I have a client who bought a brand new home in South Reno in 2005. At the time we thought she was getting a great deal in a great location at a 2004 price, thanks to some flipper that fell out of contract with the builder because he couldn’t secure another buyer fast enough. So in goes my client, and everyone’s happy.
Fast forward to fall 2007. Her adjustable rate mortgage resets to some horrendously high payment that she can’t really afford. She goes through all her options and gets on the phone with the bank. After three months, four phone calls, and many pages of documentation proving income and expenses, the bank lowers her payment.
Still, the house is too big, and she’s looking for ways to reduce monthly expenses. She decides not to sell because foreclosures in the neighborhood have driven down values significantly, and she’s not ready to take that hit on equity. Fortunately she put 20% down when she bought, so she figures she can rent the house out with only a small monthly loss. She’s done the math and figures that even with this loss, she can rent a smaller place for less that’s cheaper to heat and cool and still save money, so she goes ahead and puts her home on Craigslist.
She connects with a family from LA. They’re relocating for the husband’s job but can’t sell their house there, so they’ve decided to rent out their own house and rent here as well. My client goes looking for a smaller place and finds the perfect little cottage in Old Southwest. Turns out the cottage owner couldn’t sell his house for what he wanted, so he’s renting it out as well.
Which makes me wonder… how many reluctant landlords are there now? Renting their houses instead of selling? And how many rentals like these can our market absorb? There are reports on the rental market in Reno-Sparks, but they’re based on multi-units versus single family because there’s really no reporting mechanism for the thousands of individual landlords out there. It’s definitely a shadow market that would be interesting to track.
Dave
Derrick,
You know, if you’ve actually participated in all those calls, I’m happy for you. But I have to say you’d get a whole lot less flack if you just wouldn’t have such a negative attitude about it.
I noticed you failed to respond to any of our comments on Wednesday and I’m sure you were somewhat shaken come early Thursday when the supply data came out showing a draw on crude supplies. Luckily for you crude actually pulled back from those levels.
I’ve also noticed you’ve failed to tell us what your stop levels were despite you mentioning you were getting short @ 129 and crude running up to 135+ after that. Yet you went on to mention your use of a stop loss in other situations… Hmm…
I’ll say that I actually trade the markets everyday. I’ve made quite a bit of $$ shorting the home builders & financials earlier this year, and I’ve made some decent money going long the DUG sub 26 post the fed minutes a few weeks back.
Anyhow, you’ve mentioned you plan on riding the oil short until $90, I fully expect you to hang on to your position until it reached 90.00. You also have failed to share your instrument of choice in order to short crude. Are you using the USO short or do you have the balls to short the crude futures contracts? I’m guessing its the USO (if anything).
Finally, all these calls and predictions might help boost your ego or make you some money, but even if they did, we’d have no way of actually telling.
All I was trying to say as a trader (if you’re actually a ‘trader’ and not a ‘forecaster’), its not really the safest thing to try and pick tops.
For example, if you had went short Crude @ 129 and it spiked to 135-136… can you imagine how high it would have gone if there were actually any significant supply disruptions?
If anything, I’m guessing crude would have gone much higher had it not been for congress threatening to intervene and forcing the Nymex & commodities commission to raise the margins per contract.
Cheers.
DERRICK
dave I do not disclose EVERY investment transaction I make and at what what prices,, especially ONLINE.. Too many weirdo’s out there sorry..
basically for my own safety since I have had some posters from this blog ,, send me threatening emails, and attempt to post any and all information about me online..
pathetic.. I know.. but thats the world we live in ..