Comments on: No Money Down Investing With Apartments

By: 1Cranberry1

1Cranberry1 — Wed, 26 May 2010 08:19:29 +0000

One comment: your annual return from appreciation over the 10 years was 26%, not 88%.

By: georgetran3

georgetran3 — Wed, 26 May 2010 07:27:55 +0000

THIS IS A FAT LIE:REAL ESTATE DONOT make Forbes world rich:look at NOW, many foreclosure=result of R.E LIAR. yes,only 1.26^10=26%/yr rate, not 88%; WARN:HOW can R.E ALWAYS APPRECIATE or even 24% one yr?=LIE

By: beninnesker

beninnesker — Wed, 26 May 2010 07:08:16 +0000

George, the numbers in the video come from U.S. government data on existing home sales. The information is what it is, it’s not a matter of anyone lying. Look it up if you want to.

Foreclosures always happen. They are happening in mass numbers now because masses of people took out high LTV sub-prime loans who couldn’t afford to repay them, during the period of 2002-2005, causing the R/E market to go white hot.

By: beninnesker

beninnesker — Wed, 26 May 2010 06:47:05 +0000

The bubble burst when the borrowers on these loans spent all their money and couldn’t afford the payments anymore.

The loans shouldn’t have been made in the first place to high credit risk borrowers, but Wall Street had gone “mortgage securutization mad”. They had securitized every good credit risk mortgages they could find and (because securitization makes investment bankers so much money) they were looking for more.

By: beninnesker

beninnesker — Wed, 26 May 2010 05:48:05 +0000

With no more good credit mortgages available, some bright spark came up with the idea of securitizing bad credit “sub prime” mortgage. “Heck, why not?”, one imagines must have been their rationale, “We gotta securitize something!”.

As a result of this deep sickness that periodically infects Wall Street, billions and billions and billions and billions of dollars were made available to sub-prime mortgage lenders across the country.

By: beninnesker

beninnesker — Wed, 26 May 2010 04:50:33 +0000

The word was, “get the money out into loans … whatever it takes.” So underwriting was relaxed and every homeowner who had a pulse who applied for a an equity loan, was approved. And the cash FLOWED into the economy, the 2002-2005 r/e boom resulted. When the borrowers’ loan procceds were all spent, and they couldn’t make their big mortgage payments anymore, the foreclosure rate began to climb.

By: beninnesker

beninnesker — Wed, 26 May 2010 04:31:46 +0000

And it’s still climbing today. We are only learning now how much bogus sub-prime lending went on then by how many foreclosures there are today.

It’s a disaster, no doubt, and the tax paying citizens around the world are paying the price.

But the fact that real estate goes through periods of high appreciation in some markets followed by precipitous drops doesn’t make it bad. If you educate yourself about real estate investing it’s good, “very” good.

By: beninnesker

beninnesker — Wed, 26 May 2010 04:05:47 +0000

Regarding “HOW can R.E ALWAYS APPRECIATE or even 24% one yr?”, no market ALWAYS appreciates at 24% a yr, nor did I say that. As I stated in the video, the 88% increase is based on what the building was worth when it was bought, compared to what it was worth after 10 years, then divided by 10 to give you an “aggregate” yearly return. A simple calculation. If you learn about market cycles, buy at the bottom of a market (eg. now) and sell at or near the top, this is not hard to achieve.

By: beninnesker

beninnesker — Wed, 26 May 2010 03:06:22 +0000

But you have to educate yourself George, don’t just react to what you read in the newspaper.

I wish you the best.¨

Ben

By: stonecoldjason

stonecoldjason — Wed, 26 May 2010 02:40:32 +0000

now with ca in the red and market crash property woth $250,000 maybe