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REAL ESTATE American Home Mortgage - Bankrupt!

AroundTheWorld

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Jul 24, 2007
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http://www.usatoday.com/money/industries/banking/2007-07-31-american-home-mortgage_N.htm

This is another step down.... as they primary loaned "Alt-A" (between prime and sub-prime)

With credit drying up - even those bargain hunters that find a home they like may not be able to buy.... further driving down the housing market.

How low will it go?

What will the indicators be that it will turn around again?

What needs to happen before that occurs?
 

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andviv

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speculation?

I think this just shows that people with scores 680-750 also bought banking on speculation and now can't get rid of the places.
 
Nov 1, 2008
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American Home Mortgage specializes in adjustable-rate mortgages, which carry interest rates that reset according to certain benchmark interest rates. This type of debt has hamstrung a lot of borrowers in the past year because interest rates have jumped.
 

hatterasguy

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Jul 29, 2008
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Sigh, when will this mess end. I'm tired of this BS, I can't wait for the market to do something so I can start selling houses again. I want a new Mercedes.
 

reipro

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Sep 27, 2007
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Lincoln, NE
hatterasguy,

I would not worry about selling anything in this market. It is only time to buy. Buy all you can buy, in 2-3 years you will have your car.:hurray:
 

hatterasguy

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Jul 29, 2008
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Yeah well I only have so much cash to play with, I need to turn and burn deals in order to raise capital.

If I can't sell new houses, I don't have money to buy building lots and build more new houses.

I'm just starting so I can only hold onto so many building lots at once. Sadly I don't have $2m sitting in my checking account to really make some moves.
 

reipro

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Sep 27, 2007
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Lincoln, NE
Get a partner! Find someone who has CASH! Go talk to 50 or 100 banks!!! The money is there is the deal is right!
 

hatterasguy

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Jul 29, 2008
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I have partners, they are pulling back now too. They own a lot and the future is uncertian. Maintaining liquidity in this market is important. You don't want to burn all your cash and than choke and die if you can't sell anything for 12-18 months. If the market does something other than crash it doesn't take long to whip out the checkbook and start writing contracts.

No one who is alive has seen anything like this before. This makes the 80's look like a burp. Buyers are few and far betwee and only cheap houses seem to be selling. Prices on houses for sale are starting to free fall, and you would think that means rents will do allright. Well no, I have never seen so many rentals on the market. Prices on those are dropping to. Like I just said to my friend over the phone 5 minutes ago, the RE market in my area no longer exists. Their simply is no market. Just vulters are left and their are only so many of them.

I caught a falling knife on my first deal and got cut, so my profit will be very small on that one. On my second I should make out allright. I'm working on taking control of a 3rd with none of my money.

No one is going to be doing much of anything around here until spring. If I could afford to I would just take next year off.

If your looking to buy and hold long term for rentals now is a great time to buy. Although I would caution against over extending.
 

hatterasguy

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Jul 29, 2008
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In my area the cheap houses are $200k-$250k. Those are selling, slowly. 10 this month in my city, down from say oh 35-50. I can't really build a house for that price unless I get the land for free.

The land is the only real flexablity you have in building, construction costs don't change.


Its just going to be a slow couple of years.
 

andviv

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so I take there are not FHA loans in your area, Hatteras?
 

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andviv

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What is your cost/sq.ft?

I'm seeing properties built in 2004 go for $44/sq.ft. (obviously, not the perfect locations, in some submarkets in FL) but there is no way a new construction could compete in a market like that.
 

wildambitions

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Aug 29, 2007
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I have partners, they are pulling back now too. They own a lot and the future is uncertian. Maintaining liquidity in this market is important. You don't want to burn all your cash and than choke and die if you can't sell anything for 12-18 months. If the market does something other than crash it doesn't take long to whip out the checkbook and start writing contracts.

No one who is alive has seen anything like this before. This makes the 80's look like a burp. Buyers are few and far betwee and only cheap houses seem to be selling. Prices on houses for sale are starting to free fall, and you would think that means rents will do allright. Well no, I have never seen so many rentals on the market. Prices on those are dropping to. Like I just said to my friend over the phone 5 minutes ago, the RE market in my area no longer exists. Their simply is no market. Just vulters are left and their are only so many of them.

I caught a falling knife on my first deal and got cut, so my profit will be very small on that one. On my second I should make out allright. I'm working on taking control of a 3rd with none of my money.

No one is going to be doing much of anything around here until spring. If I could afford to I would just take next year off.

If your looking to buy and hold long term for rentals now is a great time to buy. Although I would caution against over extending.

Go back and re-read all of your posts in this thread... STOP making and finding all the excuses and make and find a way to do what you need to do to keep moving. No matter what is happening anywhere there is opportunity to make money. No one said it was going to easy (if it was, everyone would be rich). So get out of your current thought process and don't be the victim!
 

hatterasguy

Bronze Contributor
Jul 29, 2008
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What is your cost/sq.ft?

I'm seeing properties built in 2004 go for $44/sq.ft. (obviously, not the perfect locations, in some submarkets in FL) but there is no way a new construction could compete in a market like that.


$55-$60 up here. I can also assure you that we are the lowest cost, yet still deliver a good product.
 

hatterasguy

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Jul 29, 2008
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I don't want to give the wrong impression. I am moving forward and most likely will meet my goal of building and selling 3 homes next year. Heck I already have two in the pipeline, I might even surprise myself and do 4. These deals go to together real fast and easy now that I have the right partners.

However I can only work as fast as I can build and sell projects, money is limited. Also frankly this market has me worried. I think its possible it could get very, very bad for a few years. Although since their is nothing I can do about that its just a worry, so I'll have to push on and hope for the best.

The fundimentals say I should be able to sell them in the low $300k range which is very profitable. Maybe this is still possible. My market is very unique because its very mature. So the handfull of new construction that gets added every year is usualy eagerly bought up. People love getting to buy a new house in a 100-400 year old neighborhood, much less upkeep.

I'm never going to leave real estate, its in my blood. Right now it doesn't seem like to many people in my area are making a killing in it. But long term I know its a good business. The RE agents are all sucking wind, the old guard is hording cash, and flippers and all those fringe guys never seem to make any money anyway. I can't even think of a single one who is still around.

What is concerning me is the pulling back of the old guard, thats been through the 80's and 70's. Up until this past month they were buying a lot. Heck my partner wrote $1.5m in checks in September and October alone. Lots of snapping up. But now he pulled back and didn't buy the two properties for $800k that he was going to buy this month. He can't sell anything or rent anything, so he figures he will wait and see. The market is all messed up.

I just need to stop watching the news.
 

hatterasguy

Bronze Contributor
Jul 29, 2008
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I have, I'll see what 2009 brings.
 

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