買房者三思

Hi all,

First of all, I'm not a realtor. I'm writing this piece because I was asked too many times by my colleagues at a Pharmaceautical company in NJ how I bought a house at $400k but worth 1.6million, in the past 2 years. I did not answer them, and even discouraged them to buy any house. But I now realized that it's time to write some thing to my. My experiences might help them a lot if they take the hard-learnt experiences seriously. The current cooling market might provide excellent investment opportunity if you strike it at the right time in the right manner. Any way, let me just give you some of my un-organized thoughts for you to think:

先看看一個家庭的月開銷變化 (after interest rate has gone up)

利率：4% ARM，300K， PAYMENT/MONTH=$1432 (before)
6.5% FIXED，300K， PAYMENT/MONTH=$1849， ====>-$400
油價：100=>200 -$100
食物：200=>300 -$100
保險：50 -$50
其他：100 -$100

Total shortage: -$750/month!

Where to get the money?????

Look at the following 3 groups of home owners:

1) People who divorce (divorce rate in USA is very high), when the couples could barely afford the house, the only choice is to sell, but remember, the people who can afford 400k house now can only afford a house of $350k. The buyers are not simply there!

2) People who took ARM mortgage or even no interests loans. Now their payments have jumped dramatically.

3) People how lost their jobs---well they simply dont have any income to pay the mortgages!

Also remember one fact: the net saving rate in USA is negative now, meaning that people simply put no money in the bank after a monthly hard working.

Also watch what the banks would react to the current housing market. Image you are a banker and I'm a buyer. 2 years ago, you believe, as the whole country believe that the housing market is going up, and up. You buy a house for 400k then two years later it's worth 1.4 million! You feel its a safe market that you will lend the money to me at a very low rate---it's low risk. Now, it's different. You are like me: you believe the market is going down and you must be careful about your investment. Ok, what you do? 1st, you don't do aggressing lending. You carefully exclude a lot of people. Then you ask for a bigger chuck of downpayment so that when the morgagees have bad luck you can get your investment at a lower price.

Now, the banks' changing behavior would kick off a lot people from the buyers crowd! These people have to join the renters as they did before the housing boom. Now, my friends, if you are a biostatistican, or SAS programmer or a database manager or a MD, or a lab scientists at Forest Lab, Novartis, Merck, then you have an increasing income. You really don't need to jump in the market as ordinary buyers.

I'm not saying that you don't ever go to the market. I'm suggesting that you do careful research before you do. You find the best deal in the market to control your risk.

But how? We will get to that later. In general, real estate investing is both a science and art. It is science before you need data, you need numbers, you might need get some descriptive statistics, though time series is not necessary. It is art because real estate is a business about people. People have reason most of times, but they have passion or emotion some times. When to use reason? When to manage passion or emotion to your best interest? That is art, my friend.

(I decide to write a newsletr to benefit friends--no commercial at all, so if you want to receive it on a regular basis, just send email to: to [e-mail]):

所有跟帖： 

• I really suggest that you put this thing somewhere else, and bet -8668- ♂ (176 bytes) () 05/04/2006 postreply 06:39:30

• Good suggestion, thanks! -johnuseast- ♀ (198 bytes) () 05/04/2006 postreply 06:44:30

• 回複：買房者三思 -APAP- ♀ (131 bytes) () 05/04/2006 postreply 21:15:33