Random Thoughts

I’m sort of over the shock of having people you think will watch your back just sort of say “Hey, i don’t really understand this, and think I should just stay pretending I’m a bump on a log.”.

Fuck them.  There are things in life where you need someone to cover something you are doing.
My belief, in times gone by, was that there were people who would actually “cover my back”.  Meaning, they’d have the resources and the intellect to be able to determine that something I had an interest in would also provide some return for them.  Sadly, people are often restricted with what they can do by the things they know, or think they know.

I lost a friend with this bit of turmoil.  Not because of any decision to invest, or not invest, but strictly based on whether a person has the capability to express their concerns/desires to someone else.

I fully understand that everyone has different objectives, when a person changes/modifies objectives, they should be straightforward with their changes.

Enough said, I’ve got no-one to watch my back.  I’ve run that way for many years, I suppose it’s natural that things drift back in that direction.

Funny, but I got thrown under the bus today.  I’d thought that I was really past all the depending on other people to do what they said they’d do, but I put some faith in family members.

Bottom line, people want to do other things, and fuck what they said was important.  Personally, I put quite a bit of thought into commitments I make, it really pisses me off when people whimsically change their minds.

My real problem with the whimsy is that I’ve been dealing with the given project for two freaking years.  So now what, people think it’s time to take a different tack?

Fuck them.
I’m about as pissed off as  I ever get, and they blithely wander through their existence.  I can understand changing objectives and adapting to market conditions, but you just don’t decide you’re out and throw everyone else under the bus.  It’s O.K. if it’s a “let’s see if there’s a market” kind of thing, but two years and 5 figure investment?

Yeah, I’m pissed, let’s see what the little bitches come up with tomorrow.

I’ve seen recent requests for information about the process of a deed-in-lieu of foreclosure.
In it’s simplest form, it’s simply the owner of a property giving the lender a deed to the property instead of the lender completing a foreclosure action. While it might seem like a good option to the homeowner who knows they can’t keep up with their payments, lenders really do not want properties signed over to them.
It is important to note that sending the lender a deed does not transfer the property title, the lender must accept the deed.

So what are the requirements for a deed in lieu?
Typical requirements will be that the property has no other loans/liens, the owner cannot afford to continue making payments, the property must be left clean, and the owner must have tried to sell the property on the open market.

Here are some links to web pages that have a little bit more information about deed in lieu from major participants in the lending industry.
Fannie Mae Loss Mitigation Policies
Hud Deed in Lieu of Foreclosure Fact sheet
VA Deed in Lieu

Policies are pretty much equivalent across the board with a few minor differences, if you have questions or comments about a deed in lieu, they can be posted here.

O.K.  I called a Realtor buddy and said I’d like to see a property tomorrow if it is possible.  Not just any property, but a freakin’ Bed and Breakfast.  Why?  Well, my wife and I have been talking about this for a while, so it’s not a totally impulsive thing, but we’d like to build something.  Obviously, it’s a business and needs to be run like a business, this isn’t the Yuppie dream of buying a Victorian out in the country and making it a place where you throw out some bagels in the morning and eat bon-bons the rest of the day.

The property?  From what I can tell, absentee owner with on-site manager, owner used to do books but left due to health issues.  Property has multiple possibilities for income, but the only one being utilized is the B&B.  Drive-by traffic under-utilized, exposure and advertising certainly not the best.

So, does it make sense?  I don’t know.  We’ll have to see it, I’ve been told there is some deferred maintenence, and if the general layout sucks, then that really can’t be fixed.  The only reason we’re looking at it is because if the numbers are at all close, the property can come reasonably close to supporting itself.  Buy, rehab, and hold for some years.

It’s been a while since I’ve looked at retail properties, it’s interesting to revisit that aspect of the market.

Casey Serin is a 24 year old from Sacramento, California who thought he could be a real estate investor. Investing without money, or skills, can be done, but it’s difficult and takes many years to become established and profitable. Casey Serin thought he could spend upwards of $30,000 on real estate seminar materials, get No-Doc loans and become a player almost instantly. What qualified him for this venture? He owned a condo that appreciated in the year before he sold it.

So how do you lose 2.2 million in real estate? Casey Serin did it by buying eight properties in 4 different states, some of them unseen, virtually all of them with some amount of cashback to him from the sellers. The loans were “stated income” loans, all obtained within a short time frame so individual lenders would not be aware of other lender’s loans.

How do you make a bad thing worse? Casey Serin started a blog to talk about his real estate and life problems in September, 2006. I am Facing Foreclosure is his blog, but it’s changed quite a bit from when it was originally started.  Because Casey Serin does not appear to be too bright, and continually makes the worst choice possible in any given situation, his blog has become a place where most of the commenters are there to heap ridicule and scorn on poor little Casey.  Current comments from Casey seem to indicate that he now feels it’s the lenders fault that he lied on his income, took illegal cash back, lied about owner occupancy and did not disclose his other debt.  It’s pretty easy to find yourself thinking that Casey Serin is a manipulative con-man.

So what did this adventure cost him?  Casey has said he’s going to shut the blog down on Aug. 3rd, although he’s said it before and actually shut it down a couple of different times.  But it comes back, just like roaches and weeds.
He’s said the reason for the shut down is because his family wishes it.  His family, including his mother who apparently co-signed for some of Casey’s debt, and his wife who is now separated from Casey.  He still has no regular income, Mom’s on the hook for some of his debt, his wife seems to want nothing to do with him and he won’t have his blog.  All that in less than 12 months.  His biggest success in life seems to be digging the biggest hole imaginable.

When I read various stories/posts about people facing foreclosure, I never read anything remotely like the Casey Serin story.  It’s usually about someone facing hardship(s) and looking for a little direction.  His saga is really about wanting to be a businessman so badly that he’s destroyed the relationships that are most important in life.

Last night I was talking with my youngest son, the conversation turned to the pigs in the backyard.  He told me that two nights ago one of the big pigs was on the lawn eating one of the fruit that had rolled down.  So, the dumbshit kid grabs his Amazon.com blowgun and goes out to peg the pig.

His blowgun is maybe 30 inches long, the darts are piano wire with a plastic piece on the back that act as fletching.

This big pig is about the length of a German Sheperd, but obviously rounder, and with much shorter legs.  Feral pigs are very fast and mean with big tusks that can inflict serious damage if they get close and are pissed off.  Now, maybe the kid thought pigs weren’t that big of a deal, he’d seen one last summer when some hunters camping next to us brought a pig back for cleaning and smoking.  The hunters use dogs, and guns, which makes quite a bit more sense than a blowgun.

Anyway, my kid turned on the inside kitchen light, opened the back door, slid to the side of the doorway and took his shot.  Missed the pig, but the noise was enough to make the pig leave the yard.  Child wasn’t damaged, although hearing the story did make me wonder whether there is some brain damage.
I promise, no more pig stories.

It’s not that I really like pork all that much, although I’ve been know to enjoy the occasional carnitas dinner, it’s mostly that I have a problem with pigs. Not the cute little Charlotte’s Web kind of pig, but big nasty feral pigs.
How’d you like to have the pictured pig in your backyard?
That’s not a picture from my yard, but that’s what I get in my yard almost every night. Pigs, for those who don’t have them, like to root around at night and eat, or stomp pretty much anything they can find. That includes the young trees and vegetables that were just planted in the morning.
Why do I have pigs?
My uphill neighbor has an old avocado tree that’s really pretty productive. Avocados on the downhill side drop, then roll down the hill into my yard. Bonus, right? Not really, cause you don’t see all of the avocados, but the pigs can smell them, and pigs really seem to enjoy avocado. Once they’ve learned where pig dinner is being served, they just keep coming back and if there aren’t any avocados, well then they’ll just stomp around looking for some other good thing to eat. That stomping always seems to include any new plant that I’ve put in the ground. Nobody has fences, so there’s really no way to stop the pigs unless I want to sit in the backyard all night.

Eat more pork!

Image from RECHARTS, click to enlarge.

This chart from Credit Suisse shows the volume of ARM resets including the option arms that have been popular in recent years for purchasing property in some real estate markets that are a little frothy. Chart is based on January 07 being the start point, with the number of months after January 07 listed across the bottom of the chart.

We are just entering the time period where the reset volume will be about 2.5 times the previous volume. What’s that mean for the borrowers with those loans? There’s going to be a hell of a lot of people who are going to have huge jumps in their monthly payment. That’s going to lead to increased defaults in the coming months.

I’m not going to keep posting on bubble issues, these past two posts were just to illustrate why people have been saying the number of foreclosures is going to be going way up.

There is an interesting chart at Housing Tracker that includes a ratio of housing cost divided by average income. It’s fun to look down from the top seeing the variation in that ratio until you reach Barnstable Town, MA that has a ratio of 5.6 Now, I don’t have any idea where Barnstable Town is, but it’s distinctly more expensive than the previous communities in that chart. O.K., maybe it’s a really nice area.

Check out some other cities:
Honolulu, HI 8.7
Los Angeles, CA 10.4
New York, NY 8.4
Oakland, CA 8.7
San Diego, CA 8.9

Ask a Realtor in any of those areas, I’m sure they’ll tell you it’s a great time to buy. Ask an investor, I’m sure they’ll tell you they are looking either for very specific properties, or are going out of area. The ONLY way I’d buy in those areas at this time was if the property was hugely discounted in price, or the income produced by the property would be enough to cover it’s debt.
Certainly looks bubbly to me.