Off to watch some scifi.

The article points out the problem:
"Unlike, say, buying an apartment building with 100 units, it buys one house at a time and then must manage scattered rentals."

This is a huge PITA, and means high maintenance and operational costs. How do you keep an eye on a bunch of scattered properties to prevent meth labs and grow houses?

Seems to me that this sort of business could be profitable with $100k total investment and $1200-$1500/mo rent. But the investors are making a mistake thinking this is a get-rich-quick scheme. They will need to roll up their sleeves and actively manage these units... repairs, evicting tenants for non-payment, screening tenants, etc... Not passive investment that scales up easily.

"It is very unlikely the price will double in five years - or even ten years. "

The price could easily double in 5 years. But the price of oil and grain will quadruple.

"But the investors are making a mistake thinking this is a get-rich-quick scheme."

More like a "lose investor's money slow" scheme. Whoever puts up the money for this scheme will get bled dry by management fees and expenses. But the promoters might be able to make fat salaries and great bennies for five years.

Price is a function of supply and demand. Demand is a function of disposable income. Income is a function of value added.

Houses depreciate, unless they are art. Low-end houses are rarely art.

This is the normal cycle.

The part they have wrong is the projected rents. Rents will be lower as more and more investors buy up the low end units. That always happens and is happening now.

The second thing they have wrong is that they have to hire a management firm to deal with the properties. Depending on what they are buying the maint could be low or high.

Lastly, 5 years will be way too short of a time frame for any real estate to double. No way, not going to happen, (unless everything else tripples)

Yep, buying low end housing as we slide into a prolonged economic downturn is a sure way to get rich. After all, the neighborhood is only going to get better.

So sm_landlord, with a price/annual rent ratio of 7 (assuming their numbers to be true) and gross cap rate of 14%, this would seem to be viable. Is scaling up the issue?

How much house does 1,200 or 1,400 get you renting there?

"In a nutshell, being a landlord of low-end housing pretty much sucks as a "life-style event" for most."

We did OK by buying low-end apartment buildings in areas that we thought would gentrify.
But it was pretty painful while we waited it out. Lots of nasty problems like tenants going nuts and setting their unit on fire. But I sure learned how to paint, do plumbing and electrical repairs, etc.

And the "low-end renter mindset" is a very gentle way of describing the people problems.

looking at the June economic summary in graphs, it appears evident that we are just getting started.

/sigh

NO.

repeat of Simpson's March episode at 9:30 EST.

ARM resets...

(also available online)

"Is scaling up the issue? "

To me, the issue is getting the economy of scale to manage the properties. It's not that hard with apartment buildings, because you can forward site spare parts, equipment, etc. You can also have on-site managers with apartments to keep an eye on things.

With scattered houses, you need fully-equipped repair trucks rolling, and you have to hire high-priced repair people to deal with stopped up drains, for example. In an apartment building, the manager just whips out a plunger and fixes 90% of the problems in 5 minutes for no extra cost.

"Lots of nasty problems like tenants going nuts and setting their unit on fire."

That IS crazy: traditionally it's the landlord's job.

100k home in las vegas might rent for 800-900 mo.

Hey BSR.
I thought Obummer should have served Colt .45 at his beer distraction.

It always seemed that being a low end landlord would be a huge pain the ass.

Sounds like it is even worse than I imagined.

speaking of falling rents -- the ghetto apartment complex that i live in dropped the rent from $440 to (i swear i'm telling the truth) $355 per month. my lease goes to december. i'm thinking about trying to do some negotiating. meh... we'll see.

location: las vegas -- walking distance to unlv

Lowend is pretty awfull.

You want middle income, blue collar tenants. You want houses 10 yrs old or newer, No pools, 3 bed 2 ba, plain houses. 20% below current give it away prices. Do a full inspection, do not buy large rehab jobs or allot of differed maint. Those will cost you double what you figured on. If it works today it will break in the future.

One manager can handle 100 SFRs or more, with an assistant. I have managed several hundred with an assistant and a bookkeeper. I do all the work for 60 by myself, except leasing cause I don't like working weekends.

In the mid 80s I did investor acquistions of SFH, bought 20 + SFRs per month for the investor group. If you do it right it works, if you screw up one part of it you are totally screwed. I think these guys are screwed.

$6 mil done right will by 300 to 400 properties. If I were them I would set up a management office in each city and get the income from management as well.

sm_landlord (profile) wrote (in reply to...) on Sun, 8/2/2009 - 6:31 pm

It's really fun restoring them to marketable condition.
Not.

Cat piss. There is no security deposit large enough to cover the remediation.

Relatives of mine cured me of the low-end-rental-as-path-to-riches mindset. They bought a place right off the 215 in Riverside, and along with it 12 years of headaches. Every single tenant change out required complete paint and carpet; even with section 8 vetting. Several times the new carpet was stolen before the new tenants moved in (another reason not to buy rentals in "cookie-cutter" neighborhoods. The guy next door has the same exact floor plan.) The place was torched twice, once by a vacating tenant, once while vacant. They had four forcible evictions during the 12 years as well.

Yes, the place doubled in price over that period, but the amount of time and money and stress spent over that time was IMHO not worth it.

I think scattered housing in the exurban bust areas is very dubious.

DESERT DISPATCH: METH, MORONS, AND MURDER IN VICTORVILLE - By Yasha Levine - The eXiled

'Nuff said.

Only 15 houses on the market, but 530 REOs according to Staley.

In a partial echo of Doc Holiday above -- this sounds to me an awful like the same sort of "investing" going on in the stock market. People buying cheap, hoping for an immaculate V-shaped recovery. But it doesn't seem like the banks can hold off the FDIC and other regulators for that much longer, though, and even without that, there's a lot of inventory that is going to hit the streets...

"...even with section 8 vetting. "

Section 8 vetting? The last junkie they sent me left bloody used needles in the common area and automobile batteries in the destroyed kitchen.

I won't touch Section 8 tenants any more.

Actually Lothar, we've always been renters and always left places better than we found them. Usually after a few months the landlord will deduct rent for repairs I make myself. And every time we go to rent some place new, the potential landlord is positively giddy after completing a background check. So there are good renters, just not that many I suppose.

Investors are such great landlords. Never wanting to cut corners on upkeep. Complaining about giving new tenants a new paint job. Going bankrupt, leaving common areas to rot and leaving the tenants facing eviction...

What no one has mentioned is that actual houses are treated at AAA rated assets at the Federal Reserve window. The banks can use them as collateral.

Kidding. Well, ok, I think I'm kidding, but I wouldn't be that surprised to find out somehow I'm right. You know, maybe you could put 530 homes into an ownership trust at 60% off original loan value and get them rated AAA, use them as collateral, take some money from the Fed window, and go buy long term bonds.

In the depths of the last SoCal crash, Sec 8 was all they could get.

Max, sort of the same in Az. But you can find good tenants if you have decent, mid level housing.

Because tenants traditionally have had so much choice. If your landlord doesn't make repairs, just move to a better one when the lease is up. Why would a landlord ever arbitrage moving costs?

He's not in it for the money, but to add value.

i swapped out a sliding door for a french door at one house and had to move all sorts of shit to be able to work properly. french doors eat up sq feet if they swing in which these did so i had to move furniture. found fossilized dog shit. the entire carpet was stained except for areas under heavy garbage. the back yard looked like a dump. even the stair case had tons of misc. garbage on it. yep, home owners are just grand.

I have repeatedly heard that landlords who rent 10-20% below market, carefully screen, and look for tenants who want to stay long term often do quite well. Low vacancy rate, low damage, etc. It doesn't sound like that's what's happening here.

HOA rules that are in violation of Federal Law won't hold up. Fair Housing is a very powerfull thing.

The scifi things were not good.

Was at one of the rental houses on Friday and watched the neighbor digging up the bushes . Was told he's in foreclosure and was leaving ( taking whatever he wanted while it was still his ) . The rental houses are a pain but it bets the stock market for me at least .

The law is irrelevant on that street corner. The local councilman and the HOA prez are old buddies. Neither one is going to screw the other - they just screw those of us who are using our houses as homes and not rental properties by allowing these jokers to rent. Hell, between the 7 of them their cars are worth more than both houses if they actually paid straight cash for them.

It just lowers the values of the rest of our homes if we did want to sell.

"I explained that would be a violation of most leases. "

Even in the absence of a lease, most rental agreements specify the people who are allowed to live in a unit. Otherwise you end up with rotating roommates and no responsible party, or similarly, sublet situations where you have no idea who is living in the property, no opportunity to screen, etc.

Banks are stupid. That's the reason. Have anyof them done anything
intelligent, except how to figure out how to brown nose politicos?

The other thing that I have to explain to frustrated clients who are trying
to buy is that there is no "THEY". Even more than there is no normal.

There is no individual who will gain or lose money on the sale of the
inventory. There are bean counters. There are people who make rules for
the clerks to follow. None of these people ever seem to have done a
closing before. No rule is bendible no matter how much sense it lacks.

The clerks are terrified to break a rule. I assume that they are punished
for that, but not rewarded if a lot of reasonable sales go thru. There is
no getting thru to a decision maker, indeed there seems to be no decision maker.

Literally nobody cares.

In all other areas you can get thru to a seller. They may be totally unreasonable
and mean, and you may decide that you don't want to buy from that person.
Here there is literally no one in charge, and if there is, they have carefully hidden
themselves. Me, I think there is no one in charge.

From the lowly renter side of the ledger, I have always left every rental I have had better than I have found it and my current LL is in foreclosure. LL aren't any picnic either.

p.s. I've never been late a day on my rent. My last LL told me there was a $25 NSF fee. I asked them what NSF meant.. they laughed and told me they were sure they were going to rent to me. I have 800 FICOs and make over double the median income for my area. I just want a small house in an ok area for not a lot of money. We just arent there yet in my market.

The NEW BUBBLE!!

Seriously...back in the day, when I heard golf partners, mostly plumbing, construction type talking about flipping houses, I knew the whole thing was doomed.

Liz, Josap, Eff Dem..thanks for the response.

Pitch for the money has a pro forma with whipped topping. Cash out contains a lot of hard won lessons.

Pretty typical, really. Unless you're into flipping banks. There, the organizing team only promises 13%. These guys go to fourteen.

i just read the article. are these guys idiots??

King George thought he was a fine absentee landlord, with only the tenants' best interests at heart. He really couldn't understand the resentment. Why would they trash all that perfectly good tea?

I have repeatedly heard that landlords who rent 10-20% below market, carefully screen, and look for tenants who want to stay long term often do quite well. Low vacancy rate, low damage, etc. It doesn't sound like that's what's happening here.

I consistently rent for ~20% below market and have great tenants many of who become long term friends. Landlords who are pigs often get pigs for tenants. So it goes.

NEW YORK (Reuters) - Investment bank Goldman Sachs' (GS.N) reputation among both the general public and financially sophisticated Americans has been damaged by the events of the past year, the Financial Times reported on Sunday, citing research conducted for the paper.

The paper said a survey of 17,000 Americans by Brand Asset Consulting found that Goldman's stature had suffered in 2008 and 2009.

While long-time rival Morgan Stanley (MS.N) also suffered a decline in stature in the survey, respondents liked and respected Morgan Stanley more than Goldman, the paper said.

The biggest U.S. investment bank has faced a torrent of unwanted publicity including an unflattering spread in Rolling Stone magazine, which accused the bank of having a key role in various market bubbles stretching back to the 1920s.

When I managed property in east oakland I did a few simple things that helped get good tenants.Price at 10% less than market annd screen carefully,put in a NICE low maintenance garden,and put in a rebuilt wedgewood or o'keefe and merritt stove. rebuilt the stoves myself.this proposed biz plan will not work for the reasons many have notedplu You HAVE to have a first rate manager in areas like this and they are few and far between.

I am one of those crazy renters that leaves a home better than I found it. I have done two big plumbing fixes to my current digs (including finding and repairing an absolute builder F-up from thirty years ago), repaired walls, and painted 80% of the place--without even asking for a rent reduction in kind. I just got the nicest note from my landlord, who sent a check in appreciation.

If stuff is going to be done (especially plumbing), it ought to be done right, and I don't trust most of the outfits out there. I have been a homeowner for many years previously, and I can do anything except masonry and cement finishing to several degrees better than any of the average new construction standards.

When I finally do get back into ownership (2015?), you can bet I will not buy anything built in this millenium. If the investors from the subject article are looking at properties built in the last decade and NOT projecting more than $100K per unit in improvements, they are doomed to lose every dime they invest.

In short, they are so screwed. So SCREWED.

And they're in Pittsburgh--shit!

They won't get $1200 a month.

They will buy so many in one area that they will compete with themselves. Or they will be competing with the 100 other "smart" investor groups that are doing the same dumb thing. Rents will go down over the next 2 years, until owner occp start buying - if things really turn around. Which is in quesiton.

Another day, another scam. $1200/mo. will barely cover the taxes and insurance.

According to the "prospectus," the payday comes by selling the house for twice as much at the end of 5 years.

I don't know much about Antioch/Pittsburg - just driven past them several times. From the freeway, they always seemed like dumpy towns.

If these investors like Antioch and Pittsburg, they must be positively salivating at the home prices in Detroit. Heck you can buy a home for $100 there (not $100,000). Much easier for a $100 home to go to $1000 than for a $100,000 home to go to $200,000 , why settle for a 2x return when you can get a 10x return ?

Being a low end landlord, in the midst of the worst recession since WWII, has got to positively suck. I am not even sure if the prospective renters for these 100K properties will pass a simple renters credit check that most landlords do.

In any bear market, there are always the knife catchers who believe the market has bottomed. Such buyers usually ensure that the bear market lasts much longer. To me these guys seem similar to tech stock buyers in early 2001 (Nasdaq can't fall much below 3500 ! It is already down about 35% from the peak , was the oft repeated argument).

sm_landlord wrote:

Section 8 vetting? The last junkie they sent me left bloody used needles
in the common area and automobile batteries in the destroyed kitchen.
I won't touch Section 8 tenants any more.

I’ve been reading Calculated Risk for a while, but this is my first post (I’ve been posting on and off on Patrick.net for about three years and on the Bay Area Socket Site real estate site for about a year). I laughed out loud this morning when I read that these guys plan to “double their money in 5 years” when they will probably end up negative after 5 years. It takes a lot more effort than people think to manage a SFH and make a profit. My parents bought their first investment home on the San Francisco Peninsula in 1965 and by 1985 (when they last bought a piece of real estate) they had more than 20 homes and 80 apartment units. Today they are all paid off any my Dad (in his mid 70’s) works full time managing them. My parents forced me to work most weekends since I was a little kid and I managed a portfolio of crappy apartments and homes as an undergrad. When I graduated in ’85 I did real well selling apartments until the market crashed in the early 90’s so I went to grad school for a couple years and then spent over 10 years funding and securitizing all kinds of (very profitable) high leverage commercial mortgages (what we now call “toxic waste”). I left the world of commercial lending well before the CMBS market crashed and bought a couple apartment buildings myself and I now leave my 4S Cabrio in the garage most days and head out in my Toyota Tacoma (with a lumber rack and tool box) to actively manage my apartments and work with my Dad (who has always tried to spend as little as possible to remodel some of the Peninsula homes he has owned for years so we can get better tenants (and way higher rents).

P.S. I just evicted my last Section 8 tenant a week ago and I will never rent to another Section 8 or welfare tenant again. The week before this tenant was evicted she locked her "boyfriend" out of the unit and he punched through one of my new Cascade double pane windows severing an artery and spraying what looks like a gallon of blood all over the patio area…

P.P.S. Does “sm” stand for “San Mateo” (most of my parent’s rental homes are in San Mateo and Burlingame)…

---- > Yukon River smokehouses should be filled this summer with oil-rich strips of king salmon -- long used by Alaska Natives as a high-energy food to get through the long Alaska winters. But they're mostly empty.

The kings failed to show up, and not just in the Yukon.

One Alaska river after another has been closed to king fishing this summer because significant numbers of fish failed to return to spawn. The dismally weak return follows weak runs last summer and poor runs in 2007, which also resulted in emergency fishing closures.

CSN:

Over the years you have been hunted
by the men who throw harpoons
And in the long run he will kill you
jus to feed the pets we raise,
put the flowers in your vase
and make the lipstick for your face.

Over the years you swam the ocean
Following feelings of your own
Now you are washed up on the shoreline
I can see your body lie
It's a shame you have to die
to put the shadow on our eye

Maybe we'll go,
Maybe we'll disappear
It's not that we don't know,
It's just that we don't want to care.
Under the bridge
Over the foam
Wind on the water,
Carry me home.

"The people who don't have health care are working class who make enough not to qualify. People working for small firms. People with pre-existing conditions who are priced out of the market."

hm. ok. i definitely agree that we need a safety net, but forking over a bunch of dough for 6' ft tall, bipedal rats doesn't sit so well with me. call it a limbic response.

Maybe these are some properties they'd be interested in!

Feral Houses | sweet juniper! 

interesting site indeed.

Well, 10 rolls of pennies is nothing compared to 40 lbs of quickcrete.

It is one thing to complain about damage, atlhough even here it isn't like LL's credit the experience against the tenants that have performed maintenance they really had no obligation to do. Most LL complaining is over wear and tear.

If you own long enough, you make your peace with the fact that there are expenses with carrying a tenant.

But I'm surprised that there are only a few comments on the shadow inventory. This guy just claimed that only 15 houses of the 530 owned by banks are on the market?! Holy moly.

Well trodden ground around here.

Well, 10 rolls of pennies is nothing compared to 40 lbs of quickcrete.

Touche! Some of the ways these guys destroyed rentals required an amazing amount of creativity. I always admired the dog people for their dedication to the destruction: the smell was like a body blow. I couldn't stand the place for two minutes, let alone two weeks!

Most LL complaining is over wear and tear.

Having spent most of my adult life as a renter, I've been on the receiving end of LL bs. One apartment charged me $200 to remove a $2 blind I installed over the bathroom window so the second story people in the opposite building wouldn't have to watch me shower. Once you give notice and there's no longer any value in the relationship, their true colors come out. However, I've seen huge destruction from bad tenants, so I understand why it's an adversarial relationship.

Re: The kings failed to show up, and not just in the Yukon.

Sounds like more doom-n-gloom from the Fishercrat environmentalists. I guess they moved from the Atlantic - where they scared everybody into thinking there was no lobsters - to the Pacific. There's plenty of fish, they're just not trying hard enough to find them. You know how them liberals are, just another excuse to regulate the honest hard-working business-men of Alaska. /sarcasm

Give a man a fish he'll eat for a day, teach a man to fish he'll eat everything he can stuff into his face.

Teach a man to securitize the financing of a fishing expedition and he will eat you alive.

OT: from Mish:

Why does Mish hate Merica so much?

Interesting shipping chart. Thanks.

Like I said, most owner landlords are way too emotionally invested in the investment.

Shakespeare said - Neither a borrower nor a lender be.

It could also be said - neither a renter nor a landlord be.

I've been on both sides of the equation, and neither are very comfortable.

Another day, another scam. $1200/mo. will barely cover the taxes and insurance.

According to the "prospectus," the payday comes by selling the house for twice as much at the end of 5 years.

So how much would insurance & taxes cost for a $100K rental house in that area? And maintenance? And the initial rehab cost?

I took a stab at a few wild guestimates and I'd expect the things to make between 10-13% before income taxes IF (1) they can buy them for $100K and not have to put much additional in and (2) they actually get $1200-$1500/mon.

What am I missing?

http://spreadsheets.google.com/ccc?key=0AjDeNPXIoXWwcjJZal9jUDNvZDd4ZUcwWnd4NmZIVGc&hl=en

$1,200 on a $100,000 is a 14 % yield. Provided rents don't crash too much this is a pretty sweet deal. We are ages from seeing deals like these in the high end.

not if they take the 6M and use it as 20% down and use the rent to pay the monthly.

then they have 36 million and can get 300 units....

i still think this seems like a terrible idea, but then again i suppose if no one builds any new houses, you will have some amount of control given you own most of the available housing, or people could just live in another city. then you'd have to start a cartel. haha.

Don't know if this is posted already: From the WSJ

High-End Homes Frozen Out of Budding Housing Rebound

...

Defaults are rising, too. Among prime mortgages, jumbo mortgages are now leading delinquencies and defaults and are the fastest-rising category for defaults of all types of mortgages. The rate of 60-day delinquencies on prime-jumbo mortgages jumped to 7.4% in May, from 4.5% in November, according to First American CoreLogic. By comparison, 60-day delinquencies on prime-conforming loans reached 4.9% in May, from 3.6% in November.

The landlords of many rental units in Manhattan are securitized consortiums of Belgians, Mexicans, Koreans, or other absentee suckers who thought real estate was no longer local. Their agents are getting desperate, so the prudent tenant should do a little research before handing over more than a month and a security. Assume 90 days notice of eviction, even if the LL is a "reputable" financial institution.

Especially if the LL....

So josap - how much does that cost?

Up front first time then ongoing per month? Any idea?

"Anual inspections for smoke alarms, fire ext"

To me, "units" implies elevator repair, window guards (after Clapton), pest control, graffitti removal, garbage collection...

These costs are for SFR. You put in smoke alarms and fire ext to lower the owners liabilty in the event the tenant starts a fire. Some co don't want to pay if they can point to the owner or manager as being negligent.

From one German doggie to another - I respect the job that Shepherds do.

I'm a bit lazier than they are, as I make up in power ratio what I lack in better hearing and agility.

Woof woof.

Sorry for all the strange info. I own a fee based property management firm.

josap,

No apology necessary. There's damn near enough great info in this thread to warrant an ubernerd entry.

Lease to own in this market makes no sense. How do you set a future price when you have no idea where the market will be? Will a tenant think the house will double in 5 yrs, not likely.

Usually there is an option fee paid by the tenant over and above the sec dep. With low prices and 3.5% down on an FHA loan, they could buy the house.

There are some scams out there that claim to lease option the house, repair the tenants credit etc. The one I heard about going on in Phx, the seller pays $2,500.00 to the managing firm to "fix" the tenants credit. Then the seller "gifts" the tennat the down payment (which is now illegal), plus pay the full commmission at sale.

The tenant profile states they need a credit score of 640, well just a bit above that will get you an FHA loan. And the tenant is required to pay the managing firm a payment for services every two weeks that will be reported to credit agencies as an on time payment. These guys are screwing everyone in the deal.

"Lease to own in this market makes no sense. How do you set a future price when you have no idea where the market will be? Will a tenant think the house will double in 5 yrs, not likely."

You never have an idea where the market will be. The idea is to buy good tenancy with a potential share in the profits.

Skin in the game theory applies to tenants as much as mortgage issuers.

Hedge funds are good at charging high fees on inflated profits from risky ponzi schemes that eventually blow up.

They can't fix a toilet.

josap - I don't know anything about the area, the properties capability of the firms - just looking at the numbers and trying to guess.

Too often folks on this forum poo-poo without checking the case for validity [similar failing bulls make when assuming it will all work out].

But if they can buy $100K properties FOR CASH [no additional credit cost]... and can get $1500-$1200 in rents and have a war chest of $6MM to start with which can buy some in-house mgmt capability. And in this labor market my guess is plenty of talent out there to staff up with. It might work for them even IF they don't get the 2X appreciation.

It really is a matter of execution & I value your input. I'm just trying to crunch the numbers myself to try and back fill their case.

I'm not saying they can' t make a profit. I just don't think they can perform as advertised.

I don't think that housing will double in price in 5 years.

I don't think they can get the projected rents.

And if these people are the managing partners for the group they will charge a monthly fee to the investors. The return numbers are what they are offering the investors.

A coworker owns a couple of rental homes and manages them himself; not low-end units, doesn't rent to college students, but this is a beach/college town and the strange are always with us.

He says he has good tenants. I asked him if he did credit checks. Never, he tells me.

It turns out he relies on his graduate degree in cognitive psychology. He can "read" applicants.

Still works hard at management, though.

The option price should be tied to whatever the appraisal is, minus half the interest earned on the escrow, out of which upkeep is paid.

Commission should be 0, since buyer and seller have a deal. Closing costs should be deflated with high unemployment.

If you want tenants to care about protecting some absentee's investment, you must pay.

That is the main problem with lease options.

They are not set up to close. The seller is looking for fast and high income. They don't want the tenant to ever buy it. That way they can do the same thing over again. I know it sounds nuts, but that is the goal of 90% of lease option investor / sellers.

One reason I have never don't lease options. I have never seen a fair option contract.

But, if the property has a mortgage, the base must be the mortgage, commission, closing costs and appriciation for the seller. With prices crashed and going lower that is not possible today.

You are not kidding.

In addition the arrears on the loans are collateral as well, from early this year from a Fed announcement I remember.

I wonder why, if tenants are such a constant hassle, anyone is willing to be a landlord. If it's such a hassle, why not just sell the properties and invest elsewhere? Frankly, as a lifelong tenant, I've found that most landlords are just cheap, and will make every repair in the cheapest way possible. My favorite, because my husband has had to fix it twice now, is the one where the landlord doesn't regrout the space between the kitchen sink and the counter, but uses the silicon that's intended for the backsplash/wall connection. It's not intended to get wet, so it starts to peel off within weeks.

I'm in the home rental business in the DFW northern suburban area. We had our crash in the 1980's. There isn't going to be a doubling of prices unless they succeed in totally destroying the monetary system of world. Experience here was it took about 15 years for prices to cycle from peak to bottom back to where they were at the peak,then they made money. These guys likely haven't seen the bottom.

Upon checking out a couple (the rental market is horrible because even the Section 8 people have programs to buy houses and the people left to rent homes on the low end are really busted. I take people the credit agency says to turn down, but only after I get an idea they are likely to pay their rent. It might take 3 or 4 applicants. Some of these outfits may be paying cash, but I would have to believe they are likely borrowing money somewhere. Anyhow, this guy told me they had bought a sizable number of homes in Las Vegas and Florida. From what I understand, it might be time to sell the Florida property before it collaspes again.

People are going to be stunned how long this mess takes to work out. The first thing that is going to occur is the lots are going to get cheaper. Then the relative neighborhoods are going to deteriorate, as bargains appear in nicer areas. Buying property where these guys are buying it, they had better figure out what the land is worth. Old houses don't have a lot of appeal, at least old modern houses built in the 1950-1980 era. Also selling a house that has been rented for a decent price is going to mean a substantial remodel. It is a business all to itself. My best guess is they make 30% on the resale if they are lucky.