Sheehan dumping Ferraris for real estate

Be careful to apply "national" residential real estate average ror's to California. The average home price in Orange County has appreciated 8%/year over the last 30 years. The beach communities have appreciated at even higher rates.

 

sounds like Mr. Sheehan is WWWAYYY overleveraged right now... to have to sell cars to get capital to buy realestate? why couldnt he have used other investments and those cars as collateral to get loans, etc. doesnt make too much sense to me

 

Can't even apply California averages to you all as the different communities and areas in your state have such a wide spectrum of desirability.

Seems Mike knows what he is doing. He has enjoyed many vehicles in his life and does not get emotionally attached to them as some of us do. If I had a collectable in the garage right now (or driveway as my current situation only allows) I would be contemplating a sale with the F-car market where it is right now. And if I had the resulting capital to reinvest, a beach-side community would be an excellent idea right now.

 

I don't know about OC, but I do the SF market. Beleive it or not, SF's prices have been rising. Yep, still going up, just not quite as fast as last year. Marin is holding it's own, while eastern Contra Costa has gotten some large losses, as have certain parts of Alameda. I don't know about San Jose, but would assume those prices are also falling. If you're thinking about the Bay Area, just remember: Location, Location, Location.

Art

 

I just spoke to Mr. Sheehan about this topic, this is what he told me:

I bought my first great car, 365 GTB/4 C s/n 12547 in 1974
at the peak of the gas crisis for $14,000.

It had been advertised for $25,000 only six months earlier.

I sold it for $35,000, (with a dead engine), in 1979 to buy my
first Industrial building, at 1665 Babcock, in Costa Mesa, for
$159,000.

Over the years I used the Babcock building as leverage to buy
seven more buildings, three houses.

The Babcock building was paid for long long ago.

My ex got that the Babcock building (and three others) in the
divorce and sold it a few years back for $2.200,000.

I kept three buildings, so I'm not suffering...

And I assure you I'm in no hurry to buy buildings, I'm watching
and waiting, as prices keep dropping...

I own Five Ferrari race cars, all paid for, so no lack of "jack".

 

According to Housingtracker.net, San Francisco is down 13.7% on the year, 8.7% over the last 6 months, and up 1% in the last 3 months then flat for the last month.

 

Sheehan is seeing what any smart investor is seeing. Rare exotics are fetching record high prices and real estate is stagnant or declining currently. If you can trade a high value high profit item for a long term depressed value asset then you should.

I'm a seller currently and I have moved several cars in the past few months. As to Laguna Beach real estate, that is a another question entirely. I know Laguna Beach very well and it sure as heck ain't depressed. In fact it is a still a rising market so any current purchase, made with capital and profits from selling cars will more than likely result in a nice value gain over the next few years. The key to making money in real estate investment is leverage and that is what is hard to come by these days. You need good property as collateral to convince a lender to allow you to borrow money. Distressed properties need to be bought for cash.

Victoria Beach at Sunset is one reason why Laguna Beach property values will hold up in the worst markets
Image Unavailable, Please Login

 

Thanks for the perspective. I look forward to receiving my copy of Octane to read Sheehan's complete remarks, as well as the context of the article. Doesn't sound like he's "dumping" anything, but selectively culling his collection to raise some liquidity for other assets. Sounds smart to me. Also, his article in the most recent SCM seems to reaffirm the value of collector quality Ferraris in an environment where most assets are being negatively re-priced.

Jack.

 

In 89 gas was 1.15 a gallon,a new Corvette was 22k, for the 500k Daytona then in today a mega inflation dollars would be in excess of 1000000 today so 350k for a Daytona today they still have a long way to go No one is gasping at these prices yet for collector Ferraris with todays severe inflation, the old Dollar just aint what it used to be and to European buyers our cars are a bargain Ill bet in another year those that sell now wish they had not The real lesson from Sheehan learned is don't get married and buy an office building

 

I find this thread completely amusing. No one but Sheehan gets to make his decisions.

 

He asked me to post above!

 

I know Mike quite well.......and the man ain't stupid.

 

Actually, I think the lesson was: Prenup.

 

This post is pretty funny to me, actually.

I am talking to him about selling my pf coupe and he has been saying how bad real estate is right now. (I have some).

Tom W

 

Yeh but you don't know that "maximum distress value" has been reached yet...

 

Funny.. are you guys talking about single-family housing prices and comparing them to apartment/commercial buildings?

The prices do drop all-around, but guess where those people who have been priced out of the housing market end up? We've got a few more years till everything shakes out- but if I had the coin that's where I'd be looking too (and my father has already started).

Just buy anything that Archstone may want in the future.

 

You left out Florida in that time period also.

 

mike, what about all this sat night quarterback stuff. can you believe this! business is so slow, even the people that won't pay me will not buy. now that is slow. why would i sell inventory i just bought. if i did not want it i would on buy. when barak becomes pres. we will have an o bomb o nation. now back to ferrari. is there a peak or are we on a mesa. this will be a goodyear to get the answer

 

It's leather right?

I think Sheenan is very smart. Wish I had the cash to buy a bunch of Real Estate right now. Buy low, sell high. People been doing it forever, and now is a better time than ever to buy cheap Real Estate right? Hello...

 

Q: A way to economize months expenditures ?
A: Shouldn't be economizing, should be making more money.

It's apples & oranges, enjoy your Ferrari and think of alternative ways to make more money then get into real estate while its still down.

 

I went back and checked. Mike didn't say real estate was in the toilet, he said the ECONOMY was in the toilet.

Sorry, Mike.

Tom W

 

in certain areas, certain types of real estate as very safe investments. In my small part of the world, commercial properties are not being sold, nor being offered for sale at any price.

 

close to the bottom... IMHO I think it will go in half before this whole thing is over. The economic incentive check thing is a loan to the american public from themselves to float the economy until Bush is out of office and from there whoever get's into office is going to have the worst job in history... This guy is selling cars worth real money for real estate that will be worth half of what he pays for it once this get's done..

I don't know if you all have seen it or not but it's now legal to own a rooster per household in Orange County, the values of homes are going down very quickly because the old middle class homes are becoming little farms and with that being okay with the local governments, it's only going to get worse, not better....

http://latimesblogs.latimes.com/lanow/2008/05/roosters.html

http://latimesblogs.latimes.com/unleashed/roosters/index.html

It won't be long before Southern California is a third world country and we all now land is pretty much free in those places...

 

Very silly comment.