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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Aug 31, 2006 7:45 am Post subject: Interesting chart on US home values... |
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Discuss.... _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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J-Ro PityDaFool Who Posts This Much
Joined: 13 Jan 2003 Posts: 5662 City: Rocklin
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Posted: Aug 31, 2006 7:54 am Post subject: |
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Well the red "x" clearly shows a downward trend. However, I disagree with the red "x". _________________ Steal My Book
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Aug 31, 2006 8:08 am Post subject: |
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J-Ro, the red X knows all. Bow to the red X and give praise!
It is just fine over here. Maybe some porn filter at your work at work? _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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ontrider Ladies Man
Joined: 30 Jul 2003 Posts: 16491 City: Russia
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Posted: Aug 31, 2006 9:28 am Post subject: |
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chavez, I can't see it either. But I agree with J-ro, the drastic incline in misuse of attached internet files in the US is causing the market to plummet and skyrocket at the same time, equally a double line graph and ultimately an X! |
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Aug 31, 2006 9:49 am Post subject: |
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ontrider, you guys both suck. It's working fine for me.
Anyhow, quitchabitchin! |
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J-Ro PityDaFool Who Posts This Much
Joined: 13 Jan 2003 Posts: 5662 City: Rocklin
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Posted: Aug 31, 2006 10:37 am Post subject: |
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I think your graph goes against your point. Look at 1940-1946. Market went up 62% and after a small dip has never gone below the high in 1948. In 1998-2006 it went up 82%. Factor in inflation and the value of the dollar and POOF, your theory goes to "Bolivion." _________________ Steal My Book
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Aug 31, 2006 12:02 pm Post subject: |
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J-Ro, I made no points.
That chart does factor inflation already. The correct way to read that chart is post-inflationary returns on that particular asset. 1890's 100 points is the benchmark.
So (very rough calculation), 99 point increase / 116 years = less than 1% per year gain (after inflation).
John had a better idea - take away the caption, and just leave a chart with dates & numbers - ignore the fact that these are homes. Then ask: is this an investment you would want to hold long term? _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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J-Ro PityDaFool Who Posts This Much
Joined: 13 Jan 2003 Posts: 5662 City: Rocklin
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Posted: Aug 31, 2006 12:29 pm Post subject: |
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chavez, I just assumed your point was your normal opinion on the housing market right now. I also didn't read the fine print of the chart, although I do remember my grandparents saying houses were $10k back in the day. I was thinking they were full of stuff for a second. Interestingly, this makes it look like the increase as of late is more of a catch up in what values should be. ie: have they simply been extremely undervalued for the last 100 years in comparison to other investments. Thats if we are considering them investments and not places to live.
However, remove the last 5 years as an anamoly and the graph could be a graph of American prosperity. Note the drops after WWI and during the depression as well as after the 70's and after the 80's declines. The opposite being the prosperity after WWII, the start of the Industrial Revolution, the roaring 80's and now. _________________ Steal My Book
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Aug 31, 2006 12:42 pm Post subject: |
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J-Ro, I agree on the prosperity chart.
If this chart was localized for our area, the top right would be near twice as tall.
The title of the book is "irrational exuberance". _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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smokedog2 Outlaw
Joined: 02 Dec 2004 Posts: 210 City: Cincinnati
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Posted: Aug 31, 2006 12:46 pm Post subject: |
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If you bought in 1960 and sold in 1997 you, on average, made nothing.
If you bought in 1997 at 110K you are now worth 200k. So my 1997 300k is worth just under 900
It is for sale
SD2
Oh, looking backward, no one should have bought a house since 2000 to be in a "good" investment.
Interesting but I'm not sold. I am so fed up with CEO compensation and fraud that I'm tempted to leave the market in protest. It is getting ridiculous. _________________ If you are going to be stupid, you gotta be tough |
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Aug 31, 2006 12:48 pm Post subject: |
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SD - a house is a place to live not an investment.
More fun... |
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J-Ro PityDaFool Who Posts This Much
Joined: 13 Jan 2003 Posts: 5662 City: Rocklin
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Posted: Aug 31, 2006 1:01 pm Post subject: |
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smokedog2, Damn, I bought in 2000. I am screwed.
(Approx. $250k in equity over 6 years, Damn that was a bad bad move) _________________ Steal My Book
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smokedog2 Outlaw
Joined: 02 Dec 2004 Posts: 210 City: Cincinnati
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Posted: Aug 31, 2006 1:28 pm Post subject: |
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At least it is not a red X
Do you have one for the market w/ inflation cut out?
Gov Bonds? _________________ If you are going to be stupid, you gotta be tough |
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Aug 31, 2006 1:45 pm Post subject: |
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smokedog2, I will be working on a few in the days to come as I'd like to overlay the S&P onto that chart.
I already know that the S&P returns are going to blow the doors off of the home values, but I think it will be interesting to visually see the trends and how they stack up. _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Aug 31, 2006 3:33 pm Post subject: |
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Here is the S&P versus Home Values, inflation adjusted, for the past 15 years. _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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J-Ro PityDaFool Who Posts This Much
Joined: 13 Jan 2003 Posts: 5662 City: Rocklin
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Posted: Sep 01, 2006 6:27 am Post subject: |
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Another reason for the recent run up versus historical data could be that in the last 20 years (But especially the last 5) people have started to see residential Real Estate as a form of investment or income stream. Causing the availability of affordable housing to decline thus increasing values up until a level of unattainability is achieved. Which is the point we are at now as inventories increase due to, IMO, three different types of owner. The person who got in over their head, the investor who is no longer receiving an income stream or wants to bag profits, and the normal selling cycle inventory. _________________ Steal My Book
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Sep 01, 2006 8:23 am Post subject: |
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Quote: | as inventories increase |
Keep in mind, that we are flirting with all time highs (population adjusted) of available inventory. (Yesterday's count = 17,723)
The flippers are a noteworthy percentage of that number, as are the over their head folks. The normal cycle folks might make up the final quarter to third of the total for sale homes - assuming that normal = maybe 3-5,000 homes on the market (in the overall area) during the summer months.
Anyhow, everything is just speculation for now as the real story is just on the horizon. We have a cycle of ARM resets that are just now beginning to take place - and how that plays out is anyone's guess. Once that ARM reset wave is over, then we will hopefully see stability again. Until then, it could be painful for some who used more "creative" ways to "purchase" a home. _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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J-Ro PityDaFool Who Posts This Much
Joined: 13 Jan 2003 Posts: 5662 City: Rocklin
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Posted: Sep 01, 2006 8:50 am Post subject: |
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chavez, I think, and this is just speculation so go with me here, that your ARM reset cycle may not be as bad as everyone thinks. Here's why. The people who really had to stretch to get into a home went with an ARM, I think we can agree on that. However, most people I know of that did that, actually went with 1 or 3 year Arms in order to get an even lower first rate. The only people I know that got a 5 year ARM were those who were expecting an increase in income. So I think we have seen most of the ARM's already come due (I have seen this first hand unfortunately) and that is what was fueling the remainder of the re-finance business in the last 3 years. Also, we have seen 6 straight weeks of lower interest rates for home loans and with the Fed stopping it's rate increases (They had no choice due to the markets laughing in their faces at the inverted curve), the 10 yr rate is going to continue to trickle downward.
Just my 2¢ _________________ Steal My Book
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Sep 01, 2006 9:32 am Post subject: |
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J-Ro, I will dig up the numbers, but IIRC the data I saw showed the # of impending ARM resets due over the next 4 years to be astonishing.
The folks you know were among the smarter of the ARM users. There are plenty of not-so-smart ARM, neg am, and I/O folks out there that did 100% (or more!) financing on something they could barely afford even with the teaser intro rate. They did not look at what the payment could be after reset, and even if they did, (as you mentioned) they thought well hell the market won't ever come back down and I will just refi - probably because some inexperienced or uncouth realtor/mtg broker told them that home prices never decline and yay NASDAQ 5000.
Anyhow, there are literally tens of thousands of these folks in the Sac area alone. When the time comes, and they cannot refi as their LTV is 110+%, they will be stuck. As it stands right now, there are countless folks that are finding themselves in negative territory due to their indiscretions (autos, new boat, insane backyard landscape, fancy vacations, etc.). Do you really think that there are this many people in the Roseville area that can actually afford the AMG Benz, 750il, Carrera 4, Cayenne S, etc etc. I sure as sh*t don't. Irrational exuberance, indeed.
As for your comments on the Fed & 10yr, I agree, of course. _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Sep 01, 2006 9:34 am Post subject: |
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Just for fun, here is a little snippet from a recent Bee article:
SacBee wrote: | Last year up to 77 percent of capital-area homebuyers used riskier adjustable-rate financing to help them buy homes they couldn't otherwise have afforded. |
77 percent! If 50% of the 77% can afford it after reset, cool. If not...... _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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J-Ro PityDaFool Who Posts This Much
Joined: 13 Jan 2003 Posts: 5662 City: Rocklin
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Posted: Sep 01, 2006 10:19 am Post subject: |
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Unfortunately I do know a lot of people that borrowed 100% plus on 1 year ARM's.
However I see the R/E and mortgage industry swooping in and making good money on new products like the 40 year and fifty year loans. People will always look for a way to keep their home.
As for your assesment on those that overdrew their equity, I totally agree. I don't know how people afford all those brand new German cars. I mean most people don't have 20% to put down on a 75k BMW or Benz. That's a $1k car payment. And if they can afford that, you know they are overextended on a $4k house payment too. I don't know, maybe I am in the wrong industry or something. _________________ Steal My Book
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Sep 01, 2006 10:34 am Post subject: |
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Quote: | However I see the R/E and mortgage industry swooping in and making good money on new products like the 40 year and fifty year loans. People will always look for a way to keep their home. |
J, (I know you know this) but you can't refi into a new loan if you are underwater. Unless the banks are going to start allowing 110% or more LTV...
Those that keep their heads above water, then yeah, for sure. I know some folks that may be candidates for that in the not too distant future.
Quote: | That's a $1k car payment. And if they can afford that, you know they are overextended on a $4k house payment too. |
Hey, if I make 7k a month, why not spend every last penny every single month? I mean, I get to drive a cool car, right?
Whaddya mean insurance is 300 a month on this thing? My driving record is perfect and this thing has all the safety features! OH thats right if someone breathes on it wrong it costs a couple K to fix..... _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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J-Ro PityDaFool Who Posts This Much
Joined: 13 Jan 2003 Posts: 5662 City: Rocklin
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Posted: Sep 01, 2006 10:50 am Post subject: |
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Quote: |
J, (I know you know this) but you can't refi into a new loan if you are underwater. Unless the banks are going to start allowing 110% or more LTV...
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You're right but there a lot of mortgage brokers that will do things that are not in their clients best interest if the client asks. (80/30 loans, 125% LTV loans, etc). It's all about how lucrative that loan is on the secondary market. _________________ Steal My Book
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8824 Ladies Man
Joined: 29 Jul 2004 Posts: 15136 City: Wilmington, Delaware
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Posted: Sep 05, 2006 7:36 am Post subject: |
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J-Ro wrote: | Quote: |
J, (I know you know this) but you can't refi into a new loan if you are underwater. Unless the banks are going to start allowing 110% or more LTV...
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You're right but there a lot of mortgage brokers that will do things that are not in their clients best interest if the client asks. (80/30 loans, 125% LTV loans, etc). It's all about how lucrative that loan is on the secondary market. |
Big investigation right now about that point.
That is the reason they want all mortgage brokers to be licensed.
I like the chart with the population numbers.
I think the population increase along with the seedy brokers and creative financial vehicles have all played a roll.
So, what will happen next? _________________ www.integrity-wake.com |
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smokedog2 Outlaw
Joined: 02 Dec 2004 Posts: 210 City: Cincinnati
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Posted: Sep 05, 2006 4:44 pm Post subject: |
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A RE investment ARM went from 5 to 7%. That is not a 2% increase, that is a 40% increase. with PITI - this thing has 0 cash flow.
Do that a lot and you are in trouble.
The bank is not returning my calls.
SD2 _________________ If you are going to be stupid, you gotta be tough |
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J-Ro PityDaFool Who Posts This Much
Joined: 13 Jan 2003 Posts: 5662 City: Rocklin
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Posted: Sep 06, 2006 5:17 am Post subject: |
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smokedog2, You can lock a 30 year right now areound 6%. Why are you calling banks? They aren't in the business of home loans. _________________ Steal My Book
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Sep 06, 2006 7:00 am Post subject: |
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J-Ro, I think he is talking about investment property loans - which I thought carry a significantly higher interest rate than primary resi loans. _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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jumalian Ladies Man
Joined: 12 Jan 2003 Posts: 7625 City: san diego
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Posted: Sep 22, 2006 6:53 am Post subject: |
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yeah, why are you calling banks? you should be calling me! _________________ my demo reel
DPC Films
Aubs wrote: | I'm thinking some island. And Alaska is not a choice. |
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8824 Ladies Man
Joined: 29 Jul 2004 Posts: 15136 City: Wilmington, Delaware
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Posted: Oct 25, 2006 9:15 am Post subject: |
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chavez, Funny thing about all these charts and stats, the economist who puts them together.
Forget the results, a room of real estate economist will analyze the model and tear the model apart before the results. With that said, it is more important to look at the name of the economist before the results.
When it comes to RE, the best thing anyone can do is buy in a good location. The Chrysler building went for over 1B a few years ago ( if I am not mistaken). The buyer of this building when asked about the price replied "location location location". _________________ www.integrity-wake.com |
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J-Ro PityDaFool Who Posts This Much
Joined: 13 Jan 2003 Posts: 5662 City: Rocklin
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Posted: Oct 25, 2006 9:36 am Post subject: |
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Quote: |
When it comes to RE, the best thing anyone can do is buy in a good location.
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Sweet, thanks for the advice Winthorpe. _________________ Steal My Book
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8824 Ladies Man
Joined: 29 Jul 2004 Posts: 15136 City: Wilmington, Delaware
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Posted: Oct 25, 2006 11:28 am Post subject: |
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J-Ro, I think you can still make money on a house today which seems to be contradictory to a few views in this thread.
But J-RO you are the master, I am surprised you are not retired yet or do you work just for fun? _________________ www.integrity-wake.com |
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Oct 25, 2006 12:12 pm Post subject: |
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muckmeister, you always can make money on a house if you have enough time. _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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J-Ro PityDaFool Who Posts This Much
Joined: 13 Jan 2003 Posts: 5662 City: Rocklin
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Posted: Oct 25, 2006 12:29 pm Post subject: |
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muckmeister, I never said you couldn't still make money, but for 99% of people, that money wan't be in their backyard. Of course location is key, it has been since the day Caveman Fred bought that shack next to the tar pits and lost his a$$. _________________ Steal My Book
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8824 Ladies Man
Joined: 29 Jul 2004 Posts: 15136 City: Wilmington, Delaware
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Posted: Oct 26, 2006 5:40 am Post subject: |
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chavez, J-Ro, when i make my trip out west, i better have the company of the both of you together for at least one beer and maybe a few shots of vodka.
i know i will see J-Ro because i am staying in his dog house if the dog doesnt mind. _________________ www.integrity-wake.com |
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J-Ro PityDaFool Who Posts This Much
Joined: 13 Jan 2003 Posts: 5662 City: Rocklin
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Posted: Oct 26, 2006 6:06 am Post subject: |
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muckmeister, The dog doesn't have a house, she sleeps at the foot of my bed. You can sleep there too but my sleepers and paper better be in my hand by 4:30 AM. _________________ Steal My Book
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