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Discussion Starter · #1 ·
I can now see how the housing and commercial market is controlled by more than just interest rates and economy. Deregulation, derivatives, immigration..... all play a part; even types of fuels used can make or break a location. What's you thoughts on the tapering of quantitative easing, Russian sanctions, interest rates ......(others?) on how it will control the market.

I can be the bestest shoe maker, but if everyones wearing sandals. Hum.
 

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I can now see how the housing and commercial market is controlled by more than just interest rates and economy. Deregulation, derivatives, immigration..... all play a part; even types of fuels used can make or break a location. What's you thoughts on the tapering of quantitative easing, Russian sanctions, interest rates ......(others?) on how it will control the market.

I can be the bestest shoe maker, but if everyones wearing sandals. Hum.
You want to keep politics out of that question?
 

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Discussion Starter · #7 ·
You want to keep politics out of that question?
You want to keep politics out of that question? I guess i should have said lets not talk about certain politicians. (trying to keep fighting to a minimum)

Sorry, don't know guitar guy, but like to meet him.

Mike- I understand what you are saying about housing. What if you are buying houses to flip or rent? Do you think this wise? Do you think the market will get worse? Do you think commercial will come back strong. I use to frame new homes, I now remodel. It is about the only thing going here since the housing crash. A lot of people lost their $ after the crash. A lot of people also made a lot of $ because they were ready for it. There is always more money made with a pen rather than a hammer. IMO staying ahead of the game is the biggest part.
 

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music9704 said:
You want to keep politics out of that question? I guess i should have said lets not talk about certain politicians. (trying to keep fighting to a minimum) Sorry, don't know guitar guy, but like to meet him. Mike- I understand what you are saying about housing. What if you are buying houses to flip or rent? Do you think this wise? Do you think the market will get worse? Do you think commercial will come back strong. I use to frame new homes, I now remodel. It is about the only thing going here since the housing crash. A lot of people lost their $ after the crash. A lot of people also made a lot of $ because they were ready for it. There is always more money made with a pen rather than a hammer. IMO staying ahead of the game is the biggest part.
Yes, I think to buy homes for income property is a great idea. I also think over the long term homes will be a great investment. You need to be careful with flipping I think, because who knows what could cause the short term market to collapse. When flipping your banking on the short term. With rentals your banking on the rent income. I've put a lot of thought into buying rentals, right now my retirement account isn't really making much. Finding good investments is a little tricky right now. I'm at that age where I can't be real risky so I try to stay in moderately risky investments. The only thing that deters me from buying rentals is it takes a lot of commitment. It can be a fricken nightmare if you get the wrong tenants. Not sure if I want to balance a construction business and a rental business at the same time.
 

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Discussion Starter · #9 ·
A home isn't an asset anyway. Because even if you sell it you have to get another one.
I think there may be two ways to look at this as well. I know other contractors that have built and sold their own home. I was told after the fifth one your house should be paid off. It's a rough life tho. I have built 1 of my own, and now on my third remodel. (of my own home). I would not use my home as an asset in the terms of borrowing money but to sell, advance, payment free, Yes.
My home, I am working on now, is payment free. It does have a lot of work that needs to be done. We spent most of our $ getting the house and don't want to borrow against it. Personally, I think a mortgage is crazy. I want to own my home, before I retire.
 

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There is no where for the market to go. The have have plenty and are enjoying flipping property for now. You can not have new home buyers up to their neck in student loans, earning under 50G a year starting out and still expect to have entry level homes under 400K. Add skyrocketing taxes.....:(
It will taper off again and then we have to have inflation at some point. If jobs were doing well and stimulus was working then they could start easing into higher interest and inflation. I dont see this happening.

Just my take from what I see.
 

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music9704 said:
I think there may be two ways to look at this as well. I know other contractors that have built and sold their own home. I was told after the fifth one your house should be paid off. It's a rough life tho. I have built 1 of my own, and now on my third remodel. (of my own home). I would not use my home as an asset in the terms of borrowing money but to sell, advance, payment free, Yes. My home, I am working on now, is payment free. It does have a lot of work that needs to be done. We spent most of our $ getting the house and don't want to borrow against it. Personally, I think a mortgage is crazy. I want to own my home, before I retire.

It depends what your long term goals are. I would like to have no mortgage on my house but it has the lowest interest rate I have. Hypothetically Let's say you own 5 mil in real estate and 2.5 is borrowed. House, residential rentals and commercial rental property. House mortgage is at 3% on a 15 yr. that is cheap money. Commercial notes run 4.5 to 5.5 % for 5 yr. I would borrow as much as possible on the house and less on a commercial property and have it cash flow more. Hypothetically
 

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Actually would love to just have a rental bussiness.:thumbup:
Almost 30 yrs construction I am a little burnt out.
Then just do it.
It involves all the same stuff - things breaking you have to fix, clients with attitudes, the gubbermint gettin it's share, time allocation, etc.

You can move up or down the economic spectrum with the target market - some like section 8 - some like working folks.

And you can get stupid, lean out too far getting enough properties to sustain a management company and go broke - or stay too small, and it's a tremendous PITA.

And if you were only so-so in your other business, you likely will be in this one too.

But as you get older - you have to accept that you will NOT be doing the bull work you once did - so howz dat going to play out?
 

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My sense of it, is that the economy is on the uptick - not just here but globally.

And there is a lot of pent up demand for good housing stock - not busted up REOs and repops - or for that matter, McMansions.

Unfortunately, whenever the economy starts to ratchet back up after a long azzed recession - that's when the natives get politically restless - we are seeing that now in places like Crimea - and we will likely see some of it here.

But that won't change the overall drive for housing, so I'm expecting a good couple of years, starting with this one.

Oh wait - the stock market is supposed to flame out in June - I forgot about that - scratch everything I just said.:no::no:
 

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With the markets manipulated the way they are by the Feds, there's no such thing as an educated guess. Everything is just a blatent guess. Back in the day when earnings and profit drove the market one could make reasonable predictions. Just not the case anymore.
 

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There is no where for the market to go. The have have plenty and are enjoying flipping property for now. You can not have new home buyers up to their neck in student loans, earning under 50G a year starting out and still expect to have entry level homes under 400K. Add skyrocketing taxes.....:(
It will taper off again and then we have to have inflation at some point. If jobs were doing well and stimulus was working then they could start easing into higher interest and inflation. I dont see this happening.

Just my take from what I see.
Inflation is here, and its been here. Flooring suppliers in my town increased prices 33% across the board. Every single one of them after the new year. Wonder how that happened?
 

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Inflation is here, and its been here. Flooring suppliers in my town increased prices 33% across the board. Every single one of them after the new year. Wonder how that happened?
Now try getting more labor to match the insurance increases& across the board cost of living.
I don't do floors but sub has been at it for 35yrs, good business too. He says he'swo rkingat 1980 prices . Guys are refinishing @1. 50 SF that's cheap. I don't know if there were less players in the game if the consumers could cough up more these days.
 

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Metro M & L said:
Inflation is here, and its been here. Flooring suppliers in my town increased prices 33% across the board. Every single one of them after the new year. Wonder how that happened?
Something tells me you can't dump trillions of printed money into an economy without some sort of consequence.
 

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There is no reason a guy shouldn't be able to stay busy and earn a living by building rentals and houses for himself every few years.

Firstly, the most basic economic unit is a family. It doesn't hurt to have a partner who can be out earning a living and contributing towards the household income. There are also a lot of things that a spouse can lend a hand with regarding building.

A lot of guys are afraid to do anything. As a friend once remarked, they wouldn't say **** if their mouth was full of it.

Anyway, this is pretty simple. You first need to have a brain, i.e. you need to be able to produce something.

Secondly, you will need your tools and what not.

Thirdly, you will need a bit of money. This is what banks are for.

So let's say you start out with your partner and she is working and making some money and you are working as a self employed guy and making some money and you have a house with a payment.

Get yourself a relationship going with a banker and build yourself a home and sell the one you are in, and make money doing it.

Now you've got yourself a nice little home and no maintenance problems and the next project is to build a duplex or pair of townhomes. So you borrow money and get this done and by golly they rent well and you have plenty of money to make your payments and there is even some income left over.

Any taxes your spouse was paying are now coming back to you in the form of a refund as you depreciate your properties.

Working alone or with limited help, it can take 1 year of steady work to complete a home.

So now you can repeat the process as often as you like. Sell the home you are in, or build another rental property.

I've built some homes for myself, I've remodeled some homes for myself. I've built some rentals and I've remodeled some rentals. The building is always better.

Get yourself in an area where it is possible to do this.

Find an area outside of a city where there is some demand, but you can still afford to buy property. Find an area where building permits won't kill you, or inspections.

Get yourself connected so that you can do most of the work, and establish relationships with excavators, heavy duty plumbers (trench work), basement guys, and sheetrock guys.

Get your spouse involved if possible. Get her to do the window coverings, the landscaping design, the kitchen design, whatever she can do. Let her be part of the operation and give her a bonus when you sell something.
 

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Discussion Starter · #20 ·
Then just do it.
But as you get older - you have to accept that you will NOT be doing the bull work you once did - so howz dat going to play out?
Yes I agree, that's why I am trying to use my brain instead of my back. I would like to leave my wife with an income (just in case). She is a stay at home mom. Were not looking for rich, but a few rentals may help ease the burden. IMO working a few rentals would be easier than hump work. Of course vetting is required.

I also agree with others I don't see the sky getting clear for a while.
There are tons of empty commerical buildings, and new houses are a no go. Right now, remodeling is doing well here. Not sure that will last. Always good to have a back up plan to back up my back up. We have an online clothing store as well. It has slowed down quite a bit, but overhead is low.
 
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