Any Residential Landlords?

[2manyrocks]

Have to wonder how much equity the renter across the street would have at today's values if he had stayed a homeowner instead of walking away from his mortgage?

 

[ultrarunner]

Have to wonder how much equity the renter across the street would have at today's values if he had stayed a homeowner instead of walking away from his mortgage?

They bought in 2004 and bailed in 2010 and now it’s 2024.

So 20 years in on the 30 year mortgage.

The person that made bank on equity is the one that bought the place for $160k now worth 650k

Worth mentioning is many also had higher rate mortgages, often adjustable rate at that and because appraised value drop so much they were locked out of getting a lower rate refi.

My lender was offering 3% lower mortgages during the crash and I was told no can do and referred to TARP…

My lender flagged my zip code as heavily impacted and much of it was… but my neighborhood was only down 20%.

No easy refi for me to capture a big interest rate reduction… I later applied to my credit union and got my 2.75 15 year fixed and almost paid off now.

 

[2manyrocks]

Next intrusive question would be how much of the mortgage payments were paid by rent collected from the guy who bailed. Feel free to say none of my business.

 

[ultrarunner]

Next intrusive question would be how much of the mortgage payments were paid by rent collected from the guy who bailed. Feel free to say none of my business.

My rent house bought in 1985 was mortgage free in 2010 and my property tax of 3k is based on my 1985 purchase price.

Now were I were to buy now at 650k my property tax would be over 11k.

 

[5030]

All I have to say is... Glad I don't live in Kalifornia.

 

[ultrarunner]

All I have to say is... Glad I don't live in Kalifornia.

Many agree… but it’s what California has become vs on what it was…

I love the weather and natural beauty and the geographic location as a hub for employment, innovation and gateway to much of the world… 3 major airports in view just looking out my living room window plus rail and ports.

Sad we are being regulated out of existence and capital and talent continues to leave…

World class Universities draw from all corners of the world…

 

[kenmbz]

A lot of people walked away from loans as they were variable, interest only with balloon payments at 5 years. Same thing that helped the crash in 2008.
So your mortgage is at about 1500 and at the end of 5 years goes to 3000 or more and you have to refinance, but these people probably should not have got a loan so big in the first place and did not have the 20% to start on the original loan.
This drove up the defaults, but all drove up short term profits for the bank c-levels.
The c-levels gamed the system when the complaining of stock holders drove them to have performance indexed bonuses. Drive up profits, drive up bonus, cash out before the defaults come rolling in.

We are trying to figure out how people in Cali are affording 1500 sw ft homes for 1.5million.
Wonder if these are the variable rate, low down payment loans again......

 

[ultrarunner]

A lot of people walked away from loans as they were variable, interest only with balloon payments at 5 years. Same thing that helped the crash in 2008.
So your mortgage is at about 1500 and at the end of 5 years goes to 3000 or more and you have to refinance, but these people probably should not have got a loan so big in the first place and did not have the 20% to start on the original loan.
This drove up the defaults, but all drove up short term profits for the bank c-levels.
The c-levels gamed the system when the complaining of stock holders drove them to have performance indexed bonuses. Drive up profits, drive up bonus, cash out before the defaults come rolling in.

We are trying to figure out how people in Cali are affording 1500 sw ft homes for 1.5million.
Wonder if these are the variable rate, low down payment loans again......

Only can comment on a few with personal knowledge such as the new couples in the neighborhood...

Professional, in late 30's with no kids and 350k combined income... the nearest ones had a 400k inheritance. 1960 built 1400 square feet on 1 acre 1.4m second owner since new.

I follow what comes up for sale in the area and 3 of the last 4 are same *** couples... again professionals with no or one child.

Not having kids and earning 175-200k opens options but will they stay when values drop?

I've posted before about a wedding I attended... bride and groom both first in their family with college degree... bride from Philippines and is RN and groom African American and police officer.

26 years old with 400k income as both have all the overtime they want...

The market has cooled... days on market longer and price drops now the norm since last year...

Only speaking for Oakland where I am...

Also seeing for rent signs now...

I'm able to minimize rent increases and keep quality tenants because I do my own work and Prop 13 which indexes Property tax based on value at the time acquired... some of my rentals date from the 80's.

3k property tax vs. 12k gives me flexibility...

 

[2manyrocks]

For all Oakland’s wealth, it does not speak well for Oakland that Oakland Animal Services is overcapacity and putting down so many dogs IMPO.

 

[ultrarunner]

For all Oakland’s wealth, it does not speak well for Oakland that Oakland Animal Services is overcapacity and putting down so many dogs.

Maybe a house of cards?

Selling the Oakland Sports Complex to cover one year of deficit, sold city hall with a leaseback to cover a budget deficit... etc.

Property tax is roughly 50% higher in Oakland compared to adjacent county but county has better services with full amenities... true no museum or symphony but schools, sidewalks, streetlights, performing arts, library, shopping, etc... better in the lower tax county... i.e. Castro Valley.

 

[newbury]

Prop 13 which indexes Property tax based on value at the time acquired

That is going to be a boat anchor.
All of my properties (in Virginia, Vermont and Mississippi) are subject to taxes based on assessments "updated" annually. Though some in Mississippi don't get changed that often. And in Virginia they actually went down for one year, since 1975.

 

[ultrarunner]

That is going to be a boat anchor.
All of my properties (in Virginia, Vermont and Mississippi) are subject to taxes based on assessments "updated" annually. Though some in Mississippi don't get changed that often. And in Virginia they actually went down for one year, since 1975.

Prop 13 fixes the base Statewide Rate at 1% of value at the time of transfer plus a 2% annual inflation cap... it applies to all assessed real estate equally... one if the reasons I had so many elderly neighbors able to remain in their homes and not be forced out.

The couple that built my previous home paid $1200 property tax and the moment I bought it went to $8800.

My current home the couple that built it paid $4500 and I'm just under 20k

The other component of Prop 13 is voter approval for additional property taxes and the voters of my city have approved something like 26 special assessments ranging from midnight basketball to streetlights

Voters in the unincorporated county have not been so generous in approving additional property taxes yet by every measure have better government services and therein lies the conundrum that more money does not equate to better government... otherwise Oakland and San Francisco would have the best of the best.

Property tax rate of about 1.1 percent county vs 1.6 city...

My brother and I both bought at the same time and paid the same for our current homes... I'm in the city and he is in the county so every year we compare and it costs a lot more to be in the city limits... one striking example is city private school is seen as a must but where he is everyone is public school with amazing public schools???

 

[newbury]

the conundrum that more money does not equate to better government.

It equates to more funding. The government (elected officials AND the ones they hired) have been known to waste money that is not theirs.
It's the responsibility of the people to elect the right officials.
(But that's treading on thin ice so if anyone finds that to political let a mod cut it)

 

[2manyrocks]

Don't know how it will play out, but I get the impression that LA has limits on how much a residential landlord can increase rent. After the LA fires, I've read that many landlords have jacked rents considerably despite the city's rent controls.