Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Jim Rogers Sells Manhattan Home
Old 02-15-2008, 01:01 PM   #1
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,315
Jim Rogers Sells Manhattan Home

Investor Jim Rogers is selling his Manhattan home for 15.75 million and moving to Singapore. He purchased the home in 1976 for 107K. Works out to a 17.5% compound annual return.

Jim Rogers' Interview
__________________

__________________
FIRE'd@51 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-15-2008, 01:11 PM   #2
gone traveling
 
Join Date: May 2006
Posts: 1,036
Quote:
Originally Posted by FIRE'd@51 View Post
Investor Jim Rogers is selling his Manhattan home for 15.75 million and moving to Singapore. He purchased the home in 1976 for 107K. Works out to a 17.5% compound annual return.

Jim Rogers' Interview

Somebody way overpaid. At the historical (since the dawn of time) 4% annual appreciation rate the home should have sold for $375,365. I hope they had a big down payment.

4% appreciation my *ss.
__________________

__________________
honobob is offline   Reply With Quote
Old 02-15-2008, 01:36 PM   #3
Thinks s/he gets paid by the post
ladelfina's Avatar
 
Join Date: Oct 2005
Posts: 2,713
honobob.. did you ever think that extraordinary RE appreciation at the highest end of the market MIGHT be correlated with the richest few% making the most gains in income and wealth over the last few years.. while everyone else is running in place? At the high end there's WAY more money sloshing around still.

There are bottles of wine that sell for $5k, $10k, even $100k.
I don't use that to figure my grocery budget.
__________________
ladelfina is offline   Reply With Quote
Old 02-15-2008, 02:19 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,526
I would be interested to find out what that $107000 in 1976 paid for. The plot of land the house sits on?

I looked at the records for my house in a non-bubbly mid-sized city in my southeastern state. In 1976, it sold for $34,600. So the NY house Jim is selling was about 3x as expensive. I find it hard to believe that one could purchase a 10,000 square foot 6 story house in Manhattan for only 3x what it cost to buy a very modest house in what was a small-ish town 30 years ago.

Was the 1976 NYC real estate market really that bad?

Also consider than Jim may have invested a buck or two (million) in updating the house over the years.
__________________
FUEGO is offline   Reply With Quote
Old 02-15-2008, 02:24 PM   #5
Thinks s/he gets paid by the post
free4now's Avatar
 
Join Date: Dec 2005
Posts: 1,225
For the other side of the story:

Top investor sees U.S. property crash | U.S. | Reuters

"Real estate prices will go down 40-50 percent in bubble areas. There will be massive defaults. This time it'll be worse because we haven't had this kind of speculative buying in U.S. history," Rogers said.
__________________
free4now is offline   Reply With Quote
Old 02-15-2008, 02:31 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,764
Quote:
Originally Posted by free4now View Post
For the other side of the story:

Top investor sees U.S. property crash | U.S. | Reuters

"Real estate prices will go down 40-50 percent in bubble areas. There will be massive defaults. This time it'll be worse because we haven't had this kind of speculative buying in U.S. history," Rogers said.
Wonder if that 40 to 50 % is total or another 40 to 50 % drop. That would mean my property would drop about 70 % total
__________________
Notmuchlonger is offline   Reply With Quote
Old 02-15-2008, 02:34 PM   #7
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,068
Quote:
Originally Posted by free4now View Post
For the other side of the story:

Top investor sees U.S. property crash | U.S. | Reuters

"Real estate prices will go down 40-50 percent in bubble areas. There will be massive defaults. This time it'll be worse because we haven't had this kind of speculative buying in U.S. history," Rogers said.
Interesting that he made this prediction and put his house on the market almost one year ago (March 2007)... and it took him until December to sell his house.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 02-15-2008, 02:40 PM   #8
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Quote:
Originally Posted by FIRE'd@51 View Post
Investor Jim Rogers is selling his Manhattan home for 15.75 million and moving to Singapore. He purchased the home in 1976 for 107K. Works out to a 17.5% compound annual return.
There should be a separate appreciation index for island real estate.

I can't imagine leaving a familiar territory at a relatively advanced age just because the economic fundamentals are shifting. Sure, I can understand hedging against the dollar and teaching your kids the next great language, but why does a place you've lived in for so long suddenly become unsuitable? Does he feel that Singapore offers an equivalent amount of civil liberties and personal independence to Manhattan or Canada? Is he unable to extract any further novelty from familiar surroundings? Is he bereft of other family (besides spouse & kid) or does he expect them to visit him in Singapore?

He could've kept the place and rented it out. He doesn't sound like he's hurting for cash flow ( I could be wrong) but he seems to be raising cash. Maybe he thinks he's gonna make a killing in Singapore real estate.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 02-15-2008, 02:44 PM   #9
gone traveling
 
Join Date: May 2006
Posts: 1,036
Quote:
Originally Posted by Notmuchlonger View Post
Wonder if that 40 to 50 % is total or another 40 to 50 % drop. That would mean my property would drop about 70 % total
It would have to be 50% on top of 50% to revert to the mean and get closer to the true value of $375,000
__________________
honobob is offline   Reply With Quote
Old 02-15-2008, 02:46 PM   #10
Administrator
Andy R's Avatar
 
Join Date: Jan 2007
Location: Dallas, Tx
Posts: 1,184
I wonder if living on the equator where it's the same temperature all year round (link) with quality access to direct long haul flights to everywhere in the world had any influence on his decision? It's a great place to FIRE.
__________________
Andy R is offline   Reply With Quote
Old 02-15-2008, 02:48 PM   #11
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,315
Quote:
Originally Posted by FUEGO View Post
Was the 1976 NYC real estate market really that bad?
In 1976, NYC was on the verge of bankruptcy, so it was the bottom of the real estate market - much like buying stocks in mid 1982. Also, the upper west side is much more fashionable today than it was in 1976. In addition, Rogers probably put a lot of money into updating the place over the years.

I think a normalized rate of return on NYC real estate has probably been in the 8-10% range.
__________________
FIRE'd@51 is offline   Reply With Quote
Old 02-15-2008, 02:51 PM   #12
gone traveling
 
Join Date: May 2006
Posts: 1,036
Quote:
Originally Posted by ladelfina View Post
honobob.. did you ever think that extraordinary RE appreciation at the highest end of the market MIGHT be correlated with the richest few% making the most gains in income and wealth over the last few years.. while everyone else is running in place? At the high end there's WAY more money sloshing around still.
Exactly my point! And if you invest in or near these areas some of that sloshing will affect your appreciation. My original Diamond Head purchase, now a $400,000+ one bedroom condo is THREE parcels away from a $27,000,000 single family home. You don't have to buy a $10,000 bottle of wine if you're a busboy in a swanky restaurant. "A toast to the Crumbs!"
__________________
honobob is offline   Reply With Quote
Old 02-15-2008, 03:37 PM   #13
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Quote:
Originally Posted by FIRE'd@51 View Post
In addition, Rogers probably put a lot of money into updating the place over the years.
I think a normalized rate of return on NYC real estate has probably been in the 8-10% range.
I wonder if we'll ever get the straight story on his basis and his appreciation.

I suspect that a lot of homeowners "forget" all the kitchen & bath renovations, room additions, appliances, roofs, yardwork, coats of paint, and other improvements made between a home's purchase & sale.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 02-15-2008, 04:07 PM   #14
gone traveling
 
Join Date: May 2006
Posts: 1,036
Well at 10% appreciation rate that the New Yorkers claim then he'd have to upgrade enough to get $13,500,000 more. So if fireplaces return 130% on the dollar that would be how many fireplaces?
__________________
honobob is offline   Reply With Quote
Old 02-15-2008, 04:11 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Ah yes, Jim Rogers, the Bill Gross of the commodity world. The guys who give new meaning to the phrase "talking your book."
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 02-15-2008, 04:23 PM   #16
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,315
Quote:
Originally Posted by honobob View Post
Well at 10% appreciation rate that the New Yorkers claim then he'd have to upgrade enough to get $13,500,000 more. So if fireplaces return 130% on the dollar that would be how many fireplaces?
If you discount the 15.75 million for 31 years at 10% you get 820K, which might have been his basis, taking into account improvements, etc. Nevertheless, I would expect that Rogers' ROR would still be better than the normalized average for NYC because he bought at a trough (1976), and also benefited from the relative improvement of the upper west side. In other words, Rogers most likely realized some "alpha" on his investment.
__________________
FIRE'd@51 is offline   Reply With Quote
Old 02-15-2008, 09:12 PM   #17
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,823
Quote:
Originally Posted by Nords View Post
He doesn't sound like he's hurting for cash flow ( I could be wrong) but he seems to be raising cash. Maybe he thinks he's gonna make a killing in Singapore real estate.
Aha! I think you have it right.

Guys like this really love making a deal, and to me, a move like this absolutely shouts that he has something in the works.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 02-16-2008, 09:15 AM   #18
Recycles dryer sheets
 
Join Date: May 2007
Posts: 290
Singapore's a nice place. I'd probably pick it over NYC myself, especially for raising kids.
__________________
bpp3 is offline   Reply With Quote
Old 02-16-2008, 09:45 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
There are six billions stories on the naked planet...
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 02-16-2008, 12:22 PM   #20
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Quote:
Originally Posted by brewer12345 View Post
Ah yes, Jim Rogers, the Bill Gross of the commodity world. The guys who give new meaning to the phrase "talking your book."
I'm not even gonna get into the subject of being 70 years old with a four-year-old daughter and a pregnant spouse.

Sounds like he's talked himself into a corner at an age when most are content to rest on their laurels, enjoying their wisdom & benefits of their accomplishments. Even if this spurs the sale of another 100,000 copies of his latest book that's what, another $100K? Can't argue with Singapore as a locale to raise your kids but I'm not sure I'd be ripping out my roots (speaking metaphorically, not follically) at that age and for such speculative returns. And then there's the imperial geopolitical risk of itty bitty Singapore right next to China, but I'm sure that everyone's commodity property rights would be respected at least as much as the last time that sort of thing happened to that "country".

Speaking of real estate appreciation rates and "alpha", I wonder how we account for the drag of taxes on investment returns. I'm paying 4.5% excise tax and another $2066.78/year property taxes in the hope expectation of collecting $33,600/year in gross rent. In other words I'm paying an annual expense ratio of 10.6% on $33,600 cash (or a 0.6% expense ratio on a $600K asset paying a 5.6% "dividend") before I've even sat down with Schedule E to try to erase our rent "profits", let alone dealt with the other carrying costs. 0.6% is coincidentally the expense ratio of the most expensive index fund in our ER portfolio.

Surely the annual tax load on Manhattan real estate carries an "expense ratio" a bit higher than the average index fund, let alone Vanguard or the TSP. Reminds me of the canard about how Trump should've just put his inheritance into S&P500 index funds and gone fishing for something other than supermodels & prenups.
__________________

__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Who sells credit default swaps? ExHermit FIRE and Money 7 01-26-2008 07:30 AM
Who buys and sells small businesses? wabmester FIRE and Money 2 04-29-2007 03:28 PM
Mystery smell settles over Manhattan dex Other topics 8 01-09-2007 10:46 AM
Poor Jim Rogers wildcat Other topics 2 10-19-2005 06:27 PM
Chief economist for Mortgage Bankers Assn sells home in order to rent cute fuzzy bunny FIRE and Money 14 06-01-2005 04:04 PM

 

 
All times are GMT -6. The time now is 02:12 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.