I think the qualified buyer thing (or unqualified buyer), has been muted a bit. It is the game lenders play that always exists, but just played different ways. Originate the loan and sell it.....
How bout that stock market?
- Thread starter zeke4ahs
- Start date
@hookyIU1990 I see you gave this a sad face. You think you're sad - I have a couple friends who are counting on their inheritance of their family farm to fund their retirement. lol (I guess I shouldn't laugh, but I think it's ridiculous they're basically waiting on the parents to die to fund the bulk of their retirement - and these friends are already retirement age).
I never had to worry about things like that. My mom will be 95 this Fall and I'll be the one paying for her funeral. She basically has nothing. But she and my dad stayed together through some hard times and were good examples of Christian living for us kids, which is worth a lot more than money.
"I refuse to join any club that would have me as a member" - Marx (Groucho, not Karl)
I think it would have to at some point, and the 5 year outlook on corn and bean prices isn't good. Corn is at a 3 year low.
The risk would be that an appraisal is overinflated. Take example X: Home owner gets an appraisal back from lender who says "the home is worth 500k". Lender says there is only 100k of equity in the home, but we will make a loan for 75k. Home owner calls his favorite appraiser, who goes out and comes up with an appraisal value of 600k--maybe he used different comps that might not be relevant, etc. Could be a host of different things. Lender says "well, I will split the difference and give you a 125k loan" know there is equity in the home of 100k. Loss might only be 25k. Under that scenario, the loss of minor, but you could have another scenario where the numbers are changed a bit and that loss turns into something much higher. Multiply that by x home loans that are second mortgages, and things look like doo doo
WOOHOOO My brokerage account is only down $2,800. It's done that 3 times in the last 4 weeks, so it just feels kinda normal now... 
Understood.
I have a friend who was once a branch manager at what used to be American General Finance -- it's now called OneMain. Basically, they do high risk personal loans -- borrowers who have limited access to loans at normal banks. Legal loan sharks.
I was razzing him back then about it, because I assumed that most of his clients were the same people who frequent payday lenders and pawn shops. He quickly corrected me and told me that most of his clients were just overleveraged high-income people (docs, lawyers, etc). And I guess I just always had assumed that anybody who had the know-how to make a high income also had the know-how to manage money well.
But I was obviously naive about that.
There’s no one worse at business/finance shit than doctors. Hell look at our own resident doc. The only poster in history who permabanned himself
I gave you the sad face, because there's tough times coming for family farmers. My youngest brother is in business with Mom and Dad. He'll end up with their land, when they finally pass and I hope it's a long time from now. It's looking like a replay of some of the tough times in the 80s is about to happen. There's been a lot of ground that he's passed on that others have gobbled up at crazy prices. It didn't make sense then at 10k/acre and it certainly won't make sense now.
To make sure I went to school, Dad basically kicked me out of the house and told me, "There's nothing for you here," back in '86 . He was right.
Agreed. We were looking at a bigger house, due to having 3 grandkids now, and I found one I really liked. But NC real estate laws are different and you have to put up a 'Due diligence' fee that you don't get back, but gets applied to the final sale if it goes through. Usually around 1%, which is a good chunk of change.
We wanted to make a contingency offering based on the sale of our house, but we didn't want to be pressured into selling our house just to close on the new one. So, while we dithered, the house sold. Bummer.
But the real kicker is, the bank told us "Oh, no problem - we'll give you a loan for 95% of the sale price for the new house. 5% down (I guess because it would be a VA loan). Like, serioulsy? We're both retired and living on SS, (very) small pensions (thanks, Obama), and IRAs, and you would loan us that kind of money??? I was stunned. And they didn't even blink an eye when I told them the condo and golf fees we pay for the place in Florida. We also don't have a mortgage on our house in Charlotte.
That seems kind of risky to me, but what do I know.
The other weird thing about real estate here is our realtor told us a bad inspection report doesn't allow a buyer to get out of the sale, if the seller doesn't want to correct it. WTF? You put a bid on a house and they find the house is infected with termites and you're SOL? Craziness.
Lawyers are dreadful business owners. Trust me, I'm doo doo on my best day
Yeah, these things go in cycles and we're long overdue for a down cycle.
I assume the buyers of land today are the mega-farms or corporations. There's just no way a regular farmer can get land, especially since interest rate aren't 3% anymore.
From a selfish standpoint, I'd love it if land would get more reasonable and I could get in on it in a small way.
Your dad is a wise man.
Yeah, i was tlaking about first/initial mortgage but you're right. HELOCs too.
Oof.
The real question is whether i'll be man enough to eat some retirement to take advantage this time. Probably not.
I've since come to realize how true this is.
I have a number of docs as friends. And I think some of them probably live well within or below their means -- at least from what I can tell (obviously, you never really know). But I also know a few whose lifestyles basically seem to have no limits. And it's really interesting to compare them to people who I'm very certain have 8 or 9 figure net worths....most of whom got that either through years of RE development/investing or growing and selling small businesses.
We did the largest study ever, of millionaires and Dr's and Lawyers didn't even make the top ten. ("Underpaid") Teachers. engineers coming in the top 5 spots. LOL
Yeah, there are people who genuinely believe this.
I'm always tempted to ask them why greedy grocers were being so generous to their customers back when nobody had any complaints about food prices. But I usually just end up shrugging my shoulders and going on with my day. Anybody who arrived at that conclusion probably isn't going to be talked out of it.
Especially in the grocery biz where margins are nearly non existent. Unless there's BIG GROCERY out there guiding the hand of the market. But then I'd have to be a BIG GROCERY TRUTHER and I ain't got time for that.
I agree with you. I have no first hand knowledge in large cities. I do have many friends in the RE business in Evansville. Many homes would be put on the market on a Friday with open house on Saturday and Sunday. By Monday morning the sellers had offers far in excess of the asking price.
I do know is small communities home didn’t stay in the market long when a for sale sign showed up in the front yard.
I believe you’re correct on Farm
Ground. The prices farm land has been selling has no correlation with the cash flow the property can generate. Please tell me how farm land that is generating $200 to $350 cash rent to the owner yet farmers are paying $15,000-$25,000 per acre and more for that same land?
A lot of good information in this thread, including anecdotal. Our investment and finance threads are always the best ones.
Always good to hear other perspectives on real estate and various local observations.
Always good to hear other perspectives on real estate and various local observations.
My sister just sold her house. She put it up two Wednesdays ago and closed last Thursday.
The lady who bought it paid over asking price, cash offer with no inspection. My sister had to see proof of finances... turns out the lady was a multimillionaire.
My sister asked what she was going to do with the house and she said that her nephew had been trying to buy one for about a month, but was always outbid, so she decided she was going to buy him one and become his banker, meaning he'll pay her instead of the bank.
As well as "subprime" lending. The only issue I see is the price of RE these days, crazy to think a 1500 square foot home on a slab with a "two car" garage (good luck getting two cars in there) is selling for around 300k or better in my neck of the woods.
The only real issue is if income decreases or if property values begin to decline. Terrible place to be is upside down in a mortgage.
One question I have is what percentage of farm land bought today is bought by Chinese firms? I saw a story a few months ago about how Chinese companies run by the Triad and sanctioned by their government is buying up land in Oklahoma to grow pot. It gets me thinking that if they have lots of cash as a government couldn't they buy up our farmland and then have us where they want us?
Only a fool would waste time looking at grocery profitability
It is Koine Greek. Translated into English, it would be "dog sh!t"
Someone always pays, the last thing a lender or an entity that purchases these loans wants is to be in the real estate business. Repo's are good buys for someone but generally losses for the banks/lenders.
The subjective nature of appraising is funny. One of my best friends owns an appraisal business, he gets threated by clients all the time when he comes back with a conservative number. Too much reputational risk and future business risk to over inflate a value.
Yup. In my neck of the woods they are knocking down million dollar homes and building 3-4 million dollar homes. Like Milton’s Dr buddy I have no idea what these people do for a living
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Please lord Jesus, I hope someone much smarter than me can finally explain how this works.
We’ve talked about it a I simply can not make sense of any of it!
And every month, when the payment is due.
Garth Brookes sings.
She was a lonely widow women
Trying to make it on her own.
She taught me things, man!!!
I mean, if I made 500k++ a year, I"d figure out a way to not be working past 55 at most instead of building/buying a mcmansion.
But that's me.
Money guys - but I also think that these guys working at fortune 100 type companies or equivalent if private that become senior vps have pay packages that are more than we realize. Much more than doctors and shit. Centene and Boeing and express scripts etc. and dual income maybe
UMMMMMMMMM
backing during the pandemic and Dem free cheese. I made a few post about what happens WHEN home prices bubble burst.
As I recall, multiple left “economic” posters here assured me that could never happen, and I was simply MAGA bot.
Well….. Johnny 5 needs power now!!!! And FVCK all the Dem economic Marxist.
A little dated, but this may help.
Cash Rent as a Percent of Farmland Price - farmdoc daily
Gary Schnitkey - Weekly Farm Economics - Cash rent as a percent of farmland price sometimes is used as a benchmark for determining the appropriateness of a cash rent level. Over time, cash rents as percentages of land prices have declined, with declines corresponding to decreases in returns of...
origin.farmdocdaily.illinois.edu
The housing market is typically a supply and demand thing. It is cyclical--some people say every 18 years-definitely a pattern regardless of who is in the white house. There are other factors. High interest rate will impact prospective home buyers. I'm sure a host of other things, but these things impact supply and demand.
Nice read, but I think that answers a different question than what I’m curious about. Which is 1) how can a farm business pay that much in cash rent 2) if a farm business can’t pay for a meager (example) 3% return on your dirt investment, HTF is it worth buying at such stoooopid prices.A little dated, but this may help.
Cash Rent as a Percent of Farmland Price - farmdoc daily
Gary Schnitkey - Weekly Farm Economics - Cash rent as a percent of farmland price sometimes is used as a benchmark for determining the appropriateness of a cash rent level. Over time, cash rents as percentages of land prices have declined, with declines corresponding to decreases in returns of...origin.farmdocdaily.illinois.edu
I know farmers just love working for free, basically, but that will only last so long.
