Monday, June 17, 2013

Richard Varney From Floyd & Varney LLC

Our Guest Speaker Last Week Was Richard Varney from Floyd & Varney LLC.

Our friend Richard did an excellent job presenting his views on what point in the market we are in and demonstrated his superior skills as an appraiser. I got the impression Richard feels by statistical information that we are at the bottom and on the way back up. He showed some interesting information to demonstrate this.

I like to  be a pessimist in this particular situation and say we have 5 more years of problems. I agree there is pent up demand in the market and the economy has resolved itself but jobs still haven't and it takes a healthy economy all the way around to get back into full swing.

My bets will remain on a stagnant housing recovery in Roanoke Virginia and suggest continuing to purchase buy and hold property. Still a little early for jumping into changing modes to flipping which is where the money will be in a good housing recovery.

The federal government has been talking about jumping into another plan where people who can't afford to buy houses will be able to purchase them. A temporary fix to the problem. If that happens sophisticated real estate investors will jump into flipping for a while and get out quick before the bottom drops out again because it clearly will.

There is a real common since solution to the problem that some politicians have with every single person not being able to own their own property. Building codes require living space to be unnecessarily large. Back the codes down so people can live in 100 square foot apartments. Mini camper style bathroom, bedroom, living room and kitchen all in the same room. Kind of like a hotel room in New York City.

Building costs with profit at 100 per square foot, a 100 square foot apartment would cost about 10,000. A 30 year note with 0 down at 4% interest would have a monthly mortgage payment around 50 bucks.

Revising building codes is a solution to everyone experiencing the American Dream of owning their own house, if that is what the American Dream is. But everyone has their own version of what the American Dream is. Some peoples dream would be to do drugs so they would still end up losing their property to foreclosure because that drug will surpass the desire to make their mortgage payments. Some are straight up irresponsible and would rather buy a new big screen TV or go on vacation than pay their mortgage as they do with rent. ETC.

This is not anything that I am proposing. Just something to think about...


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