Best Place to Stash Some Cash?

With the stock market swinging wildly up and down, real estate prices still falling in many markets, and banks paying basically zero (or worse) on savings accounts, I’m curious what the readers think about where’s the best place to keep one’s cash today.

Let’s assume you just want to hold the money and avoid losing value (including to inflation). Gaining a large return is not a requirement. Where would you stash your cash today? For the real estate option, let’s assume that we’re not talking about Seattle-area real estate, but some other market that has corrected more.

What's the best place to stash cash today?

  • savings account (27%, 152 Votes)
  • stock market (17%, 96 Votes)
  • real estate (12%, 68 Votes)
  • gold or other precious metals (20%, 113 Votes)
  • coffee can buried in the back yard (12%, 68 Votes)
  • other... (13%, 76 Votes)

Total Voters: 573

  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

112 comments:

  1. 1
    Brendan says:

    There’s always money in the banana stand…

    Rate this comment: Thumb up 0

  2. 2

    Europe Announced Today Its Hiding All Its Toxic MBSs

    By transferring/hiding the toxic loans to retirement funds.

    Now, doesn’t that make you feel much better about the world bank system stability?

    Rate this comment: Thumb up 0

  3. 3
    robotslave says:

    T-Bills, same as ever.

    Imminent demise predicted daily for decades, yet still going strong. If they ever do crater, then we’re all going to have bigger things to worry about than our investment portfolios.

    Rate this comment: Thumb up 0

  4. 4
    S-Crow says:

    I’m going to give my money to this weeks winner of “One man Army” for safekeeping.

    Rate this comment: Thumb up 0

  5. 5
  6. 6
    Steve says:

    +1 to TIPS or i-bonds. There isn’t really a way to beat inflation, after taxes, without risk. Maybe the coffee thing isn’t so crazy after all.

    Rate this comment: Thumb up 0

  7. 7
    Basho says:

    Intermediate term treasuries or high-grade corporate bonds.

    Rate this comment: Thumb up 0

  8. 8
    Joe says:

    If you plan to hold for a long time, the stock market seems like a bargain right now. Index funds are probably safe, but I’m no expert.

    Rate this comment: Thumb up 0

  9. 9
    random guy says:

    RE: Brandon Adams @ 5 – FYI TIPS have negative yields right now up to the 10 year period, so you still lose value to inflation even if you hold till maturity. http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield
    On the bright side for our government, people are so desperate to loan the government money they are actually paying the feds for the privilege!

    Rate this comment: Thumb up 0

  10. 10
    HappyRenter says:

    I voted for the stock market. Things can tip the other way very quickly in the market. Today, the talk is about firmer equities and worries for gold traders:

    http://online.wsj.com/article/BT-CO-20110823-713840.html

    Also, I believe that right now confidence in the stock market is higher than a year ago.

    However, I think that diversification is a good idea. Ideally, you want a mixture of stocks, corporate bonds, governmental bonds and cash (maybe some gold, but not sure there). You can adjust which percentage goes into which group. If you really don’t need the money for the next 20+ years, then you can have a high percentage in stocks. The difficult part is to figure out how much money you really need to keep in cash for emergencies. I think that diversification is the keyword. I tend to shy away from TIPS because they track only the CPI and not the more volatile food, energy and real estate costs, but I might be wrong there. Keeping all your money in a savings account for 20+ years is definitely wrong, as inflation will eat it. There are also programs where you can “pre-pay” college tuition fees for your children, but not sure how long those will be around for. Roth IRA is a good place to store your savings in the form of a well diversified portfolio, unless you need the money before you turn 59.5.

    A good strategy is to buy into the market little by little, in particular when the market goes down. This is how 401(k) and traditional IRAs work. Those times when you buy cheaper stocks will compensate for those times when you bought them at a higher price. Dividends should then provide a gain hopefully large enough to hedge against inflation.

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  11. 11
    Toad37 says:

    Farm land? Highest rated bonds? Silver on a pullback?

    Rate this comment: Thumb up 0

  12. 12
    NewHomeOwnerInFremont says:

    RE: HappyRenter @ 10 – You can take out your contributions penalty free out of a Roth IRA. You just can’t touch your earnings if you have any. So it’s an awesome savings account or if you don’t need the money, to invest.

    Rate this comment: Thumb up 0

  13. 13
    Ray Pepper says:

    I’m a glutton. I continue to drop $$ in Nevada (Reno-Carson) where the houses that were once 300k+ are now 60k. Where the cost to build is triple that of current purchase price and the rents bring in 10-20% interest on your money. I also like the South Tacoma 50k baggers as well.

    Bought 2 in last 12 months and looking for another…

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  14. 14
    Oberon says:

    Pay down your mortgage? You lose liquidity, but you definitely beat savings account rates.

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  15. 15

    I like stocks. Not any stocks, but boring dividend paying large caps that have international exposure. Depends on your time horizon. If you need the money right sooner rather than later, treasuries are better than a savings account, but the rates they pay are still awfully low.
    If you want to make a little more, and are willing to take just a bit more of a risk, and can wait a little longer: stocks, hands down.

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  16. 16
    2kt says:

    RE: Ira Sacharoff @ 15

    Would you mind clarifying what you mean by “little more risk”, dude? Did not the last couple of months wipe out about 20% of market’s value? I like stocks too, but there’s much more than “little more risk” involved.

    Rate this comment: Thumb up 0

  17. 17
    Blurtman says:

    Gold has done quite well. The dollar on the other hand,….

    Rate this comment: Thumb up 0

  18. 18
    Blurtman says:

    Do you really want to gamble your money in the crooked banana republic of the USA?

    Ms. Wylde to NY AG Eric T. Schneiderman regarding the AG’s opposition to a wide-ranging state settlement with banks over dubious foreclosure practices.

    “It is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street — love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.”

    Kathryn S. Wylde is not only a member of the board of the Federal Reserve Bank of New York, but occupies the seat supposedly reserved for the representing the public.

    “You must let the investment banks continue to commit fraud,” belched Ms. Wylde. “The local NYC economy depends on sucking the life out of the US economy, after all.”

    “There is law for the little people, and then there is law for the wealthy and priveleged,” continued Ms. Wylde. “AG Schneiderman is crossing the line by insisting that accountability apply to the wealthy and privelged.”

    http://www.ritholtz.com/blog/2011/08/call-for-resignation-kathryn-s-wylde/

    http://www.nytimes.com/2011/08/22/business/schneiderman-is-said-to-face-pressure-to-back-bank-deal.html?_r=1

    Rate this comment: Thumb up 0

  19. 19
    ARDELL says:

    RE: Ray Pepper @ 13

    What do those $60k’s rent for, Ray? I would do the math, but wasn’t sure if you were netting the taxes and upkeep expense.

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  20. 20
    Jonness says:

    By Joe @ 8:

    If you plan to hold for a long time, the stock market seems like a bargain right now. Index funds are probably safe, but I’m no expert.

    Stocks look cheap if we avoid a double-dip. But if we don’t, they’ll turn out to have been horribly expensive.

    This situation tends to create a lot wild price swings. Right now the market is starting to price in Bernanke riding to the rescue on Friday. But if he doesn’t show up in a magic sleigh wearing a Santa suit and promise free money for all, we’ll get another nice plunge to the downside.

    Personally, I’m doubting he’ll announce QE3. Instead, he will probably lay some hints in an attempt to lure in the suckers. Who knows? Maybe, he’ll promise to reinvest his short-term bonds into the long end in an attempt to lower the spread. But truthfully, it’s anybody’s guess what Santa will have to say. I find it somewhat alarming so many people are putting so much weight on his actions.

    I expect a nice Santa Clause bounce on Friday and/or leading up to it (today was the first day of it). Whether or not it holds through the following Monday evening seems like a coin flip to me.

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  21. 21
    Pegasus says:

    RE: Blurtman @ 18 – A new update. Here is how we handle dissidents in America even if they are right proving once again there is no rule of law in the US:

    New York Attorney General Kicked Off Government Group Leading Foreclosure Probe

    New York Attorney General Eric Schneiderman on Tuesday was kicked off the committee leading the 50-state task force charged with probing foreclosure abuses and negotiating a possible settlement agreement with the nation’s five largest mortgage firms, according to an email reviewed by The Huffington Post.

    Schneiderman, armed with New York state’s Martin Act, can bring suit against alleged fraudsters without having to prove that they intended to commit fraud, a much more lenient standard than available to federal securities regulators. New York’s top legal officer is investigating whether banks followed the state’s laws when bundling mortgages into securities.

    That probe could prove explosive.

    “If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever,” Adam J. Levitin, a bankruptcy expert and professor at Georgetown University Law Center, told a congressional panel last November. Levitin said the problem could “cloud title to nearly every property in the United States” and could lead to trillions of dollars in losses.

    http://www.huffingtonpost.com/2011/08/23/new-york-attorney-general-eric-schneiderman_n_934517.html

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  22. 22
    Jonness says:

    By Ray Pepper @ 13:

    I also like the South Tacoma 50k baggers as well.

    What were these going for at the peak? Are the neighborhoods reasonably safe?

    Thanks :)

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  23. 23
    Jonness says:

    By Ira Sacharoff @ 15:

    If you need the money right sooner rather than later, treasuries are better than a savings account, but the rates they pay are still awfully low.

    Timberland bank might make sense for the first $15,000. It pays 2.5%. They were paying 3% on the first $25K, but recently dropped it.

    Anybody else know of any good high-yield accounts?

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  24. 24
    Macro Investor says:

    Savings accounts aren’t such a bad idea right now. Everything is going down, except US gov bonds — and those are rubbing up against the 0% wall.

    If you have cash, you can make a killing in the next bull market. Hard to know when that will be. But you can’t scoop up the bargains if you’re stuck in your under water stocks or houses.

    I’m a little surprised by the comments here. Folks have learned it’s not always a good time to buy a house. Well, the same goes for other investments. “Nothing” is sometimes the best investment.

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  25. 25
    ARDELL says:

    I’m looking at the staggered bond portfolio I did for my Mom some years ago.

    Have 40% in a 7.45% Ford coming due in 2031 and 20% in GM due in 2017 and 2018.

    She’s 81. I’m hoping the car companies outlive her.

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  26. 26
    masaba says:

    I’m personally just trying to keep diversified. I have a lot of money in safe investments, and some in riskier ones.

    As far as stocks go, I have decided that the idea of ‘averaging in’ to the stock market is the best for me. I don’t try to time the bottom at all, but I invest when it is both potentially good or when it is potentially bad. I think that most people who try to ‘time’ the market end up buying high and selling low.

    For instance, there is no way that I would consider stop making my monthly investments to my IRA right now, as this is potentially a great time to buy stocks (it’s certainly a better time to buy than two months ago when everyone was bullish)

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  27. 27
    2kt says:

    RE: Jonness @ 22

    Safe neighborhoods at $60K. Have you ever collected a rent check? May be they were at $300K. Right, Ray? Or do you still find doctors to rent them $60K “gems” to?

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  28. 28

    RE: 2kt @ 16
    I wouldn’t invest in ” the market”. Investing in ” the market” is certainly risky. But I think if you look at large cap stocks that produce things that people are going to keep buying no matter what the economy, and pay a dividend,you will see that these stocks are not down anywhere close to 20% over the last 60 days. I think that buying stocks that don’t promise home runs but instead steady earnings and rising dividends significantly decrease the risk.

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  29. 29
    Hugh Dominic says:

    By random guy @ 9:

    RE: Brandon Adams @ 5 – FYI TIPS have negative yields right now up to the 10 year period, so you still lose value to inflation even if you hold till maturity. http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield
    On the bright side for our government, people are so desperate to loan the government money they are actually paying the feds for the privilege!

    Hey, that’s the price you pay for inflation protection. If you believe the CPI is any measure of it. It beats a .5% bank account, with no inflation protection, IMO.

    Also, TIPS protect against deflation because they always return at least face value. Unlike, say, your house, gold, or other inflation-oriented assets.

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  30. 30
    Hugh Dominic says:

    RE: Ira Sacharoff @ 28 – Dividends are another example of how the game is rigged for the boomers and the rich (often the same).

    If you have a lot of money, you can park it in dividend stocks paying 5-6% return annually. Like Verizon, At&t so pretty safe. So if you have $1m – and if you are 65 and prepared for retirement, you should – you would get about $50k per year. Could you live on that? Wait, it gets better.

    You would pay appx zero taxes. No Medicare or FICA. No income tax. Nothing. Dividends at incomes above about $50k taxed at just 15%. Below, zero. That’s equivalent to earning like $75k via a salary and paying tax.

    And don’t forget to cash that monthly social security check!

    Rigged.

    Rigged.

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  31. 31
    Jonness says:

    By 2kt @ 27:

    RE: Jonness @ 22

    Safe neighborhoods at $60K. Have you ever collected a rent check? May be they were at $300K. Right, Ray? Or do you still find doctors to rent them $60K “gems” to?

    I looked at one in Tacoma over the weekend and learned there are three possible neighborhood-dependent safety ratings of a cheap rental.

    1) Safest: People will come into your house while you are away and steal your stuff.
    2) Less safe: People will come into your house while you are sleeping and steal your stuff.
    3) Least safe: People will come into your house while you are awake and steal your stuff.

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  32. 32
    Ray Pepper says:

    RE: ARDELL @ 19

    900-1000 rent

    taxes are 125
    ins 50

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  33. 33
    Ray Pepper says:

    RE: Jonness @ 22

    peak 200k

    south tacoma is all over the map. some streets very good and some not. 50k is always my tgt price as it is in Nevada. I like the Nevada properties more because they are newer and have much better neighborhoods. But, they also have far fewer jobs. There are ALOT more to choose from in South Tacoma as well.

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  34. 34
    Ray Pepper says:

    RE: 2kt @ 27

    2kt we rent homes different then others. Rent to Own and Lease Option are all we seek.. When people put 10% down they have a vested interest and are the BEST tenants. Collecting rents is NEVER a problem when you make the tenants owners.

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  35. 35
    Cheap South says:

    I go with big caps that pay dividends. Utilities are pretty decent. Other than that, there isn’t much out there. For someone like Ray that has experience, the inside track, and can minimize the risk, the rental thing gives very nice returns. But it’s very risky for the rest of us.

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  36. 36
    Pegasus says:

    By Ray Pepper @ 34:

    RE: 2kt @ 27

    2kt we rent homes different then others. Rent to Own and Lease Option are all we seek.. When people put 10% down they have a vested interest and are the BEST tenants. Collecting rents is NEVER a problem when you make the tenants owners.

    How many of the “tenant owners” after putting 10% down actually end up purchasing your rentals Ray?

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  37. 37
    Blurtman says:

    RE: Hugh Dominic @ 30 – Sounds like a decent system to me. One thing is guaranteed – everyone gets old if they live long enough. Seems like motivation to save that million.

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  38. 38

    RE: Jonness @ 23

    10 Year Treasuries are 2.4%

    Kiss your liquidity good-bye for 10 years though. CDs, same conundrum. 401Ks and tax free investments….can’t get at your cash either.

    Money Markets? Ya like 0% interest?

    Coffee Can anyone?

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  39. 39

    By Hugh Dominic @ 30:

    RE: Ira Sacharoff @ 28 – Dividends are another example of how the game is rigged for the boomers and the rich (often the same).

    If you have a lot of money, you can park it in dividend stocks paying 5-6% return annually. Like Verizon, At&t so pretty safe. So if you have $1m – and if you are 65 and prepared for retirement, you should – you would get about $50k per year. Could you live on that? Wait, it gets better.

    You would pay appx zero taxes. No Medicare or FICA. No income tax. Nothing. Dividends at incomes above about $50k taxed at just 15%. Below, zero. .

    First, you can never assume a stock is safe. A lot of investors thought that about utilities, and then California made them start selling stuff at $1 that they were buying at $2.

    Second, I’m not at all familiar with the tax treatment of dividends you suggest. They don’t get taxed for SS, but they do get taxed as ordinary income, as far as I recall. And the taxes start before 50k. You could buy state and municipal bonds and avoid income taxation at any level.

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  40. 40

    By Jonness @ 31:

    I looked at one in Tacoma over the weekend and learned there are three possible neighborhood-dependent safety ratings of a cheap rental.

    1) Safest: People will come into your house while you are away and steal your stuff.
    2) Less safe: People will come into your house while you are sleeping and steal your stuff.
    3) Least safe: People will come into your house while you are awake and steal your stuff.

    Years ago a friend of mine use own a rental house near 23rd and Madison. He would joke that it was a very safe neighborhood, because the police were always at the apartment across the street.

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  41. 41
    wreckingbull says:

    Tractor w/ loader, bush-hog, and tiller. I’m done with the wall street casino. A good diesel compact utility tractor (used) will keep its value quite well and give you plenty of use. You can put thousands of hours on a good Kubota or Deere (Yanmar) and they still run like new. If you want to sell, there is always a market and often you can get more than you paid.

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  42. 42
    Ray Pepper says:

    RE: Pegasus @ 36

    Good Question… 25% when I add my smaller portfolio with all the partners. (I’m involved in a 4 LLC’s)

    But, I want to emphasize the “cost of the option-usually 10-20%” is always non-refundable but only 3x did we not refund it. Twice the people were gone and we never heard from them again. Having the option secures a variety of things for the homeowner:

    Immediate return on investment freeing up some capital
    No calls from tenants for repairs
    No Vacancy Factor
    Lastly, if a deal goes dead, for whatever reason, we have a very Large Deposit to guarantee the return of a spotless home, repair free, and quick exit from the tenant so they can be refunded PART of their option.

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  43. 43

    RE: Hugh Dominic @ 30

    Before You Place Our Retired Americans All In With the Rich Elite

    Wake up and smell the coffee….article:

    “…A new report by the Employee Benefit Research Institute suggests that many Americans will have a pretty brief retirement since they will have to work beyond the average life expectancy of a citizen before they can afford to retire. The report entitled “The Impact of Deferring Retirement Age on Retirement Income Adequacy,” says that a large percentage of Americans will have to work into their 70s and 80s to afford basis costs of living….”

    http://jonathanturley.org/2011/06/10/report-many-americans-will-now-have-to-work-until-their-80s-to-support-retirement/

    Add in, the average retirement savings accountr for 50+ YOs for retirement is under $30k.

    I do hope you younger rooters for low interest rates propping the housing market and simltaneously destroying senior incomes on savings have good jobs, you aren’t likely going to get much open retirement job slots to choose from.

    5% guarenteed in the stock market? Ask Warren Buffet if that isn’t a complete pipe dream for him too [ask SWE too]. Nope, the stock market is just a trip to Las Vegas and most lose their shirts.

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  44. 44
    Real World Express says:

    I’m 60 percent in a stable cash fund.

    20 percent in cash, savings account.

    The other 20 percent I’m using for pure speculation but only in low cap stocks.
    I don’t buy anything more than $5 a share and am buying into alternative energy and technology stocks.

    My feeling is that big caps and DOW stocks are headed down. Not because they are not “good companies” but because there is no room for them to grow revenues for the next few decades.

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  45. 45
    Pegasus says:

    By Ray Pepper @ 42:

    RE: Pegasus @ 36

    Good Question… 25% when I add my smaller portfolio with all the partners. (I’m involved in a 4 LLC’s)

    But, I want to emphasize the “cost of the option-usually 10-20%” is always non-refundable but only 3x did we not refund it. Twice the people were gone and we never heard from them again. Having the option secures a variety of things for the homeowner:

    Immediate return on investment freeing up some capital
    No calls from tenants for repairs
    No Vacancy Factor
    Lastly, if a deal goes dead, for whatever reason, we have a very Large Deposit to guarantee the return of a spotless home, repair free, and quick exit from the tenant so they can be refunded PART of their option.

    Let me get this straight. When a tenant signs a “rent to own” agreement they are putting 10 to 20 percent down? Then when they don’t exercise to own you refund the payment even if it is non-refundable? Are you only refunding a small portion of the deposit or all of it? I doubt any business with a signed agreement would refund any of the non-refundable deposit unless there is some advantage. Is there a clause in your agreements that guarantee this to the tenants? Is the sale price predetermined or is it to be established when the option to buy is exercised?

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  46. 46
    WestSideBilly says:

    The best place to stash cash is to give it to me. While my ROI is poor*, you will have the satisfaction of knowing that someone else is having fun with your money. And that satisfaction easily trumps the misery of checking your portfolio at the end of the business day and seeing that you lost 4% of your net wealth, again.

    Invest in WestSideBilly. Do it for him, do it for yourself, do it for your country.

    *Long term, my ROI is -100%.

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  47. 47
    Pegasus says:

    By WestSideBilly @ 46:

    The best place to stash cash is to give it to me. While my ROI is poor*, you will have the satisfaction of knowing that someone else is having fun with your money. And that satisfaction easily trumps the misery of checking your portfolio at the end of the business day and seeing that you lost 4% of your net wealth, again.

    Invest in WestSideBilly. Do it for him, do it for yourself, do it for your country.

    *Long term, my ROI is -100%.

    Great idea! Now all you have to do to start the money really rolling in is predict a near term date for the Rapture. Sorry but October 21, 2011 is already taken by the guy that predicted May 21, 2011, May 21, 1988, and September 7, 1994.

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  48. 48
    Hugh Dominic says:

    By Kary L. Krismer @ 39:

    Second, I’m not at all familiar with the tax treatment of dividends you suggest. They don’t get taxed for SS, but they do get taxed as ordinary income, as far as I recall.

    Incorrect. See: http://en.wikipedia.org/wiki/Dividend_tax#Dividend_Tax_Policy

    A qualified dividend is basically a US Company that you own for more than 60 days ex-dividend.

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  49. 49
    ARDELL says:

    RE: Pegasus @ 45

    It’s basically the same as RE commissions, which Ray treats somewhat the same way. There is a “legal” viewpoint via contracts and an “equitable” viewpoint, as in what seems to be more fair than the legal viewpoint for this person at this time with these set of circumstances.

    Someone who trashes the house on the way out would not likely receive the same EM return as someone who spent days trying to make it perfect so they could give it back the same or better than they found it.

    Ray could in many cases take 3% of the sale price when helping a buyer to buy a house, but he doesn’t take all that in many cases, as it doesn’t seem “equitable” to do so. I see no difference in his RE investor biz model than his normal biz model.

    He doesn’t take it just because he “can”.

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  50. 50
    Pegasus says:

    Thanks Ardell but I am interested in the specifics of Ray’s contracts and not hypothetical observations about Ray as to what he “can” do or not based on your opinion. I have always viewed most lease options as ways to prey upon the poor, the credit challenged and the ignorant to the seller’s advantage but since I have never done one and probably never will I am interested in to what Ray actually does and how his contracts actually work so I am hoping he will respond further.

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  51. 51
    2kt says:

    RE: Ray Pepper @ 34

    If you have to do “rent to own”, it means you rent to people with spotty credit histories that bank did not make a loan to. If they were a decent risk, bank would loan them the money to buy in a first place.

    The best tenants are people with stable employment history and sufficient incomes.

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  52. 52

    RE: Hugh Dominic @ 48 – While I agree that taxation of dividends is double taxation (and stupid), it’s not clear from any of the links I saw within that what a “Qualified Dividend” was. But I’m tired. Do you have a simple link to that?

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  53. 53

    By Pegasus @ 50:

    Thanks Ardell but I am interested in the specifics of Ray’s contracts and not hypothetical observations about Ray as to what he “can” do or not based on your opinion. I have always viewed most lease options as ways to prey upon the poor, the credit challenged and the ignorant to the seller’s advantage but since I have never done one and probably never will I am interested in to what Ray actually does and how his contracts actually work so I am hoping he will respond further.

    You are correct in your assessment of most options to purchase.

    I do recall though that at one time Ardell had a twist on the option to purchase that would really screw the seller (not that Ardell recognized that).

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  54. 54
    2kt says:

    RE: Pegasus @ 36

    Statistically, most such “renters” do not buy. “Rent to own” are deals with people with bad credit histories. The Wall Street is full of caskets of companies that thought that lending money or property to high-risk borrowers is a sweet deal. Conseco went bust loaning money to mobile home buyers at 12%-15%. Those folks have little savings and when they lose their jobs, which happens often, they simply don’t pay and when they leave, they usually take all they can to offset the “big” downpayment.

    Ray’s outlay on these deals is probably $25K per deal, with 30% down and $5K-$7K in repairs, etc. He figures if he charges $900/mo and nets $600/mo after taxes, he makes his money back in 3+ years. If statistics are right, and they usually are, he has about 12-24 month on average before those folks stop paying. He then may end up returning those properties to the bank.

    Good luck in beating the odds, Ray.

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  55. 55
    Ray Pepper says:

    Hope this helps answer some questions:

    The last few we bought for about 50k and there is no lienholder.
    After fix-up were into them 60k(ish).
    We Sell/Lease them with an option.
    The price of the option is 10%-20% down.
    The sales price is fixed (usually about 100-120k and based on current appraisal value) The term is not more then 2-3 years.
    If we accept a client with a Lease option we require them to speak to a Lender to verify that after the time period granted they would indeed be able to purchase the property. As some of you noted most Lease Option Buyers have either derog credit for a great many reasons and cannot buy TODAY.
    On a 1000 payment we credit back to Buyer usually about 200 per month of each payment made so at the end of the 2-3 years they will have a credit of the amount they placed down in addition to another 5-7k. This way the Buyer sees their payment is actually going towards paying down their principle.
    We also pay ALL taxes and insurance during option period.

    Due to our mobile society many people do NOT exercise their option and the option price is non-refundable + all the buyer credits is non-refundable. Also all work done to home that was paid for by Buyer is non-refundable. **HOWEVER** We do refund part/all of the option price based on condition of home/reason of non exercising/and other factors and its on a case by case.

    Lease Options are not for everyone but they work very well for us and the people that exercise are ALWAYS very happy.

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  56. 56
    ARDELL says:

    RE: Ray Pepper @ 55

    Kudos Ray! YES! That has the extra element that often makes them more successful, that I had tried to explain to Kary years ago (and to which he now refers) that often makes the difference between success and failure.

    Ray said: “On a 1000 payment we credit back to Buyer usually about 200 per month of each payment made so at the end of the 2-3 years they will have a credit of the amount they placed down in addition to another 5-7k.”

    That extra money that comes from the monthly is a key element that is most often not used here in the PNW. Did you copy that from a formula you used in Vegas? It is very common in other parts of the Country, but Kary didn’t understand it when I tried to explain it to him. In addition to the up front EM…there is a vested interest with each payment credited to the eventual purchase.

    When I was young and lived in a neighborhood of all immigrant Italians, most every person I knew became the owners of their homes with this method. And yes…not all succeed…but those who were able to see it through, and became the owners of their homes, were very happy, and raised their children in these homes for 15 to 20 years.

    Historically this method was the key to immigrants from other Countries attaining home ownership in the U.S. The 2-3 year history of payments became the basis for the bank approving the mortgage. Without this method, no one I knew growing up would have ever owned a home, including my parents.

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  57. 57
    Pegasus says:

    RE: Ray Pepper @ 55 – Thanks Ray. I guess I don’t get it why anyone would do this versus just renting and then buying a house in two years once their credit improves. They put a lot of their capital at risk if they don’t exercise. In your case there still is no guarantee that they get their down payment and rent overpayment if they don’t exercise. On a $100,000 dollar house they put as much as $20,000 dollars down and then overpay rent by $5000 in two years. Who knows what repairs and maintenance amount to beyond that.To someone credit challenged that is a large amount of capital to put at risk. Also the automatic jump in house value from $50,000 to $60,000 with improvements to $100,000 would make me question the validity of the appraisal. Also in two years if the FMV drops by 10 percent it will make it even more difficult for them to finance. It does appear to be a goldmine rate of return for the investors though.

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  58. 58
    Ray Pepper says:

    Peg we find most people want to do this because they “want their monthly payment going towards something” and not thrown out the window. In addition they feel more comfortable putting money into their home(drapes,paint,decks-who knows) when they know its THEIR home.

    I must add that there is a clause for a lower appraised value protecting the Buyer at the end of the term. It calls for a subsequent appraisal and this is more important NOW then ever in a depreciating asset environment.

    All the options are set up WIN -WIN for both parties but then life rears its ugly head and we do our best to make all sides happy.

    For the investors we have to pay no Real Estate Commissions so the amount we credit back to the Buyer is a wash.

    As with any investment the hardest part for us is “getting our money in good.” we have been very unsuccessful at Trustee Sales in the last 6 months due to all the postponements. We continue to grind it out with Agents on the MLS in Washington and Nevada and ALWAYS and I mean ALWAYS buy DIRECT from the LISTING Agent and they represent us through Dual Agency.

    Yes, Ardell we believe there is a HUGE market for what we do.

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  59. 59
    David Losh says:

    RE: Ray Pepper @ 58

    Never call the name on the sign! Call 500 Realty instead.

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  60. 60
    Pete says:

    Both Gold and Silver have provided average returns exceding 20% over the last 10 years. That’s 600% and 800% total since 2001. If you bought $25,000 worth in 2001 you could buy a house now (not in Seattle, hehe). But investing in metal is just like the housing market. There are those who don’t understand why it goes up, and they won’t understand when it’s ready to go down.

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  61. 61
    Hugh Dominic says:

    By Kary L. Krismer @ 52:

    RE: Hugh Dominic @ 48 – While I agree that taxation of dividends is double taxation (and stupid), it’s not clear from any of the links I saw within that what a “Qualified Dividend” was. But I’m tired. Do you have a simple link to that?

    There’s a link on Wikipedia. But it’s simple, just a US Company that you own for 60 days pre-div. Buy PG or T and hold it for a while and you’ve got it.

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  62. 62
    Blake says:

    RE: softwarengineer @ 38

    Agree with Ira and Cheap South… big cap stocks (that make real things people need) and pay dividends will do OK during the depressed decade ahead.
    I like: ABV, SWX, MO, PG, JNJ, INTC, CTL, UPS… COST

    I have my short term money in intermediate US bond/income funds… paying about 4-6%. Fairly liquid: CPTNX, JAFIX, and SWIIX.

    Schwabs’ “high yield checking” pays 0.20% now… High yield savings pays 0.35% !
    But FDIC insured, which might be good when the EuroBanks seize up and the contagion starts spreading again… fun times.

    (Real estate will be a good investment for wise guys in the next years as things over-correct.)

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  63. 63
    WestSideBilly says:

    By Pegasus @ 47:

    By WestSideBilly @ 46:
    The best place to stash cash is to give it to me. While my ROI is poor*, you will have the satisfaction of knowing that someone else is having fun with your money. And that satisfaction easily trumps the misery of checking your portfolio at the end of the business day and seeing that you lost 4% of your net wealth, again.

    Invest in WestSideBilly. Do it for him, do it for yourself, do it for your country.

    *Long term, my ROI is -100%.

    Great idea! Now all you have to do to start the money really rolling in is predict a near term date for the Rapture. Sorry but October 21, 2011 is already taken by the guy that predicted May 21, 2011, May 21, 1988, and September 7, 1994.

    I was really going more for the Ponzi scheme route.

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  64. 64

    RE: ARDELL @ 56 – Ardell, what you were talking about years ago wasn’t a lease option. It was something that placed the seller at great risk, which was something you didn’t understand back then. Maybe you should go back and read what I said then, and maybe, just maybe you’ll understand today. I doubt it though, but give it a shot.

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  65. 65

    Here’s a link to what Ardell was talking about a few years ago:

    http://raincityguide.com/2008/09/06/might-lease-purchase-be-this-markets-il-salvatore/

    I had forgotten some of the details, including the fact that it was risky for both the buyer and the seller. But don’t take my word for it, read Craig Blackman’s comments on 9/8 at 10:00 a.m.m and 11:33 a.m.

    From what I read of Ray’s system, it’s more traditional, and less risky (although as someone noted before, those deals are often slanted toward the seller).

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  66. 66
    ARDELL says:

    A lease OPTION is a RENTER who “may” buy, and has first right to do so above all other potential buyers. He loses the “option price” if he doesn’t buy.

    A lease PURCHASE is a BUYER, who is not closing until later, and part of the monthly payment goes toward the eventual purchase.

    There can be some overlap…but the key is whether the person is a “renter who may or may not buy it” or a “buyer who is leasing it until closing”.

    The part of the monthly amount going to the eventual purchase in Ray’s example and in my example of Lease Purchase is key…without that, there are more problems than with it, as Ray said.

    I have had quite a few people call me on listings to do “that” and I ask are you renting it or buying it. If they answer renting it…then that is not usually what a seller is looking for. They want a buyer…who will lease it until closing…even if as in Ray’s example that closing is 2 to 3 years out.

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  67. 67

    RE: ARDELL @ 66 – I don’t really want to go through all that again, but the reason that is risky for the seller is if you put the buyer into possession under a P&S agreement (what would happen with your lease/purchase), you’ll likely have to foreclose them out to get them out if they don’t perform. That would be extremely expensive, cumbersome and time consuming.

    The reason it’s risky for the buyer is you indicated that they would have to be subject to an election of remedies rather than forfeiture of earnest money. Maybe we should try to determine what that condo you used as an example is worth today to see what the buyer’s exposure would have been?

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  68. 68
    David Losh says:

    RE: ARDELL @ 56

    I couldn’t understand why you would bait Kary again. I was thinking today that was a stupid thing to do. It would just get Kary all riled up.

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  69. 69
    David Losh says:

    RE: Kary L. Krismer @ 65

    Then Kary posted this!

    Kary, you have absolutely no concept of Real Estate, or the Real Estate business.

    Ardell toasted you then, and she just did it again.

    The best part was, she didn’t do anything to you, you did it to yourself.

    That there was beautiful blogging, good for you.

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  70. 70
    ARDELL says:

    RE: David Losh @ 69

    David,

    See the last line of Kary’s comment 53. If we could have a rule that Kary can’t use my name in his comments all the time…but once he does…I would say he is the one baiting me.

    I cannot ignore his comment of me screwing a seller. I hate to repeat his phrase…but I cannot let that stand and am surprised Tim allow that kind of talk. I answer about the real estate of it…I ignore the personal attack.

    I think you missed the last line of comment 53. I think I’m going to try to get a restraining order against Kary using my name anywhere on the internet. :)

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  71. 71

    By ARDELL @ 70:

    See the last line of Kary’s comment 53. If we could have a rule that Kary can’t use my name in his comments all the time…but once he does…I would say he is the one baiting me.

    Give it a break Ardell. You brought up the question on RCG of why I don’t think you are a good agent. This is just in response to that question. If you don’t like the answers, you shouldn’t ask the question. And no, I’m not going to post on your site where you can insult me and not allow me a response.

    In case you haven’t gone through all the responses to your earlier thread linked about (I certainly haven’t), I found a 1993 case where your type of scheme cost the owner of the property three years of his life fighting the tenant. Title to his property was screwed up for that long, not to mention having to spend probably half a fortune in attorney fees. That’s discussed at the end of this link:

    http://blog.seattlepi.com/realestate/2008/09/11/how-many-professionals-do-you-need/

    So, what I brought up was just another example of your being wrong and refusing to recognize it.

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  72. 72

    RE: David Losh @ 69 – David, you don’t have a clue, about anything, real estate or otherwise.

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  73. 73

    By ARDELL @ 70:

    I cannot ignore his comment of me screwing a seller. I hate to repeat his phrase…but I cannot let that stand and am surprised Tim allow that kind of talk. I answer about the real estate of it…I ignore the personal attack.

    Sorry to hurt your delicate eyes, but putting the seller at risk of having to foreclose out a party, rather than being able to proceed through an eviction process, is screwing them. Again, look at the case discussed in my link, Bar K Land v. Webb.

    You might not like the terminology, but putting someone at extreme risk is screwing them, IMHO.

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  74. 74
    David Losh says:

    RE: Kary L. Krismer @ 72

    Lovely.

    In the thread you linked to at Rain City Guide http://raincityguide.com/2008/09/06/might-lease-purchase-be-this-markets-il-salvatore/

    We found a very fresh, young Kary Kismer trying to feel his way through a Lease Purchase, as opposed to the Lease Option.

    It was explained to you, once again, in great detail, and you still couldn’t, and refused to get the concept. It’s kind of like a debate, but not.

    Let me say you are 110% correct “putting the seller at risk of having to foreclose out a party, rather than being able to proceed through an eviction process” is a great risk. You are 110% correct and any rookie Real Estate agent should know that. I don’t think that was the topic.

    The topic was Lease Option, as opposed to Lease Purchase, and Ardell put in the post, at the beginning, many words of caution.

    You ran through 200 comments trying to make some obscure point that is correct, you are 110% correct, there is a severe caution in a Lease Purchase, but you should have known that, you didn’t then, and it appears you still haven’t learned.

    The Real Estate business is fluid, it changes, it’s a bunch of agents working deals. At the time of Ardell’s post the Lease Option, and Lease Purchase looked like solutions to a stalled Real Estate market. At the time very few people saw the great decline in Real Estate prices.

    Sniglet, in the comment section of the Rain City Guide linked post, was the only one talking about deflation at that time. He was the one here at the Seattle Bubble who changed the tone of this blog more to economic principles than just Real Estate agent bashing.

    Anyway, that aside, the Lease Purchase, or Lease Option went away when interest rates hit such an all time low, and the price of Real Estate continued to decline. What Ray has outlined might work, but you didn’t pull that apart. You took time out of your day to attack Ardell instead.

    Flame on.

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  75. 75

    By David Losh @ 74:

    What Ray has outlined might work, but you didn’t pull that apart. You took time out of your day to attack Ardell instead.

    Flame on.

    Despite your claim, what Ardell was talking about was a lease/purchase. That was the entire point of her post. I don’t understand you you missed that.

    I didn’t have a problem with what Ray wrote because it seemed to be a lease/option, and I didn’t see any obvious glaring things to point out about what he wrote. I did note, however, that lease options are often bad deals for the lessee, but that is not necessarily always the case. Thus from the information given I didn’t have a problem with what Ray posted.

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  76. 76

    David Losh wrote:
    “We found a very fresh, young Kary Krismer…”
    In 2008? I think Kary and I are about the same age, and I haven’t been fresh and young for about the last 30 years:)

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  77. 77
    ARDELL says:

    RE: David Losh @ 74

    The onlsaught caused me to be sick that day…I literally needed medical assistance due to Kary’s relentless attack, and I honestly didn’t understand why he was doing it…still don’t.

    I actually wrote that post while very busy, to meet a deadline request of a competition called ‘The Magnificent Seven”. Not only did my post win the weekly event with a Gold Medal…it won again as one of the best 7 posts of the entire year. Seemed very odd that a post that got me those kudos would be the one Kary was fuming about. Unless he objects to the fact that I get kudos. I think he does, as he constantly refers back to my making front page news with my bottom call, and hates that too. I think he hates the recognition of me…vs me. Kind of the green monster theory.

    As to Sniglet vs me predicting that prices would be down, actually I agreed with Sniglet at that time, though not to the extent of decline he was predicting, which was more drastic.

    Quoting from one of my comments on that linked thread:

    “Here are the choices.

    1. Rent – don’t buy
    2. Buy – don’t rent
    3 . Lease purchase
    4 . Lease with an option to buy

    If you are sure that prices are going down and you don’t need to own now, then you would be at choice #1!!!!!!!!!

    Here’s where the agent “predicting” what is most likely to happen with prices comes in very handy Kary!!!!!!!!!!!!!!!!!!!!!!! You always say agents shouldn’t predict, but you are dead WRONG on that.

    I predict prices are going down…that helps my clients make the right choice from the get go. You act like you can’t tell, so your clients have to look for a bunch of loopholes. That’s where what “we used to be” before we were agents makes a HUGE difference.”

    So David…I appreciate your support, but note that I WAS predicting prices to be further down…I was merely writing the post form a seller vs buyer perspective, as was also noted in the comments.

    When we KNOW prices are going to go down…we tell sellers to sell by any means available, Lease Purchase…whatever. We tell buyers to go home and come back out when the dust settles, or do a Lease OPTION.

    Lease PURCHASE is a Seller tool…Lease OPTION is a buyer tool. That is the primary difference. A seller wants a buyer…not a tenant. A buyer needs to keep their “options” open in a down market.

    That is why we need to be able to predict price trends. We don’t need to be 100% correct…no one is ever 100% correct. But we can’t act as if we don’t have that Crystal Ball called “experience”.

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  78. 78
    Scotsman says:

    Secular bear market ahead. Cash, even at zero current returns, will be king. FDIC insured deposits or a coffee can in the back yard:

    “The most important question to ask yourself is, “can we have another major bull market in U.S. stocks anytime in the near future?” We believe the answer is a resounding “NO”! Just look at what took place in Japan after their stock market and economy “hit the wall” at the end of 1989. The private sector corporate debt that was primarily responsible for the most significant bull market in Japan’s history continued deleveraging for decades. Government debt rose in order to replace the shrinking of the non-financial corporate debt (the debt that drove their bull market) that was either defaulted on or paid off. If the non financial corporate debt drove the market up during their great bull market, it only makes sense that their stock market (Nikkei 225) would decline as the deleveraging process was taking place. And that is exactly what has been taking place for the past 21 years (since 1989) as the Nikkei declined from almost 40,000 to under 10,000 where it is presently. We also note that during the past two decades Japan’s GDP grew at an average annual rate of only 1%.

    Why would we expect any different outcome in the United States as the household debt sector (the main sector that rose and drove the U.S. bull market of the 80s and 90s and also continued adding to the debt as the housing market took off from 2003 to 2007) is still in the process of deleveraging since 2007? That is just a little over 4 years, and we can expect a continuation of deleveraging for many years to come-we have a long way to go in order to get back to the levels of household debt relative to GDP or Personal Disposable Income (PDI). ”

    http://www.businessinsider.com/why-we-believe-we-are-in-a-secular-bear-market-2011-6

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  79. 79
    David Losh says:

    RE: ARDELL @ 77

    The predictions weren’t the point.

    The point was that Kary missed the concept. You explained it well, and several times, many different ways.

    In the end he focused on a point of law. Craig was engaged at that point, and defending Kary. Kary could have slipped away, unscathed, but chose to continue the relentless attack. Finally everybody backed away, then the thread dies, at 200 comments.

    That would have been something better left in obscurity. It just looks bad.

    The fact Kary brought it up again is the real puzzler.

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  80. 80
    ARDELL says:

    RE: David Losh @ 79

    I think in CA you must choose between being a lawyer and being an agent and can’t be both. Apparently the two don’t always mix well. Perhaps that’s an internal conflict.

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  81. 81
    David Losh says:

    RE: Kary L. Krismer @ 72

    I’m really very stupid. My personality is caustic; that’s how many people describe me.

    The thing is though that real estate has been good to me in these past forty years. The Real Estate business has been very good to me.

    I encouraged you here because I thought that over time you would shed some insight into the bankruptcy process. My opinion, in the past, was that every consumer should explore bankruptcy rather than give bankers another dime. I now see that bankruptcy is another gift the consumer pays to banks. The attorneys reap the rewards.

    We need to change the bankruptcy laws. We need to make bankruptcy a quick, painless, cheap, process. That will tighten credit standards. If there is a back lash, then the laws can change back, but for right now banks need to pay for some of the mess they created.

    Flame on.

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  82. 82
    seattle_re_guy says:

    I’ve been lurking here for a long time and I just don’t get how a real dunderhead like Kary can get over like this.

    Kary…you’re wrong. Sorry fella, but you DO need a checkup from the neck up.

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  83. 83

    By ARDELL @ 77:

    RE: David Losh @ 74

    The onlsaught caused me to be sick that day…I literally needed medical assistance due to Kary’s relentless attack, and I honestly didn’t understand why he was doing it…still don’t.

    Relentless attack? Give me a break. This is a relentless attack!

    http://raincityguide.com/2011/08/21/ardell-dellaloggia-and-kary-krismer/

    When you lose an argument you turn to insults. Apparently now if that doesn’t work, you turn to the type of thing in the above link.

    You’re just lucky I haven’t sunk as low as you (and don’t pretend you don’t know what I mean by that).

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  84. 84

    By ARDELL @ 80:

    RE: David Losh @ 79

    I think in CA you must choose between being a lawyer and being an agent and can’t be both. Apparently the two don’t always mix well. Perhaps that’s an internal conflict.

    You try to do both and can’t do either, even at the most pathetic level! I can do both and rather well. Anyone who has you as an agent is in a very precarious situation if you act anything like your Internet persona.

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  85. 85

    By David Losh @ 81:

    I’m really very stupid. .

    LOL because I almost made a negative comment about the people who believe Ardell before reading this. I deleted it, however.

    I will say though that you actually show flashes of brilliance every now and then. I first realized that when you made a comment about Justin formerly of RCG, and what a crock that site was. But there have been many other instances since then.

    Let’s just say you don’t see things the way everyone else does. That’s okay. The best man at my wedding (RIP) didn’t either, and he was one of my favorite people. I only wish he had live to see the collapse in 2008-2009. He would have been saying: “I told you so!”

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  86. 86
    Scotsman says:

    Why don’t you continue your pissing match in a private room? Ya’ll are giving real estate “professionals” an even worse reputation than they already have. Maybe it’s time to find a new calling. I wouldn’t even consider doing business with either of you.

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  87. 87

    By Scotsman @ 86:

    Why don’t you continue your pissing match in a private room? Ya’ll are giving real estate “professionals” an even worse reputation than they already have. Maybe it’s time to find a new calling. I wouldn’t even consider doing business with either of you.

    Well said, Scotsman. But I don’t think these guys make all real estate “professionals” look bad.
    It takes a lot to make somebody like Ray Pepper or me look good, but I think that’s being achieved:)

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  88. 88
    Scotsman says:

    RE: Ira Sacharoff @ 87

    Ah, you’re a “gem”! Ray’s a “wild ‘thang” but at least he’s constructive and informative.

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  89. 89
    David Losh says:

    RE: Scotsman @ 86

    You are right about that.

    Ardell is an internet personality. She does have Real Estate experience which is the main thing internet Real Estate lacks. Most of the people who frequent the internet Real Estate sites are tech people, like Tim, here, or Dustin Luther on the Rain City Guide, or even Glenn at redfin. We can throw in Inman News, Trulia, and Zillow. These are tech sites that are using an interest in Real Estate to further internet business models.

    Zillow just turned a profit by selling ad space to Real Estate agents.

    In Ardell’s world she has actual Real Estate experience. That is a commodity of value.

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  90. 90
    David Losh says:

    RE: Kary L. Krismer @ 85

    Now you, on the other hand, are toast.

    This is the internet. Even if you were right you have shown bad judgement over an extended period of time. It’s not like you are going to have a come back.

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  91. 91
    MichaelB says:

    By Scotsman @ 78:

    Just look at what took place in Japan after their stock market and economy hit the wall at the end of 1989. …Why would we expect any different outcome in the United States…. ”

    http://www.businessinsider.com/why-we-believe-we-are-in-a-secular-bear-market-2011-6

    Yes, there are strong similarities, but the USA and Japan are different in many ways. The USA is itself a big market and has ample natural resources and land, superior higher education, a diverse population, and the capability to rapidly reinvent itself. In the end, we must grow our way out of debt by doing the following:
    1. Invest in infrastructure
    2. Invest in education
    3. Develop an industrial policy that brings good quality jobs back to the US. This would include identifying strategic industries such as biotechnology, software development, shipbuilding, steel, aerospace, semiconductors, etc…
    4. Increase taxes on the wealthiest Americans, to reverse the growing gap between rich and poor – a strong middle class is the key to economic growth
    5. Join the rest of the industrialized world in offering universal healthcare
    6. Bring our troops home and reduce our military presence to only defending our true strategic interests.
    7. Increasing taxes on global corporations that want to sell in this country
    8. Tax stock market transactions to reduce speculation
    9. Reduce the impact of the financial sector on the economy through greater regulation

    The problem is that people have been borrowing money over the last 20 years to speculate on real estate and the stock market, and to purchase consumer products rather than to invest in our country’s future. A misallocation of borrowed funds.

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  92. 92
    Scotsman says:

    RE: MichaelB @ 91

    Nice theories, but we- and Japan- are done. It’s only a question of time. The debt, now equal to the gross output of the economy, is growing at a faster rate than the underlying economy that supports and pays the interest. The laws of exponents say the debt has to win in the end. We will default, either out right or through currency devaluation, i.e. printing and inflation. Japan will do the same. They have survived as long as they have only because they are savers (buying their own debt) and have lower medical and military expenses.

    Say goodnight.

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  93. 93

    By David Losh @ 89:

    RE: Scotsman @ 86

    You are right about that.

    Ardell is an internet personality. She does have Real Estate experience which is the main thing internet Real Estate lacks. Most of the people who frequent the internet Real Estate sites are tech people, like Tim, here, or Dustin Luther on the Rain City Guide, or even Glenn at redfin. We can throw in Inman News, Trulia, and Zillow. These are tech sites that are using an interest in Real Estate to further internet business models.

    Zillow just turned a profit by selling ad space to Real Estate agents.

    In Ardell’s world she has actual Real Estate experience. That is a commodity of value.

    In the attorney world there are those with years of experience, who are really bad attorneys. Experience doesn’t mean you are good, and that is true in Ardell’s case. She is a train wreck waiting to happen, if her Internet activities matches her real life activities.

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  94. 94

    By Scotsman @ 86:

    Why don’t you continue your pissing match in a private room? Ya’ll are giving real estate “professionals” an even worse reputation than they already have. Maybe it’s time to find a new calling. I wouldn’t even consider doing business with either of you.

    First, I’m not sure what you think these types of sites are for, if not exchanging information. It’s too bad Ardell had to turn to insults, but having done that, well that’s where we’ve gone. Remember how this started. I posted two things about what the DOL and NWMLS were doing. Ardell went on the attack by falsely claiming experience she didn’t have and a bunch of total nonsense. When she wasn’t getting her way she turned to insults and then to her blog piece at RCG.

    Second, you forget I really don’t generally care for clients off the Internet. While I have had a few in particular who presented interesting situations/challenges, most the people who contact you off the Internet are flakes. I have to explain that on the phone at least once a week.

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  95. 95

    By David Losh @ 90:

    RE: Kary L. Krismer @ 85

    Now you, on the other hand, are toast.

    This is the internet. Even if you were right you have shown bad judgement over an extended period of time. It’s not like you are going to have a come back.

    Again, if someone wants an agent who is a pushover, and will just let insults go unnoticed, I am not the person someone would want as an agent. You do realize that agents are representing opposing interests, right? Generally the agent relationships are friendly, because things go smoother that way, but if necessary they have to get adversarial because the buyer’s interests are considerably different, if not opposite of the interests of the seller.

    If anyone is toast here it’s Ardell. Having to turn to insults after making stupid arguments really doesn’t say much about her abilities. I don’t know how she could possibly represent a party when all she can do is make nonsense arguments to the other side. Hoping the agent on the other side is stupid enough to believe something doesn’t seem like a very likely way to succeed.

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  96. 96
    David Losh says:

    RE: Kary L. Krismer @ 95RE: Kary L. Krismer @ 94RE: Kary L. Krismer @ 93

    I’m stunned.

    You have insulted every one who engages you. You started insulting me by telling me I needed to take Economics 101 when my opinions contridicted your 1980s thinking. About a month ago you started insulting Pegasus. When Ardell corrected your baseless assertions about short sales you attacked her.

    Stating you have extremely limited information about Real Estate or Real Estate matters is just a statement. You can dispute that, but it’s hardly an insult. It’s very clear to me, now.

    Once you brought in that link to the Rain City Guide exchange you had with Ardell, years ago, it showed you have had a long standing vendetta.

    Is Ardell wrong? absolutely. Is her way of doing Real Estate correct? absolutely. Any Real Estate transaction you can walk away from is a good one. How you get there is up to the individual.

    You are demonstrating why we need more broker supervision, and that brokers need to demonstrate some ability to manage. You are a loose cannon. That is very clear. My feeling is that you are retired, probably very well off, but financial success doesn’t make you right.

    Now if you can step back, you should.

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  97. 97

    RE: David Losh @ 96 – Pegasus is another good example. If he insults me, I insult him. The difference is my insults go to the heart of what he believes. When he doesn’t insult me we can actually exchange ideas.

    My saying you should take Economics 101 wasn’t necessarily an insult (it would depend on the context). Americans in general really could use a better understanding of economics. Instead they rely on conspiracy claims, assuming everyone is out to get them, just because they don’t understand what is going on.

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  98. 98
    ARDELL says:

    Kary said: …”most the people who contact you off the Internet are flakes. I have to explain that on the phone at least once a week.”

    Can you define “flake”? Who do you have to explain that to “on the phone at least once a week”?

    I had a difficult time with a person who called me from a sign at my listing last week, but that was because she didn’t speak English very well. She didn’t understand that the property was in escrow awaiting closing and the sign would be gone when it closes. Eventually I asked to speak with someone in her family who spoke English better after she called me about eight times saying “44 I buy?” Had a lovely conversation with her husband. The wife wanted to do a lease purchase to close next year. The husband and I spoke about her reasoning, and there was no reason why they couldn’t or shouldn’t stay where they were until they were ready to buy something. All ended well.

    The majority of my clients are past clients, referrals from past clients or people who contact me from the internet. Very nice people. No “flakes” that I know of…but then I don’t know what your definition of “flake” is.

    What makes a person who contacts you from the internet “a flake”? How does the fact that they use the internet translate into their being “a flake”? Can you identify the cause? Is “the internet” frying their brain?

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  99. 99
    ARDELL says:

    Kary said: “The difference is my insults go to the heart of what he (Pegasus) believes.”

    Yes, I agree. And that upset me to no end. Yes, I reacted badly to that because I felt badly for Pegasus. I regret how I handled it…but not that I stepped in to that atrocious display of a professional in my industry attacking a member of the general public. I’d rather redirect your venom at me…not sure why I did that…but admit that I did.

    Ira and I were speaking the other day about that. I do get more upset when you attack a member of the general audience vs me or one of the other agents. He didn’t understand why I do that…I don’t either really. I just know it bothers me more when you attack an unlicensed person, even more so than when you attack me or David or Ray or Ira or anyone inside the industry vs outside of it.

    It’s not about Pegasus…it’s the fact that you are a professional in my industry attacking someone from outside of the industry. It bothers me. Perhaps that’s another one of my many weaknesses in your eyes.

    What I specifically reacted to was your calling him PegaNutCase. I viewed that as a personal attack. Maybe it didn’t bother him at all, considering the source, but it bothered me. I admit that.

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  100. 100
    David Losh says:

    RE: Kary L. Krismer @ 97

    Alright, as long as it continues, it continues.

    You didn’t understand the concept that Pegasus presented so you attacked it. It was muddled to begin with, but over the course of months it became clear he or she was presenting a valid point.

    You read some place about the California energy crisis, seized on that, yet dismissed the fact Enron was a front for a thousand little energy scams. The capper was when you didn’t grasp that bankruptcy absolved a lot of sins for Enron. That’s when I got suspicious that you are only spouting the company line.

    All of that was only about a month ago, maybe a little more. Since then you have had a complete melt down.

    I get 100% of my new business from the internet. I also loose business from the internet. When I attacked the Bill, and Melinda Gates Foundation, here, on the Seattle Bubble I lost three Gates Foundation employees in the course of two months. What are the odds of that happening? I don’t think I have a Gates Foundation client left.

    You can all make fun of me but my cleaning business has doubled in the past three years. 100% of our new business comes from the internet.

    Now pay attention to this because you have a hard time grasping the concept. Twelve of our regular cleaning clients sold homes this year. What are the odds of that? We have replaced them within these four months. What are the odds of that?

    In addition my other company, A Spring Cleaning prepared maybe another 24 properties for sale. Some of those sales we worked with Real Estate agents, most contacted us directly. I have tried for over ten years to work directly with the home owner rather than go through Real Estate agents. I’ve tried a lot of things, but in the past two years we have referred many more people to Real Estate agents than Real Estate agents have referred to us.

    The internet is a beautiful place. The people who frequent here have been very good to me and I am so thankful to have this outlet.

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  101. 101

    When Seattle Bubble is at it’s best, it’s a lively discussion involving a number of people that seems to engage it’s community. It’s fun, it’s educational, and it’s addictive.
    When Seattle Bubble is at it’s worst, it devolves into a snoozefest where two people attack and defend and attack again and name call, and neither party seems to have the maturity to just stop.
    Being the paragon of maturity myself ( not), I’m not going to mention any names.
    Why does every thread have to get hijacked into a two person insult thread? This one is supposed to be about the best place to stash some cash. If only one could make money by reading online insults. Then I’d have to worry about where to stash some cash.

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  102. 102
    Lake Hills Renter says:

    Jesus Christ. What a bunch of junior high drama. This repeated juvenile hijacking of the comments by the same few members is the absolute worst part of this site by far. I say ban the lot of them and lets move on to real discussion.

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  103. 103
    MichaelB says:

    By Scotsman @ 92:

    RE: MichaelB @ 91

    Nice theories, but we- and Japan- are done. It’s only a question of time. The debt, now equal to the gross output of the economy, is growing at a faster rate than the underlying economy that supports and pays the interest. The laws of exponents say the debt has to win in the end. We will default, either out right or through currency devaluation, i.e. printing and inflation. Japan will do the same. They have survived as long as they have only because they are savers (buying their own debt) and have lower medical and military expenses.

    Say goodnight.

    Good points! But in this case, where do you stash your cash? Swiss Francs? What is your plan?

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  104. 104
    ARDELL says:

    RE: MichaelB @ 103

    People have been pointing to Japan as the “where we are headed” for several years now. Is there a Stellar Example of whom we should be emulating?

    Scotsman said: “Nice theories, but we- and Japan- are done.” May I ask is there any place that is NOT “done”?

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  105. 105
    2kt says:

    RE: David Losh @ 100

    I sure hope that with your business doubling and all, you pay your workers union-scale wages, Dave.

    Rate this comment: Thumb up 0

  106. 106
    Voight-kampff says:

    RE: Ira Sacharoff @ 101

    I’ve been on the bubble for over 5 years, and im curious:
    theTim used to moderate out any personal attacks and/or remind posters of the rules quickly (RAL comes to mind) and for offenses much less than what I’ve been reading here as of late. Maybe these recent playground antics are increasing traffic, or he is asleep at the wheel?
    Granted I’m just speculating.

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  107. 107

    By David Losh @ 100:

    You can all make fun of me but my cleaning business has doubled in the past three years.

    I don’t think I’ve once made fun of your cleaning business.

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  108. 108

    By David Losh @ 100:

    You read some place about the California energy crisis, seized on that, yet dismissed the fact Enron was a front for a thousand little energy scams. The capper was when you didn’t grasp that bankruptcy absolved a lot of sins for Enron. That’s when I got suspicious that you are only spouting the company line.

    I followed the California energy crisis very closely, to the point of actually making predictions as to when blackouts would occur! It was easy because the California entity in charge (I don’t remember it’s name) actually published a ton of data, there for anyone to see. And those “anyones” included energy traders selling energy to the same entity!

    But what I read about the California energy crisis I read back over two decades before it occurred. When you have that type of a system, blackouts are the textbook result. And even what Enron was trying to do (cutting production, diverting energy to make it appear it wasn’t from California), was all textbook stuff. And the solution to the problem, was also textbook, and it’s what ultimately solved the problem. Raising consumer prices to lower consumption. Very simple.

    Not quite textbook, but probably to be expected, was the politicians looking for a scapegoat so that they can blame the problems they created on someone besides themselves. That’s especially true when something like 98% of the California Legislature voted for the poorly thought out deregulation scheme. Enron, in the midst of a huge accounting scandal, and involved somewhat in that industry, was the perfect target. And most of the press went along for the ride.

    As to Enron and it’s bankruptcy, I’m not sure what you expected from that. A Chapter 7 bankruptcy is pretty much a death sentence for a corporation.

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  109. 109
    Jonathan Berry says:

    Surely China, Switzerland and Canada aren’t “done” yet, are we? Gold isn’t done either, but respecting cycles and “buy low, sell high”, I’m not sure how much I’d trust any advice which looks like “buy high”. It sure was an interesting read, all 108 chunks of it. Thanks.

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  110. 110
    RickB says:

    By Lake Hills Renter @ 2:

    Jesus Christ. What a bunch of junior high drama. This repeated juvenile hijacking of the comments by the same few members is the absolute worst part of this site by far. I say ban the lot of them and lets move on to real discussion.

    Agree, at least ban KLK.

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  111. 111

    RE: Voight-kampff @ 106
    The Tim is a pretty busy guy, with a full time job and a new baby. New babies around don’t allow for their parents to get much sleep. I’m a grandfather of an eight month old, and for a while there my son and his wife were looking like death warmed over.
    So we’re left to policing ourselves. And doing a great job of it, huh?

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  112. 112
    hoary says:

    Cash and gold for me!

    Agree with other posters that we’re on a similar road as Japan. Reading a book called “Dogs and Demons” about Japan’s lost decade/loss of cultural identity. Their bubble seems like it was lot worse than ours how I understand it, but the similarities in terms of policy response have been staggering.

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