Posted on April 20, 2008 @ 9:40 pm - Written by BawldGuy
A ship is safe in harbor, but that’s not what ships are for.
William Shedd
It’s important to know that words don’t move mountains. Work, exacting work moves mountains.
Danilo Docci
To avoid criticism, do nothing, say nothing, be nothing.
Elbert Hubbard
Knowing is not enough; we must apply!
Goethe
Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure or nothing.
Helen Keller
He who refuses to embrace a unique opportunity loses the prize as surely as if he had tried and failed.
William James
And one of my all time favorites — Read the rest of this entry »
Posted on April 19, 2008 @ 9:27 pm - Written by BawldGuy
The other day I was having a great conversation with one of my clients who happens to share my passion for baseball. They’d not known about my ‘baseball life’ as a former umpire. I’d worked my way up as far as one could go, umpiring every level of NCAA (college) ball, up to Division I.
Anywho, we got to tradin’ baseball stories, as her brother had played college ball in the midwest. Can’t remember the college for which he played, but it turns out they played in San Diego all three years he was there. It’s possible I umpired him. Go figure.
The present real estate market in San Diego, (Palo Alto too) and those who own income properties here, remind me of what a very experienced head coach once told me. We’d been going over a complicated, and controversial call the week before. He was sure my line of sight had been blocked, getting it wrong, while I knew for a fact my line of sight was unimpeded and I gotten it right. That’s baseball in a nutshell.
I miss it like breathing, but too many conflicts with my business schedule finally forced an early retirement. Also, I got tired of being afraid of my own assistants, who would look at me the morning after weekday afternoon games with death stares you never wanna experience.
During our discussion the coach made a comment I’ve always remembered. Read the rest of this entry »
Posted on April 19, 2008 @ 1:41 am - Written by BawldGuy
Here’s a poser for ya. This question comes up all the time, ‘cuz folks seem to ‘know’ one way’s better than the other most of the time. Problem is they almost always pick the wrong one. It usually arises when we’re talkin’ about income and expenses — you know, the month in, month out operations of income property.
Here’s the question — usually posed in such a way indicating the obvious answer.
Short Pause For A Note: There’s no way I’m gonna get a cool photo for this, so I’m just winging it with whatever strikes my fancy. I like cool pics, don’t you? Besides, it’s the weekend.
Isn’t an interest only loan a much better way to go when compared to an amortizing loan? You save all that money over the holding period, right? That really adds up. Well, usually not, sorry.
The last comparison I did was about a week ago, and it came out about 2 to 1 against interest only. Why? Simple — The money they saved in monthly payments over a 5 year holding period was around $7,000 using the interest only approach. The principal pay down of the loan balance over the same period using an amortizing loan was just over $14,000 — about twice as much.
Now I now what’s goin’ on out there, so please, step away from the calculator. Read the rest of this entry »
Posted on April 17, 2008 @ 10:11 pm - Written by BawldGuy
As promised, the subject will be subprime in general and scheduled loan resets i particular.
Yesterday I was able to view a chart (alas, unavailable) showing a very interesting chronology of these resets. It showed an clearly obvious peak. This peak was hit in Dec. ‘07/Jan ‘08 — then they dropped of into the black abyss — a 75-80% drop. Seriously. This level more or less remained until the 3rd to 4th quarter of next year. In other words, the tsunami of resets has already happened. The market now has well over a year, and possibly 18 months before the next wave (much smaller) hits.
There are folks for whom even these historically low interest rates don’t matter. In fact, if 0% was available they still couldn’t refinance. No equity is no equity no matter how you slice it. Then there are the borrowers who can use the next 12-18 months to refinance before their loan resets. Or they can sell. Some, because of the way their loans work will be able to just keep on keepin’ on, ‘cuz the reset won’t put them in the poor house.
The system is working. Property will change hands, and lessons will be learned. As more and more buyers cast themselves off the fence, this process will inevitably gain speed. Before we know it, the cycle will have begun anew. Is the system about to serve us all up a big juicy burger? Hhmmm.
Let’s cut through this whole Bull/Bear stuff, OK? Read the rest of this entry »
Posted on April 16, 2008 @ 10:52 pm - Written by BawldGuy
I’ll make this short and sweet. Waiting ’till the shoeshine boy tells you Texas is the place to be will, as the famous story goes, make you late for the party. The time to get there is when it’s still invitation only.
Consider yourself officially invited.
You may RSVP via the Contact Bawldguy link.
Talk to you soon.
P.S. I’ll be talking about it tomorrow, but Larry Kudlow said today that transport may indeed be showing us the way. See? I’m not the Lone Ranger on that one.
Also tomorrow — Empirical evidence, not screaming rhetoric, showing scheduled loan ‘resets’ peaked over two months ago, and…well, read tomorrow. Don’t ya love two parters?
Me neither.