What is the intention of investors?

readytopurchase_IHB

readytopurchase_IHB

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What is the intention of investors? I've been up again several on different homes for bids, and they come with all cash offers. This is a legitimate question. Do they plan to rent it out and wait until years from now to try and sell? Or are they hoping something happens short term for a quick profit? Any insight as to their thoughts behind swarming the market? Thanks!
 
[quote author="readytopurchase" date=1254307719]What is the intention of investors? I've been up again several on different homes for bids, and they come with all cash offers. This is a legitimate question. Do they plan to rent it out and wait until years from now to try and sell? Or are they hoping something happens short term for a quick profit? Any insight as to their thoughts behind swarming the market? Thanks!</blockquote>
I'd be willing to bet that they think prices are gonna rocket up again and they'll just rent out there properties for a few years until that happens. I never knew there were so many cash buyers out there. They'll be a waiting a long while. This market is just plain stupid...if you don't get outbid by cash buyers then banks decide to take lower cash offers....you can read up about my frustration here -----> <a href="http://www.irvinehousingblog.com/forums/viewthread/6300/">126 Arden in Northwood Pointe</a>
 
What I don't understand is if you have $800,000 cash, why not pony up a few bills to hire someone to show you how to buy your Irvine dream house for $200,000 less at auction????
 
[quote author="USCTrojanCPA" date=1254308611][quote author="readytopurchase" date=1254307719]What is the intention of investors? I've been up again several on different homes for bids, and they come with all cash offers. This is a legitimate question. Do they plan to rent it out and wait until years from now to try and sell? Or are they hoping something happens short term for a quick profit? Any insight as to their thoughts behind swarming the market? Thanks!</blockquote>
I'd be willing to bet that they think prices are gonna rocket up again and they'll just rent out there properties for a few years until that happens. I never knew there were so many cash buyers out there. They'll be a waiting a long while. This market is just plain stupid...if you don't get outbid by cash buyers then banks decide to take lower cash offers....you can read up about my frustration here -----> <a href="http://www.irvinehousingblog.com/forums/viewthread/6300/">126 Arden in Northwood Pointe</a></blockquote>


But I do think these types of buyers will run out and be left holding the bag (or the empty bag which would have been full of money, as the case may be).
 
[quote author="Mcdonna1980" date=1254309916]What I don't understand is if you have $800,000 cash, why not pony up a few bills to hire someone to show you how to buy your Irvine dream house for $200,000 less at auction????</blockquote>
A few of my buyers are seriously considering that. But the discounts aren't $200k anymore because there are more and more investors and people who intend on occupying the properties at the auctions now. I swear, it has all the smell of a mini bubble waiting to burst. Besides, it's easier said then done because you don't know how many times the property you have your eye on will be postponed or canceled. Add to that at least 50% of those properties aren't listed so it's tough to see what the inside looks like and the bank may set a very high opening bid.
 
[quote author="readytopurchase" date=1254582831]Found out recently, it's official. Lost out to an investor. This is getting nauseating.</blockquote>
At the auction or a regular sale?
 
[quote author="readytopurchase" date=1254582831]Found out recently, it's official. Lost out to an investor. This is getting nauseating.</blockquote>


What price range of homes are you looking at? The sub $500K market seems pointless to even try from what my friends have experienced. The $650-$800k market is pretty frustrating also. Once you venture into the $850K market, it seems as if you are flying above all the turbulance of investors and most other buyers. When I was peeking at the $850-900k homes, it seemed as if sellers were eager to talk but many were still clinging to the bubble world price since they read how hot the market was (not in their price range). A few closed a good amount under their original asking and the ones who stuck to their price are still on the market.
 
[quote author="USCTrojanCPA" date=1254593718][quote author="readytopurchase" date=1254582831]Found out recently, it's official. Lost out to an investor. This is getting nauseating.</blockquote>
At the auction or a regular sale?</blockquote>


USCTrojanCPA,



Do you ever sleep? :)

I was surprised to see you post a few minutes before me.
 
[quote author="davenlei" date=1254594232][quote author="USCTrojanCPA" date=1254593718][quote author="readytopurchase" date=1254582831]Found out recently, it's official. Lost out to an investor. This is getting nauseating.</blockquote>
At the auction or a regular sale?</blockquote>


USCTrojanCPA,



Do you ever sleep? :)

I was surprised to see you post a few minutes before me.</blockquote>
Sleep is overrated and for the weak. haha
 
Intention of investors is to maximize return... unfortunately they are looking at the wrong place for cash-flow & appreciation is at least a decade away...
 
[quote author="USCTrojanCPA" date=1254593718][quote author="readytopurchase" date=1254582831]Found out recently, it's official. Lost out to an investor. This is getting nauseating.</blockquote>
At the auction or a regular sale?</blockquote>
It was an REO we were waiting for to pop up after a failed short sale.
 
[quote author="roundcorners" date=1254636306]Intention of investors is to maximize return... unfortunately they are looking at the wrong place for cash-flow & appreciation is at least a decade away...</blockquote>
See? That's what I don't get. Are they aware that perhaps 5-10 years or more before they can sell for a profit? It just seems odd - unless they know something we don't. Whenever my emotion starts to get the best of me, I just look to the data - with unemployment now at 9.8% nationally, this is not a "typical" recession. If all of this government intrusion into the free market would cease, we'd probably be pulling out of the recession already like other countries around the world. I say "Harumph!" to "Change."
 
[quote author="readytopurchase" date=1254640686][quote author="roundcorners" date=1254636306]Intention of investors is to maximize return... unfortunately they are looking at the wrong place for cash-flow & appreciation is at least a decade away...</blockquote>
See? That's what I don't get. Are they aware that perhaps 5-10 years or more before they can sell for a profit? It just seems odd - unless they know something we don't. Whenever my emotion starts to get the best of me, I just look to the data - with unemployment now at 9.8% nationally, this is not a "typical" recession. If all of this government intrusion into the free market would cease, we'd probably be pulling out of the recession already like other countries around the world. I say "Harumph!" to "Change."</blockquote>


I would not assume that any investor would know more than you. There are many sets of data and much of one's viewpoint depends on what one reads. If one just listens to the MSM, the bottom is in and the economy is improving and now is a great time to buy.

Me? I will wait.
 
[quote author="USCTrojanCPA" date=1254308611]I never knew there were so many cash buyers out there.</blockquote>


I doubt there were as many investors before. Last year's free fall in the stock market caused a lot of people to pull their money and they are now seeking alternate investments. If one doesn't believe the stock market to rally and only move sideways for years, then buying to rent then sell is an interesting alternative.
 
Just spoke with a neighbor who is a broker. He said that the investors are getting unsecured loans from a bank with about a 15% interest rate (must have stellar credit score), then are able to make the all cash payment on a home and win it. Can anybody confirm? I wonder if this is an option worth looking into. How would one refinance once you own the home? Would it be difficult?
 
[quote author="readytopurchase" date=1254816024]Just spoke with a neighbor who is a broker. He said that the investors are getting unsecured loans from a bank with about a 15% interest rate (must have stellar credit score), then are able to make the all cash payment on a home and win it. Can anybody confirm? I wonder if this is an option worth looking into. How would one refinance once you own the home? Would it be difficult?</blockquote>
I know that banks are still offering unsecured lines of credit, but I hardly doubt that they'd be willing to lend you hundreds of thousands of dollars unless you have a stable high paying job or a very profitable small business. Maybe they are getting cash advances on their credit cards, I dunno. You can get a cash-out loan after you buy the home but you have to wait 3-6 months after the purchase to do so from what I've heard from a few lenders.
 
[quote author="USCTrojanCPA" date=1254816619][quote author="readytopurchase" date=1254816024]Just spoke with a neighbor who is a broker. He said that the investors are getting unsecured loans from a bank with about a 15% interest rate (must have stellar credit score), then are able to make the all cash payment on a home and win it. Can anybody confirm? I wonder if this is an option worth looking into. How would one refinance once you own the home? Would it be difficult?</blockquote>
I know that banks are still offering unsecured lines of credit, but I hardly doubt that they'd be willing to lend you hundreds of thousands of dollars unless you have a stable high paying job or a very profitable small business. Maybe they are getting cash advances on their credit cards, I dunno. You can get a cash-out loan after you buy the home but you have to wait 3-6 months after the purchase to do so from what I've heard from a few lenders.</blockquote>
Yeah, it sounded a bit risky. He's not the greatest resource - was previously pushing me to buy, buy, buy! I think I'll stick with the traditional home loan models and hope that I find a home that an investor would rather pass on.
 
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