Category — Investments

OVER 1400 REAL ESTATE & MORTGAGE professionals were arrested today.  Bear Sterns hedge fund managers were taken away in handcuffs.  FBI special agents are the guys that carry guns.  They actually arrest people for mortgage and real estate fraud.

I used to remind mortgage agents that when their client (my clients too) sign a deed of  trust there is bold ten point print that points out that not occupying the property on a owner occupant loan, is a felony.  I’ve even had people (not my clients) actually ask me “do we really have to move in?”  Ya.  Otherwise the guys with the guns show up.  And now you know.  They do arrest borrowers.

There are a variety of mortgage scams, but the most common one is the investor who applies for and gets an owner occupied loan, and never intends to move in.  Bye Bye Puddin’ Pie.

McMurdie’s Real Estate Rule No. 26: Don’t be a Puddin’ Pie.  Tell the truth.

DAYS ON THE MARKET is now less than 90 days in most Santa Clara Valley neighborhoods, and although total listings have increased, homes are selling.  Interest rates are low, and likely to rise, particularly fixed rate as the dollar weakens.  Prices have flattened.  It is time for bargain hunters to buy!  Follow McMurdie’s Real Estate Rule No. 12: buy real estate counter cycle, buy at the market low as soon as it goes flat.  This takes courage, and reading your calculator!

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INLAW UNITS legally known as “secondary units” are in great demand. These are small one bedroom 450-750 sq. ft. detached cottages, or separate access rentals located on single family R-1 lots. California passes legislation in the early 1983 authorizing cities to adopt ordinances allowing people to construct Inlaw Units, sometimes also called “Granny Cottages”, on single family home lots.

Cities responded with a wide variety of ordinances governing the rules under which these units can be constructed. In effect, a single family home lot becomes an R-2 duplex. After mom does live in the cottage, eventually a renter moves in.

I’ve become an expert on secondary unit ordinances in San Jose, Campbell, Saratoga, [Read more →]

PETER THIEL brings us an optimistic thought experiment on globalization that includes an analysis of the subprime mortgage market bust on global markets.  This is an important article for anyone interested in global markets, booms, busts, and the future.

My favorite line by Thiel: “approaching retirement in an actuarially bankrupt country.” Sigh.  Unfortunately true.

THIS FLYING SAUCER HOME is being auctioned.  Love UFOs?  Buy now and get your very own flying saucer home!  Any little green family out there? The parking area looks nice.  I always wanted a bigger tree house, but a flying saucer… nah.