wrote in message
oups.com...

NOYB wrote:
wrote in message
...
On Mon, 19 Sep 2005 12:37:26 GMT, "NOYB" wrote:

Or they could do a reverse mortgage and retire off the 1000% increase
in
equity that they accumulate over the the next 25 years.

That's not how a reverse mortgage works. The mortgage company pays a
fixed amount per month (usually based on a fraction of the current
appraised worth plotted against an optimistic guess on how long the
person wil live) and hopes to pocket the appreciation.

They only hope to pocket the appreciation beginning from the initial
starting point of the reverse mortgage. Any appreciation that occurs
between now and when the reverse mortgage starts belongs to the home
owner.
The homeowner's equity in the house drops as the bank continues to make
payments. But the homeowners reaps the benefits of the appreciation that
occurred before the payments begin.


They also won't
write a reverse mortage unless the owner is pretty old.

In other words...most retirees would qualify.

It is really just a scam that the banks foist off on old folks without
anyone to look out for them.

It's not a scam. It's a process that allows the homeowner to take out
the
equity of the home without having to pay monthly payments on the equity
line.

Here's another way to look at it:

Suppose you live in a million dollar home, but have zero equity in that
home
(ie--you owe 1 million dollars). In 30 years, that home is worth $4
million, and you owe still owe $1 million on it (ie--you had an
interest-only loan). You have $3 million in equity on the home. You
decide
to take out $2 million of that equity, and put it in an investment that
pays
a rate equal to what the monthly payment would be on the loan (ie--you
end
up with a net monthly outlay of cash of zero). You can then use the $2
million to live on.

You won't live very well on that $2mm if its only worth "half a house."
First thing you know, you'll need to buy a new $250,000 car or a
$500,000 ski boat. You will think twice before taking that $40,000
vacation in Europe. Surely you didn't expect housing prices to go up in
a vaccuum, right?
Heck, you'll be paying your pool boy and gardners $100 an hour (and
getting by so cheaply only because they don't speak English and work
under the table) when houses are $4mm a throw.

I wouldn't be surprised if my house doubled in value every 5-7 years. But
even if it doubles every 10 years, that means it will be worth $12+ million
in 30 years. I used the $4 million dollar figure as an example.




You want to make some money and retire off real estate?
Here ya go. This will work for you, particularly because you're in your
early 30's.

Buy up as many rentals as you can find. Yes, they will go up in value-
but although the day will come when there are "do you want to sell
XXX Main Street" letters in the mail several times a month you'll never
consider parting
with them. Money machine. You can have a couple of dozen properties
paid down to zero by your mid 40's if you work at it. Then you can
retire, or not, but you won't ever have to worry about money as long as
people need a place to live.


I'm in the process of doing that right now.

Harry Krause wrote:

Maybe NOYB will open a B&B to make ends meet.



Wonder if he'd throw in use of his boat? I wouldn't mind getting some
Florida sun in January or February.

"thunder" wrote in message
...
On Mon, 19 Sep 2005 12:44:45 +0000, NOYB wrote:


I agree. But I don't think prices will "correct". They'll plateau and
stagnate, but not fall significantly. Demand is increasing
exponentially
with the baby boom population retiring.

A real estate bust is not like a stock market crash. Any corrections will
not happen overnight, but they will occur. A very general scenario,
right now, your market is overheated, they are building like crazy,
everybody is getting fat, and the market will never go down. But watch,
you see a couple of buildings completed, usually a retail unit, with no
occupants. Same with a house, here or there, completed with no one moving
in. Six months later, it's bust. The switch has been thrown, and there
will be no new starts. The well financed builders will complete their
projects and hope for the best, the less well financed will leave theirs
incomplete. Now comes the corrections.

The prices will remain high, because no one is willing to sell for less
than they paid, but those that thought they were going to get rich,
leveraged to the max, can't make the payments, will either walk or declare
bankruptcy. Those that have to leave the area, for whatever reason, will
have to take the hit. That's the bottom. Then there are those, such as
yourself, who bought a house to live in, they'll ride it out.

Excellent synopsis. So the only thing that will drive prices down will be
those folks who *must* sell because they can't afford the payment on an
investment that they can't rent out. That is precisely why DSK's idea of
rental properties makes less sense than dumping all the money into your
primary residence. When you live in the house, you can afford to ride it
out.



I read somewhere
that speculators are a third of your market.

I've read up to 40% in some areas like Punta Gorda. It's much, much
lower
in Naples.

Nothing against speculators, but if they are in the market enough to
effect the market, it's a dangerous market. They don't really add
anything to the market, they just take from it.

They are definitely parasites on the housing and gasoline markets.

"Harry Krause" wrote in message
...
NOYB wrote:
"DSK" wrote in message
...
So, who is actually the smart one here?
PocoLoco wrote:
NOBBY!

He's the one who will be pocketing the money while the rest of you are
telling
him how foolish he is!
If he can really afford a $5000/m home payment on an interest-only
mortgage, and is *gambling* that his home equity will rise fast enough
to both pay off the home and provide a good financial return, wouldn't
he be better off living cheaper and investing that $5k/m?

How would I pocket $5k/mo if I lived in some place cheaper? Even a
cheaper place would have a mortgage, taxes, and insurance. Perhaps you
meant to say "pocket a portion of the savings"?

A similar home to mine that is *not* on the water would run about
$550-600k. But the ones that aren't on the water are appreciating at
half the rate as the ones that are on the water. I'd wager any amount of
money that I couldn't save enough money living in a house off the water
to come anywhere near the amount of appreciation that I'm seeing by
living on the water.

Here's an example:
Suppose a million dollar house on the water appreciates 10% per year
(they've been averaging more than three or four times that rate over the
last 10 years though). That's $150k. Suppose the $500k home that is
not on the water appreciates 5% (once again, an extremely conservative
figure). That's $25k. So the equity of the guy on the water is outpacing
the other guy's equity by $125k each year. If the mortgage payment on
the million dollar home is $5k/mo. and the $500k home is $2500/mo., then
the guy who is not on the water can put away about $30-40 k more (the
extra $5k is for additional taxes and insurance) each year in savings.
But that's still a lot less than the $125k net advantage in equity growth
for the waterfront homeowner.


Close your eyes, change a few words, and you sound like a degenerate
gambler.

I might be a degenerate...but I'm no gambler. I take well-calculated risks
only...and always leave a safety net.

I agree. But I don't think prices will "correct". They'll plateau and
stagnate, but not fall significantly.

That depends tremendously on location.

... Demand is increasing
exponentially
with the baby boom population retiring.

Ya think? Seems to me that more people are downsizing as they retire.


A real estate bust is not like a stock market crash. Any corrections will
not happen overnight, but they will occur. A very general scenario,
right now, your market is overheated, they are building like crazy,
everybody is getting fat, and the market will never go down. But watch,
you see a couple of buildings completed, usually a retail unit, with no
occupants. Same with a house, here or there, completed with no one moving
in. Six months later, it's bust. The switch has been thrown, and there
will be no new starts. The well financed builders will complete their
projects and hope for the best, the less well financed will leave theirs
incomplete. Now comes the corrections.

And this also *can* (not necessarily) lead to a steep drop in ask
prices. It will certainly lead to a steep drop in realized prices.




The prices will remain high, because no one is willing to sell for less
than they paid, but those that thought they were going to get rich,
leveraged to the max, can't make the payments, will either walk or declare
bankruptcy.

And those houses go on the block for whatever they will fetch, which
drags down other ask prices.

It's also quite possible for local conditions to change (perception of
schools, for example... or traffic & road conditions) such that an area
becomes much less desirable, and prices drop. Sometimes it's more of a
long term lag, sometimes it's falling off a cliff as the number of homes
for sale in the area increase and buyers aren't coming.

... Those that have to leave the area, for whatever reason, will
have to take the hit. That's the bottom. Then there are those, such as
yourself, who bought a house to live in, they'll ride it out.


NOYB wrote:
Excellent synopsis. So the only thing that will drive prices down will be
those folks who *must* sell because they can't afford the payment on an
investment that they can't rent out.

Excuse me? Was that written between the lines somewhere? In any event,
it's quite wrong.


... That is precisely why DSK's idea of
rental properties makes less sense than dumping all the money into your
primary residence.

What was my idea about rental properties?


... When you live in the house, you can afford to ride it
out.


Not necessarily. And you're overlooking a very key fact- if your
appreciation doesn't dramatically outpace your loan (which could easily
given any of the above scenarios), your home performs extremely poorly
as an investment.

DSK

"Harry Krause" wrote in message
...
Don White wrote:
Harry Krause wrote:

Maybe NOYB will open a B&B to make ends meet.



Wonder if he'd throw in use of his boat? I wouldn't mind getting some
Florida sun in January or February.


There is a place in the upper to middle keys that does that. It's an ok
older motel right on the water, with a good restaurant and the use of a
whaler skiff and outboard is included. The beauty of the place is that the
"offshore reef" is about a half-mile offshore, and that's as far as you
have to go to catch some damned nice fish. I stayed there for a few days
about five years ago. Nice beach, too.

I lived down here for 4 1/2 years before I went to the Keys. I don't know
what I was thinking. I finally "discovered" them this year, and have been
there twice already since Memorial Day...and I'm going back in 3 weeks. I
realized that if I want to head out to deep water to catch pelagics, it's
cheaper and easier to put the boat on the trailer and drive 3 hours to the
Keys with boat in tow. I can be in deep water off Islamorada in 3 1/2
hours...which is the same time it would take to run my 25' boat out 110
miles off Naples to reach the 100 fathom mark. And the fuel spent on the
Keys trip is 1/5th what I'd spend running to the deep water over here.

A better alternative yet, is running across the Alley and launching at Miami
Haulover or Port Everglades. This area is great for snook, tarpon, grouper,
jewfish, sharks, redfish, cobia, and snapper, but if you want pelagics
(dolphin, tuna, billfish) you need to run across to the East coast or Keys.

Harry Krause wrote:
Don White wrote:

Harry Krause wrote:


Maybe NOYB will open a B&B to make ends meet.



Wonder if he'd throw in use of his boat? I wouldn't mind getting some
Florida sun in January or February.



There is a place in the upper to middle keys that does that. It's an ok
older motel right on the water, with a good restaurant and the use of a
whaler skiff and outboard is included. The beauty of the place is that
the "offshore reef" is about a half-mile offshore, and that's as far as
you have to go to catch some damned nice fish. I stayed there for a few
days about five years ago. Nice beach, too.



If you can remember the community or motel name I'd appreciate it.
Never been to the Keys, but would like to see them.

"DSK" wrote in message
...
I agree. But I don't think prices will "correct". They'll plateau and
stagnate, but not fall significantly.

That depends tremendously on location.

... Demand is increasing exponentially
with the baby boom population retiring.

Ya think? Seems to me that more people are downsizing as they retire.


Houses in Florida don't have basements...and as a general rule are seldom
two stories, and are on tiny lots. Moving to Florida is considered
"downsizing"...everything but the price.



A real estate bust is not like a stock market crash. Any corrections
will
not happen overnight, but they will occur. A very general scenario,
right now, your market is overheated, they are building like crazy,
everybody is getting fat, and the market will never go down. But watch,
you see a couple of buildings completed, usually a retail unit, with no
occupants. Same with a house, here or there, completed with no one
moving
in. Six months later, it's bust. The switch has been thrown, and there
will be no new starts. The well financed builders will complete their
projects and hope for the best, the less well financed will leave theirs
incomplete. Now comes the corrections.

And this also *can* (not necessarily) lead to a steep drop in ask prices.
It will certainly lead to a steep drop in realized prices.




The prices will remain high, because no one is willing to sell for less
than they paid, but those that thought they were going to get rich,
leveraged to the max, can't make the payments, will either walk or
declare
bankruptcy.

And those houses go on the block for whatever they will fetch, which drags
down other ask prices.

It's also quite possible for local conditions to change (perception of
schools, for example... or traffic & road conditions) such that an area
becomes much less desirable, and prices drop. Sometimes it's more of a
long term lag, sometimes it's falling off a cliff as the number of homes
for sale in the area increase and buyers aren't coming.

... Those that have to leave the area, for whatever reason, will
have to take the hit. That's the bottom. Then there are those, such as
yourself, who bought a house to live in, they'll ride it out.


NOYB wrote:
Excellent synopsis. So the only thing that will drive prices down will
be those folks who *must* sell because they can't afford the payment on
an investment that they can't rent out.

Excuse me? Was that written between the lines somewhere? In any event,
it's quite wrong.


... That is precisely why DSK's idea of rental properties makes less
sense than dumping all the money into your primary residence.

What was my idea about rental properties?

Sorry. I meant Gould's idea. It was to buy a cheaper primary residence and
put the savings into rental properties.


... When you live in the house, you can afford to ride it out.


Not necessarily. And you're overlooking a very key fact- if your
appreciation doesn't dramatically outpace your loan (which could easily
given any of the above scenarios), your home performs extremely poorly as
an investment.

I only look at my home as an added bonus investment. It's not my primary
means of investment. And what price can you put on the enjoyment of living
on the water with a boat in my backyard and only 2 miles from my office?

NOYB wrote:
"Shortwave Sportfishing" wrote in message
...
On Sun, 18 Sep 2005 17:42:30 GMT, "NOYB" wrote:

When home prices hit the outer stratosphere, the number of potential
buyers
admittedly shrinks. But the Naples luxury market is still in boom mode,
local agents say, despite forecasts of a housing bubble that some predict
eventually must burst.

A slowdown?

You will get your turn and sooner than later.

It's already starting up here in NE.

I figure that once the NE slows, we'll soon follow. They'll be a slowdown,
but never a correction. There are too many baby boomers looking to retire
down here.

If the typical house in Naples becomes worth 5-7 times as much as a
typical house is worth anywhere else in the country, (and that is what
you seem to predict), those boomers will "look to retire" where it
won't take a nest egg of
$4-5mm just to buy a retirement cottage, and more importantly, where
taxes won't be taking a $30,000/year bite out of pension and social
security earnings.

It's a screw job. You live in a house that is valued at
$XXX,XXX,XXX.00, and you are free to sell it, but if you do and you
have no desire to start a new life in another portion of the country or
move into a beater you will be compelled to spend $XXX,XXX,XXX.00
*plus* to replace it. Put any value you want on the same property, $1
or a $100mm, and as long as you are *consuming*
the property every month by parking your butt in it that money isn't
really working for you. Meanwhile, the county tax collector comes along
and says, "Good news, NOYB, your house has doubled in value in the last
few years and so has the assessment. Here's your walloping bill for the
privilege of consuming a 7-figure house every month."

There's a reason that many of the more conservative (there's an
adjective you'll like) financial institutions *do not include* the
value of a personal residence when calculating net worth.

Did you check out "Extraordinary Popular Delusions and the Madness of
Crowds"?
(I particularly like the chapter on the Dutch tulip bulb boom and
bust).

"Don White" wrote in message
...
Harry Krause wrote:
Don White wrote:

Harry Krause wrote:


Maybe NOYB will open a B&B to make ends meet.



Wonder if he'd throw in use of his boat? I wouldn't mind getting some
Florida sun in January or February.



There is a place in the upper to middle keys that does that. It's an ok
older motel right on the water, with a good restaurant and the use of a
whaler skiff and outboard is included. The beauty of the place is that
the "offshore reef" is about a half-mile offshore, and that's as far as
you have to go to catch some damned nice fish. I stayed there for a few
days about five years ago. Nice beach, too.



If you can remember the community or motel name I'd appreciate it. Never
been to the Keys, but would like to see them.

One of the nicest places to stay down there is Hawk's Cay at mile marker
61...just 8-10 miles north of Marathon. Those small hotel/bed&breakfasts
look pretty neat, but I've never stayed at one. We're heading to Cheeca
Lodge in a couple of weeks. They have a 500ft. pier on the Atlantic side
that they allow you to tie a shallow draft (2 ft) boat up to.

There is a terrific thread on Florida Sportsman forum with all sorts of info
on the Keys:
http://outdoorsbest.zeroforum.com/zerothread?id=100907

On Tue, 20 Sep 2005 07:50:54 -0400, DSK wrote:

So, who is actually the smart one here?


PocoLoco wrote:
NOBBY!

He's the one who will be pocketing the money while the rest of you are telling
him how foolish he is!

If he can really afford a $5000/m home payment on an interest-only
mortgage, and is *gambling* that his home equity will rise fast enough
to both pay off the home and provide a good financial return, wouldn't
he be better off living cheaper and investing that $5k/m?

Not if he is enjoying the life he is living. Who are you to say what lifestyle
NYOB would be 'better' enjoying?
--
John H

"All decisions are the result of binary thinking."

wrote in message
ups.com...

NOYB wrote:
"Shortwave Sportfishing" wrote in message
...
On Sun, 18 Sep 2005 17:42:30 GMT, "NOYB" wrote:

When home prices hit the outer stratosphere, the number of potential
buyers
admittedly shrinks. But the Naples luxury market is still in boom mode,
local agents say, despite forecasts of a housing bubble that some
predict
eventually must burst.

A slowdown?

You will get your turn and sooner than later.

It's already starting up here in NE.

I figure that once the NE slows, we'll soon follow. They'll be a
slowdown,
but never a correction. There are too many baby boomers looking to
retire
down here.

If the typical house in Naples becomes worth 5-7 times as much as a
typical house is worth anywhere else in the country, (and that is what
you seem to predict), those boomers will "look to retire" where it
won't take a nest egg of
$4-5mm just to buy a retirement cottage, and more importantly, where
taxes won't be taking a $30,000/year bite out of pension and social
security earnings.

It's a screw job. You live in a house that is valued at
$XXX,XXX,XXX.00, and you are free to sell it, but if you do and you
have no desire to start a new life in another portion of the country or
move into a beater you will be compelled to spend $XXX,XXX,XXX.00
*plus* to replace it. Put any value you want on the same property, $1
or a $100mm, and as long as you are *consuming*
the property every month by parking your butt in it that money isn't
really working for you. Meanwhile, the county tax collector comes along
and says, "Good news, NOYB, your house has doubled in value in the last
few years and so has the assessment. Here's your walloping bill for the
privilege of consuming a 7-figure house every month."

The Save Our Homes Act limits the increase in property taxes to 3% per year.


There's a reason that many of the more conservative (there's an
adjective you'll like) financial institutions *do not include* the
value of a personal residence when calculating net worth.

Did you check out "Extraordinary Popular Delusions and the Madness of
Crowds"?
(I particularly like the chapter on the Dutch tulip bulb boom and
bust).

You're comparing a tulip bulb to someone's primary residence?

"PocoLoco" wrote in message
...
On Tue, 20 Sep 2005 07:50:54 -0400, DSK wrote:

So, who is actually the smart one here?


PocoLoco wrote:
NOBBY!

He's the one who will be pocketing the money while the rest of you are
telling
him how foolish he is!

If he can really afford a $5000/m home payment on an interest-only
mortgage, and is *gambling* that his home equity will rise fast enough
to both pay off the home and provide a good financial return, wouldn't
he be better off living cheaper and investing that $5k/m?

Not if he is enjoying the life he is living. Who are you to say what
lifestyle
NYOB would be 'better' enjoying?
--
John H

"All decisions are the result of binary thinking."


That is what is so absolutely funny about this thread........folks generally
telling NOYB how to lead his life and to have the audacity to think they
know what is right or wrong for him and his family.

On Tue, 20 Sep 2005 10:42:48 -0400, "*JimH*" wrote:


"PocoLoco" wrote in message
.. .
On Tue, 20 Sep 2005 07:50:54 -0400, DSK wrote:

So, who is actually the smart one here?


PocoLoco wrote:
NOBBY!

He's the one who will be pocketing the money while the rest of you are
telling
him how foolish he is!

If he can really afford a $5000/m home payment on an interest-only
mortgage, and is *gambling* that his home equity will rise fast enough
to both pay off the home and provide a good financial return, wouldn't
he be better off living cheaper and investing that $5k/m?

Not if he is enjoying the life he is living. Who are you to say what
lifestyle
NYOB would be 'better' enjoying?
--
John H

"All decisions are the result of binary thinking."


That is what is so absolutely funny about this thread........folks generally
telling NOYB how to lead his life and to have the audacity to think they
know what is right or wrong for him and his family.


And then they get ****ed and start calling names when NOYB doesn't change his
ways to correspond with the lives *they* want him to live. It's unreal!
--
John H

"All decisions are the result of binary thinking."

NOYB wrote:
wrote in message
ups.com...

NOYB wrote:
"Shortwave Sportfishing" wrote in message
...
On Sun, 18 Sep 2005 17:42:30 GMT, "NOYB" wrote:

When home prices hit the outer stratosphere, the number of potential
buyers
admittedly shrinks. But the Naples luxury market is still in boom mode,
local agents say, despite forecasts of a housing bubble that some
predict
eventually must burst.

A slowdown?

You will get your turn and sooner than later.

It's already starting up here in NE.

I figure that once the NE slows, we'll soon follow. They'll be a
slowdown,
but never a correction. There are too many baby boomers looking to
retire
down here.

If the typical house in Naples becomes worth 5-7 times as much as a
typical house is worth anywhere else in the country, (and that is what
you seem to predict), those boomers will "look to retire" where it
won't take a nest egg of
$4-5mm just to buy a retirement cottage, and more importantly, where
taxes won't be taking a $30,000/year bite out of pension and social
security earnings.

It's a screw job. You live in a house that is valued at
$XXX,XXX,XXX.00, and you are free to sell it, but if you do and you
have no desire to start a new life in another portion of the country or
move into a beater you will be compelled to spend $XXX,XXX,XXX.00
*plus* to replace it. Put any value you want on the same property, $1
or a $100mm, and as long as you are *consuming*
the property every month by parking your butt in it that money isn't
really working for you. Meanwhile, the county tax collector comes along
and says, "Good news, NOYB, your house has doubled in value in the last
few years and so has the assessment. Here's your walloping bill for the
privilege of consuming a 7-figure house every month."

The Save Our Homes Act limits the increase in property taxes to 3% per year.


There's a reason that many of the more conservative (there's an
adjective you'll like) financial institutions *do not include* the
value of a personal residence when calculating net worth.

Did you check out "Extraordinary Popular Delusions and the Madness of
Crowds"?
(I particularly like the chapter on the Dutch tulip bulb boom and
bust).

You're comparing a tulip bulb to someone's primary residence?


Yes indeed. During the Dutch tulip bulb frenzy, people became convinced
that tulip bulbs would continue to skyrocket in price, year after year.
Many people
actually *sold* houses, farms, businesses, and what not to invest in
tulip bulbs- and in some cases the proceeds from an entire home or
business proved to be enough to pay for just a single bulb. The 'bigger
fool' theory was in high gear: "It doesn't matter what I pay, the value
of this asset will always
continue to go up and there will be somebody right behind me willing to
pay much more for the same thing almost immediately."

Want to know how much the tulip bulb factor is right now in Naples? It
would be easy to figure out. For how much do houses similar to yours
*rent*, in Naples? Extrapolate a cap rate (return on investment) of 5%.
You get a break right now because rates in general and T-bills are
down- you would normally use 8-10% cap to evaluate a property. Now you
have a picture of what that property is worth based on the amount of
wealth it can produce in a given time period. Renters are a good
barometer in the real estate market becuase they aren't betting on
appreciation, merely paying for the basic economic function of the
house (shelter) every month.


IMO, it's a good time to hold onto matured positions or sell if the
cash in hand looks more attractive than the monthly cash flow. I would
personally be reluctant to buy as we close in on the inevitable market
correction. If prices merely stabilize, then there is some assurance
that the "value" is going to be sustainable. If prices at least
temporarily drop, as they have in many overheated regions during the
last couple of decades, it pays to watch for the apparent "bottom" and
buy then.


Some links:

http://www.stock-market-crash.net/tulip-mania.htm


this one is long, but wirtten by a guy who seems fairly conservative
and it is well thought out:
http://www.washingtonmonthly.com/fea...ace-wells.html

On Tue, 20 Sep 2005 14:10:33 +0000, NOYB wrote:


Excellent synopsis. So the only thing that will drive prices down will be
those folks who *must* sell because they can't afford the payment on an
investment that they can't rent out. That is precisely why DSK's idea of
rental properties makes less sense than dumping all the money into your
primary residence. When you live in the house, you can afford to ride it
out.

Don't misunderstand me, there are other forces at work. Just as the
overwhelming optimism is driving up the market, when reality sets in, the
pressures will be downward. Think, paying a note on house bought for $2
million, when the market says it is now only worth $500,000. There will
be quite a few unhappy people around who have to make some unpleasant
choices. Look, you bought your house to live in, on the water, in a very
pleasant town. Naples will retain value and will recover, but if I was
your brother, I'd wait a year. That $340K villa may once again be had for
$209K. Then again, it might be worth $700K, but *my* money wouldn't bet
on it.





I read somewhere
that speculators are a third of your market.

I've read up to 40% in some areas like Punta Gorda. It's much, much
lower
in Naples.

Nothing against speculators, but if they are in the market enough to
effect the market, it's a dangerous market. They don't really add
anything to the market, they just take from it.

They are definitely parasites on the housing and gasoline markets.

Harry Krause wrote:

Arrrgh! It's the Rainbow Bend:

http://rainbowbend.com/


Here's some photos:

http://rainbowbend.com/photogallery.htm


Remember, the motel is older, and not fancy, but it is comfortable and
there's plenty to do in the area. I caught one hell of a lot of fish
right in front of the place in one of the little Whalers. The chef
cooked up my catches for dinner, too.


Thanks Harry...
the idea of 'old Florida' style appeals to me.

"thunder" wrote in message
...
On Tue, 20 Sep 2005 14:10:33 +0000, NOYB wrote:


Excellent synopsis. So the only thing that will drive prices down will
be
those folks who *must* sell because they can't afford the payment on an
investment that they can't rent out. That is precisely why DSK's idea of
rental properties makes less sense than dumping all the money into your
primary residence. When you live in the house, you can afford to ride it
out.

Don't misunderstand me, there are other forces at work. Just as the
overwhelming optimism is driving up the market, when reality sets in, the
pressures will be downward. Think, paying a note on house bought for $2
million, when the market says it is now only worth $500,000. There will
be quite a few unhappy people around who have to make some unpleasant
choices. Look, you bought your house to live in, on the water, in a very
pleasant town. Naples will retain value and will recover, but if I was
your brother, I'd wait a year. That $340K villa may once again be had for
$209K. Then again, it might be worth $700K, but *my* money wouldn't bet
on it.

I've been on the fence on how to advise him. Part of me believes as you do:
that $340k villa will drop in price once a correction knocks the speculators
out of the market. But if I'm wrong, then where does he live? If he pays
the $340k now, and then it drops, he can just stay in it until it goes back
up again.

"Don White" wrote in message
...
Harry Krause wrote:

Arrrgh! It's the Rainbow Bend:

http://rainbowbend.com/

Personally, I'd avoid anything that has to do with "rainbows" in the Keys.
;-)


When you stayed there, how long did it take before you realized that it was
a gay resort?



Of course, it's worth a look just because of the complimentary use of Boston
Whalers.

On Tue, 20 Sep 2005 17:21:16 +0000, NOYB wrote:


I've been on the fence on how to advise him. Part of me believes as you
do: that $340k villa will drop in price once a correction knocks the
speculators out of the market. But if I'm wrong, then where does he live?
If he pays the $340k now, and then it drops, he can just stay in it until
it goes back up again.

Yeah, my Crystal Ball is a little cloudy too. It's a tough call, but
ultimately housing's real value is to live in, not to make money on. If
he can afford it, and he is planning to stay in Naples, then . . . maybe.
The values are relative to the market. He'll only take a big hit, if he
has to leave the Naples market. That is, provided, Naples hasn't been so
overvalued that prices don't recover. I don't see that happening. Naples
is a very nice town and it will cost a premium to live there. Myself, I'm
just reaching a cautious age where I would be very hesitant in that
market. Your brother, maybe he hasn't reached that age. ;-)

PocoLoco wrote:
Not if he is enjoying the life he is living. Who are you to say what lifestyle
NYOB would be 'better' enjoying?

Can't read, can you?

Did I say that one particular lifestyle is "better" than another? Why do
you try to argue with things I didn't say, maybe because the facts are
so consistantly against you?

Answer- I said that NOBBY's financial future would be more secure.

BTW living in debt and letting the rest of society pay for your
extravagant choices is not a conservative lifestyle. NOBBY is certainly
not the worst example, but he's far from being 'conservative' fiscally.
And the part I disapprove of is only that he's gambling with his
family's security and he appears to not understand the odds, nor the risk.

DSK

... Demand is increasing exponentially
with the baby boom population retiring.

Ya think? Seems to me that more people are downsizing as they retire.



NOYB wrote:
Houses in Florida don't have basements...and as a general rule are seldom
two stories, and are on tiny lots. Moving to Florida is considered
"downsizing"...everything but the price.


???

You think retirees with less income than they had when working, who are
looking for less expense, less driving, and closer care, are going to
buy increasingly expensive & expansive homes?



What was my idea about rental properties?


Sorry. I meant Gould's idea. It was to buy a cheaper primary residence and
put the savings into rental properties.


Well, that can be made to work out, depending on your community and how
savvy a buyer you are. Probably less risk than your method.

Personally, I wouldn't even invest in REITs and the spreads the risk
maximally. But then, I don't know a lot about real estate and would
rather invest in things I *do* know about.



... When you live in the house, you can afford to ride it out.


Not necessarily. And you're overlooking a very key fact- if your
appreciation doesn't dramatically outpace your loan (which could easily
given any of the above scenarios), your home performs extremely poorly as
an investment.


I only look at my home as an added bonus investment. It's not my primary
means of investment.

Ah so. That reduces the risk considerably. But it also contradicts what
you said earlier, that you are planning to pay off your business loan
and reap an increased income in the future; not putting money into other
investments.


... And what price can you put on the enjoyment of living
on the water with a boat in my backyard and only 2 miles from my office?


Personally, I put a higher value on living more frugally, having a large
& exponentially growing net worth along with investment income that will
see my wife & I comfortably thru retirement, and independence from the
whims of local gov't & the fickle real estate market.

OTOH I bought a pretty expensive boat which isn't going to (fiscally)
appreciate at all. So obviously I place a high value on *that*.

DSK

NOYB wrote:
I've been on the fence on how to advise him. Part of me believes as you do:
that $340k villa will drop in price once a correction knocks the speculators
out of the market. But if I'm wrong, then where does he live? If he pays
the $340k now, and then it drops, he can just stay in it until it goes back
up again.


Rent cheap and put money into a residential REIT

If the housing market continues to climb fantastically, he'll have a leg
up on affording a place. If it crashes in some places or plateaus in
general, he'll have spread the risk as much as possible.

DSK

On Tue, 20 Sep 2005 14:35:48 -0400, DSK wrote:

PocoLoco wrote:
Not if he is enjoying the life he is living. Who are you to say what lifestyle
NYOB would be 'better' enjoying?

Can't read, can you?

Did I say that one particular lifestyle is "better" than another? Why do
you try to argue with things I didn't say, maybe because the facts are
so consistantly against you?

Answer- I said that NOBBY's financial future would be more secure.

BTW living in debt and letting the rest of society pay for your
extravagant choices is not a conservative lifestyle. NOBBY is certainly
not the worst example, but he's far from being 'conservative' fiscally.
And the part I disapprove of is only that he's gambling with his
family's security and he appears to not understand the odds, nor the risk.

DSK


Well, gosh. Your disapproval probably means a whole lot. His 'lifestyle'
includes living where he will.
--
John H

"All decisions are the result of binary thinking."

"PocoLoco" wrote in message
...
On Tue, 20 Sep 2005 14:35:48 -0400, DSK wrote:

PocoLoco wrote:
Not if he is enjoying the life he is living. Who are you to say what
lifestyle
NYOB would be 'better' enjoying?

Can't read, can you?

Did I say that one particular lifestyle is "better" than another? Why do
you try to argue with things I didn't say, maybe because the facts are
so consistantly against you?

Answer- I said that NOBBY's financial future would be more secure.

BTW living in debt and letting the rest of society pay for your
extravagant choices is not a conservative lifestyle. NOBBY is certainly
not the worst example, but he's far from being 'conservative' fiscally.
And the part I disapprove of is only that he's gambling with his
family's security and he appears to not understand the odds, nor the
risk.

DSK


Well, gosh. Your disapproval probably means a whole lot. His 'lifestyle'
includes living where he will.

He is being the typical liebral.......sticking his nose in everybody else's
business.

How is "being in debt" forcing society to pay for his lifestyle?


--
John H

"All decisions are the result of binary thinking."

"DSK" wrote in message
.. .
... Demand is increasing exponentially
with the baby boom population retiring.

Ya think? Seems to me that more people are downsizing as they retire.



NOYB wrote:
Houses in Florida don't have basements...and as a general rule are seldom
two stories, and are on tiny lots. Moving to Florida is considered
"downsizing"...everything but the price.


???

You think retirees with less income than they had when working, who are
looking for less expense, less driving, and closer care, are going to buy
increasingly expensive & expansive homes?


I think you don't have a clear understanding of the average Naples retiree's
financial situation. Less expense isn't exactly a top priority to someone
worth $10, 50 or 100 million.

1,400 properties sold in Collier County for more than $1 million from
January through August of this year.

Presently, there are more than 450 homes listed at $2 million or more...and
100 of them are priced at $5 million and more.

It isn't your average shuffleboard-playing retiree settling down here.


But then, I don't know a lot about real estate

No kidding.




... When you live in the house, you can afford to ride it out.


Not necessarily. And you're overlooking a very key fact- if your
appreciation doesn't dramatically outpace your loan (which could easily
given any of the above scenarios), your home performs extremely poorly as
an investment.


I only look at my home as an added bonus investment. It's not my primary
means of investment.

Ah so. That reduces the risk considerably. But it also contradicts what
you said earlier, that you are planning to pay off your business loan and
reap an increased income in the future; not putting money into other
investments.

I currently put away $25,000+ per year in qualified pension plans...and have
done so since 1999. When my business loan is paid off in 4 years, I plan
on using some of the newfound income to pay down the principal on my house.
The rest I'll probably put away for my kids' college.



... And what price can you put on the enjoyment of living on the water
with a boat in my backyard and only 2 miles from my office?

Personally, I put a higher value on living more frugally, having a large &
exponentially growing net worth along with investment income that will see
my wife & I comfortably thru retirement, and independence from the whims
of local gov't & the fickle real estate market.

OTOH I bought a pretty expensive boat which isn't going to (fiscally)
appreciate at all. So obviously I place a high value on *that*.

I put a high value on my boats too...which is precisely why I bought a more
modest-sized home than I had before, but on the water with a boat dock.

Water access is very difficult down here. If we had adequate ramps and
marinas, I'd be living in a less expensive house inland.

"thunder" wrote in message
...
On Tue, 20 Sep 2005 17:21:16 +0000, NOYB wrote:


I've been on the fence on how to advise him. Part of me believes as you
do: that $340k villa will drop in price once a correction knocks the
speculators out of the market. But if I'm wrong, then where does he
live?
If he pays the $340k now, and then it drops, he can just stay in it
until
it goes back up again.

Yeah, my Crystal Ball is a little cloudy too. It's a tough call, but
ultimately housing's real value is to live in, not to make money on. If
he can afford it, and he is planning to stay in Naples, then . . . maybe.
The values are relative to the market. He'll only take a big hit, if he
has to leave the Naples market. That is, provided, Naples hasn't been so
overvalued that prices don't recover. I don't see that happening. Naples
is a very nice town and it will cost a premium to live there. Myself, I'm
just reaching a cautious age where I would be very hesitant in that
market. Your brother, maybe he hasn't reached that age. ;-)

My brother is 32. He'll recover from whatever bad choices he might make
right now. But if the choice is to wait and see if prices fall, and they
don't fall, he may have denied himself the ony opportunity he'll ever have
to own a house in Naples.

At least he's smart enough to max out his 401-k...and has done so for the
last 7 years. And he's unwilling to reduce his 401-K contributions just to
afford a more expensive house.

"DSK" wrote in message
. ..
NOYB wrote:
I've been on the fence on how to advise him. Part of me believes as you
do: that $340k villa will drop in price once a correction knocks the
speculators out of the market. But if I'm wrong, then where does he
live? If he pays the $340k now, and then it drops, he can just stay in
it until it goes back up again.


Rent cheap and put money into a residential REIT

I don't know anything about REIT's. Can you see 30-50% returns like we're
currently seeing in the real estate market?

And are they any safer than actually owning the real estate?



If the housing market continues to climb fantastically, he'll have a leg
up on affording a place. If it crashes in some places or plateaus in
general, he'll have spread the risk as much as possible.

DSK

"P Fritz" wrote in message
...

"PocoLoco" wrote in message
...
On Tue, 20 Sep 2005 14:35:48 -0400, DSK wrote:

PocoLoco wrote:
Not if he is enjoying the life he is living. Who are you to say what
lifestyle
NYOB would be 'better' enjoying?

Can't read, can you?

Did I say that one particular lifestyle is "better" than another? Why do
you try to argue with things I didn't say, maybe because the facts are
so consistantly against you?

Answer- I said that NOBBY's financial future would be more secure.

BTW living in debt and letting the rest of society pay for your
extravagant choices is not a conservative lifestyle. NOBBY is certainly
not the worst example, but he's far from being 'conservative' fiscally.
And the part I disapprove of is only that he's gambling with his
family's security and he appears to not understand the odds, nor the
risk.

DSK


Well, gosh. Your disapproval probably means a whole lot. His 'lifestyle'
includes living where he will.

He is being the typical liebral.......sticking his nose in everybody
else's
business.

How is "being in debt" forcing society to pay for his lifestyle?

He thinks that the tax deduction that I get for the interest on my home
mortgage is somehow subsidized by the government.

Of course, he fails to realize that it's just my own money that I'm allowed
to keep.

NOYB wrote:
"P Fritz" wrote in message
...

"PocoLoco" wrote in message
. ..

On Tue, 20 Sep 2005 14:35:48 -0400, DSK wrote:


PocoLoco wrote:

Not if he is enjoying the life he is living. Who are you to say what

lifestyle

NYOB would be 'better' enjoying?

Can't read, can you?

Did I say that one particular lifestyle is "better" than another? Why do
you try to argue with things I didn't say, maybe because the facts are
so consistantly against you?

Answer- I said that NOBBY's financial future would be more secure.

BTW living in debt and letting the rest of society pay for your
extravagant choices is not a conservative lifestyle. NOBBY is certainly
not the worst example, but he's far from being 'conservative' fiscally.
And the part I disapprove of is only that he's gambling with his
family's security and he appears to not understand the odds, nor the

risk.

DSK


Well, gosh. Your disapproval probably means a whole lot. His 'lifestyle'
includes living where he will.

He is being the typical liebral.......sticking his nose in everybody
else's
business.

How is "being in debt" forcing society to pay for his lifestyle?


He thinks that the tax deduction that I get for the interest on my home
mortgage is somehow subsidized by the government.

Of course, he fails to realize that it's just my own money that I'm allowed
to keep.



That's the thing stateside. If you were like us...and not allowed to
deduct any mortgage principal or interest from your income, you might
think different.

"NOYB" wrote in message
ink.net...

"DSK" wrote in message
. ..
NOYB wrote:
I've been on the fence on how to advise him. Part of me believes as
you
do: that $340k villa will drop in price once a correction knocks the
speculators out of the market. But if I'm wrong, then where does he
live? If he pays the $340k now, and then it drops, he can just stay in
it until it goes back up again.


Rent cheap and put money into a residential REIT

I don't know anything about REIT's. Can you see 30-50% returns like we're
currently seeing in the real estate market?

Rent is not deductible.

Why can't the brain dead liebrals get it?



And are they any safer than actually owning the real estate?



If the housing market continues to climb fantastically, he'll have a leg
up on affording a place. If it crashes in some places or plateaus in
general, he'll have spread the risk as much as possible.

DSK

"NOYB" wrote in message
nk.net...

"P Fritz" wrote in message
...

"PocoLoco" wrote in message
...
On Tue, 20 Sep 2005 14:35:48 -0400, DSK wrote:

PocoLoco wrote:
Not if he is enjoying the life he is living. Who are you to say what
lifestyle
NYOB would be 'better' enjoying?

Can't read, can you?

Did I say that one particular lifestyle is "better" than another? Why
do
you try to argue with things I didn't say, maybe because the facts are
so consistantly against you?

Answer- I said that NOBBY's financial future would be more secure.

BTW living in debt and letting the rest of society pay for your
extravagant choices is not a conservative lifestyle. NOBBY is
certainly
not the worst example, but he's far from being 'conservative'
fiscally.
And the part I disapprove of is only that he's gambling with his
family's security and he appears to not understand the odds, nor the
risk.

DSK


Well, gosh. Your disapproval probably means a whole lot. His
'lifestyle'
includes living where he will.

He is being the typical liebral.......sticking his nose in everybody
else's
business.

How is "being in debt" forcing society to pay for his lifestyle?

He thinks that the tax deduction that I get for the interest on my home
mortgage is somehow subsidized by the government.

Of course, he fails to realize that it's just my own money that I'm
allowed
to keep.


No ****.......taking advantage of current tax law is not making society
pay..........it simply decreases the theft by society from your wallet.

Rent cheap and put money into a residential REIT


NOYB wrote:
I don't know anything about REIT's. Can you see 30-50% returns like we're
currently seeing in the real estate market?

Nope. But check out the history of people who sink their money into
chasing this years hot returns.



And are they any safer than actually owning the real estate?


Yes, considerably. In the same way and for the same reason that owning
shares in an index fund is safer than owning shares of stock in an
individual company.

DSK

You think retirees with less income than they had when working, who are
looking for less expense, less driving, and closer care, are going to buy
increasingly expensive & expansive homes?


NOYB wrote:
I think you don't have a clear understanding of the average Naples retiree's
financial situation. Less expense isn't exactly a top priority to someone
worth $10, 50 or 100 million.

1,400 properties sold in Collier County for more than $1 million from
January through August of this year.

What that tells me is that the people who are going to make money are
the people who 1- sell those homes and collect commission (and the
appraisers, insurers, etc etc)
2- bought into the market several years ago.

Buying into a hot market because it's going up like a rocket is not
generally how one makes a large profit. Not in the stock market, not in
a crap game, and not in real estate.

The fact that real estate has run up far faster than inflation over the
past few years is a good indication that 1- inflation is going to pick
up (after all housing costs are a big part of the consumer spending
"basket")
2- it is *less* likely to outpace inflation over the coming years
(nothing goes up & up & up forever & ever..



I currently put away $25,000+ per year in qualified pension plans...and have
done so since 1999.

That's a good move. Of course, it really depends on having a gov't that
doesn't simply confiscate wealth from people who were wise enough to
save up (ie a very different gov't from the one we have now).



Water access is very difficult down here. If we had adequate ramps and
marinas, I'd be living in a less expensive house inland.


So, if boating is important to you, move to place where marinas are cheaper.

The most important vote is cast with one's feet.

DSK

There is a place in the upper to middle keys that does that. It's an ok
older motel right on the water, with a good restaurant and the use of a
whaler skiff and outboard is included. The beauty of the place is that
the "offshore reef" is about a half-mile offshore, and that's as far as
you have to go to catch some damned nice fish. I stayed there for a few
days about five years ago. Nice beach, too.

Rainbow Bend Resort just east of Marathon. Not a bad place at all,
stayed there with the family about 5 years ago. The food is good and
we were out in the Whaler every day.

http://www.rainbowbend.com/

If you can remember the community or motel name I'd appreciate it.
Never been to the Keys, but would like to see them.


http://www.rainbowbend.com/

As Harry described... Nothing fancy but we enjoyed our stay.

"Harry Krause" wrote in message
...
NOYB wrote:
"Harry Krause" wrote in message
...
Don White wrote:
Harry Krause wrote:
Maybe NOYB will open a B&B to make ends meet.


Wonder if he'd throw in use of his boat? I wouldn't mind getting some
Florida sun in January or February.

There is a place in the upper to middle keys that does that. It's an ok
older motel right on the water, with a good restaurant and the use of a
whaler skiff and outboard is included. The beauty of the place is that
the "offshore reef" is about a half-mile offshore, and that's as far as
you have to go to catch some damned nice fish. I stayed there for a few
days about five years ago. Nice beach, too.

I lived down here for 4 1/2 years before I went to the Keys. I don't
know what I was thinking. I finally "discovered" them this year, and
have been there twice already since Memorial Day...and I'm going back in
3 weeks. I realized that if I want to head out to deep water to catch
pelagics, it's cheaper and easier to put the boat on the trailer and
drive 3 hours to the Keys with boat in tow. I can be in deep water off
Islamorada in 3 1/2 hours...which is the same time it would take to run
my 25' boat out 110 miles off Naples to reach the 100 fathom mark. And
the fuel spent on the Keys trip is 1/5th what I'd spend running to the
deep water over here.

A better alternative yet, is running across the Alley and launching at
Miami Haulover or Port Everglades. This area is great for snook, tarpon,
grouper, jewfish, sharks, redfish, cobia, and snapper, but if you want
pelagics (dolphin, tuna, billfish) you need to run across to the East
coast or Keys.



I have a friend who launches his Whaler out of Haulover. He lives just
south of there, across the bridge, in Bal Harbour, one or two condos down
from that bridge on the ocean side. When I'm down there, he lets me borrow
the Whaler. You sure don't have to go far out of Haulover to catch some
really nice fish.

It's a sloppy inlet on an outgoing tide and an onshore wind, though.

"DSK" wrote in message
...
You think retirees with less income than they had when working, who are
looking for less expense, less driving, and closer care, are going to buy
increasingly expensive & expansive homes?


NOYB wrote:
I think you don't have a clear understanding of the average Naples
retiree's financial situation. Less expense isn't exactly a top priority
to someone worth $10, 50 or 100 million.

1,400 properties sold in Collier County for more than $1 million from
January through August of this year.

What that tells me is that the people who are going to make money are the
people who 1- sell those homes and collect commission (and the appraisers,
insurers, etc etc)
2- bought into the market several years ago.

Buying into a hot market because it's going up like a rocket is not
generally how one makes a large profit. Not in the stock market, not in a
crap game, and not in real estate.

The fact that real estate has run up far faster than inflation over the
past few years is a good indication that 1- inflation is going to pick up
(after all housing costs are a big part of the consumer spending "basket")
2- it is *less* likely to outpace inflation over the coming years (nothing
goes up & up & up forever & ever..



I currently put away $25,000+ per year in qualified pension plans...and
have done so since 1999.

That's a good move. Of course, it really depends on having a gov't that
doesn't simply confiscate wealth from people who were wise enough to save
up (ie a very different gov't from the one we have now).



Water access is very difficult down here. If we had adequate ramps and
marinas, I'd be living in a less expensive house inland.


So, if boating is important to you, move to place where marinas are
cheaper.

The most important vote is cast with one's feet.

Affordable areas in Florida don't exist anymore. But if by some miracle you
happen to find one, the people living there have no money for
dentistry...nor do most of them have teeth.

wrote in message
oups.com...

NOYB wrote:
wrote in message
ups.com...

NOYB wrote:
"Shortwave Sportfishing" wrote in message
...
On Sun, 18 Sep 2005 17:42:30 GMT, "NOYB" wrote:

When home prices hit the outer stratosphere, the number of potential
buyers
admittedly shrinks. But the Naples luxury market is still in boom
mode,
local agents say, despite forecasts of a housing bubble that some
predict
eventually must burst.

A slowdown?

You will get your turn and sooner than later.

It's already starting up here in NE.

I figure that once the NE slows, we'll soon follow. They'll be a
slowdown,
but never a correction. There are too many baby boomers looking to
retire
down here.

If the typical house in Naples becomes worth 5-7 times as much as a
typical house is worth anywhere else in the country, (and that is what
you seem to predict), those boomers will "look to retire" where it
won't take a nest egg of
$4-5mm just to buy a retirement cottage, and more importantly, where
taxes won't be taking a $30,000/year bite out of pension and social
security earnings.

It's a screw job. You live in a house that is valued at
$XXX,XXX,XXX.00, and you are free to sell it, but if you do and you
have no desire to start a new life in another portion of the country or
move into a beater you will be compelled to spend $XXX,XXX,XXX.00
*plus* to replace it. Put any value you want on the same property, $1
or a $100mm, and as long as you are *consuming*
the property every month by parking your butt in it that money isn't
really working for you. Meanwhile, the county tax collector comes along
and says, "Good news, NOYB, your house has doubled in value in the last
few years and so has the assessment. Here's your walloping bill for the
privilege of consuming a 7-figure house every month."

The Save Our Homes Act limits the increase in property taxes to 3% per
year.


There's a reason that many of the more conservative (there's an
adjective you'll like) financial institutions *do not include* the
value of a personal residence when calculating net worth.

Did you check out "Extraordinary Popular Delusions and the Madness of
Crowds"?
(I particularly like the chapter on the Dutch tulip bulb boom and
bust).

You're comparing a tulip bulb to someone's primary residence?


Yes indeed. During the Dutch tulip bulb frenzy, people became convinced
that tulip bulbs would continue to skyrocket in price, year after year.
Many people
actually *sold* houses, farms, businesses, and what not to invest in
tulip bulbs- and in some cases the proceeds from an entire home or
business proved to be enough to pay for just a single bulb. The 'bigger
fool' theory was in high gear: "It doesn't matter what I pay, the value
of this asset will always
continue to go up and there will be somebody right behind me willing to
pay much more for the same thing almost immediately."

Want to know how much the tulip bulb factor is right now in Naples? It
would be easy to figure out. For how much do houses similar to yours
*rent*, in Naples? Extrapolate a cap rate (return on investment) of 5%.
You get a break right now because rates in general and T-bills are
down- you would normally use 8-10% cap to evaluate a property. Now you
have a picture of what that property is worth based on the amount of
wealth it can produce in a given time period. Renters are a good
barometer in the real estate market becuase they aren't betting on
appreciation, merely paying for the basic economic function of the
house (shelter) every month.


IMO, it's a good time to hold onto matured positions or sell if the
cash in hand looks more attractive than the monthly cash flow. I would
personally be reluctant to buy as we close in on the inevitable market
correction. If prices merely stabilize, then there is some assurance
that the "value" is going to be sustainable. If prices at least
temporarily drop, as they have in many overheated regions during the
last couple of decades, it pays to watch for the apparent "bottom" and
buy then.


Some links:

http://www.stock-market-crash.net/tulip-mania.htm


this one is long, but wirtten by a guy who seems fairly conservative
and it is well thought out:
http://www.washingtonmonthly.com/fea...ace-wells.html


But:

Tulip bulbs can die

You can't live in a tulip bulb and wait until prices rebound.

Tulips can be replaced by roses, lilies, etc.

Only an idiot would sell his house to buy a tulip bulb

"Harry Krause" wrote in message
...
NOYB wrote:
"Harry Krause" wrote in message
...
NOYB wrote:
"Harry Krause" wrote in message
...
Don White wrote:
Harry Krause wrote:
Maybe NOYB will open a B&B to make ends meet.


Wonder if he'd throw in use of his boat? I wouldn't mind getting
some Florida sun in January or February.
There is a place in the upper to middle keys that does that. It's an
ok older motel right on the water, with a good restaurant and the use
of a whaler skiff and outboard is included. The beauty of the place is
that the "offshore reef" is about a half-mile offshore, and that's as
far as you have to go to catch some damned nice fish. I stayed there
for a few days about five years ago. Nice beach, too.
I lived down here for 4 1/2 years before I went to the Keys. I don't
know what I was thinking. I finally "discovered" them this year, and
have been there twice already since Memorial Day...and I'm going back
in 3 weeks. I realized that if I want to head out to deep water to
catch pelagics, it's cheaper and easier to put the boat on the trailer
and drive 3 hours to the Keys with boat in tow. I can be in deep water
off Islamorada in 3 1/2 hours...which is the same time it would take to
run my 25' boat out 110 miles off Naples to reach the 100 fathom mark.
And the fuel spent on the Keys trip is 1/5th what I'd spend running to
the deep water over here.

A better alternative yet, is running across the Alley and launching at
Miami Haulover or Port Everglades. This area is great for snook,
tarpon, grouper, jewfish, sharks, redfish, cobia, and snapper, but if
you want pelagics (dolphin, tuna, billfish) you need to run across to
the East coast or Keys.


I have a friend who launches his Whaler out of Haulover. He lives just
south of there, across the bridge, in Bal Harbour, one or two condos
down from that bridge on the ocean side. When I'm down there, he lets me
borrow the Whaler. You sure don't have to go far out of Haulover to
catch some really nice fish.

It's a sloppy inlet on an outgoing tide and an onshore wind, though.





It's fun watching the inlet water wash up onto the little jetty on the
north side and the retaining wall on the other side. I've seen a few
slower boats get into trouble there.

When I went through it, I was in my 17' Outrage. The boat ahead of me was a
25' Proline and took a wave right over the bow. I trimmed the bow way up,
and jumped through a lull in the waves.



Were you aware there is a nudist beach at the north end of the park there,
or at least there was?

Yes. While tying the boat down in the parking lot for the trip back to
Naples, a couple of guys in G-string banana hammocks went strolling through
the parking lot. Following them was a group teenage kids whistling at them
and hootin' and hollerin'. Any curiosity that I may have had to walk across
the street and take a look left me at that moment.




Good place to buy and fly kites, too.

If you go back to the area, ask someone for directions to the Little
Havana Cuban restaurant, which is only a couple miles from there, a bit
south, and across the causeway. Great authentic Cuban food, pretty
reasonable. It's on Biscayne Boulevard. Good selection of beers, too.
It's a family restaurant; always lots of Cuban families there with kids.
We were in the front dining room one evening and got invited to join an
anniversary party at the next table.

I trailer the boat when I head over there...so stopping to park and eat is
not an option.