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Old 06-16-2011, 10:51 AM   #41
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My only real estate investments are our house and Vanguard's REIT index fund.

RE is too much work for me. I am also away from home too much. And it is not liquid.

You guys go ahead--start without me.
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Old 06-16-2011, 12:51 PM   #42
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Quote:
Originally Posted by sheehs1
That may be arbelspy...but there have been no offers at any price. There are few if any buyers in this area.

For the most part on this entire real estate topic...I'm playing devils advocate with myself. Am struggling with the decision. At the end of the day.we all have to do what we are comfortable with.
I have a few qualifiers for my real estate investments.
1. Close proximity to my home
2. Single family, 3 bd or more
3. House must sit on a unique irreplaceable lot
4. No HOA fees
5. Positive cash flow or extremely undervalued
6. A place I would live in myself
7. Appeals to high end renters
This still doesn't protect you from bubbles, unfortunately.
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Old 06-16-2011, 01:06 PM   #43
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Originally Posted by brucethebroker View Post
There are many urban legends about the 3 AM toilet stoppage and having to get out of bed and clean the tenant's sewer lines.
1. I have never gotten THAT call.
2. I would call the plumber. At today's prices, I can afford it.
Those thoughts keep many, many people out of the rental game. More for the rest of us!
I've gotten that call. Having to choose between the plumber's price gouging and my sleep was a difficult decision (the plumber won).

RE was not for me. I sold when I owned up to the fact that I could make more money with less grief working overtime at my day job.
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Old 06-16-2011, 01:17 PM   #44
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Originally Posted by Gatordoc50 View Post
I have a few qualifiers for my real estate investments.
1. Close proximity to my home
2. Single family, 3 bd or more
3. House must sit on a unique irreplaceable lot
4. No HOA fees
5. Positive cash flow or extremely undervalued
6. A place I would live in myself
7. Appeals to high end renters
This still doesn't protect you from bubbles, unfortunately.
Thanks for sharing Gatordoc50. That's pretty much my list as well. Both of the two short sales we are looking at meet all the criteria....in my view one more so than the other in terms of lot location but even that is a matter of perspective. One is ocean front. The other is in an area with few lots with panoramic views of a bay and sound. By panoramic I mean more than 180 degrees...bordering on 360. Checking out the water levels in that area and past flooding if there was any. Proven rental history for both. Ocean front one has been stripped of furniture and appliances. Sound front only has appliances but no furniture. Realistically...we would have to carry the house for 9 plus months before it generated any income. Both off the renters market for this summer due to short sale process. Will factor that in with the offer if we make one.
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Old 06-16-2011, 03:04 PM   #45
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Originally Posted by sheehs1
Realistically...we would have to carry the house for 9 plus months before it generated any income.
Why is that?
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Old 06-17-2011, 05:21 AM   #46
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The part missing from this discussion is looking at the real books. Plus, it is a forward looking investment opportunity discussion (hopes and dreams) and not a backward look at what actually happened (i.e., the accounting books).

I am more of a hands-off passive investor (i.e., securities). That, of course, influences my opinion.

A common sense question is: Why that investment vs another? Will it yield a higher risk adjusted profit? On average... I doubt it.

For many (I suspect the reason is): they borrowed the money (leverage). It is a business venture and they hope the eventual ownership (and sale of the property) along with net income yields a profit in the end with + cashflow along the way.

But if they subtracted their sweat equity (i.e., paid themselves a fair salary for their work along the way) and subtracted that from the rental income... they would find out the actual return on investment is less than they think.

This is not a criticism of owning/managing/maintaining/renting... just an observation.
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Old 06-17-2011, 06:30 AM   #47
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The part missing from this discussion is looking at the real books. Plus, it is a forward looking investment opportunity discussion (hopes and dreams) and not a backward look at what actually happened (i.e., the accounting books).

I am more of a hands-off passive investor (i.e., securities). That, of course, influences my opinion.

A common sense question is: Why that investment vs another? Will it yield a higher risk adjusted profit? On average... I doubt it.

For many (I suspect the reason is): they borrowed the money (leverage). It is a business venture and they hope the eventual ownership (and sale of the property) along with net income yields a profit in the end with + cashflow along the way.

But if they subtracted their sweat equity (i.e., paid themselves a fair salary for their work along the way) and subtracted that from the rental income... they would find out the actual return on investment is less than they think.

This is not a criticism of owning/managing/maintaining/renting... just an observation.
Good point. Our personal experiences and biases influence our opinions. When I was 35, I had about 400k in stocks. When it came to funding my retirement account that year I hesitated. If the market delivered it's 12% , I would have roughly 13 million dollars at age 65. If the market only delivered half that, I would have about 2.5 million. Either way, I would be in good shape and would have enough. If the market delivered squat, then it would be foolish to invest more in it. So I decided to invest in RE at that point instead of adding to securities. As it turned out, that was a really good decision. So, I'm biased.
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Old 06-17-2011, 07:02 AM   #48
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Has anyone on this board ever met a landlord with an actual exit strategy, other than "probate"?
I bought a nice two family in a college town in the late 1990s. Consequently it's easy to rent and is only 10% down from it's peak value according to zillow.com. The mortgage is almost paid off and I get $1400 a month from the one bedroom ground floor apartment....I just raised the rent for new tenants. A house down the street recently sold in about a month for just a little under asking price. So my exit strategy is to put my place on the market and wait for the offers.

I've been tempted by the real estate "bargains" today, but I would never buy a rental where i don't live on the premises as I don't want the hassle of managing remotely and I'd want a nice place so I'd still have to pay a lot of money and that would be too much tied up in real estate.

I put in minimal time to land lording, a few repairs and cash the checks.
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Old 06-17-2011, 11:08 AM   #49
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I think my sister and her DH are a bit different in renting... they only have one place, their first house they bought... they have kept it for 'insurance' in case they lost a job or had medical problems... they figured they could always afford that place...


They rent the house out at below market rate to a very high rated tenant... and make the tenant responsible for repairs... I think they have had 4 or 5 tenants in the last 25ish years... and all have treated the house as if it was 'theirs'... sis just cashed the checks...
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Old 06-17-2011, 03:53 PM   #50
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Yep. Or should I say "Whinny..."

I think most landords view "diversification" as "having more than one property". While there may be lots of bargains around, the problem is the temptation to take on too much work, let alone leverage the debt. I don't know about you guys, but most of my landlording routine seems to be months of silence punctuated by hours of slavery. My feelings depend on which part of the cycle I'm currently experiencing.
On target! This is how mine works also. Yesterday I got a call from a tenant that I have had for 8 yrs. The hot water hook up for the washer broke off and water was going everywhere. So today myself and my fix it guy spent 3 hrs cutting drywall, cutting pipes, reconnecting, re-drywalling, etc. This puts the reality check in when I think about scooping up another one. The only way I am going to add any more units is if I can get a certain ROI after I pay a mgt company to take care of everything!

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Old 06-17-2011, 08:24 PM   #51
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I was indolent today - PAID a plumber to go under the place I pumped out and had a fan going on. Nasty stinky grey water leak. Little bitty guy with a business called Pink Sized Plumbing. Drove a lifted F350 Diesel and had something to prove to the world about his capabilities. Charged a fair price, did nice work; think we've got a new go-to plumber.

Also happened to be a several of the places we have yard work done when the new yard guy showed up. He did a better job with me onsite, I praised his work mightily, suspect better work will continue for a while. Something about the owner being right there... Met 3-4 of the new tenants, which was fun. Something to being an offsite landlord and steaming into port to show the flag.
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Old 06-17-2011, 11:26 PM   #52
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Originally Posted by Tomcat98

The only way I am going to add any more units is if I can get a certain ROI after I pay a mgt company to take care of everything!
That's definitely the way to go about it: calculate a management fee of 8-10% in when calculating your cap rate.

I'm managing our properties right now (because I figure why pay a thousand or two per property per year to a property manager, when I can think of it as a side gig), but there will definitely be a point where that changes, and I'd want a good return on our money even after paying someone else to do it.
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Old 06-17-2011, 11:29 PM   #53
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Originally Posted by Ed_The_Gypsy View Post
My only real estate investments are our house and Vanguard's REIT index fund.

RE is too much work for me. I am also away from home too much. And it is not liquid.

You guys go ahead--start without me.
Can I sit next to you on the bench ?

I have my own home for my sole RE investment. I used to own a small amount of VG REIT but exchanged it to VGENX in the course of a multi-year exercise to simplify my portfolio (too many funds). It turned out the exchange was a good move at the time...in my case, pure dumb luck.
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Old 06-18-2011, 11:18 AM   #54
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Good Day All,
I am a Real Estate Investor and US Soldier out of NC, I also trade on the FOREX, Commodities and the Futures markets. As I read most of these post I see a lot of speculation and FEAR. With any market, regardless of the investment vehicle it's all about positioning. Is your money in a position that is producing?! Real Estate is a great vehicle (To Me), my money as well as the money of thousands of other Investors are in a position to produce or we wouldn't keep investing. If you are not making money in this market then you are positioned incorrectly! You may need to invest in another state or city to find better deals. I know that every city and state does not have gems laying around, but they are just laying around, just not in your backyard! Instead of saying how bad the market is "reposition yourself". Find individuals that are making money in the market and find out what they are doing that you aren't. Being a landlord can be a huge headache, but it can also be very rewarding "if done correctly". What most are not told is that being a landlord is a skill that is developed. You don't just buy property, collect rent, make a few repairs and zing your rich! You really do need to have a system for how you run your properties, so that they are not running you! Being a landlord is also not the only way to invest in Real Estate! Many of you have money in accounts that are not performing the way you hoped they would; we continually give investors a SECURE 12-15% return on Privately Invested money. I am sorry to be long winded, but for those that speak negative about how the market is (reposition yourself, you are investing WRONG!)

To Your Success,
Oscar Rodriguez
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Old 06-18-2011, 11:30 AM   #55
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we continually give investors a SECURE 12-15% return on Privately Invested money.


Oh, this will end well...
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Old 06-18-2011, 11:38 AM   #56
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Oh, this will end well...
Only if he diversifies too!
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Old 06-18-2011, 11:43 AM   #57
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I find it amazing that people find these returns impossible! We do these types of transactions on a weekly basis. It's not my intent to persuade anyone to invest in Real-Estate, I just wish people were better educated before making comments of skepticism.

V/R,
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Old 06-18-2011, 01:18 PM   #58
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I find it amazing that people find these returns impossible! We do these types of transactions on a weekly basis. It's not my intent to persuade anyone to invest in Real-Estate, I just wish people were better educated before making comments of skepticism.
I don't find the returns impossible at all. Heck, I think quite a few folks here have seen pretty good returns on a variety of investments over the past several decades we've been investing.

Quote:
Originally Posted by Rodreinvestments
we continually give investors a SECURE 12-15% return
There's a couple of interesting keywords Rodreinvestments uses here that send up a flare.

Continually... SECURE 12-15%

See, claiming continuing, secure, very high real rates of return is something we've seen before.

Words like "guarantee," "high return," "limited offer," or "as safe as a C.D." may be a red flag. No financial investment is "risk free" and a high rate of return means greater risk.
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Old 06-18-2011, 01:57 PM   #59
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An old thread:
Funding private loans

I know at least one other member on here has loaned on property recently and is doing well. We are down to three loans, all current, in the 10-11% range. We also have a loan that is worth a year of our retirement living expenses that is worthless: no pay, no security. I anticipate that one of the loans we hold, on an old trailer park with a number of acres of land, will go bad, leading to a costly foreclosure, costly cleanup/fixup, possible introduction to trailerpark management, and ultimate ownership of some nice wild property and sale of a funky trailerpark.. Have had two consecutive late pays so we drove up to take a look and three of the five trailers that had been there are gone, taking with them our borrower's income.

The investment group we had made a number of loans to has pretty much stopped in this area - the houses just weren't selling.

I like and make money on real estate, but it's not for everyone. (more for me)
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Old 06-18-2011, 03:00 PM   #60
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