Jump to content

Catching the Low in US Property prices


Recommended Posts

"I'm going to get a big T-shirt saying, 'Real Estate Bull', and wear it everywhere." - Tom Obrien on TFNN show, Oct.6th, 2010

 

tom4.jpg

He got into Gold around $265, and rode it up to $1200. Now he thinks a bottom in US Real Estate mighht be only three months away of so. And he thinks a cyclical upturn of about ten years may lie ahead.

 

He will buy the shares to start. And he is already making a list of the shares that he might want to own.

 

I wonder what is on his "potential BUY list"?

 

Will he be early on this call, as he was a bit early in selling his Gold shares?

(That's my view, since I think the low could be 2011 at the earliest in the US. And probably 2012-13.)

Link to comment
Share on other sites

"I'm going to get a big T-shirt saying, 'Real Estate Bull', and wear it everywhere." - Tom Obrien on TFNN show, Oct.6th, 2010

 

He got into Gold around $265, and rode it up to $1200. Now he thinks a bottom in US Real Estate mighht be only three months away of so. And he thinks a cyclical upturn of about ten years may lie ahead.

 

He will buy the shares to start. And he is already making a list of the shares that he might want to own.

 

I wonder what is on his "potential BUY list"?

 

Will he be early on this call, as he was a bit early in selling his Gold shares?

(That's my view, since I think the low could be 2011 at the earliest in the US. And probably 2012-13.)

I'd like to read his theory of a cyclical upturn of about 10 years. What's gonna drive that?

Perhaps he is getting things back to front? Selling gold and buying property doesn't sound watertight to me.

Link to comment
Share on other sites

I'd like to read his theory of a cyclical upturn of about 10 years. What's gonna drive that?

Perhaps he is getting things back to front? Selling gold and buying property doesn't sound watertight to me.

He hasn't bought anything yet.

 

But he rode gold from $265 to $1200+, and made more by trading around that.

 

He still expects stocks to fall to SPX-$850, while Gold corrects.

If we get that, he may be a buyer of both Gold and US property stocks.

 

Way too many people are in the Gold trade IMHO.

I am still long, and continue to raise cash be selling Gold related investments.

 

What I have left in gold-related investments is still worth $xxx,xxx - 6 figures

== ==

 

RATIONALE FOR US PROPERTY RALLY

 

This chart might be a starting point...

 

US PROPERTY And a Comparison with the UK : Pulte / PHM, my US homebuilder bellwether .. update

 

usuk.jpg...phm.gif

 

Also, he thinks the US economy will continue to pick up, rather than sliding into a Depression.

Link to comment
Share on other sites

He hasn't bought anything yet.

 

But he rode gold from $265 to $1200+, and made more by trading around that.

 

He still expects stocks to fall to SPX-$850, while Gold corrects.

If we get that, he may be a buyer of both Gold and US property stocks.

 

Way too many people are in the Gold trade IMHO.

I am still long, and continue to raise cash be selling Gold related investments.

 

What I have left in gold-related investments is still worth $xxx,xxx - 6 figures

== ==

 

RATIONALE FOR US PROPERTY RALLY

 

This chart might be a starting point...

 

US PROPERTY And a Comparison with the UK : Pulte / PHM, my US homebuilder bellwether .. update

 

usuk.jpg...phm.gif

 

Also, he thinks the US economy will continue to pick up, rather than sliding into a Depression.

Hi Bubb,

I'm not trying to lay my boot into O'Brian (or you) re gold (he has had far more success than I-that's for sure), just trying to fathom why US property would be a buy in 3 months. Maybe within that time he is expecting a flash crash, who knows? My own feeling is property- any direction I am looking -is not a buy at the moment. But that is why he is successful,perhaps? I would like to see the argument for the US.

 

I would also be happy to see gold go down but only for a better buying opportunity like October 28 2008, ;) . As it is I was a few quid off the low end of August which was timely but nowhere near your 6 figure number. I don't think you have to try and justify your position to anyone. You obviously do very well at what you do. And others likewise. I sometimes tire of the endless debate, so just do the things I can the way I can inbetween a busy life. I dare say that is the same for everyone. :)

Link to comment
Share on other sites

"I'm going to get a big T-shirt saying, 'Real Estate Bull', and wear it everywhere." - Tom Obrien on TFNN show, Oct.6th, 2010

 

tom4.jpg

He got into Gold around $265, and rode it up to $1200. Now he thinks a bottom in US Real Estate mighht be only three months away of so. And he thinks a cyclical upturn of about ten years may lie ahead.

 

He will buy the shares to start. And he is already making a list of the shares that he might want to own.

 

I wonder what is on his "potential BUY list"?

 

Will he be early on this call, as he was a bit early in selling his Gold shares?

(That's my view, since I think the low could be 2011 at the earliest in the US. And probably 2012-13.)

 

 

Remind me, what is the base rate in the US?

Link to comment
Share on other sites

Hi Bubb,

I'm not trying to lay my boot into O'Brian (or you) re gold (he has had far more success than I-that's for sure), just trying to fathom why US property would be a buy in 3 months. Maybe within that time he is expecting a flash crash, who knows? My own feeling is property- any direction I am looking -is not a buy at the moment. But that is why he is successful,perhaps? I would like to see the argument for the US.

I think he is expecting a sharp falloff before the end of the year.

If it doesnt happen, he can delay his idea on when we might see the Low.

 

BTW, you know ... I think he is early on that call. But we shall see

 

Property shares (which is what he was talking about buying) should bottom months before actual properties

Link to comment
Share on other sites

The Hilbert Mansion in Indianapolis (Carmel) has just sold for $3M, down from $20M asking price 5 years ago. That much for the high end is safe. :o

http://www.indystar.com/apps/pbcs.dll/arti...D=2010310060003

post.jpg

For that much money, you can buy the penthouse one floor above me

Link to comment
Share on other sites

I think he is expecting a sharp falloff before the end of the year.

If it doesnt happen, he can delay his idea on when we might see the Low.

 

 

 

Property shares (which is what he was talking about buying) should bottom months before actual properties

 

So it is all talk and no do? Bit different to buying the T-shirt.

 

I think this kind of conjecture is useless.

 

Yes, UK/Japan?Hong Kong property might fall off a cliff tomorrow and I'll buy...but first I'll wait till tomorrow and see how close to the edge they are creeping. Pointless comment in the first instance isn't it?

 

I agree with you on buying timelines. End '11, better '12 and probably even better '13.

 

What can suddenly U -turn the US property market psychology? Threat of IR rises? Hyperinflation of currency fear? Rush back into real estate asset class?

 

I think selling gold and buying property is too contrarian for me at the moment.

 

 

Link to comment
Share on other sites

Not suggesting buying into US property yet but I get bombarded with gross yield 20%+ net yield 15% BMV properties in various parts of US - not just Detroit anymore. Admittedly the properites attract high taxes reflected in the net yield and voids are a risk but I can't help thinking that with low or negative real interest rates seemingly locked in and property down circa 35-50% that prices have not much further to fall if you buy in the right location. How long this takes to turn however is the question - one, two or three years? - physical property is still too early in my opinion.

 

I'll be watching US land and property shares with interest though. I remember Sven Lorenz tipping US land shares at the start of 2010 in Moneyweek - too contrarian for me at the time - but I'll start to watch shares such as Pulte now for signs of a turn and may take a small nibble if I find a share I like. Pulte (PHM) may be fnding a bottom around the $7.50-$8.00 level.

 

Lev

Link to comment
Share on other sites

So it is all talk and no do? Bit different to buying the T-shirt.

 

I think this kind of conjecture is useless.

 

Yes, UK/Japan?Hong Kong property might fall off a cliff tomorrow and I'll buy...but first I'll wait till tomorrow and see how close to the edge they are creeping. Pointless comment in the first instance isn't it?

 

I agree with you on buying timelines. End '11, better '12 and probably even better '13.

 

What can suddenly U -turn the US property market psychology? Threat of IR rises? Hyperinflation of currency fear? Rush back into real estate asset class?

 

I think selling gold and buying property is too contrarian for me at the moment.

 

 

I'll second that.

 

 

Link to comment
Share on other sites

  • 1 month later...

(Here's some really great advice on how to Buy property in the USA):

 

How do I buy Property in the US - I'm in California now:

 

If you are in California. Your starting point should be to pin down the area that you wish to buy into. Once you have done that, you should meet up with a mortgage officer/mortgage brokers in the US, or local US bank such as Bank of America, Wells Fargo or any other local ones to see, what sort of mortgages do you qualify for. I am asusming that you will be buying with help of a mortgage. In the US, when you do put an offer on a property, sellers like to see that you are pre-approved from a bank or a mortgage broker. Typically, you are a stronger candidate when you are approved directly by a lender vs a broker. Lender is someone like your bank or warehouse facility holders that can directly fund your loan.

 

A broker will issue you a pre-approved letter, a lender can potentially give you commitment letter, which is bit more secure from seller's perspective. You do need to know what amuounts can you qualify for and how much you need to put down. My advice is that if your loan amount is less than 423K, you look into FHA loans. You will hear the terms conventional FNMA loan, jumbo loan and FHA. As long as you are below the 417 to 423K mark, you will be getting conventional or FHA loan products which have low down payment requirement. On FHA you have to pay as little as 3.5%.

 

Once you have qualified for a loan, or while you are sopping for it, contact a reputable real estate agent. Remax is nationwide so that could be a starting point. Actually, you should go on remax.com or search properties online to get a feel of what you want to buy. In the US, you get represented by your own real estate agent, and seller gets represented by his. One agent can represent both, but I do not recommend this. The buyer DOES NOT pay commission, all the commision typically 6% to be splitted between buyers and sellers agent is paid by seller.

 

Do not sign anything without asking first, you will be asked to sign exclusive right to represent right away by most agents, which restricts your ability to use another agent. If you do, you may still be liable to pay comission to first agent. Again, if you are confused about anything, come back to these boards.

 

Once you have an estate agent, tell them what you want, a condo, townhouse or detached. They will send you listings which gives you basic data. You can then choose to go to see these properties accompanied by your agent. Once you make up your mind, you send an offer through your agent to other agent. In this offer, you negotiate the price, the date, and how to handle the transactional costs, which include county recording fees, attorney fees, title insurance fees and any other mortgage related fees. In current market, I would ask the seller to pay all these fees. You are typically allowed anywhere from 3 to 6% closing cost help. Closing cost are transactional costs. You need to check with your lender, how much closing cost they allow. If you do not negotiate this you will end up paying out of pocket.

 

Your agent can help you pick up any settlement lawyer or you can ask for recommendation. Typically, any mid level law firm would do. Mostly agents have good relations with a law firm that they like to use and I would not mind taking their recommendation as long as the closing costs are reasonable. Your closing cost should not exceed more than 3%, unless there are hidden charges.

 

Make sure you do get title insurance which covers you in case if there are issues with the title of the property that you are purchasing. It is the single most important thing in the light of foreclosure mess.

 

/More: Jacob Mizra, at PT: http://propertytribes.ning.com/forum/topic...buying-property

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...