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When is the next recession, and what will usher it in?

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    #16
    I have no real idea. IT will probably happen from something out of left field that most people aren't paying attention to.
    It won't be from something obvious.
    Brian

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      #17
      Originally posted by TexasHusker View Post

      Yes when things go parabolic it's easy to see that it can't continue. I am seeing this with real estate in the Gatlinburg TN market currently and it is very tempting to cash out. Homes are staying on the market a day or two with multiple offers at the ask or even above, with zero concessions from the sellers. I wonder how long it can continue.
      If you are brave (or stupid), cash out refi and buy more properties. I would just sit on what you have right now and enjoy the income. Your CAP rates don't change, but you would have to deal with CAP gains and depreciation recovery unless you used a 1031 exchange to roll it all into something else. You've won the game, enjoy the fruits of your labor.

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        #18
        I think the next financial crisis will be caused by some sort of cyber hijinks. Whether an attack, glitch or mistake, something will happen and trillions of dollars will disappear.

        Or not.

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          #19
          Originally posted by TexasHusker View Post

          Yes when things go parabolic it's easy to see that it can't continue. I am seeing this with real estate in the Gatlinburg TN market currently and it is very tempting to cash out. Homes are staying on the market a day or two with multiple offers at the ask or even above, with zero concessions from the sellers. I wonder how long it can continue.
          So are houses gaining more value beyond the closing cost if you were to buy and sell it 6 - 9 months later?

          There's a huge barrier to entry when it comes to "making money" off houses thanks to commission and closing costs. We shouldn't worry that houses will cause the next financial collapse again unless people are making money just by signing a few forms and sitting on a property for a month. A high demand for housing in a particular area is not really problematic. Start dumping houses when Joe Nobody start giving you advice on how to make quick cash from buying houses at market price.

          My alarm bells were ringing when Joe Nobody who didn't understand electronics and computers are decided to set up accounts and buying BTC during the craze...despite me trying to convince them out of it. Also everyone during dinner were talking about it while checking the bit coin app.

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            #20
            Originally posted by Singuy View Post

            So are houses gaining more value beyond the closing cost if you were to buy and sell it 6 - 9 months later?

            There's a huge barrier to entry when it comes to "making money" off houses thanks to commission and closing costs. We shouldn't worry that houses will cause the next financial collapse again unless people are making money just by signing a few forms and sitting on a property for a month. A high demand for housing in a particular area is not really problematic. Start dumping houses when Joe Nobody start giving you advice on how to make quick cash from buying houses at market price.
            That's a very good question. I bought this one for $182K exactly 24 months ago. I could probably sell it in 24 hours for $225-230. So that's what a 25% gain in two years? Will it go up another 25% in two more years? I don't see how, but I guess anything is possible.


            https://www.zillow.com/homes/for_sal...-TN,-37862_rb/
            How can you have any pudding if you don't eat your meat?

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              #21
              I think we're looking late next year at the earliest, but possibly the year after, although we're technically overdue already.

              What's been propping the economy up the last few years has been the trump policies. He effectively cut business taxes across the board by 20%. My business is small, but I effectively participated in that tax cut. Now you imagine businesses making millions or billions of dollars with the same tax cut. Despite appearances, taxes on individuals were also cut, protectionism and trade policies also propping up the US economy. The effect of all this is basically throwing gasoline on the US economic fire

              What will be the "spark" that ignites everything? I'd hazard a guess at the 2008 style credit bubble. I dont have the data, but I'd also guess that personal, mortgage, and student loan debt are already way past what they were at the 2008 peak. You'll see the pendulum start swinging that way when stagnation hits, then the implosion.
              Last edited by ~bs; 03-11-2019, 06:13 PM.

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                #22
                Originally posted by disneysteve View Post

                You could potentially really clean up if you sell at the peak, sit on the sidelines for a bit, and then jump back in. The problem is you can never be quite sure where the peak is. Plus, as you've noted before, you'd need to find something else to do with the money in the meantime or else you lose the income you would make while you're out of the game.
                real estate can be a dangerous game to play. you had better know what you're doing and the risks and rewards. i remember back in the 2000s, everyone was a realtor and real estate expert, fully leveraged buying up all sorts of properties. Then the bubble imploded, and a lot of them were left with huge losses. Delayed people's retirements by a decade or longer.

                I mentioned it before, but I already shifted my long term strategy to accumulating cash. I'm not really selling my current investments, stocks, rental property, etc, but just adding to cash position. After the next recession, I plan on making acquisitions and although I dont plan on retiring, hope to be able to comfortably retire a few years in the wake of the recession (I'm 37).
                Last edited by ~bs; 03-11-2019, 06:21 PM.

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