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Recession End In Sight

Stephen1151

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QUOTE (thomasbeyer2000 @ Mar 5 2009, 02:18 PM) one person`s (pessimistic) view ..

Interesting that if someone would have posted on my reinspace a year or so ago that said real estate prices would fall by 15-20% and not to buy, They most likley would have been called pessimistic. What would be nice is not optimisim nor pessimisim but "realisim"
In the ealy 1930 After the stock market crash in 1929 credit was available at very low rates according to Wikipedia, very similar to now. A scary thought
 
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RussellWestcott

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Stephen, each and every month the Economic fundamentals are updated and presented to the REIN™ members at the monthly workshops. I see you are in Abbotsford, hopefully you are registered for the upcoming ACRE™ weekend.

Don will be spending this Friday night and about 4 hours on Saturday morning diving head first into the current market reality across Canada, and primarily in BC... Including some very interesting research on what happens to the economic GDP growth in post recession years.

As well the brand new Top BC Investment Town Report will be presented this weekend for the first time.

Hope to see you there.
 

housingrental

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It`s not 1930
People were posting last year and half ago that there was a risk of prices fall in Alberta, like me, and got lots of hate messages for it



QUOTE (stephen @ Mar 5 2009, 05:33 PM) Interesting that if someone would have posted on my reinspace a year or so ago that said real estate prices would fall by 15-20% and not to buy, They most likley would have been called pessimistic. What would be nice is not optimisim nor pessimisim but "realisim"
In the ealy 1930 After the stock market crash in 1929 credit was available at very low rates according to Wikipedia, very similar to now. A scary thought
 

Stephen1151

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QUOTE (RussellWestcott @ Mar 5 2009, 05:04 PM) Stephen, each and every month the Economic fundamentals are updated and presented to the REIN™ members at the monthly workshops. I see you are in Abbotsford, hopefully you are registered for the upcoming ACRE™ weekend.

Don will be spending this Friday night and about 4 hours on Saturday morning diving head first into the current market reality across Canada, and primarily in BC... Including some very interesting research on what happens to the economic GDP growth in post recession years.

As well the brand new Top BC Investment Town Report will be presented this weekend for the first time.

Hope to see you there.

Hi Russell and thanks for your message

I would like to go, In fact as of a year ago I was a rein member. I stopped to save money. When I was a rein member I always listened to the market fundamentals presented in the "whats behind the curtian" and I acted on it and bought, but now I have seen my investment go down more and more. As much as I enjoyed being a part of rein I wish I had not acted on thoes "fundamentals" and bought when I did. Dont get me wrong I did enjoy rein and I love how everyone is so supportive helping each other acheive there dreams.
I just wish I hadnt bought at the hight of the market....I guess no one has a crystal ball.
 

thoyem

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Quite honestly, the REIN mantra has been buy, buy, buy, "the fundamentals are as perfect as they have ever been for real estate in Alberta" end quote by Don Campbell.

But I agree that is what they have seemed up until 8 months ago. Regardless buying for cash flow makes sense certainly. But what worries me is just because my mortgages are at historic low rates, does that mean I will be able to keep them filled and cash flowing. So far so good. But can I realistically renew those mortgages in 3.5 -4.5 years without them being seriously underwater. I hope so, because this is now a distinct possibility. Using a Heloc to fund down payments was my only method of coming up with the money at the time. Now most of my rentals are only maybe slightly equity positive and my personal residence is about the same. SO the farm was bet so to speak, based on the best real estate research going. It is nice to have cash flow, but some appreciation would be good too. Can we hold through the renewals??? My new rents are far lower than they were last year, is this going to continue??? But to be fair my rental income is very good at the moment.
Otherwise where is this all going???
Right down the toilet, so to speak. I am not being negative, just a realistic appraisal of where I am at.

Certainly it may seem a great time to buy, but how low did real estate go during the 1930`s. I believe it was 80-90 % like the Dow charts we just looked at. Mind you if this is the case, we are all screwed big time. There would be massive currency devaluations in the pipe as well.

Maybe inflation is not coming back to save our butts this time, who knows.

Maybe some more money under the mattress is in order!!!! I really do not know just yet.

Thanks for listening.

Todd Hoyem
 

EdRenkema

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QUOTE (thoyem @ Mar 6 2009, 12:27 AM) There would be massive currency devaluations in the pipe as well.

Maybe inflation is not coming back to save our butts this time, who knows.

Maybe some more money under the mattress is in order!!!! I really do not know just yet.

Thanks for listening.

Todd Hoyem

Currency devaluation is exactly what inflation is to my knowledge.
With the amount of liquidity that will be injected by the US gov`t there will be currency devaluation = inflation.
 

mcgregok

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QUOTE (thomasbeyer2000 @ Mar 5 2009, 02:18 PM) one person`s (pessimistic) view ..

Thomas, When I posted this information I did not mean it to be pessimistic. Rather I thought it to be the start of an oportunity. Many people have neaver invested in anything and totally missed the last boom ion real estate and stocks. Only 30% of Canadians have an RRSP which says 70% who havn`t invested get a second chance. I think the debate has finished on weather the economy is going down . The debate now is how bad is the fall out and when will it end so we can alll get back to business. This chart gives a timeline of around 18 months. This is what I found interesting . If I thought it was pessimistic I would have titled it RECESSION - NO END IN SIGHT.
 

Thomas Beyer

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QUOTE (EdRenkema @ Mar 6 2009, 05:04 AM)
Currency devaluation is exactly what inflation is to my knowledge.

With the amount of liquidity that will be injected by the US gov't there will be currency devaluation = inflation.


indeed .. PLUS the previous post:



QUOTE
Maybe some more money under the mattress is in order!!!!


indeed .. more cash as a reserve is required in bad times .. plus more cash-to-close is required.



W-Canada and Alberta is doing far better than other parts of the world .. yes we have a recession too .. and yes, it is not over ..



and yes, you should not buy overpriced homes that are not designed as a long term rental houses, i.e. you should buy a cheap house that has a higher probability to be rented than one for $400,000. Any house over approx. $350,000 is not an investment for real estate holding. It is purely speculative .. did Don and REIN not point this out ?



Real estate, much like the stock market, is not a 1-2 year investment either. It is a 5+ year investment .. better 10 years. Did Don + REIN not preach that numerous times ?



We were all just fooled by the 1995 to 2007 up up up curve which of course has to correct ! Who told you 2008 is higher ? Who told you 2009 will be higher ?



2020 will be higher .. I am convinced .. but 2010, 2001 will likely still be lower than 2007 .. 2012 or 2013 will likely be at par with 2007 again .. more or less .. so a 6 year peak-to-peak adjustment .. if you can't hold that long then you bought the wrong property ..



see here a Calgary 50 Year house price view: http://myreinspace.com/rein_members_only/Members-Only_Discussion/81-6621-50_Year_Calgary_House_Price_View.html



Perhaps you heard only what you wanted to hear .. namely "up" .. what you may not have heard .. but what was said was "it will take time" .. "it is not a straight line" .. "look at fundamentals" .. "think long term" .. "don't over pay" .. "use a 10% .. and later an 8-9% filter" .. "many homes are too expensive to be rental properties for a 5+ year hold" .. "it is harder in big cities .. not impossible .. but harder" .. "treat it as a business" .. "it is not easy .. it is hard work" .. "don't flip" .. "be a smart landlord" .. "have some reserves" .. "buy in growth markets" .. "do your due diligence" .. "do not buy in too small a town with one industry only" .. "use our systems such as: gold mine score card, pro-active landlording techniques ..." ..



I can guarantee you that

a) $s under the mattress will erode in value

b) any hard asset, such as gold, oil and real estate in inflationary times will go up in value

c) we will have tenants next year, 5 years and 50 years from now

d) we have loads of kids of baby boomers (echo boomers) in the late teen's to late 20's renting as it makes more sense due to mobility, lower cost/month than buying and lack of guaranteed/speculative equity gains

e) we will have cheap money for many years to stimulate the economies worldwide

f) there are bargains to be had now and next year

g) not all real estate makes a great investment (such as higher priced homes, retail, raw land, vacation condos ..) with cash-flow and equity upside .. and certainly not at every price .. hence REIN's focus on older/used smaller homes in growth locations, with long-term cash-flow and equity upside

h) some parts of the world with in-migration, natural resources, low debt and stable governments make a better investment location than others (W-Canada, for example .. some US, E-Canada, Asian and S-America pockets too)

i) 6 years from now you will say "I am such a fool .. I should have bought some real estate in 2009"
 

housingrental

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I like Thomas post above but disagree with parts especially:
a) No one knows the future - likely so but deflation is possible no ? All markets can under and overshoot...
b) any hard asset, such as gold, oil and real estate in inflationary times will go up in value
What about in dying towns? What about hard assets that have fallen in inflationary times ?
h) Not necessarily from a real estate investor perspectives - think Alberta
 

schoobie

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I can see where everybody is coming from, and I guess no one has a crystal ball to tell you what to do best with your money. But after joining REIN, after an MBA, and after some other business courses @ Stanford, I can say this: Real estate investments are not like day-trading, and if you would like to see profits an hour later after investing, then this is not your game.

This game is very stable, it’s low risk hence highly certain, where you can systematically apply your own strategies over time to achieve higher returns when compared to the large cap equity markets of any developed-country stock exchange.

The historic returns of a variety of investments instruments correlated to its beta coefficient show that real estate investments can be surpassed only by junk bonds and startups. The beta is a parameter in the capital asset pricing model that describes the sensitivity of the asset with respect to the return of an investment on its own market.

As D. Campbell said: "Real estate investing is boring, and once you have figured out it is like a cookie cutter." And I would like to add that you will never feel the adrenalin rush that you feel when your stocks are going down or up.

To me, the key to this game is to play it with a long term exit strategy, 5 years being my preferred choice. Because time will fix your mistakes here, but that does not hold true for startups nor junkbonds.

Just my 2 cents.
 

Thomas Beyer

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QUOTE (schoobie @ Mar 6 2009, 03:26 PM) I can see where everybody is coming from, and I guess no one has a crystal ball to tell you what to do best with your money. But after joining REIN, after an MBA, and after some other business courses @ Stanford, I can say this: Real estate investments are not like day-trading, and if you would like to see profits an hour later after investing, then this is not your game.

This game is very stable, it’s low risk hence highly certain, where you can systematically apply your own strategies over time to achieve higher returns when compared to the large cap equity markets of any developed-country stock exchange.

The historic returns of a variety of investments instruments correlated to its beta coefficient show that real estate investments can be surpassed only by junk bonds and startups. The beta is a parameter in the capital asset pricing model that describes the sensitivity of the asset with respect to the return of an investment on its own market.

As D. Campbell said: "Real estate investing is boring, and once you have figured out it is like a cookie cutter." And I would like to add that you will never feel the adrenalin rush that you feel when your stocks are going down or up.

To me, the key to this game is to play it with a long term exit strategy, 5 years being my preferred choice. Because time will fix your mistakes here, but that does not hold true for startups nor junkbonds.

Just my 2 cents.brilliant !!

do you have some articles or website re that `risk adjusted return`i.e. beta stuff ... academic or lay person material ..
 

realfortin

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QUOTE (schoobie @ Mar 6 2009, 03:26 PM) To me, the key to this game is to play it with a long term exit strategy, 5 years being my preferred choice. Because time will fix your mistakes here, but that does not hold true for startups nor junkbonds.

Just my 2 cents.
I like the saying "get rich slow"
 
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