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Link Posted: 5/10/2022 9:06:56 AM EDT
[#1]
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Originally Posted By bradpierson26:

I got a citi and someone else's offer - 0.99% and 2.99% for balance transfers instead of 0%
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Originally Posted By bradpierson26:
Originally Posted By bad2006z71:
Originally Posted By bradpierson26:
Lol, yeah I'll get right on that

https://www.ar15.com/media/mediaFiles/184182/349B74EB-6D66-4173-96B5-391F9C3407A2_png-2377917.JPG

Yea WF bought our refi. We have been getting a mailer about once every couple of weeks telling us about their great rates, let us help you refi.
Last one I looked at a couple of weeks ago was 4.85% @ 30. We are currently @ 2.75% @ 25 years.
I shred that shit.

Also, I get a fuck ton of CC offers. Ill look occasionally. All have crept up from the 10-15% average to 18-20%+ now.

I got a citi and someone else's offer - 0.99% and 2.99% for balance transfers instead of 0%

I get little check transfers from Citi at least twice a week. They have been 0% and 0.99% but for shorter terms.
Chase sent me one lately that had a 5% transfer fee instead of the normal 3% I see.
Link Posted: 5/10/2022 9:11:19 AM EDT
[#2]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By bad2006z71:

I get little check transfers from Citi at least twice a week. They have been 0% and 0.99% but for shorter terms.
Chase sent me one lately that had a 5% transfer fee instead of the normal 3% I see.
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Originally Posted By bad2006z71:
Originally Posted By bradpierson26:
Originally Posted By bad2006z71:
Originally Posted By bradpierson26:
Lol, yeah I'll get right on that

https://www.ar15.com/media/mediaFiles/184182/349B74EB-6D66-4173-96B5-391F9C3407A2_png-2377917.JPG

Yea WF bought our refi. We have been getting a mailer about once every couple of weeks telling us about their great rates, let us help you refi.
Last one I looked at a couple of weeks ago was 4.85% @ 30. We are currently @ 2.75% @ 25 years.
I shred that shit.

Also, I get a fuck ton of CC offers. Ill look occasionally. All have crept up from the 10-15% average to 18-20%+ now.

I got a citi and someone else's offer - 0.99% and 2.99% for balance transfers instead of 0%

I get little check transfers from Citi at least twice a week. They have been 0% and 0.99% but for shorter terms.
Chase sent me one lately that had a 5% transfer fee instead of the normal 3% I see.

Ditto but the term from Chase was still 14 months.
Link Posted: 5/10/2022 9:15:11 AM EDT
[#3]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By bad2006z71:

I get little check transfers from Citi at least twice a week. They have been 0% and 0.99% but for shorter terms.
Chase sent me one lately that had a 5% transfer fee instead of the normal 3% I see.
View Quote

4 and 5% fees have seemed normal for a few months. My CU offered like 12m for a 3% fee or 18m for a 5% fee
Link Posted: 5/10/2022 9:17:59 AM EDT
[#4]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By bradpierson26:

4 and 5% fees have seemed normal for a few months. My CU offered like 12m for a 3% fee or 18m for a 5% fee
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Originally Posted By bradpierson26:
Originally Posted By bad2006z71:

I get little check transfers from Citi at least twice a week. They have been 0% and 0.99% but for shorter terms.
Chase sent me one lately that had a 5% transfer fee instead of the normal 3% I see.

4 and 5% fees have seemed normal for a few months. My CU offered like 12m for a 3% fee or 18m for a 5% fee

Those still create an arbitrage situation with I bills.
Link Posted: 5/10/2022 9:21:05 AM EDT
[Last Edit: Agilt] [#5]
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Originally Posted By maleante:


My credit union is an enabler.


There are many reasons why you should choose property as an investment, whether it be for tax advantages, stable rent revenue, or you just want to have an investment you can touch with your own two hands. We have experts that can walk you through all the details of why you should choose real estate as an investment. Our experts can also help you determine where to start and what areas you may want to invest in. Some of the areas we will cover in the webinar are:
Long-Term Buy & Hold
Fix-and-Flip
Live-in Flip
Vacation Rentals
BRRRR Investing
Let us help you create a plan on how to start investing in real estate. Attend our FREE webinar on Thursday, May 12th from 6:30 PM to 8:00 PM
View Quote



Did they really put "BRRRR Investing"!? WTF is that?

And yes, I get a mailer probably once a week from CR advocating for poor life choices too.
Link Posted: 5/10/2022 9:22:51 AM EDT
[#6]
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Originally Posted By transplanted:


Would you post on a major social media platform with your regular username if you got margin called and had to sell your house?

I sure as hell wouldn't!
View Quote


What's spideys reddit username?
Link Posted: 5/10/2022 9:23:33 AM EDT
[#7]
Discussion ForumsJump to Quoted PostQuote History



That graph is exactly what I tried to explain to Spidey but once again “you are wrong and stupid”.  That chart is not sustainable.
Link Posted: 5/10/2022 9:26:36 AM EDT
[#8]
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Originally Posted By Ellenripley:


I am so tired of cryptic horseshit that people who think they're in the know spew to other people who think they're in the know like some secret society language.
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Originally Posted By Ellenripley:
Originally Posted By maleante:
https://i.imgur.com/82rcwUR.png


I am so tired of cryptic horseshit that people who think they're in the know spew to other people who think they're in the know like some secret society language.



Just keep your head in the sand it will make all the things go away.  Jesus we are fucked beyond belief.
Link Posted: 5/10/2022 9:28:28 AM EDT
[#9]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Agilt:



Did they really put "BRRRR Investing"!? WTF is that?

And yes, I get a mailer probably once a week from CR advocating for poor life choices too.
View Quote


Buy, remodel, rent, refi, repeat.

Only issues with that is many investors get over leveraged constantly refinancing the max amount, and lots of the loans are variable.

BRRRR is very common.
Link Posted: 5/10/2022 9:29:38 AM EDT
[#10]
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Originally Posted By DaveM4K:



Just keep your head in the sand it will make all the things go away.  Jesus we are fucked beyond belief.
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Originally Posted By DaveM4K:
Originally Posted By Ellenripley:
Originally Posted By maleante:
https://i.imgur.com/82rcwUR.png


I am so tired of cryptic horseshit that people who think they're in the know spew to other people who think they're in the know like some secret society language.



Just keep your head in the sand it will make all the things go away.  Jesus we are fucked beyond belief.

It’s going to be a party.
Link Posted: 5/10/2022 9:29:50 AM EDT
[#11]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Ellenripley:


Yeah, I guess taking a loan on unrealized gains is about as risky as it gets.
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Originally Posted By Ellenripley:
Originally Posted By transplanted:
Originally Posted By Ellenripley:


I am so tired of cryptic horseshit that people who think they're in the know spew to other people who think they're in the know like some secret society language.


Would you post on a major social media platform with your regular username if you got margin called and had to sell your house?

I sure as hell wouldn't!


Yeah, I guess taking a loan on unrealized gains is about as risky as it gets.



Now multiply that number by millions and suddenly the light bulb will come on about “all cash buyers” of houses.  There are huge REIT and corporations pulling this very stupid stunt.
Link Posted: 5/10/2022 9:29:50 AM EDT
[#12]
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Originally Posted By DaveM4K:



Just keep your head in the sand it will make all the things go away.  Jesus we are fucked beyond belief.
View Quote


Each market is different.

We have 150b in new investmenr/factories /etc coming to my region. Not every area of the USA is a miserable mess.

Many, many people I personally know are sitting on $1-50 million in cash waiting for that collapse to buy. If there's a collapse it's gonna look quite different.

Even with the potato in charge, there's only so far things can go when there's huge demands for jobs and business.
Link Posted: 5/10/2022 9:31:28 AM EDT
[#13]
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Originally Posted By williammunny:


Buy, remodel, rent, refi, repeat.

Only issues with that is many investors get over leveraged constantly refinancing the max amount, and lots of the loans are variable.

BRRRR is very common.
View Quote

Thanks.
I know of the concept, just using that acronym without reference and maybe how we use "brrrr" around here just made it funnier when I read it.
Link Posted: 5/10/2022 9:36:08 AM EDT
[Last Edit: DaveM4K] [#14]
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Originally Posted By Shockergd:


Each market is different.

We have 150b in new investmenr/factories /etc coming to my region. Not every area of the USA is a miserable mess.

Many, many people I personally know are sitting on $1-50 million in cash waiting for that collapse to buy. If there's a collapse it's gonna look quite different.

Even with the potato in charge, there's only so far things can go when there's huge demands for jobs and business.
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Originally Posted By Shockergd:
Originally Posted By DaveM4K:



Just keep your head in the sand it will make all the things go away.  Jesus we are fucked beyond belief.


Each market is different.

We have 150b in new investmenr/factories /etc coming to my region. Not every area of the USA is a miserable mess.

Many, many people I personally know are sitting on $1-50 million in cash waiting for that collapse to buy. If there's a collapse it's gonna look quite different.

Even with the potato in charge, there's only so far things can go when there's huge demands for jobs and business.


I realize that intel has announced the fab plant, they haven’t turned the first shovel of dirt.  

If the fed keeps raising rates there is a 50/50 chance it is never built.
Link Posted: 5/10/2022 9:39:08 AM EDT
[#15]
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Originally Posted By DaveM4K:


I realize that intel has announced the fab plant, they haven’t turned the first shovel of dirt.  

If the fed keeps raising rates there is a 50/50 chance it is never built.
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Originally Posted By DaveM4K:
Originally Posted By Shockergd:
Originally Posted By DaveM4K:



Just keep your head in the sand it will make all the things go away.  Jesus we are fucked beyond belief.


Each market is different.

We have 150b in new investmenr/factories /etc coming to my region. Not every area of the USA is a miserable mess.

Many, many people I personally know are sitting on $1-50 million in cash waiting for that collapse to buy. If there's a collapse it's gonna look quite different.

Even with the potato in charge, there's only so far things can go when there's huge demands for jobs and business.


I realize that intel has announced the fab plant, they haven’t turned the first shovel of dirt.  

If the fed keeps raising rates there is a 50/50 chance it is never built.

Bullard's comments this weekend don't make it an if, but a when.
Link Posted: 5/10/2022 9:43:01 AM EDT
[#16]
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Originally Posted By exponentialpi:

Bullard's comments this weekend don't make it an if, but a when.
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Originally Posted By exponentialpi:
Originally Posted By DaveM4K:
Originally Posted By Shockergd:
Originally Posted By DaveM4K:



Just keep your head in the sand it will make all the things go away.  Jesus we are fucked beyond belief.


Each market is different.

We have 150b in new investmenr/factories /etc coming to my region. Not every area of the USA is a miserable mess.

Many, many people I personally know are sitting on $1-50 million in cash waiting for that collapse to buy. If there's a collapse it's gonna look quite different.

Even with the potato in charge, there's only so far things can go when there's huge demands for jobs and business.


I realize that intel has announced the fab plant, they haven’t turned the first shovel of dirt.  

If the fed keeps raising rates there is a 50/50 chance it is never built.

Bullard's comments this weekend don't make it an if, but a when.



The fed has made it clear they are going to destroy a large part of the money supply they created the last 24 months.  It’s going to be ugly.  Take a meth addict off meth for 24 hours and watch what happens.
Link Posted: 5/10/2022 11:31:26 AM EDT
[#17]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Agilt:

Thanks.
I know of the concept, just using that acronym without reference and maybe how we use "brrrr" around here just made it funnier when I read it.
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Originally Posted By Agilt:
Originally Posted By williammunny:


Buy, remodel, rent, refi, repeat.

Only issues with that is many investors get over leveraged constantly refinancing the max amount, and lots of the loans are variable.

BRRRR is very common.

Thanks.
I know of the concept, just using that acronym without reference and maybe how we use "brrrr" around here just made it funnier when I read it.


Yup. That's the sound of the money printer.
Link Posted: 5/10/2022 11:52:27 AM EDT
[#18]
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Originally Posted By maleante:
https://i.imgur.com/82rcwUR.png
View Quote


Here's another:

https://www.reddit.com/r/REBubble/comments/umkd27/it_begins/


So either Redditors like a good tale, and they're all posting variations on the same story for clicks; or these are the "cash buyers" that everyone said would keep propping up the market forever. Guess we'll find out soon enough.

Link Posted: 5/10/2022 11:59:48 AM EDT
[Last Edit: maleante] [#19]
Oof.

If these anecdotes are accurate, I wonder how many more are in similar positions.

ETA

From the original thread:

Link Posted: 5/10/2022 12:07:28 PM EDT
[#20]
So if all the cash buyers are simply horribly risky, arguably insane loan products abstracted one layer away from the actual purchase (and reporting/regulatory framework everyone “relies” on)…that’s bad right?

Link Posted: 5/10/2022 12:09:38 PM EDT
[#21]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By williammunny:


Buy, remodel, rent, refi, repeat.

Only issues with that is many investors get over leveraged constantly refinancing the max amount, and lots of the loans are variable.

BRRRR is very common.
View Quote View All Quotes
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Discussion ForumsJump to Quoted PostQuote History
Originally Posted By williammunny:
Originally Posted By Agilt:



Did they really put "BRRRR Investing"!? WTF is that?

And yes, I get a mailer probably once a week from CR advocating for poor life choices too.


Buy, remodel, rent, refi, repeat.

Only issues with that is many investors get over leveraged constantly refinancing the max amount, and lots of the loans are variable.

BRRRR is very common.



I'll say this about residential real estate. Had my parents not had theirs almost paid for, they would have lost it all during the 2006-2011 time frame. Occupancy rates in SW Florida were less than 50%. There was a two year period when they made enough to pay taxes and insurance. They also were not tied to just a few units. They owned enough apartments and triplexes to make it work.

It's one of the reason I skipped the whole SFR and jumped into apartments in 2011. I have the capability to set the market with lowering rents if it comes to it.

FYI...the parents started buying in 1993/1994. They originally held a few SFR but after finding out how much it took to manage those versus say a five or ten plex, they sold the SFR's and moved the money elsewhere.

I'd never own an SFR. Just my preference.




Link Posted: 5/10/2022 1:02:27 PM EDT
[#22]
I don't think my definition of "CASH" and many others, including the financial industry, is the same.

Which of us is wrong?
Link Posted: 5/10/2022 1:07:45 PM EDT
[#23]
Closed on our house in NC for above list today. Could’ve gotten more but a tight closing schedule forced us to take a slightly lower offer.  Seems like the market is still nuts.
Link Posted: 5/10/2022 1:22:06 PM EDT
[#24]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By BPR:
I don't think my definition of "CASH" and many others, including the financial industry, is the same.

Which of us is wrong?
View Quote


Sellers want easy sales . They don't care if it is cash you have or cash you borrow
Every property I've bought in the last 5-6 years has been "cash"
Typically I have a secure line of credit or private financing
I borrow 100% of the purchase price and then fix them with my cash flow from other properties
Quick example
I bought a 9000 square foot building on 7 acres at a tax auction for $130,000
Town appraisal was about $700,000
I put $80,000 in it and rent it for $4000/month
I had an offer 1 month after I bought it for $200,000
Debt isn't bad if you use it properly
Link Posted: 5/10/2022 2:10:55 PM EDT
[#25]
I'll gladly pay you Tuesday for a hamburger today.
Link Posted: 5/10/2022 2:14:35 PM EDT
[#26]
Link Posted: 5/10/2022 2:41:05 PM EDT
[#27]
Discussion ForumsJump to Quoted PostQuote History


I knew you could borrow on margin against your investment account to invest in more stock. I don't know why I never made the mental leap to do that to finance the purchase of a house.

That is insane.
Link Posted: 5/10/2022 2:52:29 PM EDT
[#28]
Interesting note recently about the SBLOC.  Heck of a time to borrow against something when so many of the big names have been taking a bath.

https://www.morningstar.com/news/business-wire/20220427005644/the-bancorp-inc-reports-first-quarter-2022-financial-results

SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 32% year over year and 8% quarter over quarter to $2.21 billion at March 31, 2022.
View Quote
Link Posted: 5/10/2022 3:14:44 PM EDT
[#29]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By BustinCaps:
So if all the cash buyers are simply horribly risky, arguably insane loan products abstracted one layer away from the actual purchase (and reporting/regulatory framework everyone “relies” on)…that’s bad right?

View Quote



There are not that many individual homeowners doing this, but yes it is bad.  
Link Posted: 5/10/2022 3:33:48 PM EDT
[#30]
Huh, buying a house on margin.  Don't think I would have ever thought about that one.  

Shiiittttt!
Link Posted: 5/10/2022 10:50:42 PM EDT
[#31]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By m6z:
Huh, buying a house on margin.  Don't think I would have ever thought about that one.  

Shiiittttt!
View Quote


Wowza
Link Posted: 5/10/2022 11:08:58 PM EDT
[#32]
Link Posted: 5/10/2022 11:13:23 PM EDT
[Last Edit: spidey07] [#33]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By m6z:
Huh, buying a house on margin.  Don't think I would have ever thought about that one.  

Shiiittttt!
View Quote


It’s not a terrible idea provided it’s not your entire nut your putting up for the credit.  And for gods sake not a single stock, which is also your employer. Talk about every egg in a single 3” basket.

Risking 5% of your equities on a credit line for a lower than mortgage rate fixed I can see.

Link Posted: 5/10/2022 11:14:27 PM EDT
[#34]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By maleante:
https://i.imgur.com/82rcwUR.png
View Quote
unrealized
Link Posted: 5/10/2022 11:18:27 PM EDT
[Last Edit: ThrustMyStoma] [#35]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By bradpierson26:
Anecdote:
First time I texted/responded to a text to sell my house with a price and they ghosted me instead of at least having some banter


View Quote
did this last week. house worth abt 360k the broker texted with 408. i sent back a crack pipe pic and 700k. im waiting for the counter of 460 or so then i will send a limp pic and a tag of 794k.  

go away realtors. retire and go back to making sandwiches and picking out layn bryant boardshorts.
Link Posted: 5/10/2022 11:19:53 PM EDT
[#36]
Link Posted: 5/10/2022 11:26:57 PM EDT
[#37]
Link Posted: 5/10/2022 11:27:03 PM EDT
[#38]
Link Posted: 5/10/2022 11:39:15 PM EDT
[#39]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ThrustMyStoma:
unrealized
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Originally Posted By ThrustMyStoma:
Originally Posted By maleante:
https://i.imgur.com/82rcwUR.png
unrealized


Biden be like "We should tax that!".  

Link Posted: 5/10/2022 11:43:40 PM EDT
[#40]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By williammunny:


Buy, remodel, rent, refi, repeat.

Only issues with that is many investors get over leveraged constantly refinancing the max amount, and lots of the loans are variable.

BRRRR is very common.
View Quote


Lol. Over leveraged in real estate. What can go wrong.
Link Posted: 5/11/2022 12:05:01 AM EDT
[#41]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By PresidentJ:


Lol. Over leveraged in real estate. What can go wrong.
View Quote


If you do BRRR right you get 30 year fixed rate residential loans at 70-80% LTV.

If you do it wrong you can really fuck yourself.

Link Posted: 5/11/2022 9:09:11 AM EDT
[#42]
What could go wrong?

Attachment Attached File
Link Posted: 5/11/2022 9:12:46 AM EDT
[#43]
Discussion ForumsJump to Quoted PostQuote History
View Quote

This time it’s different.
Link Posted: 5/11/2022 9:18:01 AM EDT
[#44]
I've seen this movie.  I think it was about 14 years ago.

Spoiler alert: It doesn't end well.


Link Posted: 5/11/2022 9:21:22 AM EDT
[#45]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By C3H5N3O9:

This time it’s different.
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Originally Posted By C3H5N3O9:

This time it’s different.


no no this totally isnt a repeat of 2008. everything is so different this time, its not a bubble...
Link Posted: 5/11/2022 9:22:10 AM EDT
[#46]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ThrustMyStoma:
did this last week. house worth abt 360k the broker texted with 408. i sent back a crack pipe pic and 700k. im waiting for the counter of 460 or so then i will send a limp pic and a tag of 794k.  

go away realtors. retire and go back to making sandwiches and picking out layn bryant boardshorts.
View Quote View All Quotes
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Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ThrustMyStoma:
Originally Posted By bradpierson26:
Anecdote:
First time I texted/responded to a text to sell my house with a price and they ghosted me instead of at least having some banter


did this last week. house worth abt 360k the broker texted with 408. i sent back a crack pipe pic and 700k. im waiting for the counter of 460 or so then i will send a limp pic and a tag of 794k.  

go away realtors. retire and go back to making sandwiches and picking out layn bryant boardshorts.

Lol I only demanded $600k. Maybe coulda sold for $515k in December
Link Posted: 5/11/2022 9:37:56 AM EDT
[#47]
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View Quote

If a 1% difference in the mortgage interest rate makes or breaks the deal, the buyer needs to look at less expensive houses.

Meanwhile...
https://www.ar15.com/forums/general/April-inflation-comes-in-hot-8-3-/5-2551923/

Bond interest rates... going up... mortgage rates... going up more...
Link Posted: 5/11/2022 10:23:51 AM EDT
[#48]
There is a house being built on a vacant lot just down the street from me.  The builder is asking a good bit more per square foot than I spent on my house just 2.5 years ago.

I'm hoping the increased interest rates will put a damper on the sale price.  I don't want high comps raising my property taxes.
Link Posted: 5/11/2022 10:44:42 AM EDT
[#49]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ManyFacets:


no no this totally isnt a repeat of 2008. everything is so different this time, its not a bubble...
View Quote

That’s what some of the experts at arfcom have told us!
Link Posted: 5/11/2022 1:15:34 PM EDT
[#50]
NYT article essentially describing that the signs of what’s coming were visible late last year.


https://archive.ph/2022.05.11-100240/https://www.nytimes.com/2022/05/11/technology/tech-start-ups.html


By Erin Griffith
Erin Griffith, who covers start-ups and venture capital, has reported from the San Francisco Bay Area since 2018.
May 11, 2022, 3:00 a.m. ET

Start-up workers came into 2022 expecting another year of cash-gushing initial public offerings. Then the stock market tanked, Russia invaded Ukraine, inflation ballooned, and interest rates rose. Instead of going public, start-ups began cutting costs and laying off employees.
People started dumping their start-up stock, too.
The number of people and groups trying to unload their start-up shares doubled in the first three months of the year from late last year, said Phil Haslett, a founder of EquityZen, which helps private companies and their employees sell their stock. The share prices of some billion-dollar start-ups, known as “unicorns,” have plunged by 22 percent to 44 percent in recent months, he said.
“It’s the first sustained pullback in the market that people have seen in legitimately 10 years,” he said.
That’s a sign of how the start-up world’s easy-money ebullience of the last decade has faded. Each day, warnings of a coming downturn ricochet across social media between headlines about another round of start-up job cuts. And what was once seen as a sure path to immense riches — owning start-up stock — is now viewed as a liability.
The turn has been swift. In the first three months of the year, venture funding in the United States fell 8 percent from a year earlier, to $71 billion, according to PitchBook, which tracks funding. At least 55 tech companies have announced layoffs or shut down since the beginning of the year, compared with  25 this time last year, according to Layoffs.fyi, which monitors layoffs. And I.P.O.s, the main way start-ups cash out, plummeted 80 percent from a year ago as of May 4, according to Renaissance Capital, which follows I.P.O.s.
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An Instacart shopper at a grocery store in Manhattan. The company slashed its valuation to $24 billion in March from $40 billion last year.
An Instacart shopper at a grocery store in Manhattan. The company slashed its valuation to $24 billion in March from $40 billion last year.Credit... Brittainy Newman/The New York Times

Last week, Cameo, a celebrity shout-out app; On Deck, a career-services company; and MainStreet, a financial technology start-up, all shed at least 20 percent of their employees. Fast, a payments start-up, and Halcyon Health, an online health care provider, abruptly shut down in the last month. And the grocery delivery company Instacart, one of the most highly valued start-ups of its generation, slashed its valuation to $24 billion in March from $40 billion last year.
“Everything that has been true in the last two years is suddenly not true,” said Mathias Schilling, a venture capitalist at Headline. “Growth at any price is just not enough anymore.”
The start-up market has weathered similar moments of fear and panic over the past decade. Each time, the market came roaring back and set records. And there is plenty of money to keep money-losing companies afloat: Venture capital funds raised a record $131 billion last year, according to PitchBook.
But what’s different now is a collision of troubling economic forces combined with the sense that the start-up world’s frenzied behavior of the last few years is due for a reckoning. A decade-long run of low interest rates that enabled investors to take bigger risks on high-growth start-ups is over. The war in Ukraine is causing unpredictable macroeconomic ripples. Inflation seems unlikely to abate anytime soon. Even the big tech companies are faltering, with shares of Amazon and Netflix falling below their prepandemic levels.
“Of all the times we said it feels like a bubble, I do think this time is a little different,” said Albert Wenger, an investor at Union Square Ventures.
On social media, investors and founders have issued a steady drumbeat of dramatic warnings, comparing negative sentiment to that of the early 2000s dot-com crash and stressing that a pullback is “real.”
Even Bill Gurley, a Silicon Valley venture capital investor who got so tired of warning start-ups about bubbly behavior over the last decade that he gave up, has returned to form. “The ‘unlearning’ process could be painful, surprising and unsettling to many,” he wrote in April.
The uncertainty has caused some venture capital firms to pause deal making. D1 Capital Partners, which participated in roughly 70 start-up deals last year, told founders this year that it had stopped making new investments for six months. The firm said that any deals being announced had been struck before the moratorium, said two people with knowledge of the situation, who declined to be identified because they were not authorized to speak on the record.
Other venture firms have lowered the value of their holdings to match the falling stock market. Sheel Mohnot, an investor at Better Tomorrow Ventures, said his firm had recently reduced the valuations of seven start-ups it invested in out of 88, the most it had ever done in a quarter. The shift was stark compared with just a few months ago, when investors were begging founders to take more money and spend it to grow even faster.
That fact had not yet sunk in with some entrepreneurs, Mr. Mohnot said. “People don’t realize the scale of change that’s happened,” he said.
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Sean Black, the founder and chief executive of Knock. “You can’t fight this market momentum,” he said.
Sean Black, the founder and chief executive of Knock. “You can’t fight this market momentum,” he said.Credit...Jeenah Moon for The New York Times

Entrepreneurs are experiencing whiplash. Knock, a home-buying start-up in Austin, Texas, expanded its operations from 14 cities to 75 in 2021. The company planned to go public via a special purpose acquisition company, or SPAC, valuing it at $2 billion. But as the stock market became rocky over the summer, Knock canceled those plans and entertained an offer to sell itself to a larger company, which it declined to disclose.
In December, the acquirer’s stock price dropped by half and killed that deal as well. Knock eventually raised $70 million from its existing investors in March, laid off nearly half its 250 employees and added $150 million in debt in a deal that valued it at just over $1 billion.
Throughout the roller-coaster year, Knock’s business continued to grow, said Sean Black, the founder and chief executive. But many of the investors he pitched didn’t care.
“It’s frustrating as a company to know you’re crushing it, but they’re just reacting to whatever the ticker says today,” he said. “You have this amazing story, this amazing growth, and you can’t fight this market momentum.”
Mr. Black said his experience was not unique. “Everyone is quietly, embarrassingly, shamefully going through this and not willing to talk about it,” he said.
Matt Birnbaum, head of talent at the venture capital firm Pear VC, said companies would have to carefully manage worker expectations around the value of their start-up stock. He predicted a rude awakening for some.
“If you’re 35 or under in tech, you’ve probably never seen a down market,” he said. “What you’re accustomed to is up and to the right your entire career.”
Start-ups that went public amid the highs of the last two years are getting pummeled in the stock market, even more than the overall tech sector. Shares in Coinbase, the cryptocurrency exchange, have fallen 81 percent since its debut in April last year. Robinhood, the stock trading app that had explosive growth during the pandemic, is trading 75 percent below its I.P.O. price. Last month, the company laid off 9 percent of its staff, blaming overzealous “hypergrowth.”
SPACs, which were a trendy way for very young companies to go public in recent years, have performed so poorly that some are now going private again. SOC Telemed, an online health care start-up, went public using such a vehicle in 2020, valuing it at $720 million. In February, Patient Square Capital, an investment firm, bought it for around $225 million, a 70 percent discount.
Others are in danger of running out of cash. Canoo, an electric vehicle company that went public in late 2020, said on Tuesday that it had “substantial doubt” about its ability to stay in business.
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Baiju Bhatt, left, and Vlad Tenev, founders of Robinhood, at the New York Stock Exchange last year for the company’s initial public offering. Robinhood recently laid off 9 percent of its workers.
Baiju Bhatt, left, and Vlad Tenev, founders of Robinhood, at the New York Stock Exchange last year for the company’s initial public offering. Robinhood recently laid off 9 percent of its workers.Credit...Sasha Maslov for The New York Times

Blend Labs, a financial technology start-up focused on mortgages, was worth $3 billion in the private market. Since it went public last year, its value has sunk to $1 billion. Last month, it said it would cut 200 workers, or roughly 10 percent of its staff.
Tim Mayopoulos, Blend’s president, blamed the cyclical nature of the mortgage business and the steep drop in refinancings that accompany rising interest rates.
“We’re looking at all of our expenses,” he said. “High-growth cash-burning businesses are, from an investor-sentiment perspective, clearly not in favor.”
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