ROCK EARLE: FROM WHERE I SIT

Notwithstanding the vagaries of the SFR fix and flip market (it comes and goes, and maddeningly so), rental yields are at the point where it makes sense to buy and hold. Of course, the full functionality of our property management division helps with that decision.

Anyway, with net current cash flow yields above 12% pa, and SFRs available for 30-50% of one-time retail value, it doesn't take a genius to figure out what a 2-5 year hold period would do for returns. I'm working on it.

Casa Grande's premier master-planned defines quality living in Arizona's Golden Corridor.

An elegant master-planned community in Casa Grande, Villago is a chance to “live away from the crowds and congestion of urban sprawl” while just minutes from the I-10 freeway and a short drive from historic downtown Casa Grande. With easy access to the freeway, it’s also a quick 10 minutes from the newly-completed Promenade at Casa Grande, which hosts a Harkins Movie Theater, Best Buy, Target and restaurants including The Olive Garden. The community, built by some of the most trusted homebuilders in Arizona, is a partnership between Fulton Homes, Greystone Homes, Morrison Homes and US Home. It offers many amenities including lakes, lush parks, basketball/tennis courts and walking trails which meander throughout the neighborhood.

Visit our portal to the Golden Corridor to read more about Villago and to see a current list of homes available in the Villago community or to create your own custom MLS search.

...visit ROX Commercial to find out how my suspicions were confirmed.

Not just sorta confused.  REALLY.  TOTALLY.  CONFUSED.

Every headline, blog, tweet and blast screams "home prices falling", "inventories growing", and "second wave/shadow inventory (pick one) coming".

And yet, the winning bids for the last twenty houses I've bid on at auction have blown right past mine.  And not just by a little - BY A LOT.  Right up to 90%+ of my retail estimate.  And these are not - can't be - all owner-occupant homebuyers.

Who needs the Comedy Channel?  Get yourself some popcorn and a soda, log on to auctionnetwork.com, and sit back and laugh!

Seriously, though:  what's going on?

Statistics can lie.  The blogosphere is rife with this study or that poll, earnestly cited by bloggers in support of their position(s).  I myself see dozens a day:  either the sky is falling or the sun is rising, depending on your perspective.  And as I was pondering this blizzard of stats while looking for some to support something I wanted to say, I realized that the entire pursuit is so subjective as to be useless.  So now I don't wanna hear, see or read anything with stats offered up as proof, and I will refrain from same.  Thank you, and you're welcome!

Gotta love this commentary by my colleague Bea Lueck on the the challenges we all face when we decide to dive into the e-pool...and Lord knows we could use a chuckle on Monday morning!

Just back from a whirlwind mystery/birthday trip to Nashville during which we did our livers no favors, Woman and I opened what we call our 2010/2011 “Canadian Season” last night with two wonderful Canadian couples, sharing a barbecued steak dinner with seemingly unlimited red wine, under the stars on a wonderful Arizona fall evening on my patio here in Casa Grande.

Years ago, we would occasionally get together with the odd snowbird over the winter – whenever they could spare the time from their busy golf schedules.  But as the aforementioned trends have converged, Canadians and their second-homes have become a huge part of our business, as well as our personal lives.

Where January and February were once the big social months, we now greet the early arrivals around Canadian Thanksgiving (early October) and the party doesn’t stop until everybody’s tax time (April);  for six months we are busier than ever with real estate during the day and cocktails, comestibles and camaraderie in the evening.

Which is great – we tend to really really like the Canadians we know – except that any time is party time for them – bless their hearts, they’re on vacation – so in addition to weekends, our quiet weekday recovery evening is now just another time and place for a party, and we have no time to dry out in between.  And worse – or better - we now regularly spend several weeks both in the winter and in the summer in Canada, visiting our new friends and denting the wine supply there, too.

Yet lest you consider this complaining in any way:  even as they cart me off to the cirrhosis ward, I will insist that I am the luckiest guy in the world.

Quantitative Easing (Part 2), that is.

I'm no economist - thank my lucky stars - but I figure any sort of quantitative easing ends up sooner or later as inflation.  And that's good for all of us.  Because people naturally want to believe that tangible assets like real estate will become more valuable over time - scarcity and rationality be damned.

These beliefs become self-fulfilling prophecies, so we the people actually have the ability to choose a future in which tangible assets appreciate.  And since I believe that the Fed can't not debase our currency, I am buying real estate again.  Care to join me?

We all know that these are strange times, but who knew just how strange?!  When this Great Recession started I thought that housing price declines of 25% were great – time to buy…real estate was too expensive anyway and I’ve made way more money buying real estate in bad times than in any other of my endeavors:  I’m famous for saying “buy when people are selling, and sell when they are buying.”

At the time, an elderly investor of mine who I would regularly visit (my own Tuesdays with Morrie, but that’s another story) would look at me with pity in his eyes; he was of the opinion that prices could eventually drop 50% or more and was just sitting on million$ in T-bills at  0% yield…I thought he was crazy.

I bought and sold steadily through the last several years anyway, and have done nicely.  Today, I routinely look at deals that are priced at 30-40% of their highest sales prices (60-70% discounts from the top), can hardly believe my good fortune, and cannot imagine this is not the bottom and prices will start climbing “soon.” 

So imagine my surprise (dismay?) when I looked at a wonderful little house yesterday at 26% - yes, 26 percent – of it’s closed price in 2006.   Will I buy it?  YES – if it survives the HUD 10-day investor wait.  Am I nervous in the least?  YES.  What if my friend Maurice was right?  Will I buy it anyway?  OF COURSE.  Not that I can discuss it with him – he passed away several months ago, still happily sitting on his cash.