Re: Meg Munn chunters on...

Heidi Graw wrote:
> >"Mark Sobolewski" <mark_sobolewski@xxxxxxxxx> wrote in message
> >news:mark_sobolewski-2D65C9.21241626092005@xxxxxxxxxxxxxxxxxxxxxxx
> (snip)
>
> >>Heidi wrote:
> >> Most traditional mortgages have the interest part higher at
> >> the beginning, but virtually nil near the end of the life of that
> >> mortgage.
> >> So, over time, equity builds. Market values also rise, which affects the
> >> building of equity.
>
> > Mark wrote:
> > But this is for the first _20_ years of the loan. Sheesh!
> > The first kid (I hope) should be grown up and in college
> > by then (if it's a boy :-)
>
> Warning: Harsh note: Nagging from Heidi: ;-)

It sounds more like clucking. :-)

> Mark, you're 38 years old. You've been dithering around the last 20 years
> not doing anything at all to build up some equity of your own. What makes
> you think you'll be able to do so within the next 20 years!

This may surprise you to hear, but there are other investments
besides real estate. :-) You sound a lot like my father, RIP,
who had an FDR era investment attitude: Real estate, and whole life
insurance.

Nothing is wrong with those things, but they aren't the ONLY options
available. Also, I have a lovely, hard working young wife, right?

> Thus far,
> you've spent your time lingering around cafes sipping tea

Not around American cafes, no. :-) Although, some of those
iced teas that starbucks is now making are getting there.

> and flapping your
> gums. No American girl found you worthwhile. You simply weren't ambitious
> enough!

HAHAHAHAHA! I mean, there are just so many delightful replies
to that one. Oooh oooh. Where do I start flapping my gums? :-)

Indeed, when it comes to failing to land "ambitious" American girls
who worship money and real estate (and have dozens of
government agencies and lawyers who use children to seperate
men from them), I guess I'm a "loser" there.

A friend of mine from Switzerland said years ago in her
Sweiss accent: "American women are ambisssious!" When she first
said that, I thought she didn't understand the word. What's
wrong with ambition? Oh, wait, I was thinking of the term
as applied to _men_. Men are BREADWINNERS so for them being
ambitious is a good thing. When women are "ambitious", it
usually means ruthless and materialistic and demanding.
(Perhaps the word should instead be: "Ambitchious" :-)

Hmmm, this does tie into the discussion of seeking real
estate, or marriage, at any possible cost or risk.
Let's look at my personal situation: 20 years later,
I have no precious equity and I don't yet have children.
Yet, in both cases, I was free to play the market.
I know men who married "ambitious" American women and
now many of them are divorced and don't have the
house to begin with.

I won't say American men are slackers, but I know many
who don't seem to freaked out that they don't have
a ball-and-chain mortgage and don't have a high paying
job to give their girlfriend or wife the option
to do what _she_ wants with her goals. Sorry, but
these sled dogs have mutated into cats. :-)

FYI: I did have American career women who did date
and even proposition me for the reasons I mention:
I was been debt and child-support free and had a
decent income. That's not too bad especially in
many age brackets. I chose not to get involved
with "ambitious" people either through a conscious
choice or by not throwing down my VISA card when
they expected.

I have no regrets.

> You had to actually leave the country to marry a foreigner.

It's somewhat more difficult to marry a foreigner locally. :-)

> You haven't got
> a pot to piss in, nor a window to throw it out off.

You mean... (drum roll) I don't OWN a house! Eeek! :-)

> You're tucking away a
> measely $300.00 per month as a last ditch effort, hoping this will be enough
> to get you into the housing market.

Nope. I merely said that was the difference between the cost
of owning my unit versus renting.

> Well, guess what, Mark? It may already be too late for you! You may never
> accumulate enough to get you into that housing market.

*sniff*.

Indeed. A LOT of people may never get into the market to help
bail out all those people with interest only loans or those
"ambitious" women who buy real estate, at any cost, just
to own. I feel just so bad. (hehe)

> You may never be
> able to afford to send your son to college. You may never have enough upon
> which to retire comfortably.

I remember as little as 20 years ago it was possible for children
to work their way through college. Retirement was supposed
to be provided by social insecurity. The FDR social
security program is still functional, but probably not for long.

Why didn't I jump head first into financial and social
paradigms that clearly don't have much future? Real estate
that has to balloon into inaffordability to be a good
investment, college funds for schools that are largely
marxist indoctrination centers, and ambitious women who
offered a coin flip to financial and personal ruin?

FYI: I plan to send any children I have to a foreign school
where they get a great accent and education for a fraction
of the price of U.S. public institutions.

> Yet, despite all that, there may yet be some hope. It is entirely possible
> that in the near future a relative associated with the Russian mafia kicks
> the bucket and leaves Irina with a small inheritance.

Oh, it's good you came back to my wife:

Indeed, the "ambitious" women who passed me over supposedly
had an income, yes? What about that? Oh, wait, that
was THEIR money and THEIR home. I got it. They would
be more than happy to marry up in income to get MORE
(or mo' as they say in the states) money but to marry
down? Fogget about it! :-)

My wife has a slightly better value system and between the two
of us, we can manage our incomes,savings and investments
even without real estate to build both a nice nest egg.
I do not spend a lot of time awake at night worrying.
I would probably spend a lot more time worrying if I had
married an American Uber-Frau who freaked out that
her neighbors have a nicer lawn than us (and we should
dump 10 grand into landscaping to compete and keep our
"home value) up and to blow 100 G's for an English
Literature education for our daughter (whose friends
there are mostly lesbians) and apologize for oppressing
her as I wash the dishes.

Gee, I just so missed out. :-)

Heidi, I want to thank you for reminding me that even if I made
human mistakes along the way in life, I really did stay
on the right path.

I was also thinking about this last week when my wife noticed
some moisture damage on our ceiling because of a leaky A/C.
If we were homeowners, we'd be paying about 2 grand to take
care of it. Instead, I just called the landlady that exploits
us. Life is good...

> If this happens, then
> maybe you'll have some luck. You'll achieve what you're dreaming about now.

I always look at things from both an ideal or predicted
plan and if I'm mistaken: At worst, we can't buy the
precious real estate for maybe 5 years until the prices stabilize.
We don't get to buy in on a bust as I had hoped.

In the meantime, we roll the $3,600 (plus the other money
we have) per year into a variety of investment tools
and make a good deal of money that way _AND_, as
I said, we get more time to consider exactly
where we want to live. We like where we are now,
but that may change in 4 years hence.

> Whew! That felt good! Sorry, Mark, I just simply had to get out a small
> rant! ;-)

Sure. About 10 years ago, I ranted about how impossible life
seemed with all of these duties and burdens I faced with
the system and the ambitchious women I met and now, 10 years later,
I'm happy. Life isn't perfect, but I at least know what's
going on and feel that I have options.

I'm happy for you Heidi, truly, but your experiences aren't
mine, ok? If anything, you've shown precisely you lack
the empathy required to give serious advice to someone
such as myself. I only hope your husband has more
saavy in advising your sons.

> >>Heidi wrote:
> >> That mortgage holder who paid $350.00 per month 30 years ago is
> >> now paying nothing.
>
> >Mark wrote:
> > Ok. And if the person put the money with a Janus fund at
> > 10%, they'd have $2,000,000!!!!!!!
>
> ...and if they had *both?* That $350.00 per month 30 years ago was *not* a
> heck of a lot of money to spend on a mortgage. Such a person could still
> pay $350.00 into a Janus account. That person would have the equity from
> both home *and* investment plan.

Because you didn't think of it? :-) You had just implied that
Real Estate was the only game out there and now you're saying
they have all kinds of options. Exactly. Nice of you to
figure out what I just taught you. I guess it's like Eisenhower
said: Anything can be done if someone is willing to give up
the credit.

> What you're doing, though, is not using that rent money as a mortgage
> payment.

In my case, it's a loss of only $150 to $250 that would
go to the principle for the first 20 years. You keep
forgetting that.

Did you sniff too much of that garden mulch?

> You can find something to buy for $1,000 per month *PLUS* keep
> those $300.00 payments into Janus going.

Er, no. I wouldn't "buy" it for $1,000 a month. Didja
hear of taxes? Utilities? I already told you it was
more than that.

> At least you'd get something for
> the housing, too.

Sure. 750 bucks in interest payments per month! Woo hoo!
I can take them off my TAXES too (after 16 grand). What
a bargain!

> (snip)
>
> >>Heidi wrote:
> >> And if you buy a home, you can have that additional $1,000 earning a good
> >> return for you, too!
>
> > Mark wrote:
> > Sure! In 75% interest that goes to the bank. I suppose they
> > can send us a toaster for the first 20 years or so.
>
> Don't ignore the rising property values. That adds up over those 20 years!

Exactly!

Ultimately, you keep coming back to buying from Peter only makes
money if you sell to Paul: It's just another turnover scheme.

In order for this to work over 20 years, at the current
rising property value rate, the units would be effectively
unaffordable. Somehow, I don't think that's going to happen.

> (snip)
>
> >Mark wrote:
> > I have read discussions about housing regulations and from
> > what I hear, it's actually very difficult for a landlord
> > to evict a tenant unless, perhaps, they are planning to
> > convert the property to condominiums.
>
> ...or do major renovations which makes it necessary for the tenants to be
> removed from the premises for safety reasons.

Sure. But homeowners face similar problems. In fact, my
wife and I often see houses around our unit hit by the
storm with trees falling on roofs and fires.

Granted, there's insurance but that costs money doesn't it?
Ooops! That's something else I don't have to worry
about a renter: we keep all our valuables in a safe. If
the roof is damaged or there's water problems in the basement
or cockroach extermination, it's not my expense. Cool.

> >Even then,
> > I imagine that they would have to compensate the
> > renters for moving expenses and breach of contract
>
> We're talking *rent* not *leases.* There is a difference.

So explain the difference. I signed a lease as did they.

> As for moving
> expenses...no renter gets that from a landlord.

You're 100% sure of this? You made a bunch of claims
about eminent domain and when called on them, you then
said you didn't know much about US law. Fair enough.
But these regulations and laws vary on a STATE level
here so making such claims is rather presumptuous to
say the least!

> As for people bound by
> lease agreements, then ya...depends what the contract states. When the
> contract runs out, though, the landlord does not have to renew that
> contract. The lease is finished, done and over!

Yes and no. Not every tenant signs a lease all at the same time.
We all gossip in the laundry room and there's not a lot of
secrets. So if a tenant is told that they're being
kicked out when the lease is up, they have time to look
for a new place. Some people have 2 year leases.
This means that the apartment then faces the problem of
having several percent of units unoccupied while waiting
for the existing tenants to move out.

This is all largely hypothetical because I've never, repeat,
never heard of this happening either to me, to places
where I lived, or to ANYONE I know. Let's move on:

> > similar to your hypothesis about the government giving
> > "fair market value" to displaced homeowners
> > (which isn't true as it turns out.)
>
> Depends on the government and courts should the dispute go to trial. What
> I've noticed is that in my area government will indeed offer fair market
> value that includes moving expenses. Problems arise when owners simply
> refuse to move or they expect an outrageous price for their properties.
> Sometimes assorted appraisers come up with wildly different assessments
> which are then haggled over.

So it looks like this is all speculation. Let's move on:

> > I could always threaten to fight her in court and
> > make her life a living hell if she doesn't give me compensation.
>
> Compensation for what? You're a renter! If, however, you have a lease, the
> lease agreement will outline just what sort of compensation you may be
> entitled to should she as landlord wish to break it.

I have never had an apartment or even room to rent without a lease
of some kind. I am not a month-by-month renter.

> >>Heidi wrote:
> >> I've done some reading up on these "interest-only loans." From what I
> >> understand, it is only within the first 5 years that only interest is
> >> being
> >> paid. Then the equity that should have been paid during that time is
> >> compressed into 25 years instead of 30. The result may be that people
> >> will
> >> end up paying *slightly* more than they had been. In some cases that
> >> only
> >> involves $200.00 more per month. This is not so significant that people
> >> will abandon these houses. You're not going to find people walking out
> >> by
> >> the *millions*. That 30% drop in real estate values is just not going to
> >> happen.
>
> > Mark wrote:
> > Millions, thousands, what's the difference? :-)
> >
> > My point is that at the end of that period, they have ZERO equity,
> > remember what you told me was so bad about renting?
>
> What ZERO equity? If the value of the property rose within those 5 years,
> and that value outstripped the costs of the monthly payments and property
> taxes, there's equity plus profit!

Once again, this "if" relies upon the speculation that the property
is going to increase in value driven by more people jumping
on the pyramid.

If the market just maxes out, they get NOTHING AND they have to
hope they can sell to someone before it goes down. If it goes
down, they're so screwed.

What's drove up R.E. prices here in the states in recent
years was Greenspan lowering interest rates to help
the economy recover after the dot.com burst and
9-11. Those days are over and fewer and fewer
buyers will be willing to pay hugh amounts for R.E.
when interest rates rise to more reasonable levels
within the next _2_ years. Can you say, "bottoms up?"

> For example: A house bought for $200,000. Interest only mortgage of 6%
> would be $1,200 per month. Annual property tax $2,000. The total expense
> over 5 years for mortgage payments $72,000...taxes around $10,000 plus more
> due to rising value of house.

Is that fixed rate? :-) The best bet, repeat, 100% chance
is that rates will rise for the next two years. But let's
take that 6% rate at face value.

> So, now the big question: How much in value did that house gain over 5
> years?

Indeed! Assuming that prices always rise, you have a point.
I'm saying that there's a good chance, from a variety of
market indicators, that won't be the case. Higher interest
rates will dry up the buyers that flooded the market at
the time the person bought the home. Also, these same
people will be looking to dump more or less close to
about the same time.

Everyone, even home owners here, are bracing for this bump.

> The owner now at this time faces having to pay a higher mortgage payment to
> make up for those 5 years lost. The mortgage is now being compressed to
> cover 25 years, instead of 30. He faces paying $1,700 per month instead.
> However, this $500 he knew he'd be paying at this time, he had actually sunk
> into a Janus account for the last 5 years. That account is now worth some
> money. That's accumulated to $30,000 plus interest, dividends and share
> values. Gawds only know what that could be. ;-)
>
> It's time to renew the mortgage. The owner pays down the mortgage using
> those $30,000 plus he earned at Janus. He's got that much less to pay off.
> There is much less to finance over the next 25 years. Or, if he chooses to
> keep up with paying $1,700 per month, the life of the mortgage is
> significantly and drastically reduced.
> He also discovered that over the next 5 years he can renew that mortgage at
> 5% interest. What a deal! ;-)

HAHAHAHAHA! Sure, assuming that interest rates, which were
at historically low levels when he bought the home have been
rising over the next 5 years both cutting off new buyers and
making it impossible for him to refinance.

> > Mark wrote:
> > Interest only folks are gambling that their home will be worth
> > more at the end of the period than they started
>
> ...yes...and the likelihood of their property having increased over the
> course of 5 years is what?

At the bottom of a market, pretty good. At the top of a market,
er, not so good! :-)

> >so they get
> > to cash in on the homebuying frenzy.
>
> Indeed. They've stuffed money into their own pockets rather than the
> landlord's.

Er, no.

They've stuffed money into their BANK'S pocket in the hopes that
they can sell the home later and stuff someone else's money
into their pocket, yes? The interest only mortgage
only holds onto the home, it doesn't create any equity
whatever in the mortgage. They still owe the same principle
they did before.

> >Unless, of course, it
> > doesn't work out so well for them.
>
> And even if the property values stagnate and remained exactly the same
> throughout those 5 years, the homeowner would have what? A house he can
> still live in!

Great! He can have a great ol' time starting that 25 year mortgage
paying for a house that's less than what he owes on it.

Sounds like a lot of fun! Especially if he's mortgaged to
the hilt. Casa la Mule.

> So, instead of paying $1,000 rent for an apartment, he lived
> in a real house for the past 5 years for $1,200 per month.

What a bargain! Getting to live somewhere without earning
any equity, real or paper, for 200 bucks more than renting.
Where do I sign up? :-)

> The kids have a
> yard to play in. The wife has a lovely large kitchen in which to cook all
> those gourmet meals. The husband has his rec. room with his large screen
> TV. They have a deck for those bar-b-que parties. There's space for
> friends and family to mill around.

Cluck cluck cluck! :-)

First off, they can get this by renting too. Did you know that?
Granted, they wouldn't OWN the deck, but they could still
have BBQ's on it.

> >Then they have to decide
> > whether to push money into the hole or cut their losses...
>
> ...and why not simply enjoy living in a real house? ;-)

Gee, I felt the walls of our apartment and they appear real.
(I'm reminded of the joke on the man show where Jimmy
Kimbell gives a stripper a fake dollar. "This isn't
real!" she yells and he replies: "Neither are your
tits, but I'm not complaining.)

The question is whether a person buys a property
that has a good, long term investment value or whether
they are doing so for emotional reasons. Emotional
reasons are the WORST reason to buy and if there
are lots of buyers out there like you, well, all
I have to say is yum yum as I pick up their property
at rock bottom prices after they've gotten
in over their head and declare bankruptcy.

It will make that BBQ meal all that much more tasty.

> > Mark wrote:
> > You say you hate paying rent. Imagine being one of these
> > folks seeing themselves facing HIGHER monthly payments
> > for a home that's worth LESS than the bank loan they
> > own on it. Does that sound like a fun way to start 25 LONG
> > years? :-)
>
> They were informed of the risks, but decided to do so anyway.

Yeah yeah yeah. As if YOU have been "informing" us of those
risks as you talk over and over again about the property
being bound to rise and downplaying any chance of a fall
in the market. Do you think a bank is going to be
more honest with them? Or the homeowner whose flipping
it to them?

You're just so sympathetic to these people.

> They did that
> because *most* , if not all, believed they could afford it. They've created
> a budget around this. They'd rather eat macaroni and cheese every day
> instead of letting go of that house!

Sounds like a lot of fun. Maybe it is for you.

> > Mark wrote:
> > If the landlady served up the eviction papers, I imagine enough
> > tenants would get riled up and go to court and seek an immediate
> > injunction and get delays and continuonces for up to 6 months
> > or even YEARS! Then the poor landlady is really up a creek.
>
> Bear in mind the landlady *owns* the building. It's *her* property, not
> yours! The landlady, too, has some rights!

I never said she didn't. But the tenants have a lease
and the courts here (thanks to the socialist commies) do
give renters rights when it comes to evictions. This includes
court procedures including delays and continuances.

> If the tenants become too cocky
> too often, you may just find landlords and landladies getting out of the
> rental business altogether.

You're the one saying the landlordess is just going to come out
of nowhere and evict them? Now you're saying they're cocky?
Who are you, the landlady's lawyer? :-)

> It may not be worth their while with all the
> hassles, restrictions, this that and the other thing.

Yeah, it's just such a hassle to honor the leases the
tenants signed in good faith and maintained their units
cleanly and paid rent on time. The bastards! :-)

> All these demands for tenant protection could backfire. Landlords may find
> turning rental suites into condos for sale is an attractive way out!

Sure! Just some more unoccupied units to be bought by
speculators. Did you read that URL?

Unless the speculators then rent out the units anyway and then
it's just another landlord...

> The rental business could be handled by government agents instead.
> Government can build the buildings. Government can rent them out. Renters
> can then deal directly with government, rather than landlords. For all the
> rules and regulations, this is probably the way to go.

?!?!? You're saying the whole leasing industry should be nationalized
just because tenants might not want to be evicted within
2 months just for the hell of it after you made a big
deal about how awful that was?

> I haven't noticed anyone building new rental units in my area. They all
> seem to be condos...suites for sale. Even those lowly basement suites that
> individual homeowners are trying to rent out to augment their mortgage
> payments are being targetted for licensing and inspections.

Indeed! And ultimately, all these costs for regulations will
be born by the rentors if there's a glut in the rental market
and it's a buyer's market for them. Tee hee hee. Care to
shoot yourself in the foot too?

> There seems to be real pressure to make renting as hard and as difficult as
> possible. But at the same time, not much is being done to accommodate
> low-income people with a chance to get into property ownership, too.

Indeed! Punishing landlords and fueling high priced real
estate markets just to help keep the ponzi scheme going
a little longer doesn't sound like a good idea. Especially
since when such markets fall, they fall harder rather
than when they make a gradual correction.

> This is a real problem...with no cheap places to rent, no cheap places to
> buy, where are they to go?

I went quietly to a landlord who rented me a unit and I paid
him in cash. It wasn't like I was going to take the money
off on my taxes. On top of that, the government missed out
on taxes for the rental income. Double bonus!

> In Richmond, BC hundreds of these people are
> being evicted with no other places to go to! The outlying areas can't
> accomodate them either! I'll be keeping tabs on what is being planned for
> these people. This should turn out to be an interesting fight.

It sounds to me like the government is messed up where you are.
Here in Virginia, it's more or less a pretty good balance.
Few landlords want to evict good tenants anyway.

regards,
Mark Sobolewski

.