Tuesday, August 18, 2020

It looks like the pre-foreclosure wave is starting. There are 19 properties in my city in pre-foreclosure, when normally there is one or two at most.

Oddly,  most of them entered default before the middle of Feb. So these are not pandemic related.


  1. We sold our mini farm, tried to buy a hud foreclosure last week during owner occupier stage. We thought we would win with $6k over ask, it went for $70k over ask (a hefty 18% premium). In the meantime, our buyer is now having to pay cash for our place because the bank yanked his credit. Two other farms that we bid on called us back this week because they had their financing fall through too and wanted to know if we would up our bids. Seems like there was a desperation land grab but the banks are doing everything they can to balk at the prices. What happens to prices if everything ends up having to be paid in cash? I don’t know what we do with the animals in a month, but our plan is to try and float for 3 - 6 months in a rental and then revisit when owners realize that there isn’t any liquidity left in the housing market. When you look at the delinquent loans + the forebearance that is due in the next 3, 6, & 9 months, I don’t see how this ends well for the housing market. DF

  2. Congratulations. Get that money in the bank as soon as possible. He's good for it right?

    The bank is telling you that they don't think prices are going to hold up. This is some early housing crisis shit right there. You are in the stage I was when I bought my rental. There was all sorts of convulsing like that. I naively thought the crisis was almost over at that point because recessions always lasted no longer than three years.

    The banks always signal what is coming and if they want cash - they are freaked out. People who are out bottom fishing though just see the first opportunity to get their feet in. They don't realize how much father things can fall. The government is literally backstopping everything. IMO - this is not a time to pay over.

  3. Capital of Texas RefugeeThursday, August 20, 2020 5:09:00 PM

    "The bank is telling you that they don't think prices are going to hold up. This is some early housing crisis shit right there."

    There's a lot of pressure for moving downward versus upward in the US, and it signals to the banks that the current housing valuations in the US are much too high.

    HUD foreclosures may be tempting for people who are trying to bail out of cities such as Minneapolis and New York that have been imploding over the past two to three months. If you think you're going to be stuck with a house investment that you can't unload, why not be stuck with less of one?

    And so I have a friend who's been looking at somewhat shifty sub-200k places in North Florida because it's cheaper than renting in Miami and a lot safer. You can still buy a pretty good bit of house in the 160k to 200k range in those areas if you're willing to put up with a few things, such as not being walking distance to anything, let alone Cuban coffee.

    Whereas both my old place and his old place in Miami were walking distance to the crap that happened on Biscayne Boulevard and around the police HQ a while back.

    Meanwhile, New Yorkers who want to Escape From New York have been moving into those places we'd moved out of, not because Miami is much safer, but because Miami at least lets them preserve a remnant of a lifestyle they recognize.

    Yeah guys, enjoy the Cuban covfefe while it lasts.

    Won't you pour them a Cuban breeze, Gretchen ...

    BTW, Geneva's a little freaked out about stuff right now, so that idea of being away from both Geneva and Zurich? There's a lot of merit in it not just right now but also as a long-term strategy.

    Debt isn't easy here: credit cards are debit cards.

    Want a 500k CHF credit limit, stick 500k CHF plus enough for your account maintenance and transaction fees in the funding account for your card.

    That's how the average adult here can have 500k CHF in savings. The systems actually punish you in relatively mild ways for spending money.

    If you come here broke or leveraged ... well, I'd hate to be you, but you could probably get out from under that debt faster here.

    It does help when income taxes are a fifth or less of the punitive rates being demanded in the US, so there's also that. Free and easy banking like in the US? You think Fee of America and Hells Fargo charge a lot of fees? Experience the initial culture shock for yourself ... and then you notice how you were actually getting ripped off in the US when you have substantial balances.

    But let's also face a fact in the US: easy mortgages have been driving up valuations well past any point where they have any semblance of being grounded in reality.

    That's even more true for commercial real estate than it has been for residential real estate, and now a lot of those commercial RE people are finding out that companies want distributed smaller offices instead of everyone under one roof.

    "Digital nomads" fleeing cities will be a great market for those who can build the types of structures that they need to survive, and that's even true here.

    This past week Geneva has done a few new and special things to make sure that people here might just want out of town for a while.

    Maybe my B&B idea should be done here instead of on "some island in the bay".

    You know this Donald Fagen song is like my favorite song because it's really about Hemingway and Cuba, right?

    My grandfather had some stories to tell about the Havana Hilton just before shit became real. I didn't forget what he told me: even when you're in a place that feels like it could be home, remember to keep at least one bag packed at all times.

    But for now, this feels a lot better and a lot less meaner than being in America, and so I can put up with the occasional culture shock.

  4. Lolz, the winning bid fell through on our Hud home. We’re trying again, not optimistic that we’ll get it but our contingency will be after we know if it will burn down. Our buyer did get funding on his loan, but had to pay more in a down payment and had to commit to finish funding with three fires surrounding our town. Unfortunately, the bank is insisting that we eradicate our sticky icky or they won’t fund. DF