5 ms·
The recession may be lifting
- adamhowell 18y ago"Keith Kelley, a Las Vegas estate agent, has an investor interested in offering about $80,000 for a foreclosed, four-unit apartment building which, fully let, could bring in over $25,000 a year in gross rent." Wow, when reading stuff like, I sometimes wonder if I'm not wasting time putting all my efforts into web apps, etc. Find a few deals like this, hire someone to maintain them, profit. Of course, I'd probably hate every second of it, but still.
- kiba 18y agoIt is not a waste of time to write web application. You have a comparative advantage in that area assuming that you're any good at it.
- dschobel 18y agoA counter-argument can be made based on the ridiculously low barrier to entry for web apps though. I'm finding this amongst even startups I think are darn useful. It's just hard to get noticed anymore. Everyone's (ie; the investors) are just looking for "disruptive technology", the next google, et al.
- eru 18y agoAren't the customers more important?
- eru 18y agoGross rent is before costs, isn't it?
- jonknee 18y agoYes, but the payments on a loan of that size are laughable. $70,000 at today's rates is $375/mo ($4,500 a year) for a 30 year. You could rent it out for a couple of years and pay off the loan free and clear.
- menloparkbum 18y agoAh... I wasn't aware that loans were that cheap or easy to get.
- tomjen 18y agoGood credits, and somebody will be happy to lend you money.
- deleted 18y ago[deleted]
- rjurney 18y agoBreak even is just barely making the payment on the loan. Repaying the loan - a 30 year mortgage - in 3-4 years is not only good, it is astronomically good. Because at the end of three years you have $25K gross/yr, and you own the building. When you own it, you can sell the building and make $75K (or whatever its value then is) in a lump sum.
- josefresco 18y agoHa! I love comments from people who have never been landlords. Key here is even after 3-4 years the building is YOURS. Which means you fix it, you maintain it, and you deal with late/lazy/messy/loud/obnoxious tenants every single day. And when they walk out without paying the rent, how much success do you think you'll have in small claims court recouping your rent? (hint: not much) Believe me, if it was "that easy" to buy and rent a place ... everyone would be doing it. Do yourself a favor and talk to someone who owns multi-unit buildings first.
- HeyLaughingBoy 18y agoPerhaps you are :-) A friend of mine likes to tell the story of him discussing a technology idea with a business-owner friend of his. The reaction of the businesss guy was "you know, I see all these tech guys building these grand online empires that never make them a dime. Meanwhile, Town Hall has a contract out for $100,000/year to vacuum the floors and scrub toilets and no one is bidding on it!" Just something to think about :-)
- falsestprophet 18y agoHow can one find these contracts?
- bmelton 18y agoIn addition to the other link posted, all the RFPs (Request for Proposal) are listed at FBO.gov, browsable by type of work, agency, etc. That said, a lot of it is hard to get into. The list of company requirements for non-special bids is pretty long, and that's BEFORE you get into exclusive work that only 8A, Disabled-Veteran-Owned or Minority-Owned businesses can bid on. It's harder to get a government contract than it is to get a government job (read Federal Wasteland [http://federalwasteland.blogspot.com/] http://federalwasteland.blogspot.com/]) for more on that. If you're really interested, it's probably easiest to find a prime contractor that regularly does business with the government and sub-contract to them. Of course, I'm speaking of federal contracts, and all my experience is with IT. If you're really wanting to clean floors at your local town hall, it's probably outside the scope of what I know.
- adbachman 18y agoMost governments (city, county, state, and even national) are required to post all requests for proposals (RFPs) publicly and consider all proposals they receive. As with any business or political process, it helps if you know people. http://lmgtfy.com/?q=city+RFPs%7Cstate+RFPs%7Cfederal+RFPs http://lmgtfy.com/?q=city+RFPs%7Cstate+RFPs%7Cfederal+RFPs
- menloparkbum 18y agoThat seems like a bad investment. It would take 4-5 years to break even, IF the building is fully rented.
- jonknee 18y agoWhat do you mean break even? Take in $80,000 in rent? I'd say buying the building and taking in more money every month in rent than I'm paying on the loan is more than breaking even. And that's day one.
- menloparkbum 18y agoyeah, I replied to your other comment above. I didn't know the loans were so cheap.
- sethg 18y agoThat depends. If the building has been so broken-down that it will cost a lot to put it in rentable condition (e.g., people came in and stripped out all the copper wiring while it was foreclosed and abandoned) or if there simply isn't much demand for rental housing in Las Vegas right now, then the investor can still lose money on this deal.
- mhb 18y agoIsn't the problem that no one wants to rent the apartments for $520/month and no one has any idea when someone will want to rent them?
- eru 18y agoWhy would you hate it? Finding mispricings in the market and correcting them should be very rewarding.
- TweedHeads 18y agoThe stocks are also rising. AAPL went from low 80s in march to 115 today. Those who were waiting for the right time to buy may have missed the boat. I always thought the DOW hitting 6000 was the lowest it would get without causing world collapse.
- dschobel 18y agoThe problem with trying to pick the bottom of a slide is that you never know until you're many months if not years out of it. It could just be a bear bounce. I certainly wouldn't start proclaiming that people have missed the boat on the value. Either way, the bottom line is that there's historic value out there today and it just depends on your level of optimism whether America and the civilized world in general (and their economies) will be around for another 100 years. So unless you're glenn beck, there's cause of optimism.
- electromagnetic 18y agoIf you're looking for a long term investment, then I don't think anyone's missed the boat. In the long run, buying in a few months late won't affect you much right now. IMO Apple is pretty much guaranteed to double in value when the economy returns to normal, so if I had a spare $20,000 I wouldn't mind putting it into the company, if they pulled off another iPod effect on their stock then all the better.
- justindz 18y agoI bought AAPL on the way down and am quite happy with my decision so far. I was also curious to see if the S&P 500 would get to where the name was an indication of the value as well as the strategy. I am not as well versed in the DOW (partially because I'm not well versed in trading in general) to know where the world ends, but I suppose if the ship has turned around there will be some really insightful postmortem activity going on and I can't wait.
- patrickg-zill 18y agoDead cat bounce, in my opinion. How many jobs have been lost each month for the past 3 months? About the same number each time.
- ojbyrne 18y agoUnemployment is a lagging indicator.
- gills 18y ago...in a growing economy.
- nostrademons 18y agoPeople always say that, but it applies only in an ordinary, garden-variety recession. In the great depression, payrolls started dropping around May of 1930, roughly 8 months after the financial contagion began (where are we now? 7 months after the financial contagion began). Then they kept dropping for about 2 years. Each time someone was laid off, they spent less, which meant some other business took in less revenue, which meant they had to lay off people, who in turn spent less... It's too soon to tell, but I'd bet this recession is a lot more like the Great Depression than the 91 or 01 recessions, or even the 80-82 and 73-75 recessions. 91 and 01 were fueled by the bursting of economic bubbles in specific sectors of the economy (S&L and tech, respectively). 73-75 was an exogenous supply-side shock (oil crisis), and 80-82 was because of monetary policy (Volcker lifting rates to squeeze out inflation). Both 29-32 and 08-?? came about because the consumer is tapped out - they've taken on more debt than they can possibly service, so there needs to be a period of deflation while those debts are unwound and prices readjust.
- ojbyrne 18y agoAs you said, it's too soon to tell. I think a lot of consumers (me included) aren't tapped out - they've been furiously saving money since September or October, and are feeling the urge to spend. Admittedly I live in a government town so we're somewhat sheltered but the lineups I see in stores (which have cut back on staff) are getting pretty long and annoying.
- david927 18y agoI think we'll be hearing a lot of this now, and it's my feeling that it's a sucker's rally. Every single one of those who correctly called the financial crisis are quite clear: it's not over by a long shot. The fundamentals have to return, and to do that we have to pay off debt and start having savings again, which means not spending (i.e. liquidity trap), which means that we'll go through a period of undervaluation, both in terms of assets and labor, before the smoke clears. There's no happy six month reversal here; just a dead cat bounce. And those who are selling you that it's the end of the depression are those who sold you the whole Ponzi mess in the first place. Shame on them.
- JeremyChase 18y agoYour reaction to this article makes no sense to me because the author is telling us how we are not leaving the recession any time soon. Your post post seems to imply that the author has something good to say, and I just don't see that at all. Quite simply it says that we have very small good signs, but most of the fundamentals are rubbish. Some choice quotes: "Yet even if the bottom in economic activity is in sight, a robust recovery almost certainly is not." "The National Association of Realtors estimates that up to 45% of existing homes sold were “distressed” properties—those in, or close to, foreclosure." (This whole paragraph is explaining that the unexpected rise in property sales is attributed to homes being sold in distress) "The tonic of lower interest rates has been dulled by the dysfunctional financial system." "That is bad news, not good news: banks are lining up to repay the money to free themselves from political interference, even though the loss of capital will constrain their lending. That increases the odds of a multi-year, Japanese-style credit crunch." Jeremy
- utnick 18y ago" Every single one of those who correctly called the financial crisis are quite clear: it's not over by a long shot." Who are these people that correctly called the financial crisis? It could be that they are perpetual pessimists. A broken clock if you will...
- ivankirigin 18y agoThese broken clocks had reasoned arguments to justify their claims, similar to their claims as to where the bottom is. That's different than just being a pessimist. Also, it's overly optimistic to presume those predicting this recession were just lucky.
- tokenadult 18y agoAnother link just submitted to HN says that the recession will last for a long time. Somebody is wrong. My bet is that the recession will last longer than indicated by this Economist article, based on other trends that The Economist (a good magazine, which I like a lot and subscribe to) has missed in the last few years.