How to best invest 170k dollars??

[Mal Brossard]

Have I ever told you about the Duffman23235 Fund?  For pennies a day, you can help save the rare and endangered species Duffmanus musicalus.

Actually, I would agree with Walk for once in my life.  Real estate may not be the best investment right now.  (I will admit now that I am blatantly plagiarizing this next section here.)  The way people buy homes has changed drastically over the last 10-20 years.  There's a lot of risk involved and I think these devices will help lead to a bust in 2007 or 2008.  Interest rates have one way to go, and that's sky-high.  According to the Washington Post, more than 50% of all mortgages are either interest-only or adjustable rate.  There's no doubt in my mind that the combination of a housing bubble with the future hikes in interest rates are going to lead to one helluva crunch.  However, signs have pointed to a massive crash for years, and it still has yet to happen.  Even if the mortgage rates even went up a few points the cost of homes could/would/should drop.  Double digits-- which appears to be possible-- would be nuts.

In any case, wait a few years.  The potential for a real estate bust is building up and you may be able to get more for your money if you wait to buy in a couple years rather than now.  However, if you time it right, it could work.  When there's a bubble, buy high as long as there's someone willing to buy even higher.  This seems to be what's happening now.

[SLCPUNK]

Rates will not go up that fast. Not fast enough to create a "crash" type effect.

Look, nothing is for sure, and I am not one of those people who think the sky is the limit with real estate. There are plenty of people who think it will never stop going up, and those people are fools. But everytime the rate goes up a bit, it turns around and goes back down. They can't raise the rate from 6 percent to 9 percent overnight.

There are markets that are totally out of control and not realistic right now. But there are still markets that are undervalued and remain low/no change.

Las Vegas blew up a couple years back. I was looking at buying a home there at the time. Price point...around 180-200k. At that time you could get a very nice home with a pool, in a brand new community. Within nine months that same home was worth 350k...a few more months they were asking 410k. I missed that by about 9 months,not to mention I could not afford that home any longer. Came to Florida, and while some places were jumping 50% increases, most of Fla was 20%. Which is strong, but not out of control. So I was able to buy in here and my home is going up now at 20-25% rate. That is fast and I will dump it in 3 years if I can for a profit. But...if the market stablizes, or 'crashes' I won't lose a thing because it is my primary residence. I could still keep it as a rental and not lose my ass too.

I've read articles dating back to 2001 saying "next year there will be a crash." And there still has not been. Right now, driving this nutty market are the investors. 25% of homes (give or take) being bought now are being bought by investors (big and small) who are inturn pushing the market prices up. I know a bartender that owns 10 homes!!! All with renters in them and appreciating between 20-50% !!! However, I'm sure he has them all on interest only loans and ARMS since he'll want to sell and make a ton. He could make a shitload of money coming up...or really get his teeth knocked out. I still would bet, he'll make a killing in 3 years. Would I want to be in his shoes....uh..that's too much risk for me. But people make big money...taking big risks. I remember reading about a waitress in Las Vegas who did the same thing. Except she had 5 rental homes. Almost overnight her homes doubled in price...think she's waiting tables anymore?

There is no  telling the future, but it is very possible markets will come down, slow down, and have drastic changes. I'm curious to see what. After vegas blew up, prices did come back down a bit. But the problem was that people from California kept moving in and compared to California, LV was cheap! So prices started going back up again. Same with Florida...You have people move down from NJ who paid 550k for a townhome, for them 350k for a home is a bargain! So you have that driving the market prices as well.

Who the hell knows. I can't wait to see what happens. Good news is that Utah is considered to be 25% undervalued. So if I can make a shit load of money on this house I can go back out to Crazy-Utah-land and buy a killer home for cheap......we'll see.

I'd still buy real estate now, for either a quick flip (since people are buying crazy dumb right now) or long term hold. I think those two are ok.

My .02 cents.

[erose]

ever heard about the housing boom! the bobble has been growing for many years now, and sources say it's about to burst.

like i said, invest in gn'r memorabilia!

[pilferk]

ever heard about the housing boom! the bobble has been growing for many years now, and sources say it's about to burst.

like i said, invest in gn'r memorabilia!

Been hearing about it for 4 years now...during 3 of which the prediction that the bubble was about to burst have been, seemingly, everywhere. 

SOME markets (California, Southern Florida, Boston, DC) are probably going to see some market corrections on pricing.  They simply have to in order for the houses to sell to anyone with the "average" income in those states once interest rates start to come up.  However, the vast majority orfmarkets, IMHO, are more likely just to flatline when/if interest rates start to rise.  There may be some short term (as in, houses on the market already) price corrections to keep pace with the market, and ensure sales of the properties, but I highly doubt we'll actually see anything really close to a "burst", where prices suddenly plummet.

[SLCPUNK]

ever heard about the housing boom! the bobble has been growing for many years now, and sources say it's about to burst.

like i said, invest in gn'r memorabilia!

LOL, did you read what I wrote at all?

For the years people have been saying that, people have been making thousands upon thousands of dollars in the meantime. In the end somebody may be left holding a home that can't unload or get what they paid for. But I doubt it'll be like the dotcom crash in the 90s.

 Again, I think there is good money to be made with a flip, and any long term hold is ok, because obviously, you are not trying to 'time' anything.

[SLCPUNK]

ever heard about the housing boom! the bobble has been growing for many years now, and sources say it's about to burst.

like i said, invest in gn'r memorabilia!

Been hearing about it for 4 years now...during 3 of which the prediction that the bubble was about to burst have been, seemingly, everywhere. 

SOME markets (California, Southern Florida, Boston, DC) are probably going to see some market corrections on pricing. 

I thought I read an article a bit back that said DC is starting to slow down.....

[erose]

ever heard about the housing boom! the bobble has been growing for many years now, and sources say it's about to burst.

like i said, invest in gn'r memorabilia!

LOL, did you read what I wrote at all?

no, and to be honest i don't know jack shit about this topic.

I have a friend from DC tho who told me that serious news mags like the economist have written about this housing boom for years, and just recently shit like cnn and fox etc. are starting to report about the same thing. it was more of a discussion about how you can't trust cnn nor fox.. anyway, thats why i asked if anyone have heard about it? no offence dude.

and my soruce is a rocker from DC so it's not nearly as credible as i.e. giggers

i guess pilferk explained it well tho!

[pilferk]

ever heard about the housing boom! the bobble has been growing for many years now, and sources say it's about to burst.

like i said, invest in gn'r memorabilia!

Been hearing about it for 4 years now...during 3 of which the prediction that the bubble was about to burst have been, seemingly, everywhere.?

SOME markets (California, Southern Florida, Boston, DC) are probably going to see some market corrections on pricing.?

I thought I read an article a bit back that said DC is starting to slow down.....

Slowing, in comparison to the growth rates of 50% to 75%...yes.   But still pretty hot last time I actually looked (which, admittedly, was a month or so ago).  I do know it's still listed as a "hot" market by every tom, dick, and harry, in the media, who wants to comment on the subject.  I have family down in that area (aunt and uncle in one area, his son's family in another) and they say that a week doesn't go by without getting a call or having a card left on their door by some real estate agent wanting to sell their house for them.

My aunt and uncle had their house built back in '98, and paid off the construction loan as soon as construction was complete.  The only thing they left mortgaged was the half acre plot the house was on..so they have OODLES of equity, but have no desire to cash it in since, really, they built this house as their "dream house" and have no desire to leave.  It gets annoying hearing the "pitches" week after week, and they're getting frustrated telling these people they're not interested.  My uncle says he can't believe the look of complete shock on their faces when he tells them he's not interested.  Sorta like somone just told them that the sky is purple.  Just completely incredulous.

[sandman]

i'm in on a vacation home in wildwood, nj. and we had to put a sign up to keep people from knocking on our door making us offers. yeah i could make alot of money by selling it. just about EVERYBODY that owns a house could make a huge profit by selling. but then where do you go? unless you move to a cheaper area (like SLC described), you don't come out ahead. 

my buddy has been doing the real estate thing for 15 years. he was doing well even when the market was so-so. he bought shit-hole homes in bad neighborhoods for $25K and rented them out. at one time he owned about 20. in the last 5 years, some neighborhoods have rebounded and are now selling for up to $300K. needless to say, he's retired at the age of 35.

[SLCPUNK]

ever heard about the housing boom! the bobble has been growing for many years now, and sources say it's about to burst.

like i said, invest in gn'r memorabilia!

LOL, did you read what I wrote at all?

no, and to be honest i don't know jack shit about this topic.

I have a friend from DC tho who told me that serious news mags like the economist have written about this housing boom for years, and just recently shit like cnn and fox etc. are starting to report about the same thing. it was more of a discussion about how you can't trust cnn nor fox.. anyway, thats why i asked if anyone have heard about it? no offence dude.

and my soruce is a rocker from DC so it's not nearly as credible as i.e. giggers

i guess pilferk explained it well tho!

I'll tell ya what.

I bought a GnR comic book almost 8 years ago for five bucks....

I saw one just like it on ebay last year, for five bucks...

I'll stick with real estate.....

[SLCPUNK]

 

my buddy has been doing the real estate thing for 15 years. he was doing well even when the market was so-so. he bought shit-hole homes in bad neighborhoods for $25K and rented them out. at one time he owned about 20. in the last 5 years, some neighborhoods have rebounded and are now selling for up to $300K. needless to say, he's retired at the age of 35.

I wish I would have stayed in Tampa and done that. Piece of crap homes for 50k back in the day, now selling for 200k with little or nothing done to them. I could have bought 5 crap houses and sat on them for 8 yrs.....ugh!!!! 

But, who would have guessed? Those areas were considered slums back then.....

The thing that is cool about RE is that you can always stay busy. If the market is sluggish, you can lowball people and obtain rentals. If the interest rates are up, then rentals go up too, so you focus more long term growth. If it gets "hot" and you are the type, then flip away. I love RE. It's lots of work though, and there are lots of things to be careful of, but I love it.

[nesquick]

Im soon about to run into about a 170 k dollars and just looking try to find the best way to invest it,

The best way? Give it to me

[GnFnRs2016]

Just smoke it     





If you?re not into that, my advice would be invest 150 k in a good project and travel around the world with your 20 k left.

[SLCPUNK]

ever heard about the housing boom! the bobble has been growing for many years now, and sources say it's about to burst.

like i said, invest in gn'r memorabilia!

Been hearing about it for 4 years now...during 3 of which the prediction that the bubble was about to burst have been, seemingly, everywhere. 

SOME markets (California, Southern Florida, Boston, DC) are probably going to see some market corrections on pricing. 

I thought I read an article a bit back that said DC is starting to slow down.....

My aunt and uncle had their house built back in '98, and paid off the construction loan as soon as construction was complete.  The only thing they left mortgaged was the half acre plot the house was on..so they have OODLES of equity, but have no desire to cash it in since, really, they built this house as their "dream house" and have no desire to leave.  It gets annoying hearing the "pitches" week after week, and they're getting frustrated telling these people they're not interested.  My uncle says he can't believe the look of complete shock on their faces when he tells them he's not interested.  Sorta like somone just told them that the sky is purple.  Just completely incredulous.

That is nuts.

My dad had a solar home built on ten acres in Louden (spelling?) county back in 1982. At that time interests rates were what? 13%? He got transfered to Florida and got exactly what he paid for everything, which was 125k. Two years later, even at that interest rate, that home sold for 250k, double what he paid for it. I can't imagine what it would cost now...Probably close to a million bucks. It had a view of the blue ridge mountains and was xx miles(I can't remember) from DC .....

[SLCPUNK]

Here is an interesting article from CNN about savings and home ownership. This is one thing I will never do, that is pull money from my home to buy a car or anything else for that matter. To me, this trend is nuts. I wouldn't pull money from my home, to do repairs on it, or to buy another property. There are too many other ways/loans you can get rather than pull from your house. That's just me though.

*******

The zero-savings problem

Some savings measures show households are flush, but consumers are spending every dime they make.

August 3, 2005: 2:23 PM EDT

By Chris Isidore, CNN/Money senior writer


NEW YORK (CNN/Money) - The savings of U.S. consumers are:

a) at the lowest rate since the Depression.

b) at peaks not seen even during the stock market boom of the late 1990s.

c) all of the above.

If you're wondering how "all of the above" could be the correct answer -- and it is -- walk outside your front door and look around.

Even as a government report Tuesday showed the national savings rate at zero -- that's right nada -- the rise in the value of homes has given the average U.S. household a net worth of greater than $400,000, according to a separate report from the Federal Reserve.

Household real estate assets have risen by just over two-thirds since 1999, and the run up has enabled consumers to spend more money than they are bringing home in their paychecks. They're viewing their homes almost like ATM's, using home equity loans and refinancings to pull out cash and support a higher level of spending.

"[Rising home values] are making people feel they don't need to save," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute.

That means they are spending more of their paychecks than they would otherwise. That's good news for the current economy but it could cause trouble longer term, according to some economists.
A zero savings rate

The Commerce Department calculates the savings rate by taking the difference between after-tax income and all expenditures, including housing, food and clothing.

June was only the second month the rate was at zero since the monthly figure started being calculated in 1959. The annual rate for 2004 was 1.8 percent; the last time the annual rate was lower was 1934.

Strong auto sales in June played a big part in the latest read on the savings rate. The government counts the entire price of the autos purchased during the month, even though most consumers pay for vehicles over time.

But even if that zero savings rate is a bit of a quirk, the trend towards lower and lower savings rates is unmistakable. In May, before the current "employee pricing" offer from automakers, the savings rate was only 0.4 percent, or 40 cents for every $100 of take-home pay.

As recently as 1994, the savings rate was nearly 5 percent. Go back 25 years and double-digit savings rates were the norm.

In fact, the government's calculation may even overstate how much of a typical paycheck is going into savings.

Any money directed into 401(k) plans is considered to be part of take-home pay in the government calcuation. But that 401(k) money isn't available to spend.

Take a person who contributes 10 percent of income to a 401(k). If the government counts him or her as having a zero savings rate, he or she is actually spending about 10 percent more than the actual take-home pay, liquidating assets or taking on debt to support spending.

One of the factors driving down the savings rate is rising energy costs, said Robert Brusca, economist with FAO Economics. He estimates the rate would still be in the neighborhood of 2 to 2.5 percent seen two years ago, before energy prices started moving higher.
Problems seen ahead

The low savings rate has kept consumers spending, which in turn has kept the economy growing.

"We've backed ourselves into a very dangerous situation," said Dean Baker, co-director of the Center for Economic and Policy Research. "The economy is dependent on everyone consuming like crazy. If everyone heard my diatribe and said, 'Yeah, we better start saving,' the economy would go into a recession."

And while it's not going to be the warnings of economists that start people saving, the slowing of housing price growth or actual declines will put brakes on the spending as people will run out of equity they can tap.

The savings rate will also have more downward pressure as Baby Boomers start retiring and drawing down on retirement savings. While Social Security benefits count as income, withdrawals from 401(k) and other retirement accounts do not.

So if there is no change in the spending habits, the aging of the U.S. workforce could soon make zero or negative savings rates the norm.

"I find it just odd for all these economists and policy makers to be cheering for all this consumer spending when we're just digging ourselves into a hole," said Brusca. "With all the obligations we have ahead, to retirees and to ourselves, we have all the reasons in the world for people to be saving more and be controlling their spending."