Posted by TLR_KY on 9/16/05 8:01am
Msg #65645

Question for Charles_Ca the great

What changes, if any, do you think the refi business will make in the wake of Katrina. I have already hear some talk of new construction business and purchases benefiting but do you think this disaster will affect the economy enough to have the feds lower rates again?

Reply by BrendaTX on 9/16/05 8:18am
Msg #65649

Not Chas...but

On Fox's Financial show...one of the heads said they might not go down, but they'll hold for now.

Reply by TLR_KY on 9/16/05 8:34am
Msg #65650

Re: Not Chas...but

Thanks Brenda. That may not be all that bad either. With rate rising as they were it wouldn't be that bad for them to hold steady for a while. I do know that I have been doing a lot more purchases in the past month than I have in the past.

Reply by Charles_CA on 9/16/05 11:44am
Msg #65681

Here I am!

Sorry guys and gals but work raises its ugly head everyonce in a while and I need to keep wine and bread on the table too say nothing about holding back the wolf at my door. I am trying to find out what happened because I know that Alan Greenspan had a conference within the last day but no one seems to be reporting it and I haven't had the time to dig. I know that interest rates have been going up. I have one wholesale loan vendor who has revised his rates upwards three times in the last 24 hours, I haven't received their updates today since they come out about 10AM PT: they are here on the West Coast. I am told by one of my vendors (Malan Financial, they handle about 700 different lenders) that the bond market went into the tank yesterday around 1PM PT. I suspect that regionally once the place dries out that business will be brisk in the Gulf States but mostly among contractors and materials vendors. Unfortuantely I don't think we will see the low interest rates we've seen in the last few years. I don't know how many of you remember back to the early 90's but with 16 and 17 percent interst rates there was still a loan market. There will always be a loan market it is just that making money in some markets requires a lot more work and ingenuity. I survived the 90's and even increased my portfolio during that time. People adjust to the conditions and other concessions were made because of the high interest rates. I suspect that the loan business in the Gulf states may also be supported by the Federal Government and may not be as free wheeling as the last few years. Five years ago when people were just beginning to realize that loans were cheap you could actually feel the momentum build daily. Last Fall you could also feel the brakes go on. Perhpas its because I am in both real estate and lending that I can actually feel the dynamics changing but things are kind of steady state and I expect them to keep at about this pace unless we start seeing lending interest go into the double digits. Actually I see lenders starting to hedge their bets by capping ARMs at around 16%, and that's not really a good sign. Of course those ARM I've seen capped at 16% have been B paper so there is much greater risk. A good way of keeping your hard-earned cash is to diversify and be in different markets because not everything goes sour at once. I have a good friend of mine who owns a chain of steak houses and he is also in the beef futures market: he tells me that it tends to level the bumps but he literally buys beef by the ton for his restaurants.

Reply by Charles_CA on 9/16/05 11:46am
Msg #65682

Didn't notice the moniker, should be Charles, Idiot/Savant

cause I'm kind of one dimensional

Reply by Charles_CA on 9/16/05 12:29pm
Msg #65690

Errata

Sorry, I got dislexic again. Malan Financial, 750 loans, 26 lenders not 700 lenders.

Reply by TLR_KY on 9/16/05 12:33pm
Msg #65692

Just like watching Home Improvement

I love to listend to your insight on the market. I kinda get the same reaction when I read this as Tim Allen does when someone talks about building a car or fixing something big. I too have found that being deversified is always the best bet. My wife and I like rentals for our area. We have started flipping some low range housing which is still a little stable but I'm sure will change as well in the near future. Thanks for your prospective

Reply by TLR_KY on 9/16/05 12:34pm
Msg #65693

I meant perspective. Darn hook on phonics :( n/m

Reply by Charles_CA on 9/16/05 1:47pm
Msg #65706

Re: Just like watching Home Improvement

Rentals are always good. They are a PITA but they just keep on earning. I own primarily multifamily residential and single family residential which i rent out. The single family are actually easier to deal with and are more liquid thatn multifamily. The ROI on the Multifamily is much better so they kind of balance out. I ahve some commercial and industrial but the commercial have not been as great in the earning department but the industrial are fantastic, triple net leases, no problems ever. The downside to industrial is that when they are vacant they are usually vacant for a long time but at the same time when they are rented the leases are usually a min of 5 years with 5 year renewals. I just got an e-mail that the rates are worsening again, got to go check it

Reply by Peter Lipke on 9/16/05 5:38pm
Msg #65731

Charles...

I have invested very heavily in REITs, mortgage and ARM providers. One way to gage the market is to watch their dividend payout to see just how well these companies are doing. Annaly Mortgage (NLY) just cut its dividend by 70% today and I've seen a drop in their stock price of almost 40% in the last 3 months. Also, Watch Thornburg Mortgage (TMA) in the ARM business. I've been happy getting my 10%+ dividend for years, but their stock has also taken a beating in the last month on fears of a slowdown. The market is telling me a slowdown is coming if not already here. NLY and TMA make a majority of their money on originations so when that slows their earnings drop. I feel the pain...

Reply by Peter Lipke on 9/16/05 5:40pm
Msg #65732

Whoops... I meant TLR_KY, not Charles...N/M