475 responses so far ↓

• 1 Renter Tom /Oct 8, 2008 at 1:45 pm  Vote:    

  I suppose there is a knife-catcher out there who will buy it at this still inflated price! Just kidding! Not bad price at all, wonder if it will set the market. Still, buying into a condo building with massive HOA problems is like being in a life raft with people what are only concerned for themselves and aren’t hesitant to turn to cannibalism. Desperate people do desperate things…

  Heck, maybe I’d buy one just or a hurricane evacuation pad….

• 2 Raffi /Oct 8, 2008 at 1:59 pm  Vote:    

  Renter Tom,

  prolly wont be much of a hurricane pad since its two blocks from the bay. The Vue has the most problems out of all the buildings, but its in a good location (relatively speaking), one block from brickell ave. and 2 blocks from Mary Brickell Village, with a little paint job on the ugly exterior you got yourself a nice building. under 100k sounds good to me, you would just have to weather the storm of crap in that building for a few years.

• 3 Shelley /Oct 8, 2008 at 2:13 pm  Vote:    

  Wow…this sold for $490,000 in 2006! That is quite a haircut. I just wish their were included pictures to see just how crappy the actual unit it.

• 4 Cristian /Oct 8, 2008 at 2:33 pm  Vote:    

  It doesn’t surprise me at all, 1 br below $100k is the tip of the Iceberg.
  South Beach already has 1 br below $100k hitting the market. The buildings are older and some of them don’t have parking but you can’t beat the south beach location, location, location.

• 5 Richard /Oct 8, 2008 at 2:51 pm  Vote:    

  The realtor could have put $50,000 as list price—its all subject to lenders approval. Very misleading–makes car dealers look almost legit with their small print

• 6 Cristian /Oct 8, 2008 at 3:02 pm  Vote:    

  @Richard

  the 1br below $100k in South Beach I’m talking about is bank owned.

• 7 Renter Tom /Oct 8, 2008 at 3:11 pm  Vote:    

  I did look up other “11″ line units in that building….there are others for sale under $120K if that is helpful.

• 8 Hugo P /Oct 8, 2008 at 3:43 pm  Vote:    

  Get ready folks… my guess is that we will see a lot of these in the near future.

  Can anyone say $200psf average?

• 9 Muir /Oct 8, 2008 at 4:43 pm  Vote:    

  Guess I’m in the minority. I see MUCH steeper drops.
  Can someone here explain to me what significance there is what it previously sold for when money was monopoly money, no doc loans ,104% financing ruled the day, straw buyers everywhere, Just what significance?
  NONE.
  At 100K would this unit cash flow positive at current rentals with 20% down?
  Maintenance at $450 (796sq feet)
  Taxes $7550 year (based on similar) = $630
  Rents are asking, ASKING $1275
  -
  Please explain to me, just how on earth $99K makes sense?
  -
  Let’s assume that the country where these properties are located are NOT in two wars and NOT facing a recession/ depression.
  -
  Now, explain why this 99K is a deal.

• 10 Renter Tom /Oct 8, 2008 at 4:56 pm  Vote:    

  Muir - You must not have been paying attention. Owners are supposed to chip in hundreds if not thousands of dollars to their rental condo each month. It doesn’t need to be cash flow positive! LOL LOL LOL You just need to make friends with your tenants…that’s priceless.

• 11 Muir /Oct 8, 2008 at 5:01 pm  Vote:    

  I’ll answer my own question so you can criticize my analysis and hopefully I’ll learn something.
  Assume a 30% decrease in taxes to $5300.
  Assume renting it for $1050
  Make/break point is 50K for me.
  -
  Now taking into consideration a domestic deep recession, Europe’s Asia’s problems, HOA problems….
  I would CURRENTLY still use the 50K as the make break point only because at some point you have to put it somewhere before the oncoming inflation (after the current deflation cycle) arrives.
  However, as this goes lower, I could revise and go lower.
  -
  But 100K?
  I thought investments were supposed to make money, NOT lose them.

• 12 Renter Tom /Oct 8, 2008 at 5:41 pm  Vote:    

  Muir - I was being sarcastic and kinda rubbing it in on our long lost buddy and former (apparently evicted) real estate investment cheerleading resident, AJ…

• 13 raffi /Oct 8, 2008 at 5:52 pm  Vote:    

  renter tom, you must have a crush on AJ I’ve never heard someone talk so much about another person haha.

• 14 Muir /Oct 8, 2008 at 6:29 pm  Vote:    

  Sorry Tom.
  Actually answered my own post before I read yours. I know your position on this.
  Still, I just want those who answered on the poll to justify their answers.
  I can’t see where my numbers and logic are wrong.
  What is their logic if not speculation?
  Unless they believe that an Argentine type hyper-inflation is just around the corner, in which case i’d like to hear about it.
  But really, other than just pulling a number out of the air, how did they arrive at an answer, did it sound good?
  More importantly, how will they know when it IS a good buy?

• 15 DJ /Oct 8, 2008 at 6:50 pm  Vote:    

  I agree that this is a sign of the times. There is absolutely no way that prices can remain artificially high in any real market, let alone this one. Stock market’s in free-fall, we might be in a recession, and credit’s tighter than my first girlfriend. Just think about how many people are out there now that want to buy, but are no longer qualified. The question now is when will the sellers and developers admit that this is the case and lower their asking prices or begin to accept the low-ball offers.

  I tried to explain to this my realtor the other day but he didn’t seem to want to hear it and tried to convince me of otherwise, which kinda turned me off to him. If you guys remember, I’m planning on buying a condo soon for cash in the $500k range. I want a nice place to live for a while. Does anyone have any recent data that reflects how much sales prices are decreasing on average here in Miami? It seems like most of the steals out there are all REOs on sub-par units, but the average seller doesn’t seem to facing reality.

• 16 Hugo P /Oct 8, 2008 at 7:08 pm  Vote:    

  Muir… I agree with you 100%. Dead on with the $50K number.

  Purchase price: Goes for $100k (forget closing costs for now)
  Rents: Assume you can rent it at $1,200. $1.5/sf, should be OK for that area.
  HOA: The $450 in the HOA fees translates into $0.56/sf. IF the HOA has no problems (not sure), this number should be OK for that building.
  Taxes: Assume they come down and stabilize at 2% of the purchase price ($5k, $420/month).

  Assuming all of this, you net $330/month ($1200-$450-$416) or $4k/year.

  That’s a 4% return on the $100k.

  The question is, who would buy this at a 4% return with the asociated risk that it might depreciate and the income could go down (vacancy, possible lower rents, HOA problems, etc)?

  I would definitely not, but I do think that at these prices, you might get more some smaller foreign ALL CASH buyers who might want a second home and are running from the stock market.

  That being said, I don’t think that there are enough of those to maintain these prices.

  For me, it’s gotta get at least to an 8% return (your $50K ), so we can start clearing some inventory here.

  Back to basics

• 17 Hugo P /Oct 8, 2008 at 7:14 pm  Vote:    

  DJ…. Amen

  I had the same experience with my broker and she started to give me all this historic data from the peak days and convincing me I had a deal. Not biting. Made a decent offer for a new condo and wasn’t accepted. Let’s wait and see. Lots of sellers are still trying to sell at a profit and it just ain’t happening.

  No one wants a loss, but it will start hurting soon and prices will adjust.

• 18 jcrimes /Oct 8, 2008 at 7:53 pm  Vote:    

  the problem(s) with sellers is that they are reacting, rather than anticipating. mainly, if i’m throwing something on the market now and i’m SERIOUS about selling it, i would price it at a level where i anticipate asking prices to be six months from now. instead, everyone follows the leader…however…the leader’s place ain’t selling in the first instance.

• 19 Hugo P /Oct 8, 2008 at 8:13 pm  Vote:    

  Check that…. just noticed I made a mistake in the taxes: If they stabilize at 2%, it’s $2k and not $5k. ($166/month)

  This bumps the return to 7% and the price to $87K (8% return)

• 20 Renter Tom /Oct 8, 2008 at 8:36 pm  Vote:    

  DJ - I’m sorta in the same boat but am perfectly fine with renting what I’ve got now since it is a great place at half the price! My thought is the capitulation will happen in this quarter. You’d have to be pretty thick skulled to not price to market after being hammered with all that is going on. But we have to remember that the denial out there is strong…very strong. People had already “cashed in” there real estate lottery ticket in their minds and are now psychologically anchored to those prices…they simply can’t face the reality of a loss instead since it would dash their mental dreams of retirement, etc. It really is a huge blow for many. But the burden of being bled each month with no end in sight will eventually get people to throw in the towel…you CAN’T beat the market….macro econ will win every time so it is better to go with the tide than try to drain the ocean (yep, that is an original quote…. ) I really ought to be a guest host on Fast Money! LOL

• 21 SB /Oct 8, 2008 at 8:59 pm  Vote:    

  Hugo, I dont understand your math. Where are you getting $87K? Also, dont you think a 2% tax rate is quite a bit of “wishful thinking”?

  Muir, where do you get $7550 in taxes on a $100k condo?

  Trying to learn here so dont flip out please. Thanks in advance.

  SB

• 22 SB /Oct 8, 2008 at 9:00 pm  Vote:    

  oh, and $450/month HOA is a tad absurd for a $100k residence too

• 23 gables /Oct 8, 2008 at 10:19 pm  Vote:    

  the fundamental reason you are not seeing private owners price at a fire sale level is they cannot afford to do so. if you paid $300k recently for a condo now valued at $200k, you would have to write off $100k. most owners have no ability to do so. they have a shot only if the banks will allow them to short sale-but many banks are not pushing the short sales-they seem to prefer to take the property in foreclosure and then fire sale the unit. the only low sale prices i see in the listings seem to be REO. i have not seen many of the short sale listing actually close. thus you cannot blame the owners for not adjusting to the new market reality-its the banks that are in denial. most owners would run from their property if given the opportunity.

• 24 RAM /Oct 8, 2008 at 10:21 pm  Vote:    

  Muir & Hugo P,

  Your calculations are wrong.

  For a cash deal, the numbers for an investor would be:

  Annual Revenue: +$14,400 (Rent @ $1,200/month)
  Real Estate Taxes: -$2,000 ($100,000 @ 2%)
  Tax Credit: +$600 (R.E. Tax Deduction of $2,000 assuming a 30% Tax Bracket)
  HOA: -5,400 ($450/month)
  Depreciation Credit: +$1,463 ($100k for 20.5 years & assuming a 30% Tax Bracket)

  NET on Cash: $9,063 (or 9.1% on your $100k).

  For a financed deal, the numbers for an investor would be:

  Annual Revenue: +$14,400 (Rent @ $1,200/month)
  Real Estate Taxes: -$2,000 ($100,000 @ 2%)
  Tax Credit: +$600 (R.E. Tax Deduction of $2,000 assuming a 30% Tax Bracket)
  HOA: -$5,400 ($450/month)
  Annual Mortgage Payments: -$4,769 (30% down = $70k mortgage @ 5.5% for 30 years).
  Mortgage Interest Deduction: +$1,245 (Annual interest of $4,149 & assuming a 30% Tax Bracket).
  Depreciation Credit: +$1,463 ($100k for 20.5 years & assuming a 30% Tax Bracket)

  NET: $10,308 (or 34.4% on the $30,000 down payment).

  For an investor, the HOA dues may or may not be tax-deductible. The IRS allows certain expenses of the HOA but not all.

  For a home buyer, if you include the tax credits for the mortgage interest and the real estate taxes, the monthly outlay is $860/month.

  I am not suggesting that this condo is a good investment. You need to take into consideration vacancy, possible lower rents, HOA problems, repairs, headaches, etc.

  All I wanted to convey is a complete financial picture of owning/investing in a rental property.

• 25 pissed /Oct 8, 2008 at 10:41 pm  Vote:    

  RAM, You are the smartest guy on this blog. I see and hear so much bullshit here. Mostly self serving personal opinions of people. It is rare to see hard facts presented like yours. Great job.

• 26 Muir /Oct 8, 2008 at 10:47 pm  Vote:    

  Folio No.: 01-4139-088-2420
  Property: 1250 S MIAMI AVE 1111
  Mailing Address: DEUTSCHE BANK NAT’L TRU CO TRS

  4828 LOOP CENTRAL DR HOUSTON TX
  77081-
  Property Information:
  Primary Zone: 6408 RAPID TRANSIT-HIGH DENSITY
  CLUC: 0007 RESIDENTIAL- CONDOMINIUM
  Beds/Baths: 1/1
  Floors: 0
  Living Units: 1
  Adj Sq Footage: 796
  Lot Size: 0 SQ FT
  Year Built: 2004
  Legal Description: VUE AT BRICKELL CONDO UNIT 1111 UNDIV 0.2257100% INT IN COMMON ELEMENTS OFF REC 23102-262 OR 22937-4474 1204 2
  Sale Information:
  Sale O/R: 24696-1536
  Sale Date: 6/2006
  Sale Amount: $490,000
  Assessment Information:*
  Year: 2008 2007
  Land Value: $0 $0
  Building Value: $0 $0
  Market Value: $330,170 $330,170
  Assessed Value: $330,170 $330,170
  Total Exemptions: $0 $0
  Taxable Value: $330,170 $330,170
  *The market and assessed values are accurately reflected.Information related to this property’s exemptions and taxable values are being updated as a result of the recent passage of Amendment One and will be available shortly.

• 27 JL /Oct 8, 2008 at 10:54 pm  Vote:    

  Here’s my question, if this unit sells at 100K tomorrow

  How long is it going to take Miami Dade to take the taxable value from $330,170 to $100,000.

  From what I’m hearing, you can’t make any assumption that the taxable value will correlate to the purchase price and that really makes it hard to make an investment thesis.

  When condos were selling for $0 in the previous bust, what were they getting taxed at…. any ideas?

• 28 Muir /Oct 8, 2008 at 11:07 pm  Vote:    

  Pissed your an amateur.
  Ram, Gables, SB
  Monthly HOAs run around 43-50 cents.
  My exact $450 I got from this site but is quoted elsewhere for units with same square feet (someone could just call and verify. 796sq/ft * 50 cents is $398 and not $450 but I have SEEN worse)
  The taxes see above. (http://www.miamidade.gov/PA/)
  Pissed. What is the mill rate? Common what is it?
  Look at assessed value and multiply. Investment or living there? I calculated investment for my $7500.
  Prove me wrong.
  I PREDICTED a drop to $5300, thoughts?
  Ram, $1200 / month?
  Are rentals going up or down? Thoughts?
  Renting it 365 / year? No leeway for downtime? Reserving anything for minor repairs?
  Ram $2000 for taxes?! Show me the money.
  SB, So what are HOAs running per square foot since you say it is ridiculous.

• 29 Muir /Oct 8, 2008 at 11:08 pm  Vote:    

  JL look above

• 30 Muir /Oct 8, 2008 at 11:19 pm  Vote:    

  OK Ram, Gables, SB
  Show me the money!
  Pissed don’t bother, out of your league son.
  Do NOT get me wrong guys, I’d LOVE to be proven wrong cause am sitting on a shit full cash and if you convince me I would be REAL happy, let’s just use real numbers instead of wishing numbers.
  Millage? Appraised value ?(JL nailed it and I posted on it with a prediction of a 30% reduction in appraised value)
  Are rents going down? (This is easy to check and I do know the answer to this one)
  Your are assuming occupancy of 52 weeks?
  -
  Let’s start with that.
  Then we can get into other numbers. How many times a year can you rent? What are the buildings finances like?
  -
  No need to even mention the economy, let’s make believe that all is well.
  Hugo, I think your original post was right on. Then you assumed a 2% on the sale. See JL my comments above.
  Tom? Your numbers? I know your thoughts and we seem to agree, but how do you see the numbers?

• 31 Muir /Oct 8, 2008 at 11:27 pm  Vote:    

  Finally before lights out here are my original numbers:
  “I’ll answer my own question so you can criticize my analysis and hopefully I’ll learn something.
  Assume a 30% decrease in taxes to $5300.
  Assume renting it for $1050
  Make/break point is 50K for me.”
  My question was:
  “Guess I’m in the minority. I see MUCH steeper drops.
  Can someone here explain to me what significance there is what it previously sold for when money was monopoly money, no doc loans ,104% financing ruled the day, straw buyers everywhere, Just what significance?
  NONE.
  At 100K would this unit cash flow positive at current rentals with 20% down?
  Maintenance at $450 (796sq feet)
  Taxes $7550 year (based on similar) = $630
  Rents are asking, ASKING $1275
  -
  Please explain to me, just how on earth $99K makes sense?”
  -
  My numbers still hold up RAM.
  Your numbers work only if the following assumptions are true:
  “Annual Revenue: +$14,400 (Rent @ $1,200/month)
  Real Estate Taxes: -$2,000 ($100,000 @ 2%)”
  Your wrong on the second and the first I’d like to hear more about in a market with much more supply than demand.
  Again everybody, if I am wrong I will CELEBRATE!
  Just show me where if that is the case.

• 32 RG /Oct 8, 2008 at 11:45 pm  Vote:    

  RAM you forgot to factor in the tax’s you would have to pay on the rental income 1200 x 12=14400 x 30%=4320. Let be realistic and say you deduct a few grand that’s still over 3k in taxes that must be factored in.
  Another thing to point out is yes it would be fair to calculate the property tax’s as mill rate times the price you paid which is about 2% however that’s not how it works nor will it ever be like that because the state couldn’t afford such a hit so the mill rate will be multiplied by the their “market value” which is over 300k.
  A third point due to the over building rents will most definitely over the next couple of years go down due to the inventory.
  I want prices to go up as I am losing and will continue to stand to loose a lot of money but I am calling it as it is really. Nothing is an investment now, you will loose. Will prices go much lower I doubt it, you have to factor in construction cost not only rental cost as must of you do. It just wont be a good investment for a long while until prices stablize and rental prices increase but to think prices of a unit like this will drop below 50k is insane despite the fact the cost/rent ratio doesnt work out.

• 33 RAM /Oct 8, 2008 at 11:54 pm  Vote:    

  Muir,

  O.K. Let’s use your numbers:

  Annual Revenue: +$12,600 ($1,050/month)
  Real Estate Taxes: -$5,300 (using your 30% discount)
  HOA Dues: -$5,400 (again your number -$450/month)
  R.E. Tax Credit: +$1,590 (30% Tax Bracket on $5,300)
  Depreciation Credit: +$1,463 ($100K for 20.5 years @ a 30% Tax Bracket)

  NET: +$4,953 (4.95% return on full asking price of $100K).

  The analysis goes for any rental property. Not just this condo.

  Again, “I am not suggesting that this condo is a good investment. You need to take into consideration vacancy/occupancy, possible lower rents, HOA problems, repairs, headaches, etc.
  All I wanted to convey is a complete financial picture of owning/investing in a rental property.”

• 34 Renter Tom /Oct 8, 2008 at 11:57 pm  Vote:    

  RG - FYI the income taxes are paid not on total rental income but on the net after expenses. Moreover, construction costs will not be a price floor on existing home inventory, it will only prevent new construction from coming online. You are correct that govt will be slow to mark down the assessed values. There is a ton of inventory and it will take years to work through that inventory and so the bottom is a long ways off. I’d buy my rental condo at $200/s.f. this minute, $250/s.f. wouldn’t be bad either, but $300/s.f. would make me think that I could do better….

• 35 Renter Tom /Oct 9, 2008 at 12:05 am  Vote:    

  RAM - You are looking at cash flow. From a wealth accumulation standpoint and assuming you do not hold this asset until you die, you should not include the “Depreciation Credit” as an expense since it will be recaptured when sold so it is just a temporary thing. Moreover, the entire purchase price can not be the basis for this depreciation since the purchase price includes items that can not be depreciated such as land which reasonably would be 15%-25% of the purchase price (all condos have X% undivided interest in the common areas which includes an interest in the land). So, the return on a cash flow basis is an inflated return until the asset is sold. Other than that nuance, good analysis and good job.

• 36 McMichael /Oct 9, 2008 at 12:12 am  Vote:    

  Wow Renter Tom, you are really smart!

• 37 Mark (Not Zilbert) /Oct 9, 2008 at 12:12 am  Vote:    

  RAM you factor in the depreciation credit, but then you keep it as profit? Buddy you’ll be spending 1.5% on maintenance on that unit trust me. You can’t just pocket it or pretty soon you’ll be a slum lord. You will likely spend more than that. Also this unit is likely a TRASH OUT meaning the insides are gutted. Copper pipes and wiring likely stolen. So you’ll be investing quite a bit at the outset. Also, rents are headed down baby. If you think otherwise you’re out of your mind. $1/SF will be the norm in 1 year. How do I know this? They built 66% too many condos (they were all non-owner occupied), purely for SPECULATION. There aren’t enough people in Miami to actually rent all these condos. The city’s population is 409K and there are currently 25 thousand condos for sale. Think about it. There aren’t enough renters plain and simple. Prices WILL fall below construction costs.

• 38 Mark (Not Zilbert) /Oct 9, 2008 at 12:16 am  Vote:    

  Also keep in mind if you look at case shiller the price crash in Miami didn’t start until July/August of 2007 so this is only 1 year in. And housing in Miami is in infinitely better shape than condos and has only fallen 50% of the way. So what do you think will happen to condos?

• 39 SB /Oct 9, 2008 at 12:16 am  Vote:    

  I guess you missed the “dont flip out” part…

  Thanks for providing nothing to help me learn more. If you dont think 5.5% in HOA fees is absurd, Ive got a bridge in Brooklyn to sell you. Hope you enjoy being your own biggest fan. Thank you very little.

  SB

• 40 Shelley /Oct 9, 2008 at 1:01 am  Vote:    

  Can anyone provide a link detailing the past condo bust where condos were going for $0. This sounds quite amazing to me.

• 41 andrey rossin /Oct 9, 2008 at 7:36 am  Vote:    

  If it is a shortsale that is not approved they caould have listed it for $50.ooo for that matter,does not make any difference unless theres a written set price from the lender it is all sheer speculation.

• 42 BFG /Oct 9, 2008 at 8:15 am  Vote:    

  Like many of these posters, I think taking the old school real estate investment approach makes sense.

  However, like many have also pointed out, there are a TON of variables out there that make it hard to really forecast how low prices will go (global recession, tight credit markets, stock market down, rising unemployment, hurricanes, Florida losing its status as retirement capital, etc). Just like we way overshot the fundamental values on the upside, I think we’re likely to overshoot them on the downside, as well.

  And based on RAM’s analysis, I don’t think it makes sense to buy this thing at $99k if you’re only getting a 4.95% return (with some big assumptions: you make enough money to get the tax benefits, there are no maintenance costs, no vacancies at all, you paid cash, taxes will go down, rents will not drop).

  When you can get 5% guaranteed on an insured CD, why would anyone bother with an investment like this?

• 43 Muir /Oct 9, 2008 at 8:16 am  Vote:    

  RAM, TOM thx, that’s what I am talking about with the numbers.
  Guys, it works better if we all try to help each other with info.
  Each of us might have some knowledge the others do not have.
  I’m here because I am interested in buying not talking down Miami condos.
  My uncertainty is when to do so.

  RAM // Oct 8, 2008 at 11:54 pm
  Muir,

  O.K. Let’s use your numbers:

  Annual Revenue: +$12,600 ($1,050/month)
  Real Estate Taxes: -$5,300 (using your 30% discount)
  HOA Dues: -$5,400 (again your number -$450/month)
  R.E. Tax Credit: +$1,590 (30% Tax Bracket on $5,300)
  Depreciation Credit: +$1,463 ($100K for 20.5 years @ a 30% Tax Bracket)

  NET: +$4,953 (4.95% return on full asking price of $100K).

  The analysis goes for any rental property. Not just this condo.

  Again, “I am not suggesting that this condo is a good investment. You need to take into consideration vacancy/occupancy, possible lower rents, HOA problems, repairs, headaches, etc.
  All I wanted to convey is a complete financial picture of owning/investing in a rental property.”
  -
  Renter Tom // Oct 9, 2008 at 12:05 am
  RAM - You are looking at cash flow. From a wealth accumulation standpoint and assuming you do not hold this asset until you die, you should not include the “Depreciation Credit” as an expense since it will be recaptured when sold so it is just a temporary thing. Moreover, the entire purchase price can not be the basis for this depreciation since the purchase price includes items that can not be depreciated such as land which reasonably would be 15%-25% of the purchase price (all condos have X% undivided interest in the common areas which includes an interest in the land). So, the return on a cash flow basis is an inflated return until the asset is sold. Other than that nuance, good analysis and good job.

• 44 Probably too Cynical /Oct 9, 2008 at 8:29 am  Vote:    

  what your analysis is also leaving out is that this building is a toilet. I toured it in 2004 when it was brand new and hated it then. it has only gone downhill since. a friend who recently moved out tells horror stories of squatters occupying vacant units. and it is now surrounded by taller buildings on all sides, so there will be zero view. it is competing with The Club and The Sail for “Crappiest Condo near Brickell.”

• 45 Dave /Oct 9, 2008 at 8:30 am  Vote:    

  On the tax front, I think the County is going to have a tough time with the comps on these properties to come up with the taxable values because they are forbidden by state law from including “distressed property sales” in thier evaluations. How many downtown condo sales are not “distressed” (ie. not short sales, foreclosures…etc)?

• 46 Muir /Oct 9, 2008 at 8:34 am  Vote:    

  RG // Oct 8, 2008 at 11:45 pm

  “I want prices to go up as I am losing and will continue to stand to loose a lot of money but I am calling it as it is really. Nothing is an investment now, you will loose. Will prices go much lower I doubt it, you have to factor in construction cost not only rental cost as must of you do. It just wont be a good investment for a long while until prices stablize and rental prices increase but to think prices of a unit like this will drop below 50k is insane despite the fact the cost/rent ratio doesnt work out.”

  It is unfortunate that you are losing money, I gain nothing from your loss and your integrity is apparent in calling it like it is.
  I was writing something long about construction costs and selling prices when I realized it wasn’t important, if they are in a position where they have to sell, they have to sell.
  Finally thx on these 2 points:
  “Another thing to point out is yes it would be fair to calculate the property tax’s as mill rate times the price you paid which is about 2% however that’s not how it works nor will it ever be like that because the state couldn’t afford such a hit so the mill rate will be multiplied by the their “market value” which is over 300k.
  A third point due to the over building rents will most definitely over the next couple of years go down due to the inventory.”
  In Palm Beach downtown condo rentals have gone down quite a bit. Different market same principle.

• 47 DJ /Oct 9, 2008 at 9:28 am  Vote:    

  Tom (post # 20)

  I hear what you’re saying man. I’m fine renting for the time being as well, but I’m kind of at a point in my life where I feel like I need to own my own home. I’ll be turning 30 in a few months, and I guess I have sort of a psychological desire to own my first place. I’ve been pretty dead set on this for a while now, but the more I think about, the more I realize I cant let my own impulses dictate this decision. I guess now it’s just a matter of waiting things out until the best deal comes along. Hopefully it’ll be sooner than later.

• 48 GT3 /Oct 9, 2008 at 9:59 am  Vote:    

  Shelly stated “Can anyone provide a link detailing the past condo bust where condos were going for $0? This sounds quite amazing to me.” It sounds quite amazing to me, too….. amazing BS. Who is going to back up JL’s statement? Are any of you doom and gloomers (who are likely rolling around in laughter and greenbacks right now) already standing in the free-condo line? I heard that Mercedes Benz is giving away S-Classes to anyone who can pay the gas-guzzler tax and sales tax. They just don’t want to keep holding on to those depreciating vehicles any longer.
  In all seriousness, if condos on Brickell went for $0 in the last bust, and this RE/condo bust is considerably worse, then owners shouldn’t be giving them away for free. The seller should be paying the buyer to take it. So forget free condos, let’s get payed to own one. Okay, I wasn’t serious after all.

• 49 Renter Tom /Oct 9, 2008 at 10:13 am  Vote:    

  DJ - I’m renting at 1/2 price without the asset price decline or HOA worries….. It is a great deal. I’m saving a ton! If you include the asset price declines, I’d save enough for a free condo in 2-3 years.

• 50 Renter Tom /Oct 9, 2008 at 10:20 am  Vote:    

  In fact, I was really looking to buy before deciding to rent but couldn’t put a value on anything to make an offer because of the uncertainty. After getting over the “must own” mindset, I decided to rent and am very very happy! When I decide to move, I won’t have the burden and expense of selling….it is a hassle with showings (if you still live in it at the time) and of course the commission. I’ll just move out, have cleaning lady do the final cleaning, and be done….so simple. Renting is the way to go in this market!

• 51 Mark /Oct 9, 2008 at 11:03 am  Vote:    

  Renters are laughing all the way to the bank.

  Scratch the wall? Not my problem, I rent. Landlord will repaint after I more out. Fridge not working? Call the landlord, have it fixed. Poor quality cabinets? No need to call customer service/carpenter and complain, I’m out of there in 8 months, what do I care if the cabinets look like utter shit. Low water pressure in the shower? Call landlord and fix it. If it isn’t perfect I’ll just deal for 8 more months. CEILING CROOKED (NEW CONSTRUCTION QUALITY SUCKS ASS)? What do I care, it’s not noticible, its not mine, I freaking rent!!!!

  Do you see why renting is fun?

• 52 Muir /Oct 9, 2008 at 11:18 am  Vote:    

  GT3 // Oct 9, 2008 at 9:59 am
  Shelly stated “Can anyone provide a link detailing the past condo bust where condos were going for $0? This sounds quite amazing to me.”
  A little off topic isn’t it?
  So, if in 05 I had told you that in 3 years 400K condos would be asking 100K, I would have been nuts?
  Oh, hindsight is 20/20.
  Well guess what, I sold Dec 04.
  -
  Why not try answering just what would be a good investment price for this condo.
  -
  The numbers point out that 100K is too high.
  Of course, it’s a free market and someone will buy which is fine by me: prices went up a rung at a time and will climb down the same way.
  I mean what are YOUR numbers? At what numbers do you make a return that you can live with?
  -
  Provide details and not what your wishing rents and costs:
  1. appraised value?
  2. millage?
  3. rentals?
  4. rentals going up or down?
  5. HOA monthly assessments? (real numbers, not what makes sense)
  -
  Really I want sales, those are the new comps for me.

• 53 Un-Related /Oct 9, 2008 at 11:33 am  Vote:    

  Renter Tom said: “DJ - I’m renting at 1/2 price without the asset price decline or HOA worries….. It is a great deal. I’m saving a ton! If you include the asset price declines, I’d save enough for a free condo in 2-3 years.”

  The “Rah! Rah! Let’s Go Condos” crew will overlook the truth in your statement because “the truth” hurts (or kills) in this market. You use the words: “I’m renting”, “great deal”, “I’m saving”, and “I’d save” in four short sentences. These are foreign concepts to the “crew” and may be the primary reason for today’s reality. That, and we don’t need a 50-story “memorial” to a “developer-borrower” (wait until this designation becomes a standard description) on every corner.

• 54 Renter Tom /Oct 9, 2008 at 11:33 am  Vote:    

  You know what makes be really upset? There is a person I met who was telling me about their real estate troubles trying to get a short sale through the bank. This foreign couple is getting a divorce and had made a combined income of $300K-$400K. They HELOC’d and credit card debt to the hilt living a lifestyle of world travels and fine wine. This lady just kept rattling on telling me things she just shouldn’t have. Then I find out she has money hidden away (substantial money) which must be in a foreign account that she won’t access until after the short sale goes through so she is anxious (and surprisingly upset) for the bank to approve the short sale. I had to bit my tough listening to all this crap. They are going to stiff the banks for over $500K (I really don’t know the total other than that is the least amount). Meanwhile she drives around in her expensive BMW with prefectly manicured hands, etc. planning her next world trip! Unbelievable. It make me sick. I think this may amount to mortgage fraud or some other financial fraud since they must have had to fill out some forms regarding the short sale…… Hiding assets and then “bragging” about it is very very sickening.

• 55 Mark /Oct 9, 2008 at 11:46 am  Vote:    

  You couldnt pay me to live in the future housing project called “Vue”. I value my life too much. Might as well call it Cabrini-Green.

  Cabrini-Green
  Composed of 10 sections, built over a thirty-year period, the last newly constucted in 1962. The construction reflected the “urban renewal” approach to United States city planning in the mid-twentieth century.

  At first, the housing was integrated and many residents held jobs. This changed in the years after World War II, when the nearby factories that provided the neighborhood’s economic base closed and laid off thousands (sound familiar????) At the same time, the cash-strapped city began withdrawing crucial services like police patrols, transit services, and routine building maintenance (sound familiar???). Lawns were paved over to save on maintenance, failed lights were left for months, and apartments damaged by fire were simply boarded up instead of rehabilitated and reoccupied (already happening at ” Vue”). Later phases of public housing development (such as the Green Homes, the newest of the Cabrini-Green buildings) were built on extremely tight budgets and suffered from maintenance problems due to the low quality of construction (sound familiar?).

  Residents lived with substantially subsidized rents (Vue will eventually become section 8 housing and people will buy the units to rent to people on welfare). However, many neglected their units and vandalized common areas both in and around the buildings. This behavior resulted in most law-abiding residents with any financial resources moving out, leaving behind the extremely poor, petty criminals, gang members, and drug dealers.

  Unlike many of the city’s other public housing projects like Rockwell Gardens or Robert Taylor Homes, Cabrini Green was situated in an extremely affluent part of the city (so this can happen even in NICE AREAS).The poverty-stricken projects were actually constructed at the meeting point of Chicago’s two wealthiest neighborhoods, Lincoln Park and the Gold Coast. Less than a mile to the east sits Michigan Avenue with its high-end shopping and expensive housing (The future of Vue).

  . The buildings’ proximity to these affluent areas made Cabrini-Green a lucrative site for illicit drug sales (this can’t happen in Miami because drugs are not a problem here, right???); in the absence of other employment opportunities, intense competition in this underground economy fostered gang formation and violence. Specific gangs ‘controlled’ individual buildings, and residents felt pressure to ally with these gangs in order to protect themselves from escalating violence.

  During the worst years of Cabrini-Green’s problems, vandalism increased substantially. Gang members and miscreants covered interior walls with graffiti and damaged doors, windows, and elevators. Many residents urinated in the hallways which were rarely cleaned. Rat and cockroach infestations were commonplace, rotting garbage stacked up in clogged trash chutes (it once piled up to the 15th floor), and basic utilities (water, electricity, etc.) often malfunctioned and were left unrepaired. On the exterior, boarded-up windows, burned-out areas of the façade, and pavement instead of green space—all in the name of economizing on maintenance—created an atmosphere of neglect and decay. The high “open galleries” were enclosed with steel fencing the entire height of the building to prevent residents from throwing garbage over the edge, from falling, or from being thrown off (giving the visual appearance of a large prison tier, or animal cages, which further enraged community leaders).[6]

  Mark here - I’ll leave you to do further research, but eventually Cabrini-Green became the murder epicenter of Chicago and the US. There were snipers that would kill police that came to investigate crimes so eventually it became Jungle Rule.

  Have a nice day condo buyers.

• 56 Mark /Oct 9, 2008 at 11:50 am  Vote:    

  Also, the peak of the violence was in the 70s and 80s only ten years after some of the newest construction. So if Vue was built in 2004 it has like 6 more years to go…

• 57 Alejandro Diaz Bazan /Oct 9, 2008 at 11:54 am  Vote:    

  There are 31 Pending Sales right now at the Vue, 27 have closed this year. There are 323 units in the building, theres 122 current Foreclosures in the building. The even numbers face Brickell and have a premium over the odd number units that face the other side. I have had closings with financing in the building so its not only cash buyers like at the Jade. I think the location with Badrutts downstairs, Segafredo and Mary Brickell within walking distance make it great and affordable. Any of these units with 10K in them (renovate kitchen to stainless steel and granite countertops and hard flooring) look really nice. The lobby is actually very nice and if I was a young professional this would be a great building to live in. You willnot pay 5K in taxes for a 100K place, as more and more of thse comps come in at 100K you should pay $1800-2500 and you can contest your assesments with the deeds. My analysis points that the current prices do make sense as I always multiply the rent by 100 and if the asking pice is less than that then I run the numbers. So I take into consideration number of Pending Foreclosures and look at the whole pipeline rather than only take in Comparale Sales and NOI/Cap Rate Once the biulding sells most of the foreclosures the building starts turning over as every time an REO sells that condo association gets back any owed maintenance fees from 6 months Prior to the Sale Date. If you close Foreclosures you see how little the Bank actually nets, its pretty bad.

  If this sells for 85K it probably owes 2007 and 2008 taxes plus it has to pay 5% commision, plus they pay for closing, plus they pay the outstanding maintenance fees due to get the estoppel letter. The Bank probably nets about 60K (not taking into consideration what they are spending in the Loss Mitigation Dept and legal fees for the Foreclosure, eviction costs, rekeying, property trash out) for this Ninja Loan they gave with probably zero down for $490K. Whsat I find the hardest to understand is not why someone would pay $490k for a 1 Bed at teh Vue (Since it is pretty obvious they were juicing it and walking away with cash at closing) but how could the banks be so careless in the lending. Now everyone asks why the economy is so bad and howcome their balance sheets are so toxic? These are prime examples.

• 58 Probably too Cynical /Oct 9, 2008 at 12:46 pm  Vote:    

  so if one rule of thumb I used to hear before everything Brickell Condo went to hell was that a building with 20% of it’s units on the market was in a ‘distressed’ situation.

  so what does this say when 38% of units at Vue are in FORECLOSURE????

  and how many buildings in spitting distance of view are in the early stages of closings? (though not too many lights on at night in these.) not to mention how many sites within a 200 foot radius of view are now just breaking ground?

  Wow. Years from now early 2000’s Miami will be a case study of how to screw up royale.

• 59 Un-Related /Oct 9, 2008 at 12:59 pm  Vote:    

  Renter Tom said: “They are going to stiff the banks for over $500K (I really don’t know the total other than that is the least amount). Meanwhile she drives around in her expensive BMW with prefectly manicured hands, etc. planning her next world trip! Unbelievable. It make me sick. I think this may amount to mortgage fraud or some other financial fraud since they must have had to fill out some forms regarding the short sale…… Hiding assets and then “bragging” about it is very very sickening.”

  Like I posted, I was “victimized” by one of these alien frauds (FOUR $500K+ foreclosures in THREE MONTHS!). A real potentate! In the instance of this particular breed of scammer, it would be nice if the “bank” could forced these crooks into involuntary bankruptcy. They would be forced to list their assets with the Bankruptcy Court and, if they lied, subject to Five Years in a federal prison and seizure of the un-disclosed assets.

  About the BMW, I’m “guessing” it’s a lease!

• 60 Muir /Oct 9, 2008 at 1:34 pm  Vote:    

  Great data Alejandro
  Alejandro Diaz Bazan // Oct 9, 2008 at 11:54 am
  “There are 31 Pending Sales right now at the Vue, 27 have closed this year. There are 323 units in the building, theres 122 current Foreclosures in the building. The even numbers face Brickell and have a premium over the odd number units that face the other side. I have had closings with financing in the building so its not only cash buyers like at the Jade. I think the location with Badrutts downstairs, Segafredo and Mary Brickell within walking distance make it great and affordable. Any of these units with 10K in them (renovate kitchen to stainless steel and granite countertops and hard flooring) look really nice. The lobby is actually very nice and if I was a young professional this would be a great building to live in. You willnot pay 5K in taxes for a 100K place, as more and more of thse comps come in at 100K you should pay $1800-2500 and you can contest your assesments with the deeds. My analysis points that the current prices do make sense as I always multiply the rent by 100 and if the asking pice is less than that then I run the numbers. ”
  -
  There’s agreement on taxes. But today, right now, they are $7500
  I calculated a 30% decrease but long term, your number looks closer than my $5200.
  Again, you are talking about a 66%-80% decrease in assessed value.
  The other side of the coin though, rentals, I disagree.
  Seems rentals are ready for a strong decrease.
  I was using $1050 month. That seems real for what this building is. So, today you get your $1250. In 6 months? A year? Will you still get $1250?
  If I move towards your number foe taxes and keep my rental then 70K seems make break.

• 61 Renter Tom /Oct 9, 2008 at 1:35 pm  Vote:    

  Where do I report these people???

• 62 AJ /Oct 9, 2008 at 2:04 pm  Vote:    

  Sup Guys,
  I was in Bombay and Goa having a jolly good time. Loved every minute of it. Cant wait to go back.

  I read an article in a local Newspaper called “The Hindu” while I was there. Here is an exerpt of the Journalist’s coversation with his friend from Lehman Brothers. A brilliant article I might say.

  For those who are not familiar with some of these Acronyms in the following article, here is the explanation:
  1) IIM = Indian Institute of Management, something in the likes of a Harvard or Wharton MBA program
  2) One Lakh = One Hundred Thousand
  3) EMI = Equated or Equal or Easy Monthly Instalments
  4) RBI = Reserve Bank of India
  5) INR = Indian Rupee

  The bursting of the speculative bubble in the U.S. housing market has
  destroyed billions of dollars in investor wealth across the world,
  crippled the banking system, expunged close to a million jobs…and
  India has not been spared either. With banks failing by the day,
  definitely, these are uncertain times for the financial services
  industry. While many people who have lost their jobs are faced with
  permanent shrinkage of their lifestyle, others in the industry are
  going through the trauma of not knowing if and when their turn would
  come. Who is to blame?

  Flashback to year 2003:

  Rohit (name changed to protect identity), a good friend of mine and
  someone who was officially considered to be a genius with an IQ of
  150+, graduated from one of the leading IIMs . Rohit managed to make it
  into the New York Headquarters of the most sought after firm that had
  arrived on campus for the first time — Lehman Brothers — a top U.S.
  Investment Bank (then). On joining, he was assigned to Lehman’s
  mortgage securities desk that dealt with Collateralised Debt
  obligations (or CDOs).

  Following is an extracted transcript of a chat session I had with
  Rohit back in 2004:

  Me: So man, you must feel like you are on top of the world.

  Rohit: Yes dude, the job here is amazing, I get to interact with
  people around the world, investment managers who want to invest
  millions of dollars

  Me: Great…so tell me something interesting. What’s your job all about?

  Rohit: You know there is a great demand for American home loans, which
  we buy from the U.S. banks. We then convert these into what is called
  as CDOs (Collateralised Debt Obligations) . In plain English, this
  refers to buying home loans that banks had already issued to
  customers, cutting them into smaller pieces, packaging the pieces
  based on return (interest rate), value, tenure (duration of the loans)
  and selling them to investors across the world after giving it a fancy
  name, such as “High Grade Structured Credit Enhanced Leverage Fund”.

  Me: Wow! I would’ve never guessed that boring home loans could
  transform into something that sounds so cool!

  Rohit: Hahaha…actually we create multiple funds categorised based on
  the nature of the CDO packages they contain and investors can buy
  shares in any of these funds (almost like mutual funds…but called
  Structured Investment Vehicles or SIVs)

  Me: Dude, you make your job sound like a meat shop…chopping and
  packaging. So, in effect when an investor purchases the CDOs (or the
  fund containing the CDOs), he is expected to receive a share of the
  monthly EMI paid by the actual guys who have taken the underlying home
  loans?

  Rohit: Exactly, the banks from whom we purchased these home loans send
  us a monthly cheque, which we in turn distribute to the investors in
  our funds

  Me: Why do the banks sell these home loans to you guys?

  Rohit: Because we allow them to keep a significant portion of the
  interest rate charged on the home loans and we pay them upfront cash,
  which they can use to issue more home loans. Otherwise home loans go
  on for 20-30 years and it would take a long time for the bank to
  recover its money.

  Me: And, why does Lehman buy these loans?

  Rohit: Because we get a fat commission when we convert the loans into
  CDOs and sell it to investors.

  Me: Who are these investors?

  Rohit: They include everyone from pension funds in Japan to Life
  Insurance companies in Finland.

  Me: But tell me, why are these funds so interested in purchasing
  American home loans?

  Rohit: Well, these guys are typically interested in U.S. Govt. bonds
  (considered to be the safest in the world). But unfortunately, Mr.
  Alan Greenspan (head of Federal Reserve Bank, similar to RBI in India)
  has reduced the interest rate to nearly 1 per cent to perk up the
  economy after the dotcom crash 9/11attacks. This has left many funds
  looking for alternative investments that can give them higher returns.
  Home loans are ideal because they offer 4-6 per cent interest rate.

  Me: Wait, aren’t home loans more risky than U.S Bonds?

  Rohit: We have made home loans less risky now. In fact they have
  become as safe as U.S Govt. bonds.

  Me: What are you saying, man? What if the people who have taken these
  underlying home loans default? Then the investors would stop getting
  the EMIs, and their returns would take a hit. Wouldn’t it?

  Rohit: Boss, may be some will default, but not definitely more than
  2-3 per cent. Moreover, we have convinced AIG (a leading insurance
  company) to insure our CDOs. This means that even if there were big
  defaults,the insurance company would compensate the investors.

  Me: that’s amazing. What are these insurances called?

  Rohit: Credit Default Swaps.

  Me: Definitely you guys are the most creative when it comes to naming.

  Rohit: Thanks.

  Me: And why has this AIG guy insured millions of home loans?

  Rohit: See man, the logic is simple. Home prices in the U.S always go
  up. In fact over the last three years alone they have doubled. So even
  if someone defaults paying the EMI, the home can be seized and sold
  for a much higher price. So there is no risk. Insurance companies are
  actually competing to insure this, because they can earn risk-free
  premiums.

  Me: No wonder investment managers from all over the world want to put
  money in your CDOs.

  *A global financial cobweb started getting built around the American
  dream of purchasing a home and it rested on the assumption that “home
  prices will keep rising”. As demand for the CDOs started growing
  across the global investment community, the investment bankers (like
  Lehman) who were meant to sell these instruments also started
  investing a significant portion of their own capital in these. I guess
  after selling the story to the whole world, they themselves got sold
  on the seemingly foolproof concept. Gradually the markets for CDOs and
  Credit Default Swaps started expanding with traders and investors
  buying and selling these as if they were shares of a company, happily
  forgetting the underlying people behind these products who took the
  home loans in the first place and on whose capacity to repay the
  loans, the safety of these products depended.

  As Wall Street firms like Lehman were churning more and more home
  loans into CDOs and selling them or investing their own money, there
  was a pressure on the banks to issue more loans so that they can be
  sold to the Wall Street firms in return for a commission. Slowly banks
  started lowering the credit quality (qualification criteria) for
  availing a home loan and aggressively used agents to source new loans.
  This slippery slope went to such an extent that in 2005, almost anyone
  in the U.S could buy a home worth $100,000 (45 lakhs INR) or more
  without income proof, without other assets, without credit history,
  sometimes even without a proper job. These loans were called NINA —
  “no income no assets”.

  The U.S. housing market went into a classic speculative bubble. Home
  loans were easy to get, so more and more people were buying houses.
  The increased demand for houses caused the price to increase. The
  rising prices created even more demand, as people started to look at
  homes as investments — investments that never went down in value.

  When I touched base with my friend Rohit in late 2005, he was on cloud
  nine. During the previous one year, he managed to buy a home in Long
  Island (a posh area near New York City) worth almost a million
  dollars, and got himself a Mercedes. All this was interesting to hear,
  but what shocked me was that although he was earning close to $20,000
  a month (that is what CEOs in India make) he was not able to save
  anything because his lifestyle expenses where growing faster than his
  salary.

  Unheeded signals

  In late 2006, Mortgage lenders noticed something that they’d almost
  never seen before. People would choose a house, sign all the mortgage
  papers, and then default on their very first payment. Although no one
  could really hear it, that was probably the moment when one of the
  biggest speculative bubbles in American history popped. Another factor
  that lead to the burst of the housing bubble was the rise in interest
  rates from 2004-2006. Many people had taken variable rate home loans
  that started getting reset to higher rates, which in turn meant higher
  EMIs that borrowers had not planned for.

  The problem was that once property values starting going down, it set
  off a reverse chain reaction, the opposite of what had been happening
  in the bubble. As more people defaulted, more houses came on the
  market. With no buyers, prices went even further down.

  In early 2007, as prices began their plunge, alarm bells started going
  off across mortgage-backed securities desks all over Wall Street. The
  people on Wall Street, like Rohit, started getting calls from
  investors about not getting their interest payments that were due.
  Wall Street firms stopped buying home loans from the local banks. This
  had a devastating effect on particularly the small banks and finance
  companies, which had borrowed money from larger banks to issue more
  home loans thinking they could sell these loans to Wall Street firms
  like Lehman and make money.

  Everyone got into a mad scramble to seize and sell the homes in order
  to get back at least some of the money. But there were just not enough
  buyers. The guys who had insured these loans thinking they had near
  zero risk (e.g. AIG) could not fulfil the unexpectedly huge number of
  claims. The best part was that since these insurance policies (credit
  default swaps) could themselves be traded, multiple people had bought
  and sold them, and it became so tough to even trace who was supposed
  to compensate for the loss.

  The global financial cobweb built around mortgages is on the brink of
  collapse. Firms, large and small, some young some as old as a 100
  years have crumbled as a result of suing each other over the dwindling
  asset values. Lehman’s India operations, that employed over a thousand
  staff, is up for sale and many of the employees have been asked to
  leave. The Indian stock market has crashed almost 50 per cent from its
  high (and so have markets around the world) as the Wall Street giants
  sold their investments in the country in an effort to salvage whatever
  is good in order to make up for the mortgage related loss. Hedge
  funds, pension funds, insurance companies all over the world have lost
  billions in investor’s money. Many Indian B-School graduates with PPOs
  (pre-placement offers) in the financial sector (India and abroad) have
  either received an annulment or indefinite postponement of joining
  dates. IT firms that built and maintained software for the U.S.
  mortgage industry or the related Investment Banks, have shut down
  their business units, laid-off people or transferred them to other
  verticals.

  Fragile system

  For all the hoopla over the sharp and sophisticated people on Wall
  Street, the current financial crisis has exposed the fragility of the
  system. Wall Street is blaming the entire episode on people who could
  not repay their home loans. But the reality seems to point towards the
  stupidity of people who lent all this money, financial institutions
  that built fancy derivative packages and in effect facilitated
  billions in trading and investments in these fragile low quality
  loans.

  The U.S. Govt is planning to grant 700 billion dollars to the Wall
  Street firms to compensate the financial speculators for the money
  that they have lost. Isn’t this like rewarding greed and stupidity?
  The head of a leading Investment Bank has stated, “This is necessary
  to sustain financial ingenuity. We don’t want to spend this money on
  ourselves. We just want this money to go into the market so that we
  can carry on trading complex securities, borrowing and lending
  money.” (Yeah…right, so that one can act as if nothing had happened
  without analysing too much into it). The real question is: Who is
  going to compensate the common investors across the world who have
  lost their wealth in the resultant market meltdown? (either directly
  or through pension funds).

  After being unreachable for a month now, finally I heard back from my
  pal, Rohit, saying he is back in India to take a break from the roller
  coaster ride that he had lived through. After Lehman’s collapse he has
  lost his job and probably the house that he had bought by taking a
  hefty loan. I really don’t know whether to feel happy for him, for
  getting an opportunity to learn a lesson or two from the experience or
  to feel sad for him for losing his job. May be I’ll get a better sense
  of things once I meet him next week,

• 63 The Ace /Oct 9, 2008 at 2:07 pm  Vote:    

  The Smart Money was spot on the money at $125.00 per square foot. How many crazies on here said that The Ace was crazy.

  Well who’s crazy now!

  Keep yer powder dry there will be a flood of Condo’s at the $125.00 per square foot in the not to distant future.

  The Smart Money

• 64 JL /Oct 9, 2008 at 2:19 pm  Vote:    

  People have to understand the tough psychology involved here for an owner to price their units to sell in this market. By doing so, many owners now would have to admit to themselves that they are 3x the fool on the property.

  1) Fool move#1- Not reassigning your condo contract early on to somebody else for a possible small profit/loss or break even when it seemed the market was turning.
  2) Fool move #2- Closing on the condo thinking that by doing so, you could do better than receive your 5% deposit back while forfeiting the other 15% by not closing.
  3) Fool move #3- Not selling soon after closing thinking it couldn’t go down more than 20% of your closing purchase price.

  It’s extremely tough admitting you f’ed up 3x on one deal.

• 65 Miami2009 /Oct 9, 2008 at 2:22 pm  Vote:    

  This puzzles me…A unit at Emerald at Brickell hit MLS a day or two ago:
  Unit 1607 1/1 listed at 700K and 733 HOA about 863 $/SF or so. WTF! Is this person mad? Why would a RE Agent even entertain this listing at this day and age???

• 66 Renter Tom /Oct 9, 2008 at 2:32 pm  Vote:    

  JL - As I previously posted people are psychologically anchored to the “lottery ticket” price of their condos then ever before, the denial is uber strong.

  The capitulation in home prices has just begun……..

• 67 Un-Related /Oct 9, 2008 at 2:46 pm  Vote:    

  JL said: “People have to understand the tough psychology involved here for an owner to price their units to sell in this market. By doing so, many owners now would have to admit to themselves that they are 3x the fool on the property.

  1) Fool move#1- Not reassigning your condo contract early on to somebody else for a possible small profit/loss or break even when it seemed the market was turning.
  2) Fool move #2- Closing on the condo thinking that by doing so, you could do better than receive your 5% deposit back while forfeiting the other 15% by not closing.
  3) Fool move #3- Not selling soon after closing thinking it couldn’t go down more than 20% of your closing purchase price.”

  Your “FOOL MOVES” #2 and #3 are precisely that. You are equally dead from being hit by “falling knives” no matter the greedy motivation you had. You are definitely “stupider” if you “closed” hoping for the best!

  Your “FOOL MOVE #1″, in most cases, was a FRAUD perpentrated on you as a Buyer by the “Developer/Borrower”. They would NOT LET YOU SELL OR, IN ANY WAY, TRANSFER “YOUR” CONTRACT. I wanted to dump a pair of losers bought in 2005 (for a “REAL” reason) in 2006 for a 50% deposit LOSS and was basically told I would be sued and would lose the entire 100% if I even made a proposal to that effect. When they finally opened a “re-sale” program, they would not list for less that 2005 price paid and almost 8%.

  Think this is bad? You should see the 900 Biscayne, Met 1, etc. contracts. It is “close or lose 100%”. I have even heard of Cornerstone’s lawyers sending out letters saying: “Close or else we will charge you, or sue you for, liquidated damages of $100+ PER DAY! (A month later, they voluntarily gave the sh*t-hole project back to the bank!)

• 68 Renter Tom /Oct 9, 2008 at 3:15 pm  Vote:    

  One thing that I haven’t heard about anywhere in the media is that fact that stocks are mostly owned by older people, that is older people (those nearing and those in retirement) own a very high proportion of the total stocks outstanding compared to the 45 and under crowd. Why, well they are the ones with accumulated assets. Hence the recent stock market declines are going to hit the older population the hardest and we’re seeing that decline cause old people to bail out of the stock market to preserve their wealth which is causing a further decline. Hence, I think the market is going to get oversold because of this disproportionate ownership of stocks by old people who don’t have the buy and hold outlook of 20-30 years. Just a thought on who owns what and the psychology behind it. The declines to a 30 year old is a worry but to a 65 year old it is a true panic.

• 69 Probably too Cynical /Oct 9, 2008 at 3:16 pm  Vote:    

  interesting commentary on the rental market here:

  just saw a 2B/B unit I was looking at in 2004 (unit was brand new at the time and had never been lived in) and was priced at $1900 (I offered $1800 and they wouldn’t budge) now on the market for $1500. (and I bet I could get them down to $1250 today!)

• 70 lyz /Oct 9, 2008 at 3:20 pm  Vote:    

  Th Bank just approved unit 505 of Loft Downtown @ $110,000 . Still looking for a buyer that close before October 23. This will be the lowest sell in this building.

• 71 lyz /Oct 9, 2008 at 3:30 pm  Vote:    

  Thanks Mark.

  Is already on the MLS. Is been there for a while for $130,000 and when the bank finally approved the buyer couldn’t get financing. So now the bank went down to $110,000 in order to close on or before Oct 23 or there is a penlty to be paid.

• 72 Un-Related /Oct 9, 2008 at 3:52 pm  Vote:    

  Renter Tom said: “Hence, I think the market is going to get oversold because of this disproportionate ownership of stocks by old people who don’t have the buy and hold outlook of 20-30 years. Just a thought on who owns what and the psychology behind it.”

  The psychology may be: An Obama - Pelosi - Reid Market may take to Dow back to 1,000. You only think the market is bad now. It’s currently being driven by million-share sales by mutual funds because of investor redemptions. AThe big dose of socialism doesn’t work - ask the Japanese (a 35,000 Nikkei in early-1990’s. Never saw 20,000 again.)

• 73 Frank Hopkins /Oct 9, 2008 at 3:53 pm  Vote:    

  There is a foreclosure coming up at Aqua. A large 4,000 square foot townhouse for 200 dollars a square foot. Also I heard about a view available on the beach for same price per square foot. People appear to be losing their jobs rather quickly and the money they have in the condo they cannot pull out.

• 74 DJ /Oct 9, 2008 at 4:10 pm  Vote:    

  Is there anywhere that you can view all of the foreclosure listings?

• 75 Mark /Oct 9, 2008 at 7:02 pm  Vote:    

  Listen, the rents at vue will eventually reach the level that section 8 housing government vouchers pay? I think it’s $800/month for a one bedroom. hope you like the “vue” of getting stabbed in the eye and heart by a lil’ wayne look alike.

• 76 Mark /Oct 9, 2008 at 7:07 pm  Vote:    

  section 8 voucher program (aka the future of “vue”)

  Under the voucher program, individuals or families with a voucher find and lease a unit (either within a specified complex or in the private sector) and pay a portion of the rent (based on income, but generally no more than 30% of the family’s income). The PHA pays the landlord the remainder of the rent, subject to a cap referred to as “Fair Market Rent” (FMR) which is determined by HUD. FMR is determined by several factors, including:
  the geographic area (city or county) where the unit is located (generally, a unit in a metropolitan area will have a higher FMR),
  the unit size (in terms of the number of bedrooms; generally, the more bedrooms the higher the FMR, while a studio apartment would be at the low end), and
  whether the owner or tenant will pay utilities (generally, FMR is higher for units where the owner pays utilities).
  The landlord cannot charge a Section 8 tenant more than FMR, even if the landlord does so for non-Section 8 tenants in similar units.
  In addition, landlords, though required to meet fair housing laws, are not required to participate in the Section 8 program. As a result, some landlords will not accept a Section 8 tenant. This can be attributed to such factors as:
  not wanting the government involved in their business, such as having a full inspection of their premises for HUD’s Housing Quality Standards (HQS) and the possible remediations required[1],
  fear that a Section 8 tenant will not properly maintain the premises,
  a desire to charge a rent for the unit above FMR,
  unwillingness to initiate judicial action for eviction of a tenant (HUD does not permit a landlord to change the lock or cut off utilities as a means of evicting a Section 8 tenant, even when state law does permit such).[citation needed].
  However, other landlords willingly accept Section 8 tenants, due to:
  a large available pool of potential renters (the waiting list for new Section 8 tenants is usually very long, see below),
  generally prompt regular payments from the PHA for its share of the rent, and/or
  a perceived higher quality of tenants, since a tenant can be permanently removed from the Section 8 program if s/he damages the rental unit and/or fails to pay his/her share of the rent.
  Whether voucher or project-based, all subsidized units must meet HQS, thus ensuring that the family has a healthy and safe place to live. This improvement in the housing stock is an important by-product of this program, both for the individual families and for the larger goal of community development.
  In many localities, the PHA waiting lists for Section 8 vouchers may be thousands of families long, waits of three to five years to access vouchers is common, and many lists are closed to new applicants.

• 77 Mark /Oct 9, 2008 at 7:09 pm  Vote:    

  Yeah Yeah Yeah Yeah
  Miami, uh, uh
  Southbeach, bringin the heat, uh
  Haha, can y’all feel that
  Can y’all feel that
  Jig it out, uh

  Here I am in the place where I come let go
  In Miami the base and the sunset low
  Everyday like a mardi gras everybody party all day
  No work all play okay
  So we sip a little something leave the rest to spill
  Bein’ jolly at the bar running up a high hill
  Nothin less than nil, we’re addressed to kill
  Everytime the ladies pass, they be like (Hi Will)
  Can y’all feel me, all ages and races
  Real sweet faces
  Every different nation, Spanish, Haitian, Indian, Jamaican
  Black, White, Cuban, and Asian
  I only came for two days of playing
  But every time I come I always wind up staying
  This the type of town I could spend a few days in
  Miami the city that keeps the roof blazing

  Party in the city where the heat is on
  All night on the beach till the break of dawn
  Welcome to Miami (bienvenido a Miami)
  Bouncing in the club where the heat is on
  All night on the beach till the break of dawn
  I’m going to Miami
  Welcome to Miami

• 78 Mark /Oct 9, 2008 at 7:12 pm  Vote:    

  Is it me or is the new AJ crazier and brokier?

• 79 Alejandro Diaz Bazan /Oct 9, 2008 at 7:22 pm  Vote:    

  Muir,

  I was using $1,000 a month for a one bedroom at the Vue as my figure, which these units with upgraded kitchens to stainless steel and ceramic or wood floors would easily get occupied with a small vacancy rate at $1000 a month. I have been at the Vue at night and there is a lot of activity with Badrutts next door, mary Brickell Village and Segafredo. Anyone who actually lives in the building can start to see its turning around, there is a valet now and you see much activity at night. I think it looks and feels like a great building for young professionals, you can walk to work and to entertainment and $1000 a month is affordable to live in a nice one bedroom in the City, especially if you have to drive to Kendall from Brickell during rush hour, you would make up the difference in gas not to mention the amount of wasted hours you would actually loose on the drive. I live in the Grove and I always drive a couple of times a week to go to mary Brickell for dinner or to Segafredo, I would like to have access to all these within walking distance. While Brickell 3 years ago was regarded as ultra luxury thanks to this ridiculous construction boom it has become a real city where you can walk to work and walk to entertainment

• 80 Muir /Oct 9, 2008 at 7:51 pm  Vote:    

  Thanks for the info Alejandro.
  Ok, I’ll revise upwards to 65K-70K as logical.
  You are at 85K.
  After today though, with the Market tumbling and the MSM using the word “crash” in prime time TV, it would seem that my 50K makes sense.
  If things get worse, by the by, look over IMF report today, then I revise downwards.
  Someone wanted to see condos for close to 0.
  They may yet see something close to that, but there is no telling.
  If we go hyper-inflation then a 1/1 in the view will sell for 1 mil (but a gallon of milk will cost $100)
  -
  Some people REALLY hate the building (besides Mark)
  I’ve never walked inside of it or really looked at it.
  You mentioned some scary numbers: “There are 31 Pending Sales right now at the Vue, 27 have closed this year. There are 323 units in the building, theres 122 current Foreclosures in the building. The even numbers face Brickell and have a premium over the odd number units that face the other side. I have had closings….”

• 81 Miami2009 /Oct 9, 2008 at 8:05 pm  Vote:    

  How will this effect surrounding buildings, Emerald, Jade, etc…

• 82 AJ /Oct 9, 2008 at 9:46 pm  Vote:    

  Toms post #67 is the same buzz happening all over the internet. When people liquidate their stocks, what are they going to do with that money? Re-Invest in plunging commodities? Keep it under the mattress and lose it to inflation? Buy a hard and tangible asset like RE? What do you guys think? I think buying up RE outright with all cash and renting might get you the same returns as leaving the money in a CD. The pool of renters is swelling like a tidal wave and will remain so for the next 3 years due to squeaky tight credit. But ofcourse this is not for everyone. If someone does not have a stomach for being a landlord, he should not get into this.

• 83 AJ /Oct 9, 2008 at 9:58 pm  Vote:    

  Lot of smart guys seem have joined this blog. OK, can someone answer this?

  The Universe is always a zero sum game. A loss somewhere is a gain elsewhere. So what happened to the Trillions of Dollars that were robbed from the investment firms all over the World from 2003 to 2007 who bought the dubious mortgage backed securities? All those who sold their props between 2003 and 2006 should be the beneficiaries of all that cash. Where is that cash now? What happened to it? Was it ploughed back into the RE market or invested in stocks, commodities?
  Was that the same cash responsible for DOW to climb to an all time high of 14,000 in October 2007?

• 84 Renter Tom /Oct 9, 2008 at 10:05 pm  Vote:    

  AJ - There are tons of better real estate investments than these Miami overpriced condos. You’re much better off investing in an apartment complex than owning a condo and being a landlord. Right now, gold is still seeing a flight to preserve wealth speculation when you compare its % move to other metals. India is getting slammed so they won’t be buying up a lot of gold like they did. Cash or treasuries is where people are keeping their money for the 3%-5% guaranteed return. Makes sense. There seems to be a comprehensive deleveraging of all assets. The last thing I would want to get stuck with is a declining illiquid asset with no buyers like a Miami condo which is not on illiquid but has very high transaction costs and very high holding costs. People need cash so they are cashing out what is easiest to sell….stocks being one of them both for cash and second for wealth protection. The old people are bailing big time with a click of a mouse (well for those that can operate a computer)….

• 85 Renter Tom /Oct 9, 2008 at 10:12 pm  Vote:    

  The Universe is always a zero sum game.

  That doesn’t apply. If your reserve requirements are low the money multiplier is high. Hence $1 becomes $40 in lending power….. Simple banking economics….which is why no bank can survive a run on the bank.

  However, we are seeing runs on mutual funds, hedge funds, whatever so there are tons of sellers and not a lot of buyers (afterall who has the cash after those “investment” condos bleed cash). Just like housing, there are more sellers than buyers at the moment so the only way to attract a buyer is to lower the price and that is what is happening at the moment. Am I worried? Nope, not really since the price today will not be the price in 20 years. I am concerned however….on how it affects growth going forward and of course the human suffering that this will all cause. I hope those irresponsible people who caused this realize that people will die because of this…..in poor countries thousands if not hundreds of thousands will die of starvation, poor nutrition, etc. Very sad and we all have a responsibility to conduct ourselves ethically since when we don’t other get hurt.

• 86 Renter Tom /Oct 9, 2008 at 10:14 pm  Vote:    

  The good news is, as a renter, I can sleep worry free all night long……. And I can always buy later when I want to, unlike people who own now and are trying to sell.

• 87 JL /Oct 9, 2008 at 10:54 pm  Vote:    

  AJ physics is a zero-sum game in real-time. Macro-economics does not work in real time and what you are seeing right now might be the zero summing taking place on a macro level.

  You ask the question what happened to the trillions of dollars that were “lost” by Investment Banks or maybe it can be asked what happened to the trillion+ recent “loss” of equity in the Stock market or housing market

  What if you are looking at it all wrong? What if leverage and financial engineering for the past 7 years made it look like we had trillions of gains in housing and stocks and banks, when in fact the emperor had no clothes and right now, we are seeing that?

  Is there really a “loss” if the temporary gain was based on a fabrication and illusion? Imagine the SEC allowed 40:1 overnight leverage for stocks… guess what, the market would go from 8,000 to 80,000 pretty fast. But then let’s say they brought the leverage back to 2:1. The 80,000 would come right back down to 8,000. Going from 80,000 to 8,000… could you say anything was really lost or can you say the gain was never real and the “loss” is the market taking valuation back to reality.. ie. taking it back to a zero sum game? Is the Dow going from 14,000 to 8,600 a “loss” or better described as going to a valuation for companies when institutional leverage is brought back to normal.

  Not that long ago, if you went to a bank and tried to get a loan, they would assess you, your needs, your history and your ability to pay and they would loan you a maximum of 1 unit equal to what you could pay back. ie. if you are worth 1 unit, you would get loaned 1 unit keeping things in a zero sum game.

  Somewhere along the line, a person that was worth 1 unit was allowed to borrow 2 units and near the end, people that were worth 0 units were allowed to borrow 5 units. All the while through financial engineering and obfuscation it appeared that banks were generally still loaning 1 to 1.

  Now what’s happening is that every institution is being called out on their books. You can’t tell me you are 1:1, you have to prove in the marketplace that you are 1:1. And fair or not, a lot of institutions at this point are holding things that the market is valuing way less than 1:1.

  Miami condos… were they really worth what they were selling at 3 years ago or were they artificially propped up by free money loans and now the zero sum game is happening? Think about that.

• 88 Renter Tom /Oct 9, 2008 at 11:13 pm  Vote:    

  It really is simple. Say I bought a condo for $500K in 2004 and in 2005 I say it is worth $900K and try to sell it for that. If someone buys it for $900K then I now have that $900K but if no one buys it for that price and the only offer is for $520K…then where did the $380K go? Nowhere, it never existed except in my mind.

  Likewise, a share of GE last month is pretty much the same thing now but there are just not a lot of people out there who want to buy it, there is not a big market for it at the present. Big deal if you weren’t going to sell it right then what do you care what people are willing to buy and sell it at right now? Likewise you can’t really say a company is worth the last sale price multiplied by the number of outstanding shares (the company market cap). You can’t value an entire company on the spot price of one share bought and sold at the margin….I guarantee you that if all the shares came on the market all at once the real market cap would be substantially lower.

  You must always look at the underlying asset/value of your investments, not the last market price at the margin. Again, if you buy quality assets, then sit back and relax.

• 89 Dubai Dude /Oct 10, 2008 at 4:57 am  Vote:    

  There is another reason Miami is not selling….. In my Humble and Ignorant Opinion

  I recently visited Miami with a view to purchase, however, albeit on short notice, out of 4 real-estate agents, not 1 would show me a property ‘of the cuff’. Given sellers are so desperate, why is it you need to book an appointment 4 days in advance? Why can you only see properties on a Saturday? Why are the agencies closed on the weekends? Why do the agents charge 6%????!!!??? Do they have post boom arrogance?

  Obviously im from a different world where agents show you properties the same day, where commission is 2% where you don’t need an appointment, and that’s in a market that booming. For instance, you can ask the doorman which apartments are for sale and not only will he tell you, he will give you the keys to have a look when you walk in off the street…

  BTW, i dont include Lucus in this who was more then willing to help, however, he was to busy with other clients, maybe because he is the only decent realtor in Miami? The others are so depressed they cant even be bothered to show you anything!

  From what i saw in my few days there, lots of empty buildings, way over prices and no one making an effort to sell. Out of 3 properties i wanted to see - the realtors listing them refused and tried to show me other properties if I waited a week!

  Anyway, glad i didn’t invest, i feel terrible for the owners, but your economy is in dire straights. It could be years before you get the investors back - thats assuming prices are reasonable, real-estate agents actually do their job and the economy bounces back - physiologically, its a mess and will need years of therapy…..

  If I was selling, id do it myself and not list it with anyone, agents are not worth 0.5% let alone 6%!

  P.S if you want foriegn investors to buy second homes - push south beach propeties, nothing else looked interesting

• 90 Alejandro Diaz Bazan /Oct 10, 2008 at 5:02 am  Vote:    

  I dont know how relaxed Id be to pick up stock right now, after Lehman brought zero into the equation it really reminded me that you can only loose 100%. I really thought it was a goode deal at $3.60 the Friday before it went bankrupt. Everyone was expecting a market rally after the bailout, then nothing, everyone was expecting a market rally after the Fed rate cut, then again nothing. Can you imagine what it would do to unemployement ig General Motors or Ford go down. The Volatility index is in historical highs and the market has chrashed, every time I turn on the News I only see Disaster on Wall St and How is it going to affect you and a bunch of talk hosts criticizing the greed of Wall St.

  Plus the FDIC will need and will get a bailout when more small to mid size banks collapse, that is one thing that the govt cannot let happen in the US, bank deposits need to be covered

• 91 Mark (Not Zilbert) /Oct 10, 2008 at 5:26 am  Vote:    

  AJ, what are investors putting money into? Physical gold you dimwit: http://www.ft.com/cms/s/0/8de8c988-90d1-11dd-8abb-0000779fd18c.html

  NOT OVERPRICED MIAMI HOUSING PROJECTS

• 92 Mark (Not Zilbert) /Oct 10, 2008 at 5:27 am  Vote:    

  Buy stocks now. The market is oversold and there will be a huge reversal on options expiration week. If you want a good buy and hold investments now is the time to buy Ford stock. Buy when the streets are red with blood.

• 93 Mark (Not Zilbert) /Oct 10, 2008 at 5:29 am  Vote:    

  Also, the market is way oversold in the near term. In the long term the market is going down further, but expect to see ford at $35/share by 2015 if they don’t go bankrupt (and I don’t think the govt will allow that).

• 94 Mark (Not Zilbert) /Oct 10, 2008 at 5:33 am  Vote:    

  Hey RT, what I find amazing is AJ’s ability to rationalize his dumb mistake. He refuses to tell us the price/sf he bought at now because he doesn’t want to be made to look a fool. Of course he’ll eventually reveal to us what an astute investor he is in the future once he is sure prices bottomed. I’m sure he’ll then say “I bought at $125/sf”. Yeah right!!! What building is he even in? Plaza? I’m going to check sales history, I’m sure recent sales are already lower than what he paid. Good thing all RE transactions are public!

• 95 Mark (Not Zilbert) /Oct 10, 2008 at 6:08 am  Vote:    

  There will be a reversal next week….but the response to GE coming inline makes me less sure. In this case I wouldn’t recommend knife catching, but if ford falls to $1-1.5/share then I’m buying.

• 96 Mark (Not Zilbert) /Oct 10, 2008 at 6:13 am  Vote:    

  Also, I’m buying AUY (been buying for a while). If I lose money I’ll admit to it unlike AJ.

• 97 Mark /Oct 10, 2008 at 6:44 am  Vote:    

  The crisis was caused by the largest leveraged asset bubble and credit bubble in the history of humanity where excessive leveraging and bubbles were not limited to housing in the U.S. but also to housing in many other countries and excessive borrowing by financial institutions and some segments of the corporate sector and of the public sector in many and different economies: an housing bubble, a mortgage bubble, an equity bubble, a bond bubble, a credit bubble, a commodity bubble, a private equity bubble, a hedge funds bubble are all now bursting at once in the biggest real sector and financial sector deleveraging since the Great Depression.

  Translation to AJ: buy Miami real estate

  German forces have invaded Poland and its planes have bombed Polish cities, including the capital, Warsaw.
  The attack comes without any warning or declaration of war. Britain and France have mobilised their forces and are preparing to wage war on Germany for the second time this century.

  Translation to Polish AJ of 1939: buy Polish real estate

• 98 Miami2009 /Oct 10, 2008 at 8:22 am  Vote:    

  I have been looking at Ford for a while now…If it goes anywhere near $1 I’m in!

• 99 Miami2009 /Oct 10, 2008 at 8:23 am  Vote:    

  Now that I have some spare cash, since the Miami condo purchase is on hold for a while.

• 100 carbonblackcab /Oct 10, 2008 at 9:48 am  Vote:    

  Dubai Dude: How are things in Dubai? I heard that the housing bubble there is going to make the Miami bubble look like a minor correction.

  About the stock market, it is going to get worse before it gets better. There is a lot of money on the sidelines and the rebound will be HUGE. We will probably set a one day record for number of points gained. Then it will go down again and slowly come up over the years.

  I would not touch Ford, GM with a 10 foot pole. They are more toxic than the sub-prime mortgates issues in Miami to starbucks employees.

  If you must put your money into the stock market, go with companies that have solid earnings/revenue like GE, AAPL, MSFT, WalMart, etc.

• 101 carbonblackcab /Oct 10, 2008 at 10:16 am  Vote:    

  AJ (Post #82): Miami has a net population loss. So there will NOT be a flood of people waiting to rent. People who want to rent are already renting. People who cant afford to live here are leaving for cheaper places up north.

  About buying it outright and renting to make money vs putting it in a CD….that is incorrect. Given the current property tax, insurance rates, HOA, renting out a condo will result in a loss. You will be in the red every month. The risk of “assesments” is also high given the high level of empty condos that dont pay HOA fees.

  The days of buying real-estate as investment are over. The party ended in 2005.

  With the stock market bust of 2000-2001 and now this bust in 2008, we are going to lose an entire generation of investors. I know people who have been wiped out by this mess. I will be putting more money in my savings account than I will be putting in the stock market. Actually that is what the country needs right now….people who save their money.

• 102 Hugo P /Oct 10, 2008 at 10:35 am  Vote:    

  Alejandro Diaz Bazan:
  I would like to talk to you about REO properties. where can I reach you?

• 103 AJ /Oct 10, 2008 at 10:59 am  Vote:    

  JL,
  Spot on. Zero Sum is a concept applicable in Physics, not Wall st.
  In any case, I am happy when I see the Dow, Hang Seng, FTSE, Sensex, Nikkei etc get cut in half. This concept of getting something for nothing has to change.

  My question, how come smart people defend the practice of running up share prices based only on a companies ability to produce future profits and dividends and nothing to do with current ground realities? It is the same as running up RE prices expecting a furure increase in housing prices.

  Those who invested in oil when it was $140 or $120 or $100 are getting pasted. Those who are investing in Gold will get pasted too.

  Only two things in the world matter to people. Food and shelter. Everything else is a speculation.

  By the way, I am planning to securitize the ability of a country to produce the food grains and meat. I am starting an exchange soon. Any Takers?

• 104 Renter Tom /Oct 10, 2008 at 11:27 am  Vote:    

  carbonblackcab - This multiple asset deflation is taking its toll. What asset is safe? ALPACAS!!! I hear you can fit them with little booties to prevent the neighbors below from complaining. You can also teach them to be toilet trained like those cats. They fit perfectly in those studios and one bedroom condos….and if you get one of those three bedroom condos you can legally label them and their wool as “range free”. They are great to snuggle up to in the cold winter (no need for heat) and if it gets really cold you can pull out your light saber ala Star Wars V and crawl inside to prevent freezing to death just in case. They also look great in bonnets.

  Other than Alpacas and FDIC insured cash/treasuries I’m still looking…..

• 105 teepee /Oct 10, 2008 at 11:39 am  Vote:    

  Back on topic - anyone know what the actual HOA dues are for a 1br at the Vue? I see ones listed for $450/mo. and others around the $700/mo. mark. Wondering if they jacked HOA dues recently due to all the non-paying units…

• 106 Muir /Oct 10, 2008 at 11:41 am  Vote:    

  What?!!
  No takers on the 99K condo?!!
  Shame on all of you!

• 107 Renter Tom /Oct 10, 2008 at 11:46 am  Vote:    

  Muir - The apalcas produce softer wool when they have direct ocean views….. so this unit would just make for a better apalca slaughter house then alpalca farm….hopefully it has restaurant grade appliances to handle all that apalca meat!

• 108 Muir /Oct 10, 2008 at 12:32 pm  Vote:    

  
  Awesome Tom!

• 109 Mark (Not Zilbert) /Oct 10, 2008 at 12:37 pm  Vote:    

  Okay AJ, you already bought RE months ago so you WERE SCREWED. I’ve been buying gold for years. It’s up 22% this year. SO WHO’S DUMB?

  Agriculture, energy, etc will be back with a vengence. Trust me. The amount of money base we are creating now is insane. INSANE inflation is coming.

  Treasuries down even when market is down for the last 3 days, what does that tell you?

• 110 Mark (Not Zilbert) /Oct 10, 2008 at 12:41 pm  Vote:    

  ford is completely different than GM. GM is a finance company. Ford still makes cars. See ford fiesta ford kuga ford mondeo. Fiesta gets 56 mpg on gas alone. That’s better than the prius and it will cost as much as a smart car (which gets like 35 mpg). Ford will be back.

• 111 raffi /Oct 10, 2008 at 12:45 pm  Vote:    

  great now we have Mark (not zilbert) trying to convince us to buy ford stock hahaha. what happened your real estate gig finished? I would buy anything but stock or hold cash, huge inflation is coming so it will all be worth nothing, maybe real estate wont be such a bad choice. you gotta buy something gold, land,etc. cause in 3 yrs. the dollar of today will be worthless.

• 112 Mark (Not Zilbert) /Oct 10, 2008 at 1:12 pm  Vote:    

  If there is inflation stocks perform poorly, but they do no become worthless. Stocks are a portion of a company.

• 113 Mark (Not Zilbert) /Oct 10, 2008 at 1:14 pm  Vote:    

  Ford stock will perform better than Miami RE. I just bought 10K shares at 1.87. That’s a 4th of a position. If it goes lower I buy another fourth. Also, I am telling you what I am doing not to convince you but to inform you. That way if I’m right, you’ll know (and we already know AJ is wrong).

• 114 jcrimes /Oct 10, 2008 at 1:29 pm  Vote:    

  AJ
  with all due respect, please take an introductory finance class.

• 115 Muir /Oct 10, 2008 at 2:41 pm  Vote:    

  Mark (Not Zilbert) // Oct 10, 2008 at 12:37 pm
  … I’ve been buying gold for years. It’s up 22% this year. …

  Agriculture, energy, etc will be back with a vengence. Trust me. The amount of money base we are creating now is insane. INSANE inflation is coming.

  Treasuries down even when market is down for the last 3 days, what does that tell you?
  —
  raffi // Oct 10, 2008 at 12:45 pm
  … I would buy anything but stock or hold cash, huge inflation is coming so it will all be worth nothing, maybe real estate wont be such a bad choice. you gotta buy something gold, land,etc. cause in 3 yrs. the dollar of today will be worthless.
  —
  —

  Humor me, aren’t you both saying the same thing and arguing only about what to do about it?
  If I were not for the possibility that gold could be declared illegal for financial transactions, I’d buy more.
  Keep thinking about 007s’ Goldfinger and his smuggling gold cappers (youngsters here would not even get it)
  Second point.
  I do not doubt that hyper-inflation is a possibility (see post #14, my own)
  Yet, I’d like to time this right. Deflation could be around for a while.
  Whoever asked about the $0 condo may get to see something close as we head into a strong recession/depression and few can afford taxes/HOA fees.
  THEN massive inflation.
  Could be the squeeze play that take most out.
  —
  Thoughts?

• 116 Un-Related /Oct 10, 2008 at 3:30 pm  Vote:    

  Back to “condos”! The following opinion piece showed up in today’s Miami Herald, submitted by Ricardo Wolf of Wolf Intl. Realty. I don’t agree with the “nanny state” approach to HOAs.

  http://www.miamiherald.com/opinion/letters/story/720265.html

  The interesting portion of the article reads:

  The next shoe to drop in real estate

  A significant issue is unraveling in today’s world of real estate that could bring the U.S. real estate market, along with the insurance and banking industries and what’s left of our economy, to its knees.

  “Today’s most alarming issue is no longer units being foreclosed on but rather condominium and homeowner associations going broke. A growing number of condo associations are being faced with 30-60 percent in defaults on monthly association fees. For the most part, these units are all headed toward being foreclosed on by lenders. However, lenders are successfully dodging the huge expense of association fees, property taxes and other related costs of ownership by not foreclosing on nonperforming loans for periods of 12 to 18 months.

  Some owners are living in their units without paying their mortgage, association fees, assessments or property taxes. This burden has been handed over to condo associations, which are not-for-profit organizations, and their unsuspecting residents……”

  Another alarmist! Another down day on Brickell Avenue!

• 117 Renter Tom /Oct 10, 2008 at 3:40 pm  Vote:    

  I seriously doubt the HOA payments will bring the economy to its knees….how myopic. Sure Florida has a bunch of condo problems and there is a fair number in some level of distress. Cali, LV, Phoenix too but the VAST number of condo HOA’s outside these bubble markets are fine. Silly. If it gets bad then drain the pool and close off some common areas….hardly Armageddon.

• 118 Renter Tom /Oct 10, 2008 at 3:55 pm  Vote:    

  Also, the article’s author needs to note that these buildings have a ton of problems and the lack of HOA payments are just one of them. Nothing a little Section 8 can’t fix….

• 119 jcrimes /Oct 10, 2008 at 4:14 pm  Vote:    

  the interesting thing about the HOAs is that bankruptcy won’t solve the problem. for them, costs (at least the no frills line items) are relatively fixed and immutable…simply, as the article suggests, it’s the revenue side of the equation that’s killing the HOAs.

  all that said, the deterioriation in several buildings because of HOA issues is clearly evident. bayview lofts on normandly isel and ocean blue in mid beach look like shit these days. bentley bay on west ave ain’t looking too great either. as for brickell, we all know the story.

• 120 JL /Oct 10, 2008 at 4:19 pm  Vote:    

  “Some owners are living in their units without paying their mortgage, association fees, assessments or property taxes. This burden has been handed over to condo associations”

  So how does this work? If the Bank doesn’t evict, can the HOA evict? If not, can a user stay in the unit in perpetuity without paying anybody?

• 121 Renter Tom /Oct 10, 2008 at 4:52 pm  Vote:    

  JL - Yes, condo HOA’s can foreclose since the debt is a lien on the unit. Not sure about the priority in FL though first mortgage might get first dibs. Also, foreclosure can be expensive. It might get the bank moving but if the unit is upside down on the mortgage, not sure what order the HOA gets in the amount owed.

• 122 Mark (Not Zilbert) /Oct 10, 2008 at 5:06 pm  Vote:    

  I warned of this issue month ago. When Freddie extended the forclosure process to 320 days (on homes too) I knew that they were doing this to not have to recognize the loss and in effect become insolvent. When all is said and done many will have lived in condos and houses (see cook county) for 2-3 years for FREE. This includes insane AJ.

• 123 Un-Related /Oct 10, 2008 at 5:41 pm  Vote:    

  Renter Tom said: “Not sure about the priority in FL though first mortgage might get first dibs. Also, foreclosure can be expensive. It might get the bank moving but if the unit is upside down on the mortgage, not sure what order the HOA gets in the amount owed.”

  I know for a fact that the HOA is not “first in line”. When that landlord (owner) got foreclosed on the initial foreclosure of which I was also a “John Doe” defendant had the HOA of the building as a defendant as well. I am sure that the bank drops the HOA, as they did me, as a defendant.

  I have heard that the HOA can file a lien on the non-paying owner pre-foreclosure. Once it’s foreclosed on, the unit is in the hands of the bank.

• 124 The Ace /Oct 10, 2008 at 5:57 pm  Vote:    

  Remember $125.00 per square foot; you heard it hear first.

  The Smart Money

• 125 Muir /Oct 10, 2008 at 6:33 pm  Vote:    

  IRS
  FL
  Mechanics lien
  1st
  2nd
  3rd
  HOA lien (can be foreclosed)
  -
  liens that cannot be foreclosed
  —-
  do not hold me to it

• 126 AJ /Oct 10, 2008 at 6:43 pm  Vote:    

  jcrimes,
  I have utter contempt and disregard for the finance and economics majors or the brats from Harvard or Wharton who fcuked us over good and proper. Back in 2003 and 2004 I predicted that the housing bubble is set to pop. At that time I said it is going to happen (pop) in 2007 and recover in 2009 (albeit I was off by a year, I should have said 2008 and 2010, but I was right about the bubble though) . It is not a bad prediction at all considering that the assholes at the Lehman brothers were still lending to subprime credit holders as late as 2006. So who cares about a finance or economics degree when I am doing better than the cnut Rohit (post #62) who lost his million dollar Long Island home and is jobless now or for the matter of fact, most of the armchair commentators here.

• 127 AJ /Oct 10, 2008 at 6:51 pm  Vote:    

  And by the way, the biggest arsehole of the century Alan Greenspan is an Economist. That should tell you.

• 128 Muir /Oct 10, 2008 at 7:02 pm  Vote:    

  The Ace // Oct 10, 2008 at 5:57 pm
  Remember $125.00 per square foot; you heard it hear first.
  –
  $90 sq/ft you heard it here first.
  What happens afterwards, I do not know. Maybe 0 sq/ft or $1000 sq/ft.
  Depends.

• 129 Renter Tom /Oct 10, 2008 at 7:04 pm  Vote:    

  Little bit of stress there AJ? We should make all debts collectable by the IRS where the IRS gets 40% to pay down the US deficit. That will get people to pay up! Deadbeats, scammers and stupid banks, oh my!

  The good news AJ is your cash position is up from 10% to 18% of your portfolio, the bad news is the rest of your portfolio is down 40%!

• 130 JL /Oct 10, 2008 at 8:04 pm  Vote:    

  FWIW,

  It still looks like there is a lot of margin debt out there in the market. Things can’t bottom till margin levels are flushed down to historical lows IMO. ie. when a market crashes you get margin calls setting off other margin calls until very little margin is left. If you only look at NYSE margin debt in this page (2nd chart, last data point was Aug. 2008) it seems to show Margin debt in August 2008 was 2x that of the levels seen in the NYSE bottom of 2002/2003.

  Since August 2008, the overall market has dropped about 25% but I get the feeling that margin debt did not get chopped 50% in that same timeframe to take it to the same levels seen in the bottom of 2002/2003.

  http://www.marketoracle.co.uk/Article6734.html

• 131 jcrimes /Oct 10, 2008 at 8:54 pm  Vote:    

  AJ
  you may have utter contempt for those that practice “high finance” (and that contempt is not entirely misplaced) but financial theorem and fundamentals of valuation still hold. the cornerstone of finance and valuation (other than a dollar today is worth more than a dollar tomorrow) is that value is a function of today and “tomorrow.” your earlier question does away with the latter part of the equation entirely.

• 132 Mark (Not Zilbert) /Oct 11, 2008 at 1:22 am  Vote:    

  AJ should be the Fed chairman. What will be your first act as chair AJ? Back the currency with Miami Condos. Each Dollar is worth 1/500,000 of a Miami Condo. Forget the gold standard. Condos are money. I want in on the condo standard!

  AJ’s enormous popularity could then be parlayed into his bid for the 2012 presidency. All hail AJ the financial genius!

  BTW, who takes a trip to India for 1 week (the flight is 2 days each way)????

• 133 Mark (Not Zilbert) /Oct 11, 2008 at 1:25 am  Vote:    

  My first act as Fed chair would be to back the currency with M3 convertibles. Each dollar is worth 1/80,000 of an M3 convertible. We would borrow more M3 convertibles from the EU nation of Germany to print more money and prevent inflation.

• 134 Mark (Not Zilbert) /Oct 11, 2008 at 1:30 am  Vote:    

  Look at AJ in the news: http://www.miamiherald.com/news/southflorida/story/719958.html

• 135 Un-Related /Oct 11, 2008 at 7:20 am  Vote:    

  Hey Mark (not Zilbert),

  I question your: “Back the currency with Miami Condos. Each Dollar is worth 1/500,000 of a Miami Condo. Forget the gold standard. Condos are money. I want in on the condo standard!”

  You sure about this? Wouldn’t this validate the bravado of Gourge Perez. Since he will own thousands of condos for a decade or more, he can be the “king” of a ghost town!

• 136 jorge /Oct 11, 2008 at 9:19 am  Vote:    

  RAM, your numbers are like those from the email claiming the $85 bill bailout for AIG is better spent on the people because it would result in 200 million people getting $425k ea. MATH IS WRONG.
  Is actually $425 per person in that case, and in your case:

  “For a financed deal, the numbers for an investor would be:

  Annual Revenue: +$14,400 (Rent @ $1,200/month)
  Real Estate Taxes: -$2,000 ($100,000 @ 2%)
  Tax Credit: +$600 (R.E. Tax Deduction of $2,000 assuming a 30% Tax Bracket)
  HOA: -$5,400 ($450/month)
  Annual Mortgage Payments: -$4,769 (30% down = $70k mortgage @ 5.5% for 30 years).
  Mortgage Interest Deduction: +$1,245 (Annual interest of $4,149 & assuming a 30% Tax Bracket).
  Depreciation Credit: +$1,463 ($100k for 20.5 years & assuming a 30% Tax Bracket)

  NET: $10,308 (or 34.4% on the $30,000 down payment).”

  Sums up to $5,539, which is actually 18% return on the $30k, and now lets talk reality:
  use the 30% tax discount suggested ($5300 annual tax) and you’re down to 7.5% which is a much more realistic scenario. And now you go out and try to get a 5.5% interest mortgage and you might have a not so exciting deal with plenty of risks.
  No matter how you look at it the outcome is always similar, with 5% return on investment if things go smooth. Your claims of 34% returns are the reason we are in this mess. getting people overexcited with numbers that you obviously cannot compute yourself. thanks for wasting our times with nothing

• 137 AJ /Oct 11, 2008 at 10:32 am  Vote:    

  JFK -Bombay Non-Stop takes 14-16 hours each way. Not two days! East bound, you simply add a day to the date. Probably that is why you think the journey takes two days silly coot. In the same breath, West bound, you subtract a day to the date and for example if you leave Bombay at 1 am on Friday, you reach JFK at 7 am on the same Friday, making it a 6 hour trip!! Have you been asleep in school geography class when they are teaching you Latitude, Longitude, International Date Line etc? Oops mea culpa, you must be a natural born American, the Worlds poorest Geographical Knowledge holders. Sarah Palin anyone?

• 138 AJ /Oct 11, 2008 at 10:46 am  Vote:    

  Thanks Unrelated! You know why.

• 139 Renter Tom /Oct 11, 2008 at 11:35 am  Vote:    

  The October surprise? For those who followed the Chicago politics of Odumbo, no surprise at all. We’ll soon be more corrupt than a banana republic if he gets elected, country be d*mned. I prefer country first.

  http://www.miamiherald.com/news/politics/AP/story/721995.html

• 140 Clark /Oct 11, 2008 at 12:17 pm  Vote:    

  Can anyone in here tell me what is the procedure i need to follow to request a 5% or is it 10 % that I may be entitled to recover from my original 20% deposit. Do I need a lawyer to do this? Thanks.

• 141 Clark /Oct 11, 2008 at 12:19 pm  Vote:    

  Can I simply write a letter to the escrow agent for this and do i also need to contact the developer?

• 142 AJ /Oct 11, 2008 at 12:54 pm  Vote:    

  Tom,
  I consider myself fiscal conservative and a social liberal. The Rep’s are no more fiscal conservatives. They are worse than the tax and spend Dems. I am voting Dem as I think the Reps have permanently damaged the reputation, respect, capability of this great country in the eyes of the World. So give a chance to the Dem guy. You might get taxed a bit but at least you will gain the respect of the rest of the World.

• 143 Renter Tom /Oct 11, 2008 at 1:34 pm  Vote:    

  “Reps have permanently damaged the reputation, respect, capability of this great country in the eyes of the World.”

  - Why would I give a frickin’ hoot about THAT issue determining who I vote for? That is so lame. Tell you what, you can pay more tax. All the liberals who wish to have taxes increased can voluntarily pay more tax to the IRS and the IRS will accept. So why don’t you and all these liberals simply put their money where mouth is and voluntarily pay more tax? Oh that’s right, they are hypocrites that simply want to control other people’s hard earned money and spend it as they wish and give it to people who don’t help themselves with even getting a free high school eduction or GED my money so they can sit at home watching cable TV and getting obese to cost us even more in health care expenses. Let’s just remove all motivation to take care of yourself and have the federal government issue diapers and employ federal worker diaper changers? The federal government should get out of the charity business once and for all. Charity only works to really help others when charity is local. If you were ever REALLY involved with charities you would know that. Just ask anyone who works at a welfare office….they have seen and heard it all. We need workfare, not welfare for able bodied individual. Lastly, we will see capital flight from the US under Obama policies, plain and simple.

• 144 Renter Tom /Oct 11, 2008 at 1:36 pm  Vote:    

  The federal government is so generous to the point that we really the only country with obese poor people in poverty… My goodness, wake up!

• 145 Renter Tom /Oct 11, 2008 at 3:03 pm  Vote:    

  Uhhh, Mark Zilbert, I think you need to tone it down a bit. Sarah Palin and Cindy McCain are both USSS protectees and if you keep this up, you’re gonna get a knock on the door. I do not know what your obvious psychological problem is, but mental health counseling is highly recommended.

• 146 JL /Oct 11, 2008 at 3:17 pm  Vote:    

  “The federal government is so generous to the point that we really the only country with obese poor people in poverty… My goodness, wake up!”

  Renter Tom has a point. It’s a little odd getting panhandled by a guy talking on his cellphone asking for a dollar.

  Another thing I find odd are bleeding heart liberal types in Hollywood ranting about having “the wealthy” put in their fare share. If you are a wealthy Democrat and feel the tax laws are unfair, then why not do the right thing now and start sending in 50% of your income to the IRS. The government will gladly spend it.

  Nobody’s stopping Roseanne, Bill Maher, Spielberg, J. Lo et al from giving away 50% of their income to the Federal Government, so why don’t they if that’s the “right thing” to do? Is it perhaps that the Roseanne and Bill Maher types prefer talking about the right thing rather than doing it? It’s annoying to hear these deluded individuals ranting about ” “The rich aren’t paying their share” when they can voluntarily contribute more themselves to make things “right” and do not. Hypocrisy at it’s best.

  Let’s give businesses a tax break and Hollywood a tax hike.

• 147 Renter Tom /Oct 11, 2008 at 3:32 pm  Vote:    

  JL - Don’t forget about all the 20 somethings with cell phone bills that are multiple times the cost of a health insurance plan then complain when they need medical care. Give me a break. We do need some health car reform to make health care attach to the person and make it portable across state lines. The historic reasons for why employees provided health insurance is interesting to read about and where good intentions distorted the market and continue to do so today. To the pan handlers, you need to sell your gold teeth first.

• 148 Un-Related /Oct 11, 2008 at 4:26 pm  Vote:    

  CLARK asked: “Can anyone in here tell me what is the procedure i need to follow to request a 5% or is it 10 % that I may be entitled to recover from my original 20% deposit. Do I need a lawyer to do this? Thanks.

  Can I simply write a letter to the escrow agent for this and do i also need to contact the developer?”

  Who is the developer and does the “Default” paragraph in your Purchase Contract note the “excess deposit” (above 10%). If so you should be entitled to 25% of your deposit (or 5% of purchase price). So, if your 20% deposit was $80,000 you should get back 20%.

  To retrieve it you need to contact the developer and request it. The escrow company will not give it back unless they get a release signed by both the developer and you. (There should be one-half of your 20% in the escrow, so the developer and you should “split the proceeds”.

  If your contract says you should get it back and developer says “no”, then I would get a lawyer but you don’t need one unless that happens.

• 149 gables /Oct 11, 2008 at 4:37 pm  Vote:    

  you guys have a point regarding the behavior of some welfare recipients in this country, but the majority of people on welfare do not game the system and do not abuse the system. issues both inside and outside of their control tend to put people into the lowest rung of the financial caste system. providing a work incentive which helps them to move up a wrung has been shown to work-it did during the great depression and could be implemented again during this crisis.

  but if you have issues with poor people getting welfare, you should also have issues with the rich people getting welfare as well. why do so many wealthy corporations find themselves in such dire straights today? where is the cash they made during the past decade? have they never heard of a rainy day fund to keep from falling to the bottom of the totem pole? tens of billions of those dollars went to bonus pay over the past few years-keep that in mind when you hear them ask for more capitalization dollars. and the current argument that we have to rebuild wall street to save main street is not completely true. who stands to lose more in standard of living, the multimillionaire financier with a couple of mansions and yacht, or the waitress who rents a house with two room mates? if things continue to go bad, we may well see the answer in the new tenants who move into brickell area over the next year. many of the rich have seen their wealth cut in half in the past year, many of the average joes of the working world are worth exactly the same today as they were last year-whatever their paycheck is on friday.

• 150 Renter Tom /Oct 11, 2008 at 7:04 pm  Vote:    

  gables - I don’t defend either one. But there are millions more on welfare than the fat cats on Wall Street (who now are less fat and no longer able to afford their mortgages). The abuse of welfare and the wrong incentives have been permitted to fester for decades and decades. Only workfare will get us to transition out of this dependent mess. Moreover, welfare needs to be unpleasant to get people off. The scams are endless including disabilities, etc. By the way, need that free scooter chair? Come on, it must end and end today. Wake up! If you don’t bother to help yourself by getting a high school education or a GED, then I’m sorry but there should be NOTHING the federal government will provide for you until you go back and apply yourself. The federal government dependents need to be removed from the system at all levels. It is sickening to watch the waste that is financed by borrowing from our children’s futures. The federal government needs to enact some tough love since apparently the benefits are so high they sap incentives to provide for oneself. I know several case workers and the stories they tell are crazy…just stand in line at the grocery store and see what people on welfare are buying and wearing…they spend like they don’t know the value of a dollar, certainly they don’t know the value of an earned dollar. I don’t want my tax money to go to give these people food and shelter so they can just sit around all day planning drug deals and other hustling. Enough is enough…tell them they must get a legit job like the rest of us or go live under the bridge.

• 151 Mark (Not Zilbert) /Oct 11, 2008 at 7:58 pm  Vote:    

  Listen, the only person that is worthy of a vote is Ron Paul. However RT you must realize that this bullshit war costs 100x more than any welfare the govt distributes. For that reason I think Obama deserves the vote. He’ll spend less. I don’t agree with either, but we will go bankrupt faster with the war monger McCain. Take a look at govt war spending charts. They went vertical during the Reagan, Bush I and Bush II administrations. During Clinton the spending went horizontal. Now Clinton didn’t really have a surplus (because that excluded unfunded liabilities- welfare and SS), but at least he wasn’t a profligate spender like that jackass Bush II.

  I wish it wasn’t a choice between bad and worse, but people are too dumb to vote for Ron Paul so this is what we get.

• 152 Mark (Not Zilbert) /Oct 11, 2008 at 8:01 pm  Vote:    

  Please read this RT:

  http://www.warresisters.org/pages/piechart.htm

• 153 Renter Tom /Oct 11, 2008 at 8:09 pm  Vote:    

  The unfunded mandates are killers. While I think the Iraq war did cost way more than anticipated, it did contribute to rallying the terrorists and terrorists to be to fight us there versus training, planning, and attacking the U.S. here. I know, we’ll never know the costs of the “what ifs” regarding whether the U.S. would have been hit with WMD over the last 7 years or not. But I do know, the world is safer from this type of thing, a lot safer. It is and was tough and financially was far larger than expected however, the dividends haven’t started to be paid out from this “investment”….I will give it time to see if our long term presence (like in South Korea) pays dividends and ultimately a safer world. You can’t be serious about voted for what would be the most liberal and biggest spender ever are you? The guy has ZERO leadership or real political experience. He’ll be cured up in the fetal position under the deck in the office to the side of the Oval Office once the responsibilities hit the fan. If he does get elected, I can’t wait until 2012 when the same condescending statements and tone are used against him after he actually has a record….it is easy for him without much of a record to simply sit back with 20/20 hindsight and say how he would have done things….just wait, I can see the economic disaster coming under this arrogant guy once the decision responsibility lands on his shoulders….it will be ugly and out of control. I already know of some really dumb*ss things they did in the campaign (the young staffers are all show and no go) that foreshadows the idiocracy to come from Odumbo. I wish it weren’t so, but it is what it is and I can see it coming if he is elected..arrogant stupidity is worse then just stupidity since you still think you’re right when you’re wrong. At least with McCain I know he won’t screw it up during these challenging times and might actually get some fiscal restraint going.

• 154 AJ /Oct 11, 2008 at 8:17 pm  Vote:    

  JL and Tom,
  There is a fundamental weakness in your argument. Infact most Republicans are unaware of this.

  Firstly, Tom, you advocate fiscal discipline. You tell the people to live within their means, not over spend, not borrow and cash is king. Then how come you are defending the current administrations charge to the credit card mentality.
  Are you Rep’s that naive that you actually believe that the Tax cuts in the past 8 years have been paid for? I have news for you. The Trillion Dollar War is charged to the Credit Card. The tax Cuts are charged to the credit card. All the earmarks, Pork, 840 Billion Bailout, 25 billion car company bail out are all charged to the credit card. The 80+38 Billion AIG bailout is charged to the CC. I will go on and On. Do you believe one minute that the 10 Trillion Dollar national debt that we incurred since the past 8 years came about magically?

  So basically you are saying, I want my tax cuts no matter what, I dont give a shit about my children or grandchildren, whose futures I am mortgaging so that I can have a good time now. How selfish is that? You are basically selling the next generation to slavery to the Chinese so that you can have your money fix.

  I think there is a fundamental diff between the Dems and the Reps. The dems tax and spend. But they tax you and spend after the money is in the coffers. The Rep’s just charge it. I would take the first option. Thank You.

  And believe me all of you. Listen carefully. During the boom, they said housing can never go down, America can never do no wrong. Well, the house of cards came crashing down. They also said, the massive Wall st. firms are too big to fail and guess what, they did.
  The day of reckoning will be here. All it takes is the just one country say, china or South Korea or India or Saudi Arabia to dump their US treasury bond holdings. The whole World will follow suit and overnight, the dollar you have in the bank will be worth 5 cents.
  But the funny thing is the “experts” keep telling us, that the rest of the World will never resort to such a thing. America is too important, Too stable, too this and too that. Sounds familiar? So go ahead and hoard that cash. Vote the Rep’s too to help you save those dollars for you by not taxing you but borrowing from all and sundry for day to day expenses. They will bankrupt the country into indebtedness and make that cash worthless.

• 155 Renter Tom /Oct 11, 2008 at 8:41 pm  Vote:    

  AJ - The government already taxes too much….just look at total taxes throughout history. The problem is on the spending side, not the revenue side you silly liberal. Why don’t you help out the revenue side and pay the IRS twice the amount of tax you owe? Put your money where your mouth is or shut the heck up.

  ——————————–

  jcrimes // Oct 10, 2008 at 1:29 pm
  AJ
  with all due respect, please take an introductory finance class.

  - I second that motion….

• 156 Mark (Not Zilbert) /Oct 11, 2008 at 8:55 pm  Vote:    

  I hate to be associated with AJ, but he does have a few points (I feel like I’m agreeing with that idiot Jim Cramer).

• 157 Mark (Not Zilbert) /Oct 11, 2008 at 9:01 pm  Vote:    

  The govt should not increase taxes. It should drastically end war spending. Bin Laden’s goal was to BK the US govt just like he BKed the soviet union. He has defeated us. The “terrorists” have won. We are now BK fiscally and morally. The world knows it.

  We need to close the German, Japanese, Iraqi, Turkish, etc bases.

  We need to end this missile defense bullshit. It is just antagonizing Russia. MAD only works if both sides are ASSURED see? If we continue along this path we will have a new Cold War.

  End these BS wars. RT you know what a joke this war on terror is. It’s just another way to steal your money. In this case it’s war profiteers.

  Eliminate the dept of education, dept of homeland security, NASA, and many other bureaucracies…

  Cut the federal income tax by 100%.

  The End.

• 158 Mark (Not Zilbert) /Oct 11, 2008 at 9:09 pm  Vote:    

  Also, we need to go onto a “condo standard” as AJ advocates. Gold has not value. Condos do. (BEING FACETIOUS)

• 159 Brickell Bound /Oct 11, 2008 at 9:28 pm  Vote:    

  A large 2 bedroom in the 05 line @ the Santa Maria I was infomed just sold for $820,000 from a bank sale. 05 line is direct bay and city with 2,580ft. Same unit sold for around $489,00 in 2000, so we are getting closer to 2001 prices it appears.

• 160 Muir /Oct 11, 2008 at 9:41 pm  Vote:    

  Saw a couple of condos in the Gables.
  If it’s any news, confirmation, consolation or any other emotion, it can not be worse in Brickell!
  Absolute clusterf*%k.
  10 Aragon is a POS, Gables Marqui will rival the Vue in % of foreclosures….
  (wrong forum but: Pinecrest / Palmetto house prices tumbling hard.)

  ——-
  Jorge
  RAM “For a financed deal, the numbers for an investor would be:

  Annual Revenue: +$14,400 (Rent @ $1,200/month)
  Real Estate Taxes: -$2,000 ($100,000 @ 2%)
  Tax Credit: +$600 (R.E. Tax Deduction of $2,000 assuming a 30% Tax Bracket)
  HOA: -$5,400 ($450/month)
  Annual Mortgage Payments: -$4,769 (30% down = $70k mortgage @ 5.5% for 30 years).
  Mortgage Interest Deduction: +$1,245 (Annual interest of $4,149 & assuming a 30% Tax Bracket).
  Depreciation Credit: +$1,463 ($100k for 20.5 years & assuming a 30% Tax Bracket)

  NET: $10,308 (or 34.4% on the $30,000 down payment).”

  Sums up to $5,539, which is actually 18% return on the $30k, and now lets talk reality:
  use the 30% tax discount suggested ($5300 annual tax) and you’re down to 7.5% which is a much more realistic scenario. And now you go out and try to get a 5.5% interest mortgage and you might have a not so exciting deal with plenty of risks.
  No matter how you look at it the outcome is always similar, with 5% return on investment if things go smooth. Your claims of 34% returns are the reason we are in this mess. getting people overexcited with numbers that you obviously cannot compute yourself. thanks for wasting our times with nothing”

  —
  Right, that’s what we were talking about!
  Of course, the $1200 is optimistic, declining market, $1050 much more likely.
  Also, lets take into consideration some unrented time.
  How about %0.5 towards upkeep (jezz, that’s like what? $500 towards paint and calking after the last tenant leaves)
  The 5% IF everything goes smoothly becomes %___?
  Also it was already pointed out that you are not going to deduct the entire amount of the sale price as this includes land (not sure about this, I’m not an accountant)
  –
  Frankly, it just seems to me that this 100k condo when speculation is removed from the equation (greater fool down the line hypothesis) is worth 70K tops.
  —
  Now, IF there were to be some financial problems, just saying “if” (guys noticed that fine subjunctive of “be:” “if there were”) Anyways, what was I saying? Right! Now, just saying here, if there were any financial problems and/or crisis, or, heaven forbid, if the country were engaged in a war (or two, again, knock on wood. No dummy! Not your keyboard) Well, if these things were true, well…. My goodness! I think you would have to price in some risk, no?
  Just saying…..

• 161 Miami2009 /Oct 11, 2008 at 9:46 pm  Vote:    

  Mark(Not Zilbert), I almost always agree with you…However, Obama clearly says he will INCREASE spending and INCREASE taxes. So, I don’t understand why you would vote for this guy??? US is heading into a depression and the fool wants to increase spending and taxes. Wrong! The lesser of the two evils is McCain. now what is sad is that out of the 250M or so people in the US the best we could do for our next President is one of these two…Shame on us all. One wants to rob from the rich and give to the poor(yeah right) and the other is an old man who may just forget he is the president one day…wtf. God help us.

• 162 Miami2009 /Oct 11, 2008 at 9:56 pm  Vote:    

  Look as far as renting a condo for profit forget it. I owned multi-family dwellings in NYC and the amount of dead beat renters, property damage, etc will kill all your profits even if you make a small positive cash flow. One condo, one tenant spells disaster if the renter defaults on his rent. You will have to hire a lawyer to evict, repair the damages when finally evicted and then find a new tenant. Ok if you have a multi-family building where the majority is paying, but one condo, I don’t think so.

• 163 Miami2009 /Oct 11, 2008 at 9:57 pm  Vote:    

  That being said I will eventually purchase a place in Miami…I just love it down there.

• 164 Muir /Oct 11, 2008 at 10:13 pm  Vote:    

  Miami2009 // Oct 11, 2008 at 9:56 pm
  “Look as far as renting a condo for profit forget it. I owned multi-family dwellings in NYC and the amount of dead beat renters, property damage, etc will kill all your profits even if you make a small positive cash flow. One condo, one tenant spells disaster if the renter defaults on his rent. You will have to hire a lawyer to evict, repair the damages when finally evicted and then find a new tenant. Ok if you have a multi-family building where the majority is paying, but one condo, I don’t think so.”

  BUT, BUT that’s NOT what the TV TOLD me!!!

  -

• 165 Renter Tom /Oct 11, 2008 at 10:58 pm  Vote:    

  If I were president, I can guarantee you sh*t would CHANGE…and that won’t be just a slogan. The goal would be to eliminate 1/2 the non-military government jobs, simplify taxes so you don’t need to waste smart people on the tax code so they can be employed in a field that actually creates wealth (under Obama you’ll need to hire someone to do your medical bills and requests just like taxes! oh yeah!), and basically keep the federal government out of your life as much as possible. A hybrid conservative/libertarian…and NO LIBERAL!

• 166 AJ /Oct 12, 2008 at 4:16 am  Vote:    

  Tom, Dont do a Sarah Palin on me. You did not answer a single question that I posed and instead you hide behind some crazy ass idea that I need to go to a school of economics. Why am I not surprised at all?

• 167 The Ace /Oct 12, 2008 at 5:28 am  Vote:    

  About two years ago when the Smart Money first stated on this blog that Condo’s would fall to $125.00 per square foot all we recived was ridicule, now it would seem that we are stating the obvious.

  The Smart Money has NEVER been wrong so listen up you morons: Keep yer powder dry (for idiots that means “cash”) and stand fast in the ranks (for morons that means don’t go catching falling knives).

  When the Smart Money declares that it loves “Anticote Steel” (for stupids that’s code) jump in with both feet and all guns blazing.

  There’s blood on the street folks but wait for the guts and entrails.

  The Smart Money

• 168 JL /Oct 12, 2008 at 6:23 am  Vote:    

  From 10/10 NYTimes article

  “Mr. Shiller, a leader in the field of behavioral economics, believes that bubbles and crashes are a kind of social epidemic. “Ideas become contagion,” he said. When housing prices were rising quickly in the early part of this century, he said, “people misinterpreted the meaning of the price increase. The theory that housing prices could only go up began to sound plausible. It became a thought virus. And people believed it was true rather than realizing it was a thought epidemic.””

  You might see a plaque one day in Museum/Bicentennial Park that reads. Welcome to the Biscayne Wall… a product of the 2005 Housing thought epidemic.

• 169 JL /Oct 12, 2008 at 6:33 am  Vote:    

  AJ, if you’re young and a Democrat, that proves you have a heart. If you’re older and a Republican, that proves you have a brain.

• 170 Mike /Oct 12, 2008 at 6:57 am  Vote:    

  Enough with the Obama vs. McCain/Democrat vs. Republicans - I can read this stuff on realclearpolitics or dailykos… I sure as hell don’t visit a Miami real estate blog to read about it…

  Most of the stuff written here is pretty insightful and despite their escalating distaste for each other RT vs. AJ provides a pretty good ‘Crossfire-style’ of opposing views… something rare in today’s media.

  I’m interested in more about what it will take to realistically be cash-flow positive in Miami… Long-term I intend to relocate there (American/Venezuelan couple - Miami is in the middle), and it would be nice to get my hands on an affordable property and attempt to rent it cash-flow positive until I return from my current overseas location. I figure I’m ok with both exit strategies - if I find a good long-term tenant/string of tenants, than I purchase another property when I return - else I move into mine.

  But this blog has been the best place I’ve found on the net for realistic opinions from both sides of the fence as well as some good ‘expert’ opinions/information on the realities of being a 1-condo landlord.

• 171 gables /Oct 12, 2008 at 8:02 am  Vote:    

  Mike, you are right. every once in a while the blog gets hijacked by important but off topic issues. thats the price you pay for having an active and usually intelligent blog. while the views here are diverse, and people sometimes go overboard against one another, most have valid points. it is important to remember there are usually no right or wrong answers to these issues-the answer depends entirely on your point of view and agenda.

  my concern right now is the impact of the recent economic crisis on condo and RE behavior in miami. does anybody have data on sales activity over the past month? curious whether the crisis has slowed down the buying even more. also curious whether the stock losses have forced banks and owners to significantly discount prices? anybody have any hard data over the past months activities? maybe lucas has some updates?

• 172 Muir /Oct 12, 2008 at 8:18 am  Vote:    

  Gables’
  “my concern right now is the impact of the recent economic crisis on condo and RE behavior in miami. does anybody have data on sales activity over the past month? curious whether the crisis has slowed down the buying even more. also curious whether the stock losses have forced banks and owners to significantly discount prices? anybody have any hard data over the past months activities? maybe lucas has some updates?”
  -
  Just too early.
  -
  ok, let’s try again
  Muir,
  “Frankly, it just seems to me that this 100k condo when speculation is removed from the equation (greater fool down the line hypothesis) is worth 70K tops.
  —
  Now, IF there were to be some financial problems, just saying “if” (guys noticed that fine subjunctive of “be:” “if there were”) Anyways, what was I saying? Right! Now, just saying here, if there were any financial problems and/or crisis, or, heaven forbid, if the country were engaged in a war (or two, again, knock on wood. No dummy! Not your keyboard) Well, if these things were true, well…. My goodness! I think you would have to price in some risk, no?
  Just saying…..”

  –

  Is that what you want to talk about?

• 173 Miami2009 /Oct 12, 2008 at 8:43 am  Vote:    

  Muir…yeah i know I watched the same TV show…lol

  RT for president!

  Now back to RE…With the financial sector being hit so hard, will Brickell RE be hit hardest?

• 174 Brian Miami /Oct 12, 2008 at 9:13 am  Vote:    

  So which is the best condo to look for a rental? I wouldn’t mind renting awhile before I buy. Maybe Biscayne area.

  Maybe 900 Biscayne? Ten Museum? Opera Tower? Quantum?

  Looking for the best views, amenities, and easy parking, but also a good deal.

• 175 Renter Tom /Oct 12, 2008 at 9:19 am  Vote:    

  AJ - Maybe you got your money from Tony Rezko et al. for your condo like Odumbo too? hehehe

  Anyway, I think this credit crisis will hurt condo prices more than anything else. Banks were already pulling back from mortgage on these condos and with limited funds to lend, there are much more attractive alternatives to lend to. For a buyer, going to a cash only market without financing would be wonderful, but it would be an economic distortion and cause a severe negative price over correction which is something that should be avoided. I am convinced as a posted last month that we will over correct on the down side, I just don’t know by how much. On a positive note, banks will start to lend to one another this week but on a negative note they won’t lend on that condo you have your eye on so I guess the condo impulse purchase and “condo hoarding” (perhaps related to cat hoarding) will no longer be enabled by the banks and so the next time you’re in the grocery store checkout line and see an attractive condo on the impulse buy display rack next to the National Enquirer, your credit card will be declined if you try to buy it!

  P.S. There really is a fascinating psychological theory behind cat hoarding and why it is that almost all cat hoarders are middle to older aged women. The condo hoarding theory where you can’t just buy one (ummm, AJ?) is still under development but we do have a pretty good insight into this psychological disorder.

• 176 Mark (Not Zilbert) /Oct 12, 2008 at 10:23 am  Vote:    

  hahaha! Love The Ace!!!! That guy is awesome. So cryptic, so third person!!!

• 177 Raffi /Oct 12, 2008 at 10:23 am  Vote:    

  lets get some opinions here, “since everyone is so smart.” The so called “busy season” for selling properties is coming up pretty soon and we will also have a new president. what do you guys expect from the “busy season” will it be active or dead as a doorknob? I’m gonna have to say busy buying up foreclosed properties.

• 178 Mark (Not Zilbert) /Oct 12, 2008 at 10:24 am  Vote:    

  Loved the Wallstreet reference too!

• 179 Mark (Not Zilbert) /Oct 12, 2008 at 10:29 am  Vote:    

  Dead as a doorknob. You people are aware the miami had the biggest HOUSING BUBBLE of them all. It didn’t start to correct until April 2007. That’s HOUSING. What do you think is going to happen to CONDOS? There’s not enough renters for all these properties.

  Here’s a quote for all you:

  “North woods not your style? Head south to Florida, where everything you’ve heard about the collapse of the condo market is true. In 2006, 9,800 condos were sold in the Miami area. Last year that number dropped to 5,700. Through the first four months of 2008, sales totaled just 1,100, and there’s currently three years’ worth of back inventory.

  In the state’s small towns, you’ll find golf-course condos starting at about $200,000. In big cities, such as Miami and Fort Lauderdale, high-rise apartments with water views start between $300,000 and $400,000 — and that’s still a steal. Thanks to over-speculation, from 2002 to 2005 nearly 40% more homes were built in Florida than there were people to occupy them, says Bill Pittenger, chief real estate economist for Seacoast National Bank.”

  Source:http://www.kiplinger.com/magazine/archives/2008/08/vacation-homes-on-sale.html

• 180 jcrimes /Oct 12, 2008 at 11:05 am  Vote:    

  Ace
  i’ll be a weenie…it’s anacot steel.

  -blue horseshoe

• 181 Renter Tom /Oct 12, 2008 at 11:45 am  Vote:    

  Raffi - New president, old president, what can they do? As I had previously posted, any “solution” will be short termed and ineffective causing more problems then it solves. You think people will actually be going on vacation??? LOL

• 182 Mark (Not Zilbert) /Oct 12, 2008 at 12:16 pm  Vote:    

  Gotta read (about south “Flo Rida”) http://calculatedrisk.blogspot.com/2008/10/recent-home-buyers-underwater.html

• 183 Miami2009 /Oct 12, 2008 at 1:46 pm  Vote:    

  I am so glad I didn’t bite in ‘06 when my RE agent told me the 325K Neo Vertika 1 Bed loft on the 10th floor with a beautiful view of the MetroRail was the best deal I was ever going to get in Miami…lol

  Oh, make that x-Re Agent!

• 184 Clark /Oct 12, 2008 at 2:15 pm  Vote:    

  Unrelated

  Thanks for your help on my question about return of my deposit. The development is Everglades On the Bay -Cabi Developer. I cant find any Default paragraph anywhere in the contract. However. on the first page in bold print it does state in two different paragraphs that ( 1 ) The first 10 % can and will be used for construction purposes and ( 2 ) That the other 10% can also be used for construction purposes “if” and only if the developer both applys to the state requesting such and also that their request and approval from the state be sent and notified to the purchaser. I never received any such notice and I dont know if the developer did indeed apply for that. So, I guess my question is- do you think I am still entitled to that 25% of purchase price refund if they never applied for that second request from the state of florida. Thanks in advance.

• 185 AJ /Oct 12, 2008 at 2:37 pm  Vote:    

  Condo hoarding is not a disorder. Just an addiction.

• 186 Mark (Not Zilbert) /Oct 12, 2008 at 5:44 pm  Vote:    

  AJ you should see a specialist about that….that and your genital warts.

• 187 Mark (Not Zilbert) /Oct 12, 2008 at 5:45 pm  Vote:    

  Moving on, did people like my article from today’s CR ? Pretty amazing stuff!

• 188 Mark (Not Zilbert) /Oct 12, 2008 at 8:04 pm  Vote:    

  Your future neighbors at “Vue”: http://www.youtube.com/watch?v=UDAaevTq51I&feature=user

• 189 Blue Horseshoe Says........ /Oct 12, 2008 at 10:40 pm  Vote:    

  make ludicrous offers to sellers to soften them up. Never offer less than 50 percent less than asking price. Then wait 2 months and go in for the kill and get it for 40 percent off of asking price.

  Blue Horseshoe Techniques

• 190 lian /Oct 12, 2008 at 11:37 pm  Vote:    

  That video was funny but even the rappers are doing better than wall street and realtors .A sign of the time .

• 191 carbonblackcab /Oct 13, 2008 at 7:01 am  Vote:    

  Interesting article:

  http://southflorida.bizjournals.com/southflorida/stories/2008/10/13/story7.html?b=1223870400%5E1713968

• 192 Brian /Oct 13, 2008 at 8:10 am  Vote:    

  Any feedback on Opera Tower as a rental? Moving to Miami and want to get a feel for the town before I buy. Probably 6 months. I probably would not buy there, but for a short term rental seems easy to move in.
  Any advice on the building? Easy to park?
  Thanks very much.

• 193 george /Oct 13, 2008 at 8:40 am  Vote:    

  Re brian #192

  I advise you to look across the street from Opera Towers at Grand condominium at 1717 No Bayshore Dr which is housed on floors 10-42 of megastructure with Doubletree Hotel
  Also adjacent to Marriott.

  Contains several restaurants dry cleaners Wachovia branch-or will it soon be wells fargo-so you dont have to face the muggers at an outside atm-lol
  See Doubletree website for pictures amenities etc.

  Grand units are LARGE with 1 br AC living space from app 1000 -1100 sq ft and 2 brs 1400-1800 ac sq ft which likely dwarf OT floor plans.
  Since building was constructed back in mid 1980s rents could be in line with OT units that were much more costly to complete.
  And yes some of the water views are outstanding..
  There is a bulletin board where owners post notices of rent/sale units located adjacent to the mailroom left side of lobby..

• 194 Un-Related /Oct 13, 2008 at 10:18 am  Vote:    

  CLARK said: “I cant find any Default paragraph anywhere in the contract. However. on the first page in bold print it does state in two different paragraphs that ( 1 ) The first 10 % can and will be used for construction purposes and ( 2 ) That the other 10% can also be used for construction purposes “if” and only if the developer both applys to the state requesting such and also that their request and approval from the state be sent and notified to the purchaser. I never received any such notice and I dont know if the developer did indeed apply for that. So, I guess my question is- do you think I am still entitled to that 25% of purchase price refund if they never applied for that second request from the state of florida.”

  Try doing this: CALL the Escrow Company to which you wrote your deposit checks. If there is money in your escrow account, tell them in writing (a fax will do) that you are having a problem with the developer and you do not want any funds released without your written approval. That should tie the funds up.

  The project IS registered with ths State as it is over 100 units and you must have gotten a Property Report upon purchase. Some of these developers (900 Biscayne, Met1, Marina Blue, etc.) tell you “NO” when you request the return of the 25%. If there is no Default Paragraph in the contract (which really surprises me), you may need to call a lawyer to get your 25% back (maybe sue for reasons yet discovered for all of your deposit back).

  But, FIRST….TIE UP THE ESCROWED FUNDS. It’s easy, it’s chic and IT WORKS!

• 195 Renter Tom /Oct 13, 2008 at 2:47 pm  Vote:    

  I swear, CNBC is behind curve and should just listen to me! LOL LOL Per my earlier post of BIC (leaving out Russia) that is exactly what was just talked about on CNBC…..they said it is not BIC, forget about BRIC since Russian is too risky…..

• 196 Muir /Oct 13, 2008 at 3:08 pm  Vote:    

  Here’s how to do it, in case some of you forgot:
  —-

  KENT PORTER / The Press Democrat
  Della Ramsey of Santa Rosa couldn’t resist purchasing a two-bedroom condominium, which was reduced from $245,220 to $99,900. “I was like ‘wow.’ . . . If you could do it, you had to do it,” she said. After spending $7,000 on upgrades, such as painting and new appliances, she was able to rent it almost immediately.
  ….

  The condo will net her about $500 a month after homeowner fees, taxes and insurance, a solid return on an investment Ramsey plans to hold onto until Sonoma County’s housing market turns around.

  “With home prices going down, down, down, I was thinking, I had this money sitting in the bank not earning a whole lot of interest. And if you buy low, the market’s eventually going to go back up,” Ramsey said.

  Tumbling home prices are drawing a growing number of investors back into Sonoma County’s battered real estate market. Today, roughly a third of all buyers are investors who don’t plan to live in the home they purchase, up from about 10 percent last spring when the buying spree began, according to local real estate agents and mortgage brokers.

  Along with first-time buyers seeking an affordable home to live in, investors are helping drive a surge of sales at the lower end of the region’s housing market.

  While the credit crunch has made it harder to get a mortgage, investors are hunting for deals created by an unprecedented wave of foreclosures in Sonoma County. Two out of three home sales involve properties in foreclosure or short sales, where homeowners sell for less than they owe on a mortgage, according to Bay Area Real Estate Information Services, the county’s multiple-listing service.

  Sales growth at lower price ranges is beginning to cut into the glut of distressed homes on the market. But the pace must continue before the housing sector can pull out of its downward spiral, analysts said.

  “All these have to go away before the market can stabilize,” said James Madison, a foreclosure specialist at Coldwell Banker with three decades in real estate.

  Still, the return of investors is a sign that the housing market may be beginning to emerge from its worst downturn in more than two decades. Sales have increased for five consecutive months, compared with a year ago, and investors are betting that prices of distressed properties have hit bottom.

  With houses in move-in condition selling for under $300,000 and condos going in the low $100,000 range, many investors can realize positive cash flows from rents after mortgage payments and other costs.

• 197 Renter Tom /Oct 13, 2008 at 3:12 pm  Vote:    

  “The condo will net her about $500 a month after homeowner fees, taxes and insurance, a solid return on an investment Ramsey plans to hold onto until Sonoma County’s housing market turns around.”

  First, housing isn’t going to “turn around” anytime soon.

  Second, why not just put the money in the bank with a CD that earns 5%….seems a lot less work and is guaranteed. Any additional return is simply not worth the risk and work. Put the money in a CD and instead of all the time rehabbing and dealing with renters (plus vacancy costs, etc.) spend HALF that time working at Wal-Mart and you be many times ahead!

• 198 Muir /Oct 13, 2008 at 3:17 pm  Vote:    

  Well we disagree Tom.
  All condo investors should copy this and paste it to their laptops/pc/mac.
  -
  “Now we’re getting into the numbers where you can actually get some cash flow. Appreciation is the gravy. But that’s not why you should buy property. An asset is something that produces a return,” said Michael Morrongiello, a real estate investor in Sonoma.”
  -
  From the same article as above. #196
  -
  Miami has a ways to go

• 199 Muir /Oct 13, 2008 at 3:19 pm  Vote:    

  Same article:
  “Morrongiello said some investors who bought as prices soared during the housing boom that peaked three years ago got burned because they only bet on rising values. Their monthly financing costs far exceeded the amount of money they could ever hope to pocket from rents. ‘That’s what got them in trouble. They were speculating,’ he said.”
  —
  I give it 6 months before Miami realizes this.

• 200 Miami2009 /Oct 13, 2008 at 4:11 pm  Vote:    

  That $500/Month will be wiped out soon as the tenant she has stops paying rent and it takes 6 months + to evict…lol

• 201 Muir /Oct 13, 2008 at 4:27 pm  Vote:    

  You guys go from one extreme to the other.
  I post over a dozen times: 9 11 14 26 28 30 31 43 46 60 80 115 128 160 164 172 + others, with numbers to show that at 99K this condo stinks.
  Through this article I point out an example of what COULD make sense. I did not see the property or neighborhood.
  Jeez.
  But, these things DO make sense:

  1st “Now we’re getting into the numbers where you can actually get some cash flow. Appreciation is the gravy. But that’s not why you should buy property. An asset is something that produces a return,” said Michael Morrongiello, a real estate investor in Sonoma.”
  -
  2nd “Morrongiello said some investors who bought as prices soared during the housing boom that peaked three years ago got burned because they only bet on rising values. Their monthly financing costs far exceeded the amount of money they could ever hope to pocket from rents. ‘That’s what got them in trouble. They were speculating,’ he said.”
  -
  My point is that it will take a while for this to be the “norm” thinking in Miami.
  But, there we will get, whether one likes it or not.
  -

• 202 Renter Tom /Oct 13, 2008 at 4:44 pm  Vote:    

  Muir - My point was return must reward the risk taken. You can do just as well with far far far less risk and less work than residential real estate rentals of an illiquid asset. Just my opinion. But then again, I would HATE to be a residential landlord … no way would I have the tolerance for the nuisances involved let alone the worry. But that is me.

• 203 Un-Related /Oct 13, 2008 at 4:50 pm  Vote:    

  Muir said in # 196: “Della Ramsey of Santa Rosa couldn’t resist purchasing a two-bedroom condominium, which was reduced from $245,220 to $99,900. “I was like ‘wow.’ . . . If you could do it, you had to do it,” she said. After spending $7,000 on upgrades, such as painting and new appliances, she was able to rent it almost immediately.
  ….

  The condo will net her about $500 a month after homeowner fees, taxes and insurance, a solid return on an investment Ramsey plans to hold onto until Sonoma County’s housing market turns around.”

  Muir, I think the lady did the right thing for several reasons. First, the potential for future appreciation from her price level is far greater in Sonoma County CA than it is in Miami-Dade. The primary job market potential there is currently far better than here. Average income levels there have always been higher.

  Secondly, the $99K Vue sale is one condo in a building that sucks. The speculative nature of the 2004-05 market here was the only reason why that ubit was ever priced anywhere near $400K. Now, there are 10,000 more available and the $400K will get you 2-3 bedrooms with water views, in a way better building AND there will still be 10,000 empty units around. As AJ’s spiritual advisor, Reverand Wright, would say: “Miami’s chickens haven’t come home to roost….YET!” (When they do you will have to carry an umbrella because it will be raining chicken poop.)

• 204 AJ /Oct 13, 2008 at 5:00 pm  Vote:    

  Tom,
  Sad. Very sad. After trying to beat down the housing market with every scare tactic and excuse that you can find, now you are resorting to silly excuses such as it is too much work to be a landlord? Do you want to be like a welfare mama sitting on your arse and watching TV and not working for anything? Oops, sorry, you already do that. Watching CNBC 24×7, surfing the net and responding to every post on the MCI in a nano second. Pathetic!

  Miami 2009,
  Most of your posts are well thought out except a doozer here or there like #200. I have been a land lord for 10 years, 2 in New York and 2 in Miami. Never once did I have a problem with my tenants. I do my homework before I rent out. I check the precedents and antecedents of my tenants thoroughly and not just their credit history and salary. You want to rent out your house to the first loser that comes along, you do deserve what you get. Otherwise landlord who follow due diligence almost never have any trouble.

• 205 Muir /Oct 13, 2008 at 5:15 pm  Vote:    

  Tom,
  Man, you can not find a more conservative person for investments than me.
  I have 2 safety deposit boxes. PMs and cash.
  I have 2 money market deposit accounts (FDIC insured)
  No stocks, mutual funds.
  Oh, and here’s the kicker Renter Tom, I rent, I do not own. I live in Jupiter Island.
  I do not invest oversees, and this is why:
  http://www.belfasttelegraph.co.uk/breaking-news/world/europe/icelandic-assets-seized-to-repay-british-savers-14000851.html
  So much for BIC
  -
  That’s me. As you see, I believe that I may be more conservative than you are.
  Now, whereas the 99K Vue condo is a joke (even without a crisis) what makes you think your approach or mine is safe?
  Hyper-inflation could wipe me out quickly. I own physical PMs, but those could be outlawed.
  Read Un-Related’s post and what I will add on that area. Since it seems a good comparison.

• 206 Renter Tom /Oct 13, 2008 at 5:17 pm  Vote:    

  California’s unemployment rate for August 2008 was in the category of 7%-9.9% while Florida is in 6%-6.9% category with the U.S. rate at 6.1%.

  Thanks AJ, I am single-handedly moving the entire US housing market downward…. What a joke, but thanks for the compliment. Actually, I have been too bullish and not bearish enough. NY prices are coming down too.

  Not working for anything??? Well, its good to be retired at 35! Being a residential landlord is not something that I am interested in, some people like it, but when you examine the lost opportunity costs, it just isn’t worth it esp. in this market. Again, pick up a basic finance and econ book AJ…. As I previously stated my focus is on preserving and accumulating wealth, not keep busy work chasing my own tail and really getting nowhere AND taking on a lot of risk to do so….not smart, not wise.

• 207 Muir /Oct 13, 2008 at 5:19 pm  Vote:    

  Ok, I got curious about the article.
  What would make another condo a better buy?
  Went to US census and Realtor.

  —

  From US census 2006
  In labor force (population 16 years and over)
  77,176
  64.7
  65.0%
  +/-4,302

  Median household income (in 2006 inflation-adjusted dollars)
  56,556

  Median family income (in 2006 inflation-adjusted dollars)
  71,476

  Per capita income (in 2006 inflation-adjusted dollars)
  28,744

  Families below poverty level
  (X)
  6.5

  Housing Characteristics - show more >>
  Estimate
  Percent
  U.S.
  Margin of Error

  Total housing units
  65,274

  +/-2,488

  Occupied housing units
  59,082
  90.5
  88.4%
  +/-2,439

  Owner-occupied housing units
  33,993
  57.5
  67.3%
  +/-2,034

  Renter-occupied housing units
  25,089
  42.5
  32.7%
  +/-2,509

  Vacant housing units
  6,192
  9.5
  11.6%
  +/-1,437

  Median value (dollars)
  589,900
  (X)
  185,200
  +/-11,251

  ———————————–
  From Realtor.com (today)
  condos for sale : 225
  rentals: : 1

  ———————————–
  1 (That’s right 1 rental)
  ———————————–
  No comment.

• 208 AJ /Oct 13, 2008 at 5:45 pm  Vote:    

  Tom, You are retired at 35. No contest, that has been established. But how many years ago was that? You sound like an old, bald, paunchy, bespectacled man who hoards cash under his mattress. Tell us it is not true.

  Gosh, thankfully, the World is made up of all kinds of people. Unlike you I am actually very uncomfortable when cash starts piling up. I always keep between 10-15 thousand in cash for emergencies. Any accumulation over that will start getting me very edgy. I see cash lying in the house or in a bank deposit as a your second car sitting in a garage - losing value by the minute. So I put it in real estate. Not commodities, not stocks. They are too risky.

  When I do invest in RE, I almost torture myself and everyone around me to make sure that I am getting the best possible deal or nothing at all. I dont throw money at anything impulsively.

  The one thing everyone holding dollars should be afraid of, both in this country and around the world is that one day the dollar would be worth a Peso. Anyone who argues other wise is a moron just like those who said the tech stocks, the housing prices, the Oil and other commodities, the stock market etc will never go down.

  So go ahead and pick up a 2.5 million dollar condo for 800K dollars while the going is good. When the dollar plunges, at least you will have a hard asset.

• 209 Blue Horseshoe Says Do Not Buy Real Estate /Oct 13, 2008 at 5:48 pm  Vote:    

  If you need to and you can stomach the downward spiral and carrying costs, make sure you use a buyers agent. If you use a regular real estate agent they can repeat everything you say to the home seller. (like a frigin dumb ass paraquet No confidentiality with these real estate worms. I even know of one scum real estate agent that was offered a kickback if the realtor made it possible for an investor/owner to default on a unt. That type of scum should go to jail. Anyone know how to report the guy, what are your thoughts?

• 210 AJ /Oct 13, 2008 at 5:50 pm  Vote:    

  By the way, every RE investment I made is still on tops. Way way on the top. Nothing lost their original value. If I had kept cash in the bank or under the mattress, I would have been a poor, very poor guy right now.

  New York

  House in 1999
  Co-op in 2001

  Miami

  Condo in SOBE 2004
  Condo in Downtown 2008

• 211 Renter Tom /Oct 13, 2008 at 6:47 pm  Vote:    

  AJ - I assure you I look more like Matt Damon then what you were looking at in the mirror as you described yourself and I still have yet to hit my 40th! So, I got a lot of working years left and can choose what I want to do when I want to do it. By the way, you really do need to bone up on some financial books…. Here is some free advice, and I do give a lot of free advice to friends and family only upon request, you are too concentrated in real estate, you need to diversify your investments my friend. Owning mainly rental properties which are subject to things that are out of your control and are illiquid is not wise. For example, what if real etate property taxes doubled? Guess what, if you don’t pay them the govt can have your property sold to satisfy the debt. That is just one example. And with respect to cash in interest bearing accounts or treasuries…..they have been doing fine. My concern with US dollars is the value that they represent and so far it has been OK. Thankfully with cash you can always convert it to something else if you want. With illiquid assets that is hard to do quickly if you want to get the best price. And with respect to “When I do invest in RE, I almost torture myself and everyone around me to make sure that I am getting the best possible deal or nothing at all.” I have to ask what type of qualified and informed opinion do those people have? Most people are usually affirming of people’s decisions even if they disagree with them. With me I’ll tell it the way it is if you want or I will be more diplomatic if you want and phrase it “if I were buying X I would want to make sure that A,B, C were OK before doing so, etc.” or “it may be helpful if you reread such and such before making that decision”. Had to cut the beach run off early tonight since the rain was coming…..not a nice weather today at all…later.

• 212 Renter Tom /Oct 13, 2008 at 6:53 pm  Vote:    

  I don’t know, the two Miami condos might pull down any positives on the two New York one’s. It depends on where those two NY properties are located to see how much they will decline from the peak. All will decline from the peak but NY property in good locations on or before 2001 should hold up to purchase prices fine from back then, but the opportunity costs may outweigh whether it was a wise investment. Real estate has high transaction costs that often times suck up a heck of a lot of price appreciation. I for one wouldn’t want to buy an illiquid asset with a historic inventory oversupply and declining in value every day with high fixed costs, high transaction costs and using leverage to do so. Just doesn’t make sense for the meager POTENTIAL profit…the risk is too high for such little reward.

• 213 Mark (Not Zilbert) /Oct 13, 2008 at 7:01 pm  Vote:    

  Listen peeps. Did I not call the market bottom (see post 92)? I don’t know how high the market will go,but my thoughts are 10500 to 11400. If we get anywhere near 11000 sell into the rally. Short retail and durables. This rally can go one week or 3 months. You’re on your own.

  About real estate. You would have to be trapped in cryogenic stasis to miss the bottom. The bottom will be when prices in nominal terms level out bet continue to decrease in real terms. At that point you have 2-3 or more years to find a perfect unit an buy. I defy any of you morons to find and example of a v shaped recovery in housing? That’s because it has never happened before. Keep your powder dry as The Ace says.

• 214 Renter Tom /Oct 13, 2008 at 7:05 pm  Vote:    

  Muir - You must be older retired to have those investment positions. I just calculated my housing costs (rent plus utilities) and the annual cost is 0.7% of networth (might get closer to 1% with stock price down LOL). Maybe I am too conservative! Eeeecks.

• 215 Mark (Not Zilbert) /Oct 13, 2008 at 7:06 pm  Vote:    

  AJ bought early and he will lose quite a bit of real money. If he wants to buy and hold well hell, inflation will make him whole in nominal terms eventually. AJ is like a guy that bought gold in 1980…well it only took 28 years and now that guy is whole again. It will take about 6-10 years for AJ to be made whole, but in the meantime we’ll be able to own TWO condos of similar quality for the same carrying costs. We’ll be the winners. AJ will be the winner in his own puny brain.

  Also, I disagree with a buyers agent comment. What you should do is bribe the sellers agent. buyers agent and sellers agent get 3% each thus they are looking to make you pay the largest price possible. now if you offer the sellers agent money, like say the 3% on top of the 3% they are getting from the seller, well they might just insert some little thoughts into the ignorant seller’s head (LIKE: “TAKE THE DEAL, BEST DEAL YOU’LL GET!!!!”)

• 216 Mark (Not Zilbert) /Oct 13, 2008 at 7:09 pm  Vote:    

  Also, the housing recovery may come sooner if they hold the Space Olympics in Miami: http://www.nbc.com/Saturday_Night_Live/video/clips/digital-short-space-olympics/656361/

• 217 AJ /Oct 13, 2008 at 7:11 pm  Vote:    

  Tom,
  How did you retire with 1.5 million at 35? Did you work for it or was it given to you by your daddy?

• 218 Mark (Not Zilbert) /Oct 13, 2008 at 7:16 pm  Vote:    

  AJ so we are getting a whole foods in 30 months and a Space Olympics in perhaps 1000 years? Exciting times to buy Miami real estate right???

• 219 The Ace /Oct 13, 2008 at 7:17 pm  Vote:    

  To: JCRIMES,

  Get with the program, Anacot Steel was the code 7 years ago.

  The Smart Money

• 220 Muir /Oct 13, 2008 at 7:25 pm  Vote:    

  Ripley: How long after we’re declared overdue can we expect a rescue?
  Hicks: [pause] Seventeen days.
  Hudson: Seventeen *days?* Hey man, I don’t wanna rain on your parade, but we’re not gonna last seventeen *hours!* Those things are gonna come in here just like they did before. And they’re gonna come in here…
  Ripley: Hudson!
  Hudson: …and they’re gonna come in here AND THEY’RE GONNA GET US!
  Ripley: *Hudson!* This little girl survived longer than that with no weapons and no training.
  [to Newt]
  Ripley: Right?
  [Newt apes a salute]
  Hudson: Why don’t you put her in charge?
  Ripley: You better just start dealing with it, Hudson! Listen to me! Hudson, just deal with it, because we need you and I’m sick of your bullshit.

• 221 Visionary /Oct 13, 2008 at 7:30 pm  Vote:    

  AJ,

  Your post #204: I have been a landlord for more than 25 years, and I never had any problems with my tenants.
  As you stated, you have to check your tenants thoroughly.

  Renter Tom,
  I have been investing in RE in various countries and I never suffered any loss or backlash, on the contrary I made and still make some good money.

  It doesn’t matter in what markets you invest, you only have to do it in a professional, savvy and wisely manner !

• 222 Muir /Oct 13, 2008 at 7:39 pm  Vote:    

  Check out the second pic
  http://wolf.ok.ac.kr/~annyg/picture4.jpg
  -

  Oh, the silliness of it all.
  p.s. Tom, we are 12 years difference.

• 223 Muir /Oct 13, 2008 at 7:57 pm  Vote:    

  CEO — Chief Embezzlement Officer
  CFO — Corporate Fraud Officer
  BULL MARKET — A random market movement causing an investor to mistake himself for a financial genius.
  BEAR MARKET — A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.
  VALUE INVESTING — The art of buying low and selling lower.
  P/E RATIO — The percentage of investors wetting their pants as the market keeps crashing.
  BROKER — What my broker has made me.
  STANDARD & POOR — Your life in a nutshell.
  STOCK ANALYST — Idiot who just downgraded your stock.
  STOCK SPLIT — When your ex-wife and her lawyer split your assets equally between themselves.
  FINANCIAL PLANNER — A guy whose phone has been disconnected.
  MARKET CORRECTION — The day after you buy stocks.
  CASH FLOW — The movement your money makes as it disappears down the toilet.
  YAHOO — What you yell after selling it to some poor sucker for $240 per share.
  WINDOWS — What you jump out of when you’re the sucker who bought Yahoo @ $240 per share.
  INSTITUTIONAL INVESTOR — Past year investor who’s now locked up in a nuthouse.
  PROFIT — An archaic word no longer in use.

• 224 Visionary /Oct 13, 2008 at 8:18 pm  Vote:    

  Renter Tom,

  My experience: I think a good diversification for an portfolio (size $ 5-10 mil.) is:
  40-50% RE, 30-40 % stock market, the rest cash/money market.

• 225 Visionary /Oct 13, 2008 at 8:25 pm  Vote:    

  Renter Tom,

  Concerning portfolio size: To be precise, I speak of equity and not of total assets value.

• 226 Renter Tom /Oct 13, 2008 at 8:29 pm  Vote:    

  AJ - Where did you get $1.5M from? You can’t retire on that! Multiply by four and you’re in the ballpark. I worked my arse off and started several small businesses….while going to highly selective and competitive grad schools (yes, I have more than one graduate degree) full time. I have had the fortunate experiences of doing many things in many fields. My focus for the financial aspect of my life is to preserve and accumulate wealth. I plan to do some more traveling with an eye on having 2 maybe three personal but modest residences (probably condos because of the lock and leave lifestyle). But for now renting is really great….1/2 price! Why would I ever buy with that kind of deal? Regardless, I really wish there had not been a real estate bubble then could buy, but then again I wouldn’t have come across such great rental deals….I could never have decorated my place like the pro that did the condo…everyone that walks in says “wow” literally.

• 227 Mark (Not Zilbert) /Oct 13, 2008 at 8:30 pm  Vote:    

  RT, I was about to say…I hope you didn’t retire on 1.5 million. That’s 3 years of spending for me.

• 228 Visionary /Oct 13, 2008 at 8:33 pm  Vote:    

  Mark (Not Zilbert),

  Sorry, you are not worthwile debating.

• 229 Mark (Not Zilbert) /Oct 13, 2008 at 8:36 pm  Vote:    

  Well contradict that post. Let me repeat it for you:

  350 years of data from the netherlands (A VERY SMALL AND LAND LIMITED COUNTRY WITH A POPULATION EXPLOSION OVER THE PERIOD) - http://www.bloomberg.com/apps/news?pid=10000085&sid=asawSY.nwq5Y&refer=europe

• 230 Mark (Not Zilbert) /Oct 13, 2008 at 8:37 pm  Vote:    

  See visionary, my theory is that you have a brain that is puny. It is so small that you can only think in 2 dimensions. You cannot free your pathetic mind to think outside the RE paradigm. Well lots of losses and dying poor and broke will repair that.

• 231 Mark (Not Zilbert) /Oct 13, 2008 at 8:39 pm  Vote:    

  worthwhile

• 232 AJ /Oct 13, 2008 at 8:51 pm  Vote:    

  Visionary,
  I agree with your portfolio diversification. That is a good bet. But personally I am a bit shy of stocks. I would rather own the whole business or company than a share of it and keep it limited.

• 233 Mark (Not Zilbert) /Oct 13, 2008 at 9:06 pm  Vote:    

  Hey AJ. WHy don’t you tell us what price you bought at? AJ is like those guys that found bigfoot. Why not just show us bigfoot. OH yeah, that’s right, because is was a hoax. Just like AJ getting a good deal is a hoax!

• 234 Muir /Oct 13, 2008 at 9:07 pm  Vote:    

  Besides, nobody commented on the UK seizing Icelandic assets. For the the investors holding overseas stocks, I’d have thought they’d have said something.
  -
  http://www.belfasttelegraph.co.uk/breaking-news/world/europe/icelandic-assets-seized-to-repay-british-savers-14000851.html

• 235 Roger /Oct 13, 2008 at 9:15 pm  Vote:    

  mark(not zilber), what do you think is a good buy tomorrow considering that the markets are expected to be up? I’m planning to long Dow and some tech stocks

• 236 Muir /Oct 13, 2008 at 9:17 pm  Vote:    

  Well Mark.
  Obviously you are mistaken.
  From your own article:
  http://www.bloomberg.com/apps/news?pid=10000085&sid=asawSY.nwq5Y&refer=europe:
  “Adjusted for inflation, the index shows prices rose only 0.2 percent in the 3 1/2 centuries since the bubble.”
  See?!!
  Real Estate does go up.

• 237 AJ /Oct 13, 2008 at 9:22 pm  Vote:    

  For all the haters and perpetrators,
  Eat your heart out.

  1999 Long Island House:
  Paid 169K
  ‘06 Peak 525K
  Present valuation 450K
  Play 281K

  2001 New York 1 BR co-op:
  Paid 90K
  ‘06 Peak 290K
  Present valuation 245K
  Play 155K

  2004 SOBE 1/1.5 High Rise Condo in a Full service building with Bayviews and all ameneties:
  Paid 210K
  ‘06 Peak 365K
  Present valuation 275K
  Play 65K
  (Actually this building has just 2 foreclosures among the 200 flats! that is just 1%. Combined with an excellent management with very low HOA and never more than 10 flats on the market for sale and never more than 3 flats available for rent, common perception is that the rates will not go down any further in this building due to overwhelming number of end users who live here.)

  2008 Downtown 2/2 with a gadzillion dollar water views in a Luxury Building:
  Ahhhh! dont you all want to know. As I said before, In spring 2009, I would complete one year of buying this dream flat. I will announce the price I paid and the current valuation/last sale price of a similar unit. We’ll see who has the last laugh.

• 238 Muir /Oct 13, 2008 at 9:25 pm  Vote:    

  Mark (Not Zilbert) // Oct 13, 2008 at 9:15 pm
  “Who buys stocks in iceland???”
  –
  Who buys stocks in China?
  I mean, China would never seize US assets right?
  I mean, I’m just saying, we get along right.
  I mean, countries do respect each other and it’s not like the US and China have had any animosity, right?
  –
  B: They love us right?
  R: Oh, you dropped that already
  I: No problema there (I mean it’s not like nuclear Armageddon could ensue there, we even ship armaments)
  C: Oh, yeah, that’s covered
  -
  It’s like another old trading partner Iran (with the Shah, that is)
  Could have been BRIIC

• 239 Muir /Oct 13, 2008 at 9:33 pm  Vote:    

  In a deflationary environment cash is king.
  Even with inflation.

• 240 Un-Related /Oct 13, 2008 at 9:55 pm  Vote:    

  Mark said (#236): “I’m planning to long Dow and some tech stocks”

  Mar, Use some foresight and save some money. NO tech stocks until mid-2009 at the earliest. Why? Because if the world is actually into, or going into recession, the first business cutbacks are IT-related equipment. Intel is already worried about losing $15 Billion in sales for 2009. If you don’t like integrated oil companies, look at refining or oil services shares. They got killed last week, up today, but oil “issues” are not going away. Demand and pricing may be down compared to the last year but, exploration and refining are not going away. Just an opinion. Do your research.

• 241 Renter Tom /Oct 13, 2008 at 10:04 pm  Vote:    

  AJ - Assuming a 6% commission, that’d be a $60K haircut on the first three alone effectively erasing any “gain” on the SOBE property. The two Miami properties are going to drop at least 10% more. And as far as the gadzillion dollar view, get a finance book, there is no such thing as a gadzillion except in fairy tales and housing bubbles (LOL). I think that if you cashed out the two Miami properties you’d loose money but let’s just say you’d break even with NO RETURN on your investment….lost opportunity costs. Let’s also add in that you admitted you have to subsidize your renters’ so subtract that from all four too so now we’re eating into the NY properties in both the subsidies and the extra 10% price declines in the Miami properties that is probable so let’s say that is $50K decline and another $20K for subsidies. That’s $70K off the NY properties taking down those gains to $366K. Now what are the subsidies for the NY properties over the years? $50K leaving a current gain of $316K? Now subtract $70K for a 10% decline in value of those two NY properties and you’re down to say $250K??? The key is going to be the price appreciation since you have to subsidize the rents. The gains aren’t “real” until you cash out assuming you can in this environment. I think your numbers don’t reflect the net. So you focus on the gain on sale but ignore the transaction costs and costs to subsidize the rents…common error, but an error nonetheless. You’d have been much farther ahead if you had cashed on in late 2006.

• 242 Roger /Oct 13, 2008 at 10:41 pm  Vote:    

  Renter Tom,

  Regarding your post 226, curious to know what kind of businesses did you start?

• 243 AJ /Oct 13, 2008 at 10:48 pm  Vote:    

  Yes, I would have been better off cashing out in 2006. But I need these places for future.
  My 5 BR 3 bath 1/2 acre lot house on Long Island is needed to live and conduct my biz.
  The 2/2 in Miami will be for my future living.
  As I am not a great fan of 401K and other dicey future investment ideas, I invest in RE to take care of my future income. The SOBE and the NYC props are paid off and I am making serious cash from them after expenses. So even if the prices fall further (which may or may not happen), I am OK with it. No regrets ever on my RE purchases.

• 244 Mark (Not Zilbert) /Oct 13, 2008 at 11:59 pm  Vote:    

  Hey AJ, names please. That way I can check sales history.

  Let me explain why:

  I bought a penthouse unit at Setai for 200/sf. See, yiou can check if I’m lying by looking at sales history. See??

  How about: I bought a luxury penthouse unit at 200/sf…see can’t be disproven

  About tech stocks. If I was buying I would be long INTC and APPL. I would sell if I even made 10%. Tech stocks will be the first to go if bad news arises. INTC at $16 to buy and hold isn’t bad. I would buy and hold appl at $80. Buy and sell before the end of the week if the news stays good. New macbooks at 1 pm Eastern time. This will move the stock (usually down - but I don’t know).

  I like one sided trades (like soros):

  Shorted tlt above 99. Long potash @ $80 (PE WAS 12 a that point). Ford at $1.87.

  Julian Robertson had some tech picks here is part 1: http://www.cnbc.com/id/15840232?video=888731806&play=1

• 245 Mark (Not Zilbert) /Oct 14, 2008 at 12:02 am  Vote:    

  Oh yeah: AUY 1/4 of a position at $9, 1/4 at $7, 1/2 at $5.30. I will break even on this trade tomorrow. this is my one buy and hold

• 246 Mark (Not Zilbert) /Oct 14, 2008 at 12:03 am  Vote:    

  Oh yeah and I bought a bunch of $9 calls on uyg on friday.

• 247 AJ /Oct 14, 2008 at 2:52 am  Vote:    

  Some guy who changes his handle once a week asks me to prove something to him!!?

• 248 Renter Tom /Oct 14, 2008 at 5:21 am  Vote:    

  AJ - You’re too heavy on real estate. Also, did you know in some tax advantaged retirement plans (which you should check into) you can hold real estate, it doesn’t have to be only stocks, bonds and cash. You should hire a flat rate fee certified financial planner to give you a review and plan recommendations. You want someone who won’t be the guy that sells you the stocks or mutual funds and who will take the time to interview and really go over all of your finances. It’d be worth the $500-$1000. That’s just my opinion based on what I know. My guess is you made the more prudent NY purchases then later bought into the real estate hype like a lot of people and decided to buy more which would explain the two Miami purchases which really ought to have been dumped or still should be dumped esp if you can at least break even which would make it psychologically easier to do. I personally would be uncomfortable tying up so much of my net worth in real estate…over the long term a diversified portfolio performs best since we don’t know what will and will not perform or even survive over 50 years. Moreover, the only return going forward on most residential real estate will be rental income, not asset appreciation so any reliance on the latter would appear to be misplaced. Lastly, even though you may own some real estate without a mortgage, there is an opportunity cost to that money which needs to be factored into the equation. I almost always only borrow money if it is cheaper than the ability to self-invest….for example why would I borrow money at say 7% when my cash is only earning 3.5%-5% in the bank right now? One exception would be a 30 year fixed mortgage at under 6% …. that is historically cheap money and will possible inflation picking up in 3 years….really cheap money!

• 249 Hugo P /Oct 14, 2008 at 8:09 am  Vote:    

  When did this blog become about buying stocks???Why are we talking about AAPL, INTC, and AUY?

  Focus people, there are plenty of blogs out there for you to discuss the future of tech stocks BUT THIS IS NOT IT!!

• 250 Un-Related /Oct 14, 2008 at 8:46 am  Vote:    

  Hugo P said: “Focus people, there are plenty of blogs out there for you to discuss the future of tech stocks BUT THIS IS NOT IT!!”

  Fundamentally, you are right, however, permit me to point out one connection which proves Miami condo investments will financially kill almost anybody. Jim Clark, the founder of Netscape, is a majority partner in the developer that built “Blue” and “Marina Blue”. Got his fortune in tech stocks and is blowing it in Miami condos. End of story.