Then there are the newbie “investors” who want to buy foreclosed single family homes, give them a “shave and a haircut” and re-sell for a profit. They vastly underestimate the holding time to renovate, their carrying costs during that time, the costs of renovation and the selling costs. And they are overestimating the likely eventual sale price. Most of these guys are not buying at deep enough discounts to even break even. A year from now, I expect it to be the new “common knowledge” that buying foreclosed homes is a great way to lose money. That “common knowledge” will serve to dissuade other would-be speculators for another year or three.

I’m telling you, this is a “Fool’s Rally” in real estate prices. Speculating by buying at a 15% discount from the peak is for suckers. If you want to buy real estate to make money, wait until prices are low enough where it would cash flow well if rented out. In most areas, that means significant additional price declines. I’m guessing my 14 year old kid will still be able to get some good deals on fourplexes when he’s out of college.

Regarding a bottom, it was reported on CNBC today that Merrill had the biggest loss in it’s history last quarter, but it wanted to get all the information out in the open so the market knows exactly what’s going on. Apparently, more brokerage houses are going to do the same. This should begin to calm things down if they really do it. We maybe seeing the very beginning of the end of the dark days, but I want to get past the summer when most of the resets happen before I start taking the Deep Sigh of Relief.

Though I am sitting here working yet with 4 preapprovals sitting on my desk.

Do I think we’ve seen the bottom yet, based on all of the bad news that’s been reported, no I don’t. But for well positioned, well connected professionals with their customers best interest in mind, it’s going to be a good year.

http://www.msnbc.msn.com/id/7148582/

Also, I have a neighbor down the street, and she has her license with a good broker in La Jolla. Her processor said to get ready, rates are good and refis are picking up.

Take that for what it’s worth. Also, I talked to one La Jolla RE agent that works the coast and he said he had a busy December working with prospects (buyers) who are getting ready to jump back in. I registered with as an agent at the sales office of a new condo complex in downtown San Diego yesterday, and the sales gal said the same thing, they’ve been busy with prospects and she said buyers are also getting ready to come back as properties become more affordable.

I’m not saying the dark days are completely over, but we may see a bit of sunshine coming through.

Anyone else heard anything???

Another one….

We were set up with them but never used them.

Its a conventional market. Fortuanately I still have 20 conventional lenders to compete with. Most of them have Alt A and jumbo paper thats better priced than Aurora could ever offer.

Regarding your tip Toby, I have also heard many executives from fallen lenders are working on setting up new shops.

Let me ask…is it just me or is business starting to pick up everywhere? I think the fed easing is finally starting to work. My companies pipeline tripled in a week. Business also picked up a week or two earlier in January than it normally does.

I think with the agressive rate cutting that will soon come our business will pick up more than some people suspect. I think things are actually getting better now which would mean that we have seen the bottom of this madness.

It would be nice because my shop has never been better organized, staffed with as such quality people and been more cost efficient.

Tip: Expect a new company, Lehman Capital Mortgage, to rise from the ashes in four to six months with only the very talented being carried over from ALS.

Wait for the trickle down effect of this one within the week….