When is the best time to buy??????????

[no_vaseline_IHB]

AMT starts to affect filers at around 75K-100K. What you posted is true, but is moot under AMT which accelerates the phase out consideration.

There are several CPA's and EA's on this forum and none dispute what I've written.

 

[IrvineRenter_IHB]

There are many other assets that sell at their "perceived value" like stocks. The assumption is that in a market with perfect information the perception will represent an accurate future value of the asset. New events occur that change perception are said to be "priced into the market" once an adjustment has occured. One analyst's opinion (like the one quoted by JP Morgan recently) is not enough to validate a trend since they are other analysts with opinions that differ. To accept your theory rent rates equals "real values" would be like saying that book value is the "real value" for stocks.

You seem well versed in the efficient markets theory of asset pricing. Unfortunately, this theory fails to explain extremes of volatility as witnessed during a financial bubble. People bought houses because prices were going up. They had no idea why, they just saw prices rising and assumed they always would. The short-term past history of price increases creates an unrealistic expectation for future price increases. There is no concept of value.

To be more accurate, equating price/rent ratio to the real value of houses is akin to the price/earnings ratio of stocks. There is a fundamental difference between the two however. Earnings growth in stocks can justify very high price/earnings ratios whereas rents and rent growth in houses do not. Rents cannot increase faster than wage growth because people earn the money they spend on rent. The growth of rent is fairly constant. You cannot have a tremendous growth rate in the rent/price ratio of houses. This makes the fundamental value of houses consistent and predictable. It is only when people believe in unrealistic rates of appreciation that higher prices can be justified. The fact that incomes have not kept up with house prices is one of the primary reasons prices are falling right now. Prices always fall back to affordability levels when bubbles burst.

Would buying a house at the rent rate generally be a good buy? Yes, assuming that the property is a quality building in good repair in a good location that is neither excessively larger or excessively smaller than the neighborhood. Yet, wouldn't the value be higher to an investor who could receive not just the rental rate but also real tax savings from depreciating the cost of the building? Or would that same property be worth more if the rent rate could be increased by marketing the property to college students who collectively could pay more than a middle-income family and are willing to do so because it is in close proximity to their school?

There are no qualifying assumptions on whether or not rental value is a good indicator of a houses pricing. All of the qualifiers you mentioned would already be represented in the rental rates. People can only afford rent based on their incomes. Rents are tied to incomes, and houses are valued by rents.

Occasionally stocks trade at their book value. Generally the ones that do are bad companies that either don't have positive prospects or haven't been able to communicate that to the investment community. It's not irrational exuberance to acknowledge that a standardized method for valuing SFR homes is to look at recent "comps" and adjust them to match the property that you're reviewing. I've said before that in addition to the adjustments for similar attributes but you should also adjust for financing costs.

Using recent comps to value house prices is the epitome of irrational exuberance. If a fool overpays for real estate, the transaction itself is not a validation of value. In fact, comparative sales comps used in our financing system is what enables irrational exuberance. We had a series of greater fools overpaying for real estate for several years. If comparative sales were a good measure of value, why have prices dropped? Why are houses valued so much less today than they were two years ago? It is because they were never "worth" that much to begin with. There was merely a series of fools each justified by the previous one and enabled by loose lending standards. Take away the unstable financing, and you end up with a steep drop in house prices.

What you call the "real value" I consider the "minimum value". A "rational value" can and should be higher than the rental rate. At the recent peak rental rates were about 50% of the "comparable market price". With prices down approximately 25% because of the short-sales, foreclosures, and strong competition from new home sales that would put rental rates at 67% of the "value". When you consider that the "holding cost" doesn't increase as quickly as rents the longer you own the property it will gain a competitive advantage compared to the same neighborhood over time.

I wrote a long post on the real investment value of residential real estate. The whole idea of an ownership premium is a concoction of irrational exuberance only believed by bubble market participants. In every other market in the country (at least before this latest bubble), there is a premium for rental. Ownership is supposed to represent a savings over renting. Renters have unlimited freedom and no liability for maintenance and repairs. Owners have taxes, insurance, maintenance, liability, etc. The savings of ownership is to compensate them for the burdens of ownership and the lack of freedom to move when they want to. It is only the artificial ownership premium generated by a false believe in rapid appreciation that causes people to overpay. As you noted, prices were about 50% of the peak market sales prices. This is also why prices are going to drop nearly 50% from the peak.

If we were both real estate analysts at Wall Street firms, then you would most likely post a SELL recommendation and I would post a HOLD recommendation (yesterday I would have had a BUY rating but congress is adding a lot of uncertainty to the market right now by saying they're doing something then failing to get the votes).

If you were my adviser knowing that I subscribe to the higher than rental rate viewpoint... what range would you approve in protest? What would you say the current ratio is?

I would advise people to start looking when prices got to within 10% of rental parity. I would not pay any more than that because there is no return on investment if you pay more. Given how dire the financing and economic picture is, we will most likely overshoot rental parity and have many properties sell at prices lower than the cost of an equivalent rental.

 

[WestparkRenter_IHB]

Two professors from Pomona College made the same comparison and said there were no housing bubble. We now know it's false.

Faculty Research: April 2006

What Real Estate Bubble?

New research from Pomona economics professors Gary Smith and Margaret H. Smith shows homes actually are undervalued in most of the 10 U.S. markets they studied.

Fears of a real estate bubble are overblown and homes remain undervalued in many markets, according to new research from a pair of Pomona College professors who came up with a fresh methodology for gauging bubble trouble.

By comparing the cash flow generated by owning a home to the cost of renting a comparable house, economics professors Gary Smith and Margaret H. Smith found bubble conditions in only one of the 10 metropolitan U.S. housing markets they evaluated. In a paper presented March 31 at the Brookings Institution in Washington, D.C., the husband-and-wife team concluded that buying a home generally remains an attractive long-term investment – even if buyers are conservative in their assumptions about how much home prices will rise in the future.

“Most of the country is certainly not in a bubble if you define a bubble as prices far above fundamentals,” said Gary Smith, who is the Fletcher Jones Professor of Economics at Pomona College. “The average person in the U.S. is still better off buying than renting.”

San Mateo County in the San Francisco Bay area was the only region studied where homes were overvalued, by 54 percent. Elsewhere in California, Orange County prices were about right, while homes in Los Angeles (11 percent under) and San Bernardino (20 percent under) counties still were somewhat undervalued. Beyond California, homes also were undervalued in Boston (12 percent under) and Chicago (17 percent under). Undervaluation was dramatic in Dallas (40 percent), Atlanta (53 percent), Indianapolis (65 percent) and pre-Hurricane Katrina New Orleans (46 percent).

The Smiths’ methodology consisted of evaluating housing as a long-term investment, similar to stocks and bonds. In each market they studied, the Smiths matched up similar homes, comparing the cost of buying versus renting, using Multiple Listing Service data from summer 2005. They projected homeowners’ net savings on rent over time, discounted by a required after-tax rate of return of 6 percent (included because the money sunk into the home purchase could presumable be invested elsewhere, for example, in stocks and bonds.) Their analysis factored in expenses such as one-time closing costs, taxes, maintenance and insurance. On the other side of the ledger, they also factored in tax benefits from ownership and the fact that rents will rise over time, while payments on a fixed-rate mortgage will not.

They assumed a 20 percent down payment, with a 30-year mortgage at a 5.7 percent fixed rate. Under the Smiths’ model, in many cases, the home purchase initially generates negative cash flow, as the expenses of owning exceed the rental value and tax benefits. But over time cash flow becomes positive. And in some of the more dramatically undervalued markets, such as Indianapolis, owning a home generated an immediate positive cash flow.

So why all the talk about a housing bubble? The Smiths note in their paper that as housing prices have risen dramatically in recent years, some researchers have concluded that homes are now priced well beyond their fundamental values. But the Pomona College professors question the implicit assumption that market prices previously matched fundamental values but now have exceeded them. “Perhaps housing prices were too low in the past and recent prices have brought market prices more in line with fundamentals,” they write.

Beyond that, the Smiths question the methodology by which some researchers have concluded that the housing market is “bubbly.” The report notes that “housing-bubble discussions generally rely on indirect barometers such as rapidly increasing prices, unrealistic expectations of future price increases, and rising ratios of housing price indexes to household income indexes. These indirect measures cannot answer the key question of whether housing prices are justified by the anticipated cash flow.”

Gary Smith says their model also can be adapted to calculate the likelihood of housing being a good investment under different scenarios, such as an adjustable rate mortgage instead of a fixed. However, the Smiths’ model assumes buyers will hold on to the house for the long haul, not selling in a couple of years.

He advises against trying to predict which direction home prices are headed, telling the cautionary tale of a Claremont, Calif., professor who in 2003 decided against buying because he had read in the newspaper that home prices were 20 percent too high. It turns out home prices rose dramatically in the area. “You’ve got to run your own numbers,” Smith said.

Gary Smith is the author of more than 50 articles and several economics textbooks He earned his B.A. in mathematics at Harvey Mudd College and his Ph.D. in economics at Yale University. Margaret H. Smith, an assistant professor of economics at Pomona College, earned her B.A. at Yale University and her Ph.D. at Harvard University (both in economics). She also is a Certified Financial Planner and has been published in journals such as the Journal of Financial Planning, Applied Financial Economics and Industrial Relations.

Read the whole article here.

http://www.brookings.edu/es/commentary/journals/bpea_macro/forum/bpea200603_smith.pdf

 

[IrvineRenter_IHB]

Two professors from Pomona College made the same comparison and said there were no housing bubble. We now know it's false.

Read the whole article here.

http://www.brookings.edu/es/commentary/journals/bpea_macro/forum/bpea200603_smith.pdf

I wonder if this couple hides their heads in shame?

When I was doing research for the book, I was amazed at how many economists looked at the data and completely failed to see the obvious right in front of them. There is a certain amount of denial when someone takes a position in a financial market. There is a tendency to see data with an eye toward confirming the "rightness" of your initial decision to take a position. Many of the bubble deniers where undoubtedly heavily invested in real estate (See Ben Stein).

 

[columbussquare.com_IHB]

IrvineRenter thank you for the well thought reply. I plan to respond to your points but at this moment I don't have the time to do so. Yet, I did want to express my appreciation for the logic that you brought back into the conversation. I imagine that the person who posed the original question will find the most value out of posts like this. To some of your points I agree and others I don't. I'll address both of those soon. Once again, thanks.

 

[no_vaseline_IHB]

 

[flmgrip_IHB]

AMT starts to affect filers at around 75K-100K. What you posted is true, but is moot under AMT which accelerates the phase out consideration.

There are several CPA's and EA's on this forum and none dispute what I've written.

they have better things to do than to argue with you... your opinion is final anyway and is always right... amen

your certainly had one to many of those bong hits... you win... i have better things to do with my time than to keep you fighting on your strong (and partially wrong) believes...

AMT is a very complicated tax and is affected by many things, however mortgages generally speaking are except from the AMT hit. meaning you can write off mortgage interest with and without AMT, however property tax and other things might not be allowed with AMT.

consult your tax advisor...

the end

 

[no_vaseline_IHB]

AMT starts to affect filers at around 75K-100K. What you posted is true, but is moot under AMT which accelerates the phase out consideration.

There are several CPA's and EA's on this forum and none dispute what I've written.

they have better things to do than to argue with you... your opinion is final anyway and is always right... amen

your certainly had one to many of those bong hits... you win... i have better things to do with my time than to keep you fighting on your strong (and partially wrong) believes...

AMT is a very complicated tax and is affected by many things, however mortgages generally speaking are except from the AMT hit. meaning you can write off mortgage interest with and without AMT, however property tax and other things might not be allowed with AMT.

consult your tax advisor...

the end

Quitter.

Oh, and the VOC still sucks.

 

[xsocal land merchant_IHB]

Hey No-Vas

Back in your cage.

You are great for getting right to the bottom of issues.

You may want to join the "Straight Talk Express" (IHB style)

How about an update on automotive projects.

Enjoy!!

 

[awgee_IHB]

Hey No-Vas

Back in your cage.

You are great for getting right to the bottom of issues.

You may want to join the "Straight Talk Express" (IHB style)

How about an update on automotive projects.

Enjoy!!

Hey xsocal, Have you ever seen an Autobianchi Eden Roc?

And there is no way anybody in here can discuss AMT intelligently, including myself.

 

[columbussquare.com_IHB]

You seem well versed in the efficient markets theory of asset pricing. Unfortunately, this theory fails to explain extremes of volatility as witnessed during a financial bubble. People bought houses because prices were going up. They had no idea why, they just saw prices rising and assumed they always would. The short-term past history of price increases creates an unrealistic expectation for future price increases. There is no concept of value.

I agree with you on this point. For real estate, it would be difficult to call it an efficient market since it is difficult to get in and out (illiquid) and there are very high transaction costs (broker fees, mortgage expenses, resetting of tax basis, etc). Due to those in efficiencies, and due to a lack of focus on fundamentals the prices increased to much to fast in the previous five years. Therefore, let's try to validate comparable sales not use them to validate the value.

To be more accurate, equating price/rent ratio to the real value of houses is akin to the price/earnings ratio of stocks. There is a fundamental difference between the two however. Earnings growth in stocks can justify very high price/earnings ratios whereas rents and rent growth in houses do not. Rents cannot increase faster than wage growth because people earn the money they spend on rent. The growth of rent is fairly constant. You cannot have a tremendous growth rate in the rent/price ratio of houses. This makes the fundamental value of houses consistent and predictable. It is only when people believe in unrealistic rates of appreciation that higher prices can be justified. The fact that incomes have not kept up with house prices is one of the primary reasons prices are falling right now. Prices always fall back to affordability levels when bubbles burst.

This is where I begin to disagree ... but you touched on an interesting point ... one that warrants further discussion. Here is what I originally said:

To accept your theory rent rates equals “real values” would be like saying that book value is the “real value” for stocks.

I like your assessment that:

earnings = rental income

The thing that is missing from this conversation is the real estate equivalent to a P/E and that is the Cap Rate (see detailed explanation here).

Let's add:

p/e = cap rate

If you want to disregard comparable sales then lets apply to SFR homes the approach that is used by professionals in commercial real estate and apartments. The cap rate is equal to a rate of return or more simply: how long it would take for the building to pay for itself if you exclude financing and taxation. For the purposes of these discussions let's consider the decision making process the same for both "owner occupied" and "non-owner occupied". The only difference is that in "owner occupied" you are both the tenant and the landlord. The use of a cap rate allows a good reality check to see if the price matches the value.

The higher your cap rate the greater your expected return on investment (because you expect to recoup faster). The Wikipedia said, "In May 2008, the cap rates 5.98% for the offices and 6.28% for the apartments. By comparison, 10-year treasury yields have remained largely between 4% and 5%"

The formula for cap rate is:

annual net operating / cost (or value) = Capitalization Rate

Using simple algebra you can apply this formula as:

proposed purchase price * cap rate = annual net rental income

to compare it to monthly rents:

annual net rental income / 12 = monthly net rent

to "gross it up" to include operational costs:

monthly net rent * 1.05 = monthly gross rent

Let's try it with some real numbers:

proposed purchase price = $413,000

cap rate = 6.0%

$413,000 * 0.060 = $24,780 / 12 = $2,065 * 1.05 = $2168

With market rates for this property in the neighborhood of $2200/mo this scenario would indicate that the price matches the value.

However, if you went your the "rent rate = purchasing power" theory then you wouldn't be able to value the property any higher than $293,000 ($2200/mo divided by a combined cost of all expenses of $750/mo per $100,000). This would be 29.06% below cap rate valuation.

How you handle down payments? Are they just "prepaid rents"? If you allowed for 20% down you the value would only increase to $366,250. This would be 11.32% below cap rate valuation.

There are no qualifying assumptions on whether or not rental value is a good indicator of a houses pricing. All of the qualifiers you mentioned would already be represented in the rental rates. People can only afford rent based on their incomes. Rents are tied to incomes, and houses are valued by rents.

As explained above, I'm ok with tying value to rental rates. In fact, I would say that this is a much more accurate method than comparable sales. But to do so you have to use a multiplier that was designed for the cash flow valuation. That is the purpose of cap rate.

Using recent comps to value house prices is the epitome of irrational exuberance. If a fool overpays for real estate, the transaction itself is not a validation of value. In fact, comparative sales comps used in our financing system is what enables irrational exuberance. We had a series of greater fools overpaying for real estate for several years. If comparative sales were a good measure of value, why have prices dropped? Why are houses valued so much less today than they were two years ago? It is because they were never "worth" that much to begin with. There was merely a series of fools each justified by the previous one and enabled by loose lending standards. Take away the unstable financing, and you end up with a steep drop in house prices.

Agreed, the value was too high in 2006. If you use cap rate then the drop that has already occurred brings prices in some markets to their true value. Because times are tough it might mean that better prices can be gained in the next 6-12 months but that is not guaranteed. If you're in escrow right now, or considering making an offer, do the appropriate analysis and verify that the purchase price matches the value using a reasonable cap rate.

I wrote a long post on the real investment value of residential real estate. The whole idea of an ownership premium is a concoction of irrational exuberance only believed by bubble market participants. In every other market in the country (at least before this latest bubble), there is a premium for rental. Ownership is supposed to represent a savings over renting. Renters have unlimited freedom and no liability for maintenance and repairs. Owners have taxes, insurance, maintenance, liability, etc. The savings of ownership is to compensate them for the burdens of ownership and the lack of freedom to move when they want to. It is only the artificial ownership premium generated by a false believe in rapid appreciation that causes people to overpay. As you noted, prices were about 50% of the peak market sales prices. This is also why prices are going to drop nearly 50% from the peak.

Using cap rate you're ignoring any type of ownership premium since the math is the same no matter if you're the tenant or someone else is. If we say the peak was 2006, then rental rates have increased 2-4% since then. With the current level of rental income I expect that prices in most markets will not drop more than 30% from the peak (i.e. right about now). If the market over corrects, which it has been known to do, then any purchase after it crosses the "true value" line would mean that buyers would be under-paying for an asset.

I would advise people to start looking when prices got to within 10% of rental parity. I would not pay any more than that because there is no return on investment if you pay more. Given how dire the financing and economic picture is, we will most likely overshoot rental parity and have many properties sell at prices lower than the cost of an equivalent rental.

With a 6% cap rate it will pay for itself within 17 years. In some markets that you can start looking. In others we need a further decline or an increase in rental income.

 

[ipoplaya_IHB]

AMT starts to affect filers at around 75K-100K. What you posted is true, but is moot under AMT which accelerates the phase out consideration.

There are several CPA's and EA's on this forum and none dispute what I've written.

they have better things to do than to argue with you... your opinion is final anyway and is always right... amen

your certainly had one to many of those bong hits... you win... i have better things to do with my time than to keep you fighting on your strong (and partially wrong) believes...

AMT is a very complicated tax and is affected by many things, however mortgages generally speaking are except from the AMT hit. meaning you can write off mortgage interest with and without AMT, however property tax and other things might not be allowed with AMT.

consult your tax advisor...

the end

Actually, AMT is a very simple tax structure. It's that simplicity that pisses everyone off because they have become conditioned to managing the deductibility of many expenses...

Evidently there is AMT relief in the Senate version of the bailout bill. I don't want the bailout, but I sure as heck want my AMT fix for 2008. If there was permanent AMT reform included, I just might have to say yes to the bailout bill!

 

[ipoplaya_IHB]

Hey No-Vas

Back in your cage.

You are great for getting right to the bottom of issues.

You may want to join the "Straight Talk Express" (IHB style)

How about an update on automotive projects.

Enjoy!!

Hey xsocal, Have you ever seen an Autobianchi Eden Roc?

And there is no way anybody in here can discuss AMT intelligently, including myself.

Shucks awgee, I have been waiting for our resident tax expert to chime in on AMT... I'm quite sure you can discuss it intelligently. No time to be modest.

 

[No_Such_Reality_IHB]

<mass snippage>

Agreed, the value was too high in 2006. If you use cap rate then the drop that has already occurred brings prices in some markets to their true value. Because times are tough it might mean that better prices can be gained in the next 6-12 months but that is not guaranteed. If you're in escrow right now, or considering making an offer, do the appropriate analysis and verify that the purchase price matches the value using a reasonable cap rate.

<snippage>

With a 6% cap rate it will pay for itself within 17 years. In some markets that you can start looking. In others we need a further decline or an increase in rental income.

"The National Council of Real Estate Investment Fiduciaries in a Sept 30, 2007 report reported that for the past year, for all properties income return was 5.7% and the appreciation return was 11.1%.

A Wall Street Journal report using data from Real Capital Analytics and Federal Reserve [1] showed that since the beginning of 2001 to end of 2007, the cap rate for offices and apartments have dropped from about 10% to 5.5%, and from about 8.5% to 6% respectively. In May 2008, the cap rates 5.98% for the offices and 6.28% for the apartments. By comparison, 10-year treasury yields have remained largely between 4% and 5%.

The cap rates for apartments have been stable at around 6% since late 2005.

" Source Wikipedia.

In the 90s, the Cap rates for rentals were even higher. Cap rates decreased because of the assumed appreciation by the purchasers. If you factor 8.5% for your cap rate what happens to your implied value? 10%?

 

[graphrix_IHB]

<mass snippage>

Agreed, the value was too high in 2006. If you use cap rate then the drop that has already occurred brings prices in some markets to their true value. Because times are tough it might mean that better prices can be gained in the next 6-12 months but that is not guaranteed. If you're in escrow right now, or considering making an offer, do the appropriate analysis and verify that the purchase price matches the value using a reasonable cap rate.

<snippage>

With a 6% cap rate it will pay for itself within 17 years. In some markets that you can start looking. In others we need a further decline or an increase in rental income.

"The National Council of Real Estate Investment Fiduciaries in a Sept 30, 2007 report reported that for the past year, for all properties income return was 5.7% and the appreciation return was 11.1%.

A Wall Street Journal report using data from Real Capital Analytics and Federal Reserve [1] showed that since the beginning of 2001 to end of 2007, the cap rate for offices and apartments have dropped from about 10% to 5.5%, and from about 8.5% to 6% respectively. In May 2008, the cap rates 5.98% for the offices and 6.28% for the apartments. By comparison, 10-year treasury yields have remained largely between 4% and 5%.

The cap rates for apartments have been stable at around 6% since late 2005.

" Source Wikipedia.

In the 90s, the Cap rates for rentals were even higher. Cap rates decreased because of the assumed appreciation by the purchasers. If you factor 8.5% for your cap rate what happens to your implied value? 10%?

I'm sorry, but NSR, are you going to even bother with someone who cites Wiki for cap rates? I would break down how to really break down cap rates for our new member here, but I'm tired and I have done it once or twice before. I will say you don't start with the rate first, you need to figure it out before you get the rate, and it is the first mistake in the list of OMG I can't believe someone is so naive about cap rates they would actually post that crap.

 

[columbussquare.com_IHB]

In the 90s, the Cap rates for rentals were even higher. Cap rates decreased because of the assumed appreciation by the purchasers. If you factor 8.5% for your cap rate what happens to your implied value? 10%?

A 10% cap rate means that the asset will pay for itself within 10 years. With an 8.5% cap rate it would be 12 years. In order for that to happen the purchase price would have to be less or the rental income would have to be higher. The problem with published statistics about cap rate that they generally always refer to apartments or office buildings. In order to get accurate comparisons you would need to go back and review rental rates and purchase prices for comparable properties in the market that you're considering.

If you wanted to see what the numbers would be in that same scenario with either a 5.5% or a 6.5% cap rate this is what it would look like.

cap rate @ 6%; purchase price = $413,000

cap rate @ 5.5%; purchase price TBD

$24,780 / 0.055 = $450,545

cap rate @ 6.5%; purchase price TBD

$24,780 / 0.065 = $381,231

One of the reasons that cap rates are higher for apartments and office buildings is that they have fewer qualified buyers. Yet, with many more people able to purchase a SFR home you should expect cap rates to be lower than those assets. The cap rate should be somewhere between rates for treasury bonds and cap rates for apartments. The reason that prices went so high in the last five years was because buyers didn't assign a risk premium to the cap rate. With APYs low, and no adjustment for risk, people paid higher prices for the same income stream.

The question is what is an appropriate cap rate for SFR houses in your market at this time? Is the value in-line with the income stream? Should you to "make the investment"?

How about this scenario that is relevant to all renters:

Your landlord raises your rent by $25/mo. How much would that be worth at a 5.5%, 6.0% and 6.5% cap rate?

$25 x 12 = $300 / 0.055 = $5455

$25 x 12 = $300 / 0.060 = $5000

$25 x 12 = $300 / 0.065 = $4615

For kicks let's see it at 8.5% and 10%

$25 x 12 = $300 / 0.085 = $3529

$25 x 12 = $300 / 0.010 = $3000

So by your landlord changing your rent his/her net-worth increased a minimum of $3,000 but more realistically $5,000. Makes you a little more pissed off about a $25/mo increase, huh

If you have a Realtor ask them to provide rent comps at the same time they're reviewing listings and sales comps and take a more scientific approach to finding value than "what you can afford".

 

[columbussquare.com_IHB]

I'm sorry, but NSR, are you going to even bother with someone who cites Wiki for cap rates? I would break down how to really break down cap rates for our new member here, but I'm tired and I have done it once or twice before. I will say you don't start with the rate first, you need to figure it out before you get the rate, and it is the first mistake in the list of OMG I can't believe someone is so naive about cap rates they would actually post that crap.

When you're more awake feel free to actually discuss the points. The example was given with two point of data solving for a third. It's a good place to start considering it was intended to be a limpness test of a proposed purchase price. Cite your list or don't post. As a "moderator" you should know the way you show someone to be "naive" is to prove them wrong. But apparently this is the type of conversation that is modeled here at the IHB. Well done.

 

[no_vaseline_IHB]

Hey No-Vas

Back in your cage.

Are you sure you want me there? I might go back to making oval racers life tough. I know where we keep the shocks in the race trailer.

You are great for getting right to the bottom of issues.

Thank you, from the bottom of my heart, and the bottom of this bottle of Glenlevit.

You may want to join the "Straight Talk Express" (IHB style)

Pre-Karl Rove savaging in South Carolina in 2000, or post? Either way, thank you.

How about an update on automotive projects.

Enjoy!!

My car is a rolling chassis, but I don't know if I have anybody to run with (if the car counts stay as small as they have lately I won't) I may have the sexiest track car you've never seen. It really is pretty. Since any magazine who might take interest in my project is now out of publication (!) I'll probally have to post them on the internet, if I decide that I care what other people think. PM me and I'll send you a couple of shots.

 

[no_vaseline_IHB]

Hey No-Vas

Back in your cage.

You are great for getting right to the bottom of issues.

You may want to join the "Straight Talk Express" (IHB style)

How about an update on automotive projects.

Enjoy!!

Hey xsocal, Have you ever seen an Autobianchi Eden Roc?

And there is no way anybody in here can discuss AMT intelligently, including myself.

Frankly, if somebody was going to park me because I was showing my ass, I figured it would be you. If I deserve to be tossed in front of the bus, lemmie have it.

 

[no_vaseline_IHB]

I'm sorry, but NSR, are you going to even bother with someone who cites Wiki for cap rates? I would break down how to really break down cap rates for our new member here, but I'm tired and I have done it once or twice before. I will say you don't start with the rate first, you need to figure it out before you get the rate, and it is the first mistake in the list of OMG I can't believe someone is so naive about cap rates they would actually post that crap.

When you're more awake feel free to actually discuss the points. The example was given with two point of data solving for a third. It's a good place to start considering it was intended to be a limpness test of a proposed purchase price. Cite your list or don't post. As a "moderator" you should know the way you show someone to be "naive" is to prove them wrong. But apparently this is the type of conversation that is modeled here at the IHB. Well done.

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