Y2K - Posted by Dave

import · December 13, 1998, 10:06pm

Posted by Dave on December 18, 1998 at 21:19:19:

I expected some of the respones. I do not see the gloom
and doom mentality. Nor, do I think everything will be
easily handled. If there is an increase in unemployment
there will be those not prepared to handle the financial crisis they will face. Most persons do not have enough money to last even one month if their income was suddenly stopped. They go into their 401K reserve and also use their credit cards as emergency funds.
Soon, there will be additional houses on the detress market needing quick sales. Then, there will be the process of foreclosures. All of this will take time, maybe even longer than 6 months. I believe each person wanting to follow the philosophy, “I’d rather be prepared than sorry” will be prepared even though nothing major does happen. Yet, I take the biblical plan and trust the Lord, no matter what.

import · December 13, 1998, 10:06pm

Posted by Dave on December 13, 1998 at 23:06:09:

I have been reading articles provided by everyone from internet sites to my US senator. The Y2K questions continue.
Some say that RE will be hit drastically because of the problem of people loosing their jobs therefore loosing their homes. This can be a time when investors can be prepared to buy at a discount. At the time, tenants will also have job problems; therefore, rental property will be threatened. I recommend:

that you have sufficient cash to carry your rentals through this time of economic adjustment.
that you have low debt on your rentals.’
that you prepare yourself to even lower rents to keep your tenants.
that you sell your rentals and put the money in cash.’
that all investments will be affected to some degree caused by Y2K.
that you have your rentals paid in full.

Property values in Nashville are at an all-time high. The market is presently a buyer’s market with the holidays. We have many homes on the market. Market time has increased. It seems that some sellers are having to lower their prices. The homes need to be in tip-top shape. I recently put one of my houses on the market. In two weeks, it has been shown 2 times, these are very low numbers. The house is clean and priced a little below market. It is a 5 BR 3.5 bath home on a cul de sac which usually attracts buyers who want a safe street for their children. I expect it to be into next year before it sells.

How is it in your area?

import · December 15, 1998, 1:01pm

Re: Y2K - Posted by Tim Stevens

Posted by Tim Stevens on December 15, 1998 at 14:01:56:

The really important issue that concerns all of us is:

WILL THIS BOARD BE OPERATING ON JAN. 1, 2000?

import · December 14, 1998, 7:20pm

All my houses are Y2K compliant! - Posted by BankRobber

Posted by BankRobber on December 14, 1998 at 20:20:06:

Yes, I am being sarcastic. It is difficult for me to take anyone dispensing apocalyptic Y2K predictions and recommendations seriously.

import · December 14, 1998, 6:37pm

Re: Y2K - Posted by Doug Jones

Posted by Doug Jones on December 14, 1998 at 19:37:22:

Am I wrong to believe that, if enough people think
there is going to be a problem and pull their money
out of the banks and stocks, there will be a problem.
Lack of CASH…

Just a thought.

import · December 14, 1998, 5:51pm

Re: Y2K - Posted by Rob FL

Posted by Rob FL on December 14, 1998 at 18:51:00:

Down in Florida we have hurricanes. I kind of view this Y2K thing like a big hurricane. We can see it out there, it is coming and it will put our lives in some degree of turmoil. But it will eventually blow over.

That means I may stock up on some items, I may get some of my cash from the bank, I may secure some of my possessions. But it doesn’t mean that the world is going to be gone. Even with terrible hurricanes, not everything is destroyed.

I think everyone needs to prepare a little for this Y2K thing. But it shouldn’t be taken to the extreme.

After all, I think their is a lot better chance that the banks records will get screwed up and make it much harder for them to foreclose than it will be for my tenants to pay me their rent.

my .02

import · December 14, 1998, 9:40am

Re: Y2K - Posted by JPiper

Posted by JPiper on December 14, 1998 at 10:40:27:

Let’s assume for a moment that the worst happens…that we are all unprepared for the year 2000.

Why will real estate prices be dropping?? Why will rents be dropping?? Why will people be losing their jobs??

JPiper

import · December 14, 1998, 2:54am

Re: Y2K - Posted by Doug

Posted by Doug on December 14, 1998 at 03:54:38:

Yes I have to agree that the problems faced in the future are more foreclosures and more areas of real estate will be collapsing. I have been in areas that properties at one time were selling for 100,000 or better and I was picking them up for 5,000 and reselling them for 45 - 50 thousand… It is a fact that for the year 1998 more bankruptcy filings were filed than in any other year… Also more foreclosures and lis pendis were filed that any other year… This is a very serious matter in future real estate investing and the key thing is to remeber you are investing to make money so invest wisely. I would suggest if you are concerned about the future on an area do your home work before you buy for your holding portfolio… It may be wiser to buy and flip before you get stuck with a Mortgage on a home of 90,000 that will in a few years only appraise for 50,000…
Douglas Timko
notes4sale@yahoo.com

import · December 17, 1998, 3:04am

Re: Y2K - Posted by Doug

Posted by Doug on December 17, 1998 at 04:04:18:

hahhahahaahahahhaahhaaha… Steve is the winner for the BEST post on the subject… Kudos to Steve… hahahahahhaha…

import · December 17, 1998, 2:50am

Re: Y2K Forget the DARNNN Cash… Simplified - Posted by Doug

Posted by Doug on December 17, 1998 at 03:50:26:

Forget this Cash…I guess it was my fault for using the term cash… I thought most of us Investors were aware of the new Invention called CASHIERS CHECKS… Anyway if lets say it does crash and you go to the bank with no proof of your finances in your accounts that they can verify ( being that the systems are down they cant verify much of anything now can they???) Anyway if you walk in there with a Certified Check they gave you last week rest assure you will get your money since that is as good as CASH… Do you think the guy who didnt protect himself will get his money that easy… I hope I put this in as LAYMANS terms as possible as this YTK seems to already be affecting the real estate Industry right here on our MESSAGE BOARD…

Douglas Timko
notes4sale@yahoo.com

import · December 15, 1998, 2:28pm

Y2K = Cash FLOW problems… - Posted by raelynn mitchell

Posted by raelynn mitchell on December 15, 1998 at 15:28:59:

from my point of view because…

What if the banks receiving those automatic direct deposits from the gov’t cannot run their computers come 1/1/2000? Social (in)Security will be more insecure than ever. (Or worse yet, they ARE running, but some clerk doesn’t realize that they are running incorrectly. Some people are going to have too MUCH money in their accounts! And others too little!) And if the banks aren’t functioning properly, the programmers who work on the problem won’t be able to eat because most of them rely HEAVILY on ATM machines to get $$$, and once they can’t get their $$$ they will probably go home.

Imagine if you needed to survive for 2 months WITHOUT anything computerized. That means standing in LONG lines waiting for the teller to make a phone call to verify the last bank statement and any deductions/additions to your account that would be manually entered.

Imagine getting stopped by a police officer. In the old days of law enforcement (in California, anyway) (in the 1960s-70s) the officer called on the radio, the dispatcher called the DMV office in Sacramento (headquarters) and they MANUALLY pulled your driving record! The average traffic stop took well over 30 minutes while some clerk went to the record and pulled the paper copy. Today it’s all done on computers. All kinds of mahem will break out. (As a side note, the only reason Timothy McVeigh was caught was because his license plate on his car fell off and he was stopped for a traffic violation. Had he checked his car before he left OK, he would’ve seen his plate falling off, possibly would have FIXED it, and therefore never been stopped. Imagine how many other criminals will “get away” with things, even if temporarily?)

More people than anyone wants to realize depends on electronic blips on computers to tell those who need to know just how much $$$ they should be able to withdraw from their bank accounts, whether they get it from an ATM machine or from the teller inside the bank.

And another interesting thing…banks are not required to keep on hand their entire asset base, only a percentage of it in cash, so a bank run could put even the most stable of banks into a “cash crunch”. And once word gets out that one bank is having “problems” the momentum will build and snowball (or more like avalanche).

And that’s just the banking system. What about the utilities and other systems?

raelynn

import · December 14, 1998, 9:18pm

Re: Y2K - Posted by Redline

Posted by Redline on December 14, 1998 at 22:18:14:

“The glass spills itself in fear of being spilt.”.

import · December 14, 1998, 10:24am

Re: Y2K - Posted by Redline

Posted by Redline on December 14, 1998 at 11:24:43:

It sounds like you guys are believing alot of that doom and gloom being spread around by people who stand to benefit from chaos and confusion.

Consider the source when listening to these things. Yes, there will be Y2K related problems and the lawyers are already getting ready - but companies are going to need resources (people) to solve these problems. Massive layoffs are NOT going to get a companies systems Y2K compliant. Programmers, technicians and managers are. And they require a support staff.

Think about it.

RL

import · December 14, 1998, 9:36am

Re: Y2K - Posted by JPiper

Posted by JPiper on December 14, 1998 at 10:36:46:

Hi Doug:

How are you making these predictions?? What are you basing them on??

Are these forecasts based on a crystal ball or some set of facts?? Real estate prices dropping by 50% is a big move. Perhaps you would provide us some details as to how you arrived at this, what area this is forecast for, and over what period of time.

By the way, where were you buying properties for $5K that were formerly $100K and then reselling them for $50K??

JPiper

import · December 17, 1998, 3:01am

And another Thing - Posted by Doug

Posted by Doug on December 17, 1998 at 04:01:59:

Being that we are all in Real Estate I am assuming anyone knowledgeable would realize that in REAL ESTATE the term cash is usually CERTIFIED FUNDS… When a good faith estimate says CASH NEEDED TO CLOSE do you go there with an envelope or with CERTIFIED FUNDS… When you Make an offer of CASH… Do you carry a suitcase to the closing or do you bring CERTIFIED FUND… If I see another post about how going to the bank and withdrawing all your CASH is going to break the Financial Institute I will be very disappointed in your lack of knowledge when it comes to large amounts of money… I guess I gave some people a bit more credit than they desrerved when it comes to discussing the term Cash and large amounts of it…Enough said
Douglas Timko
notes4sale@yahoo.com

import · December 14, 1998, 10:54am

Re: Y2K - Posted by JHyre in Ohio

Posted by JHyre in Ohio on December 14, 1998 at 11:54:24:

Too many people are paying WAAAAY too much attention to the problem for the world to fall apart. Lot’s of places make do without computers…Why, even we used to. I’m sure the Y2k issue will cause some inconvenience, but I rather doubt that the streets will run with blood. Now those pesky black helicopers sent by the UN to invade us are a completely different issue, Agent Scully…

import · December 14, 1998, 10:03am

Re: Y2K - Posted by Bill

Posted by Bill on December 14, 1998 at 11:03:45:

My thoughts exactly, Doug has some very interesting information to share.

import · December 14, 1998, 11:30am

Re: Y2K - Posted by LHoffman

Posted by LHoffman on December 14, 1998 at 12:30:07:

Cancer-Man is behind this Y2K conspiracy…Agent Mulder

import · December 14, 1998, 10:54pm

Re: Y2K - Posted by Doug

Posted by Doug on December 14, 1998 at 23:54:45:

Hi all,
I have done some research on bankruptcy and foreclosure over the past few months as I recently got involved with a not for profit organization geared toward educating people and high school students to the importance of proper financial management. In my research I have found a handful of Articles on how the rate of foreclosures and bankruptcy has hit an all time high and is projected to get higher. We have established this not for profit Organization to educate high school students about how they should budget there finances to try to minimize bankruptcy and foreclosures in the years to come. As in all schools they prepare you for your future in how to count read and work but they dont tell you how and why your credit and financial management is so important. One of our Organizations missions is to institue Nationwide a credit and financial management class in the high school curriculum. After all the children are our future.

As far as this Y2K issue I really dont have much input on that … As I do believe that there will be some chaos and confusion, I dont believe it will affect the Real Estate Industry as hard as most are predicting…

And in response to J Piper the area in which I purchased these homes is Schenectady NY… It at one time hhoused 200,000 as General Electric was the back bone of this City from the early 1900 until the late 70’s early 80’s… Then they had a falling out with the City over taxes and showe the City who’s City it really was… THey packed up and left… Now a Company that once employed over 50,000 Schenectady residents only has a Schenectady workforce of about 3,000. Of the tens of thousands that were laid off from GE most of them lost there homes in foreclosure. Thus creating a gateway to the local Investors to buy in these areas inexpensively. Once this happened all the owner occupied areas turned to tenant infested areas bring property values even lower, Then in the mid to late 80,s Drugs (Crack ) hit the streets and did the rest of the damage to the City. So here you had a City that has housing for over 200,000 now with a population rate of about 50,000… That means you have major excess housing and I am sure you get the rest of the picture…So that is how a house in the 70s and 80s that was worth around 100,000 dropped to the ground and is now able to be picked up for under 10,000. Now as far as selling them for 40,000 to 50,000 How I did this was I found tenants that lived in these areas that could never become a homeowner due to credit problems, low income, etc. and brught them threw non conforming lenders. To use the Comparables to maintain these sale prices I kept buying and selling in the same area to use my own comparables heres a hint for you Investors out there… Ok We all know that the way most appraisers and realtors value a property is threw a MLS market annalysis… Now that means when they list or appraise a home they will look for recently solds in the MLS… Ok Now when you sell your home without the use of a realtor the MLS will never know what you sold the home for because it wasnt uploaded to the recently sold list on the MLS because no realtor was involved… Now with this in mind we buy our homes threw the realtors because they convince the seller that there house is only worth x amount in todays market… But when we sell the home we use our private sales as comparables thus being able to keep the comparables high for us to sell and the MLS low enough to buy… I hope I explained this clearly… It was a bit confusing to explain…
Douglas Timko

import · December 14, 1998, 2:30pm

Re: Y2K - Posted by MichaelR (NoVA)

Posted by MichaelR (NoVA) on December 14, 1998 at 15:30:28:

I actually have some expertise in this area. There is no way that government or industry will be completely ready for Y2K when it hits. They have basically admitted so - in fact, several government agencies project that they will not be Y2K compliant until after 2020!

Anyway, the question isn’t so much will we be ready as it is what is the heck is going to happen. No one really knows the answer to that one. The danger spots are things like our utilities, water, financial institutions, telecommunications, and etc. If power goes out for any extended period of time, especially in an urban environment, a nasty potential is there.

So anyway, the moral here is just be prepared. Chances are nothing major is going to happen, but just in case it does, don’t be caught with your pants down. Or, to put it in REI terms, make sure your CYA clauses are all fulfilled.

Don’t believe the hype. As with most things, the truth about Y2K will most likely lie somewhere in between the polyanna and the doomsday crowd. I’ll meet you here on Jan 1, 2000 to talk about it.

I’ll leave you with a quote from the two top members of the Senate Special Committee on the Year 2000 Technology Problem.

Senator Christopher Dodd (D-Connecticut), vice-chairman of the Committee, said, “Quite honestly, I think we’re no longer at the point of asking whether or not there will be any power disruptions, but we are now forced to ask how severe the disruptions are going to be.”

Senator Bob Bennett (R-Utah), chairman of the Committee, echoed his concerns: “I think there is a virtual certainty that we’ll have brownouts and some regional blackouts.” He went on to say:

“We still have 18 months [from June 1998], and nobody really knows. So there is a very slim possibility that everything will work just fine. I think the chances of regional blackouts and heavy brownout activity throughout the grid are about 80 percent.”

Enjoy!

Michael