ll put the really crappy trustee flips in traunch 3.
I have some money to gamble and I cannot think of anything more productive to invest in than unproductive house swapping. I am ready to recruit family, friends, and coworkers too. Let’s get this casino rolling – why should Vegas have all the fun?
The property I profiled in Buying a Rental at Trustee Sale did not go as planned. The flipper will still probably make a little money, but not as much as they hoped.
Flipping from the wholesale market is much easier than flipping from the retail market because the entry point to the transaction is 20% lower. Retail flipping requires rampant appreciation whereas wholesale flipping requires cash plus an accurate estimate of resale value. Retail flipping merely prices families out of the market whereas wholesale flipping returns properties to the market, most often at a discount to retail.
“Wholesale flipping”
Come on now, IrvineRenter. Do you think that 390K condos are somehow pricing families back into the market? This notion of wholesale flipping seems more a euphemism for vulching. Your post mentions these high end “investors” who want to play in the market but need more money to get in the door. Are these investors contacting you wanting to do God’s work and get families back into these homes? Is it some kind of charity venture to help families who have been priced out? These good Samaritans should stop by the observations and tell us all about it – I’d love to hear about all the families they are helping out.
These flippers are not adding anything of value to the property. So they run a comb through the place and expect a 100K profit for all that “hard work”.
If anything, these folks are keeping prices artificially high with their speculative demand influencing the market.
The high-end buyers are people looking for a family home. The investors are people looking to make money. The idea is to make the investors money while putting buyers into homes at prices under comps. Both parties benefit from such an arrangement.
Wholesale flippers may or may not add value to the property depending on whether or not it needs renovation. They make money on the arbitrage between prices in the wholesale market and prices in the retail market. If this profit potential did not exist, banks would be buying every property at auction because no investors with cash would be interested.
The flipper making 110K on this property didn’t do very much to make that money. Basically they went to auction with some checks, signed some paperwork, perhaps did some cosmetic renovation, and now they can sell in the retail market and make much more. The flippers did not create that situation, they merely took advantage of it.
Part of what I mentioned in the post is that if a buyer had preemptively approached us and committed to buy the property before the auction, we would have purchased it and sold it to them for a discount.
I would also argue that this does not keep prices artificially high because we are returning a house to the market that has been tied up in the bank neverland of amend-pretend-extend. Releasing inventory to the market pushes prices down, not up.
I am curious, what do you think should be done with these properties? Let the banks flip them? They have to go to auction. At least I am offering buyers an opportunity to purchase under comps. Neither banks nor other flippers are doing that.
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.
I am really glad you brought this point up David. I was thinking the exact same thing, except you have made the point much more eloquently than I could have.
I don’t think the housing bubble will be over until this behavior of investors, errr . . . speculators, trying to flip homes ends. And it can’t end soon enough.
here is your example of a flip gone bad:
http://www.ocreader.com/forum/viewtopic.php?f=89&t=430&p=7253#p7253
Sorry, Costa Mesa, not Irvine, though
I don’t think this was a flip, but Jim the Realtor (and a local TV station) over at bubbleinfo.com have been following a complete clusterfuck of a trustee sale purchase.
Basically what happened was a builder wanted to build at a slightly higher density than is normally allowed. To do this, they had to build a affordable housing unit. The city withheld the certificate of occupancy on the final home in the tract (used as the model home) until the affordable unit was built and occupied.
Well, of course the builder went bankrupt and the affordable housing unit was never built. But the model home was purchased by a third party (who leased it back to the builder to be used as the model). Once the builder went bankrupt, they were unable to occupy the house because the affordable unit wasn’t built. So they stopped paying on the loan and eventually went to the trustee sale-where some idiot actually purchased it. He can’t occupy it either because the affordable unit (on land still owned by the bankrupt builder) still hasn’t been built.
Buyer beware at these things. You have to do proper due dilengence or you will get your ass snakebit.
There is very little that can go wrong when you are buying properties at a 20% targeted discount with 100% cash (no leverage). A worst case scenario is you screwed up the valuation and maybe you lose 2-5%. Big deal, since it’s 100% cash, you learn your lesson and make it up in the next all cash flip.
Now I am agreeing with Planet Reality. What a strange comment thread….
So why are y’all wastin time on this blog? There’s money in them hills! Looks like plenty of money still sloshing around to try and screw the next guy over. Let’s not waste a minute!
“We’ll put the really crappy trustee flips in traunch 3.”
I will start a rating agency and if you pay me enough, I will rate even the crappy stuff AAA. Then you can sell it to pension fund managers.
I recommend targeting pensions backstopped by government agencies. Their managers are easy to bribe, since if the AAA crap fails, the public pays for it and the manager still collects his exorbitant paycheck!
Since the trustee flips are all cash it is impossible to get a worthless traunch 3. Debt is what creates trash, you guys are missing the point here.
So if I put 100K into the lotto pool for someone to take and use to buy a trustee flip and that flip ends up losing money – what you are saying is that it is impossible for me to lose money because no debt was involved. Makes perfect sense.
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?
Ok so Major has the ratings covered. Now we just need a hedge fund to place our secret bets against the traunch 3 trustee flips ( for insurance and risk mitigation purposes only of course WINK WINK ). We will even let them select the flips themselves that they think are most likely to fail.
The low interest rates are working, folks! Quantitative easing and stimulus have saved us. It’s Time For a Celebration.
South L.A Again a House Flipping Hot Spot
House Flipping in South L.A That’s so Right
YEEEEEEE-HAAAAAWWW!
My o my, look at what the Dr. wrote today (Dr. Housing Blog…the link from that site got me here)
“The fact that we have tens of thousands of people able to pay their mortgage but not doing so tells us that many people are simply following the path Goldman Sachs has laid out. Game the system. Screw the majority. This is how the game is currently being played. Yet this isn’t sustainable. Just look at how the market is reacting with the Greece bailout (you do realize we are partially bailing them out as well?). The current system is rewarding the wrong people and the majority in the public gets this and that is why you see data like the above in surveys. Strategic defaults are merely an extension of this. What people are saying is screw this mortgage and walking away (not before they yank out as many months of free rent before the bank moves on the property). Banks have been doing this kind of crony robbery of the public for decades.
Do I blame people for walking away? Not at all. Without any actual changes to the current financial system why should banks take the corrupt route and expect people to honor their responsibilities? It is the height of hypocrisy but that is now synonymous with Wall Street.”
Two wrongs don’t make a right, but when you are battling to save your A$$, you have to do what is right long term….the WISE people know this.
Things are getting ugly over in Greece….
If the austerity measures fail in Greece and then the government defaults, the entire Eurozone could collapse. This could be a trigger to the start of a double dip world wide recession if a solution isn’t found double quick like.
Had you considered that it might be the start of coups, civil wars, and the redrawing of boundaries?
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.
Thanks for the link David.
Yes, it is very sad about the state of affairs in Greece. What we see is the WORLD being close to collapse because of greed. The banksters are bilking EVERYONE of their labors. The U.S. just happens to be leading the charge.
If things don’t change, there will be riots in America, the big difference is…in America, there are more guns than people, and I wouldn’t want to be out there when the bullets start flying, and if the banksters aren’t controlled and soon, it’s EXACTLY what is going to happen…americans killing americans. This time it won’t be to free the black slaves, it will be to free the WORKING slaves…the same ones who are getting sick of providing for those whom do not, or will not WORK to support themselves (this includes the rich, just having money/watching investments does not = work.
Beware the two class system that is following the two party political failure.
Take a look at these articles:
http://makingsenseofmyworld.blogspot.com/2008/02/six-degrees-of-leverage.html?source=patrick.net
http://makingsenseofmyworld.blogspot.com/2007/05/low-interest-rates-as-destructive-as.html?source=patrick.net
What do you think?
IrvineRenter,
You mentioned that the banks moved quickly to DTS after the NOD. How long was the free rent before the NOD? The average of 417 days or was the bank’s calculation that the condo value will never be the old loan value. In other words, no chance of payback on the old loan.
Stock market taking a dive after the good news of the Greece bailout sent new money into the stock market. Let the culling begin.
When do you think the commerical RE will collapse and how likely is the commerical RE collapse to bring down the housing market via restricted money supply/liquity?
I wonder if some entrepreneurs will start up a business that will securitize foreclosures the way that LendingClub and Prosper did for consumer debt.
Krunch Investments Inc.
A Real Estate Investment Trust Fund.
Closed end with 50 shares at $25K each. Operating fund at 1MIL.
Makes lots of sense to me. You know my email address.
Throw another 10.6 Billion $ down the toilet
The just round of GSE repackaging bad loan and issuing implied guaranties on the CMO. The chickens have come home to roost (non-paying loans FC’ed and investors demanding to get paid). The govt must help their backers, GS and other banksters.
Get use to it. Both parties are in the banksters’ hip pockets. Just a dog and pony show on Capitol Hill to show how tough the Demorats and Republicrats are before they draft tough regulations with riders to indemnify the banks. Let the next round of fleecing begin.
That’s part of the continued unlimited line of credit that our idiot leaders pledged on Christmas Eve to keep this housing ponzi scheme afloat. Where is the outrage?
What happened in Greece today just might happen here if this bullshit continues. Our leaders in this country are absolute pieces of excrement for letting the common citizens get gang raped by Wall St., banks and the special interests.