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Armando Montelongo

Tuesday, March 25, 2008

Armando Montelongo. His name has been uttered so many times by the house flipping community… as we watched him for years seemingly make money hand over fist flipping houses in San Antonio, Texas.

Armando Montelongo is no doubt a bigger than life personality… on the show, Armando Montelongo was moody, had a temper, he got in fights with contractors… he definitely made the show interesting to watch…

But, did Armando Montelongo really make all that money ?

Did Armando Montelongo really flip over a hundred houses (or whatever the number he claimed) ?

Where is Armando Montelongo right now ?

 Is Armando Montelongo wealthy… is he still flipping houses ?

Mandrake

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Armando Montelongo has new episodes of Flip This House…

Friday, March 21, 2008

I figured after all the turmoil, the lawsuits, the people losing their behinds on real estate lately, that A&E would at least put their show “Flip This House” on temporary sabbatical…

BUT, NO… I turn on the tv this past weekend, and there is Armando Montelongo and his wife on a new episode of Flip This House… flipping houses the Armando way…

good for him… I wonder if he can explain this set of Foreclosure and Court activity that I found from www.FlipThisLawSuit.com

http://www.flipthislawsuit.com/2007/10/12/montelongo-foreclosure-and-court-activity/

It is definitely an interesting read… it looks to me like the “most agressive real estate business” (Armando Montelongo) is having some problems…

anyway, good luck Armando Montelongo.

Mandrake

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Yahoo Article on how to play the housing slump…

Wednesday, March 19, 2008

Here is a great article from YAHOO

http://finance.yahoo.com/real-estate/article/104629/Playing-the-Housing-Slump:-Is-It-Time-to-Make-Your-Move

The article talks about making a move in todays market.

Great read.

Mandrake

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Sellers not budging on inflated prices…

Wednesday, March 12, 2008

Here is an update to the CO-OP deal that we keep trying to get these stubborn sellers to move on…

We called them and asked them if they were ready to accept our offer… of course, they said no.

So, I guess the daily headlines describing the wave after wave of housing turmoil and destruction are somehow escaping the focus of these ill-informed sellers… or is it just that they just won’t sell at below that magical price they had in their head.

I love when sellers think that they can set the price of their home and that it is the buyers responsibility to get there… get a clue senseless sellers out there… you do not set the price just because you own the deed… Real Estate is a great capitalist system… a house is a house is a house, and if you don’t set the price to market, it won’t sell.

Oh yea, and if you HAVE TO SELL… you can kiss dollar bills out the window for every day that you stay stubborn… much like that falling stock price as the shorts pile on, and the longs give up on their last position, as you watch your account value go down and down until you finally sell at the worst possible price and think “why didn’t I sell when I had the chance?” :)

ManDrake

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The worst housing outlook in almost ten years…

Tuesday, February 26, 2008

Here we go again, yahoo has an article on the recent housing report that paints a less than rosy outlook…

http://biz.yahoo.com/ap/080225/economy.html

Sales down, median price down, inventory up…  inventory has balooned to over a ten month supply… are you kidding me ?

This coupled with wave after monstrous wave of foreclosures… flooding the already bloated existing home inventory… are you scared yet ? Do you think we are at the elusive “bottom of the market” ? Are you ready to jump back in and take a chance on an sfr in a great neighborhood that doesn’t quite break even ? 

I don’t think so :) Are you crazy ? Have you ever heard the term “catch a falling knife” ?

If you have, then you understand…. if not, then let me explain a little…

First, lets take a blunt look at the current situation:

1. Slowing Sales of existing homes… means fewer buyers… thus, the homes currently on the market will take longer to sell.

2. Rising Inventory levels… currently at over ten months… this is a function of the above… as fewer and fewer buyers buy up the inventory, fewer homes sell each month (slowing sales even further)… and as the natural order of things brings more homes into the market, the pace of new listings outpaces the number of homes selling each month… equalling a continously rising inventory level.

3. Price decline… people, econ 101 here, supply and demand… when demand outpaces supply, PRICE GOES UP. When supply outpaces demand, PRICE GOES DOWN. After reading issue 1 and 2, you now have a very clear picture of how SUPPLY is clearly outpacing demand… thus, its very simple… prices are falling steadily.  This is not going to change until the situation flips again… until demand begins to handle the currently supply, price will continue to fall… once demand can handle supply, prices will stabilize, then once demand begins to once again outpace the supply, then, and ONLY THEN will prices rise again….

So, now does the falling knife saying make more sense ? :) I hope so, because, if you buy right now, you are trying to catch the falling knife… demand is nowhere near handling the current supply… and please don’t forget the flood of foreclosures… they are creating an endless supply to the market… this is going to take years people… years… not months…

In closing, I want to remind everyone that there are always deals… in no way shape of form am I saying DON’T BUY ANYTHING… what I am saying, is the average “deal” out there right now…. probably isn’t a deal… but, if you look hard enough, if you haggle, if you wheel and deal, and maybe even get lucky… you can find deals… deals that cashflow, deals that are flippable… deals that you can wholesale… but, please, please be careful out there, and don’t let the “experts” who have a vested interest in you buying or selling convince you that “now is the time to buy” as if a blanket statement about the overall market will insulate you from making a bad deal.

Flip On Flippers.

ManDrake

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CO-OP Update!!! – Three Units now listed at $140,000 and below…

Monday, February 25, 2008

As you know the offer of $120,000.00 was rejected by the sellers of the co-op… the realtor said that the owners didn’t want to go that low… well, I just looked at the MLS and there are currently three units that are exactly the same size (2 bed, 1 bath) … one is listed at $140,000 the other, at $139,000.00 and the last one is listed at $129,000.00 but alas, with these needing ALL CASH… please tell me which buyer that is in the market for a 900 sqft condo has $129,000.00 in cash ?

My guess is that in 3 months, these units will start to move… in the range of $100k – 110k… then, after another 3 months, I think the stubborn sellers are going to finally give up… and start moving these things at under $100k… which is the only real chance for anyone to come up with in that price range and range of home, etc…

Anyway, yes its true, I am bitter that the offer was rejected, but… I still see pure logic in my thinking here… so, we will see what happens.

ManDrake

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CO-OP offer REJECTED!!!

Thursday, February 14, 2008

We put in an offer at $120k, with the owner carrying a portion of the loan… thought we had a great deal configuration out there… and bamm… the sellers rejected the offer completely.

So, we are back at square one. No house, no condo for my mother in law.

But, I have to tell you that I really feel like the sellers made a mistake… I think the market is going lower, and we may be able to buy another unit for less or heck, maybe even come back and buy this same unit from these people for less than we are offering right now… who knows…

What I do know is that the market is nowhere near bottoming… because in order to bottom, the market has to resolve a dump truck load of existing home inventory that is so vast… that it could take 10 years to resolve… I was talking to a colleague a few days ago, and we were trying to identify the signs of a bottom, and we both agreed that one of the best signs is going to be DOM, better known in the real estate world as DAYS ON MARKET.

DOM measures how long an existing home has been on the market, and is a clear indicator of how quickly homes are selling in a general area. During the housing boom, average DOM would be less than 30 days… this meant that the unsold inventory was extremely low, as homes going on the market sold quickly and the queue of unsold homes never built up…
Unfortunately, we have the opposite happening now… I have seen averages of 90-180 days on market for unsold inventory in our area… what this creates is a massive queue of unsold homes… this would be similar to a Car Dealership, where as cars are sold, they are continuously replaced with new inventory… now imagine, if the dealership was selling 100 cars per month… and thus, received 100 new cars from the manufacturer each month to make up for the cars that were sold, to keep the dealership inventory level constant… now imagine, if out of nowhere, the dealership starts selling only 50 cars per month… but, keeps ordering 100 cars from the manufacturer… now, the car dealership has an extra 50 cars on his lot… next month, the same things happens… now the dealer has an extra 100 cars, and so on… this is what is happening in the housing market… an continuous addition to the unsold inventory, and the number keeps rising… people are not buying houses fast enough to keep the inventory stable… there is only one thing that comes out of this… LOWER PRICES. PERIOD.
Lets go back to the dealer, and see what would  happen when he has 1000 EXTRA cars on his lot… he PANICS… he starts having FIRE SALES… he HAS TO MOVE THOSE CARS… or else he is going to go under… this is exactly what is happening in real estate… people are stuck with their homes… and prices are dropping, and they cant compete with the huge inventory of unsold homes… and every day, new homes come on the market and further compete with the hapless seller…

So, the moral of this story ?

If you have to sell your home, and you get a reasonable offer… TAKE IT!!!  If you don’t, you could end up like the gambler who was up… and by the end of the night, gambles all his money away waiting for that next big score… sitting around waiting for that magical offer to come may never happen.

MANDRAKE

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Co-Op anyone ???

Sunday, February 10, 2008

We were looking in the MLS, and we saw a 2bed, 1bath condo in Redlands, for only $125,000.00!
We were sure there had to be some sort of catch… seemed way too good to be true.

There was… it turns out, its not a condo… its a co-op… I had never even heard of a co-op… but, after doing a little research, I found out that a co-op is usually where you dont actually get a deed on the property like you do on a condo… instead, you get shares to a corporation that owns all the property… it also appears that co-ops are a lot more powerful than a condo board…

if anyone has any helpful info, I would love to hear it :)

Mandrake

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How to buy a house

Wednesday, November 28, 2007

In todays housing market, the question of “how do I buy a house” ? is being asked constantly… more specifically, here in the Inland Empire we have a whole county of people with low incomes and poor credit and no savings… so, how are these poor souls supposed to buy houses ?

I am starting to think that the “American Dream” of buying a house of your own is just a bunch of bull. I think that too many people who could not afford this American Dream were duped into thinking they could buy a house of their own and live happily ever after.

Here is a question. When a husband and wife go talk to a real estate agent, and ask him/her the big questions, “Can we buy a house” and “How much house can we afford”…
If the agent says, yes, you can buy a house, and you can afford x amount… here just call my buddy the loan broker…

Then they call the loan broker, and he says, what is your credit score ? 640, no problem… how much do you make ? $10 per hour … no problem… how much can you put down ? nothing… NO PROBLEM…

You can afford a $400,000.00 home!

Whose fault is that really ? Are Americans really expected to be that smart ? Is there a warning on the hair dryer, warning the smart American not to place the electric hair dryer in the bathtub ?

I am disgusted with all this… don’t even know what to think anymore… there is blood in the streets in the housing market, and anyone or anything connected with it…

ManDrake

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Undervalued Real Estate – Market downturn equals real estate opportunities of a generation.

Monday, October 22, 2007

So, here we go again people…

yet another wave of “BULL MARKET GURUS” who are going to tell you the SECRET to getting rich overnight…

this time, the same people who told you to buy, buy, buy, and never stop buying because real estate in California and other hot areas will NEVER GO DOWN…

these people are now telling you “real estate is so undervalued, that NOW is definitely the right time to buy”

this reminds me of NASDAQ 6000… in the year 2000… yea, the NAS was at 6000 in the year 2000…

then it lost 2000 points…

with the NAS down to 4000, the gurus flooded in… this is the greatest time to buy they said confidently… they sold tapes and cd’s and videos and books and systems all pointing to how you could now buy something that was 33% off its sticker price…

then it lost ANOTHER 2000 points… bringing the NAS down to 2000, and this is when everyone and their uncle in his one bedroom apartment became a guru, and they all strutted out shouting and screaming how you could now put new money to work by purchasing a product that is now selling for 66% below sticker price….

then, it made one final push downwards to NAS 1500…

this final push accomplished two things…
First,it finally made everyone who kept buying at every level finally go broke… this is where the last of the every day investors finally bailed out after losing everything…
Second, it finally discredited every last guru… the  gurus with their seminars and infomercials suddenly disappeared into thin air… leaving a path of death and destruction that ruined peoples lives and battered and destroyed the savings and financial being of many people…

So, the big question I want to ask the world is:

“is this NAS 4000, 2000, or 1500 ?”

because if the current state of the real estate market is actually just a pause before another major drop… I sure don’t want to get in yet…

I actually don’t know where we are in the cycle, and I would love for some people smarter than me (everyone with a heartbeat) to give me some advice on the subject :)

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