How I Stopped My Assets from dropping...

[freebird5825]

I will go away. sorry.

fat fingers on the keyboard? no problem.
when you quote, look for two sets of brackets...
[ quote=poster name;nnnnnn ] at the beginning and [ /quote ] at the end.
type anywhere but in between those two sets of brackets and you are golden.

 

[freebird5825]

You really are high tech Freeby.

I understand that we are all being deflated. fist like a slow leak- more recently like a blow out! But I am doing something about it. There are others too that have implemented some actions.

um...i'm a FIREd engineer. i just can't help myself.

i think we all could use a case of Fix A Flat right now.

ignore the bold formatting here. that will be covered in Quote 200. j/k

 

[blanston]

You mentioned you bought all your RE properties with nothing down, it made you sound like a Carlton Sheets commercial.......

What happens to your plan if the RE market doesn;t recover for a couple years, and you can't get tenants?

I did not buy with nothing down. I paid cash. I am not Carlton or rich dad.

I am not a flipper. I intend to hold these properties. They do cash flow. I don't expect real estate to recover for 7 to 10 years, maybe longer!

Freeby I hope this post works. now I'm i Itallics!!!

 

[Gardnr]

I'm trying to take advantage of this market by buying stocks on the cheap. Real estate is also cheap right now, obviously. Not sure where else to put my money to work... anyone know where the next bubble will be? We went through tech stocks and real estate, what's next? I'd like to get in early.

Too late. It's in short term Treasuries! Not much upside but some people are going to be disappointed when they lose money in short term bond funds.

Maybe guns, ammo and safes. Or ultra short ETFs. Too late on that one too (hopefully).

 

[freebird5825]

I did not buy with nothing down. I paid cash. I am not Carlton or rich dad.

I am not a flipper. I intend to hold these properties. They do cash flow. I don't expect real estate to recover for 7 to 10 years, maybe longer!

Freeby I hope this post works. now I'm i Itallics!!!

but you look so good in Italics.
i can't wait to see how you do with the emoticons. just kidding...
i have no idea what you see on your window, but look above for the toolbar within the post quote editor. see the B, I, U ?
click them on and off.
keep playing with the editor. you're doing fine. there are more sophisticated editors, but this is what we gots to work with. it's basic.

 

[blanston]

So the only reason why your assets haven't dropped is because you are buying deflating assets at a discount? It will prop up your balance sheet for a while but it kinda sound like a short term patch... If real estate prices keep coming down, won't that affect your total asset value at some point? Unless of course you can continue buying assets at discounted prices until the market turns around. And of course, as you build up your RE portfolio, you will need to accelerate your discounted purchases to prevent your ever larger asset base from dropping. How long before you max out your borrowing power and the banks shut you down?

Plus I am always weary of people who claim they can buy assets below market price... Whatever you end up paying for a property IS the market price as far as I am concerned.

But if it works, it will have been a very bold move on your part. Personally I can think of 3 simpler ways to stop my assets from dropping or at least slow down the decline: 1) go all cash. 2) save more. 3) invest in a reverse index fund. I have been doing 2) and 3), still not enough to completely offset the losses though. Quite a few people on this board are doing 1).

Thanks Dreamer...You have implemented a plan to help prop up your assets. Thanks for sharing. I have a little more cash too and saving more. Don't have any reverse index stuff.

I have no way of knowing that the real estate I am buying is at the bottom. But as a mortgage broker-real estate broker-landlord, I do know that I am buying below the current market value. It is aslo a fact, I am not buying at the top.

 

[blanston]

First rule I am following is to not take on any more debt.
Second rule is to pay off any debt I currently have (besides my primary mortgage).
Third is to continue to invest a small amount of cash in dividend paying equities. My dividend income continues to rise, so I have no immediate stressors.
Forth, stockpile more cash, so when things get a little more stable I can buy more heavily in the market.
I don't care if I invest at the very bottom or not, I just want to be a little more confident.

Not too bad zat. You are very conservative, so am I. I have kept my unsecured debt down too.

 

[Zathras]

For those of us looking for an income stream the ups and downs of the price of the assets isn't so important as long as the income stream continues to grow.
In my case, I am buying more as the market goes down. This raises the income stream at a lower price that I could if the market were high.
The only concern is if any of the stocks I have drastically cut or eliminate their dividends.
So far, I have many more that have raised their dividends than those that have cut them. So I am not so concerned if the portfolio value decreases.
I guess what I am saying is, I have no plan to stop my assets from falling, as my income is growing, and long term the assets will recover as well.

 

[blanston]

If Blanston can buy places for 1/3 of their last sale price in 2006 and rent them for a rent/month that is 1.4% of the purchase price he will do just great. Work will be involved handling the rentals and upkeep, but there is plenty of slack to do maintenance, deal with vacancy, and even >shock< make principal payments. Were i filled with a desire to work harder and presented with similiar deals close to where we live i would jump all over them.

Thanks Calm...I kinda of enjoy the fix up part-what little I know how to do. I have gotten my kids involved in this too. Cleaning, yard work, etc. But the real work is done by reliable handy man, etc. I woops- I am itallics again!

I review applications but leave the face to face and any other tenant contact to ohers.

 

[blanston]

In my case, I am buying more as the market goes down.

Me too Zat!

 

[nun]

I've done 2 things.

Around Dow 11000 I sold equities and went from 70/30 to 30/70. I realized that my asset allocation wasn't right for me in a falling market, but I worried that I'd sold at the bottom. I bought back to 50/50 at DOW 8500 and that's where I'm staying. This year has shown me my truly comfortable AA.

I'm saving more, maxing out 403b, 457 and DC plan and paying extra towards the mortgage each month

 

[calmloki]

Thanks Calm...I kinda of enjoy the fix up part-what little I know how to do. I have gotten my kids involved in this too. Cleaning, yard work, etc. But the real work is done by reliable handy man, etc. I woops- I am itallics again!

I review applications but leave the face to face and any other tenant contact to ohers.

So what do you pay for management? 10% of rent received? Our stuff is also free & clear, but i do all the management and much of the maintenance - while keeping the places in good order at a pretty thrifty rate i just can't convince myself to give a management company about 16.5% of our profit after expenses.

 

[blanston]

So what do you pay for management? 10% of rent received? Our stuff is also free & clear, but i do all the management and much of the maintenance - while keeping the places in good order at a pretty thrifty rate i just can't convince myself to give a management company about 16.5% of our profit after expenses.

I have someone at my office do the majority of the management- I pay the bills and involved on choosing renters-setting rent prices-making decisions on major exoenses. So I am really involved but don't deal direcly with tenants and I don't do any handy work once there are rented.

 

[blanston]

If I wasn't armslength from tenants I would'nt be in the biz!

 

[calmloki]

.... But as a mortgage broker-real estate broker-landlord, ....

Blanston: "I have someone at my office do the majority of the management- I pay the bills and involved on choosing renters-setting rent prices-making decisions on major exoenses. So I am really involved but don't deal direcly with tenants and I don't do any handy work once there are rented".

Blanston: "i ben increasing my assets by purchasing real estate. I bot 6 houses in past six months with total market value of 800k--that has more than offset my losses! Now up bout 200k overall. All REOs purchased from banks. The average discount from their high value or sold price is bout 50%. I have purchased these homes at least 25% less than current market value. this allows me to refinance them for approx the 100% of my purchase price. So i aint got nothin in them"!

Blanston: "If I wasn't armslength from tenants I would'nt be in the biz"!

Me: Looks like you are in the perfect position: you are a RE broker, a mortgage broker, and a landlord. You have someone else in your office handle tenant contact and don't do any handy work after the places are rented. You are a smarter man than me McGhee. Kudos to you for making money or saving expenses on all sides of the deal - and with minimal personal labor or involvement. Nice to have the free management - checked my math and management would cost us closer to 17.5% of our rental profit - and our places are free and clear.

 

[BunsGettingFirm]

The markets have been pulling me down like everybody, but i ben increasing my assets by purchasing real estate. I bot 6 houses in past six months with total market value of 800k--that has more than offset my losses! Now up bout 200k overall. All REOs purchased from banks. The average discount from their high value or sold price is bout 50%. I have purchased these homes at least 25% less than current market value. this allows me to refinance them for approx the 100% of my purchase price. So i aint got nothin in them!

Example: last home purchased for $65,000- selling price in '06 was 198,500. The home rents for $925 per month. I refinanced the home for the entire $65,000. (no money in) The interst pymt plus tax/insur is 420 = cash flo of $505! not too shabby!! If i can keep buying under market with nothin down and great cash flow- i think i will just keep on doing this!!!

What are others doing to combat their asset deflation?

The only way to stop your assets from dropping is to do plenty of exercise and wear supportive garments. Some also advocate hanging upside down for at least 1 hour each day and getting some light cosmetic surgery, but that's where I draw the line.

Oh, when I posted this message a while ago, the site was going nuts by constantly logging me out.

I got an REO as well, but for only 50% off the 2004 price, so for me to live in it is better than renting. I wouldn't say that even at 50% off its high that the property would make a good rental.

 

[BunsGettingFirm]

It's a natural part of the aging process. Exercise and cosmetic surgery can help, but you really can't do much beyond postponing the inevitable for a few years.

What's that?

Dropping assets?

Oh.

Never mind....

Damn, you beat me to it by a long time. Marginal minds think a like.

 

[freebird5825]

this combo of text in the first entry of Newly Subscribed Threads (responded to) when i clicked on User CP got me giggling...

thread title...
"How I Stopped my Assets from dropping"
last posted by
"BunsGettingFirm"

i am sooooooo easily entertained.

 

[blanston]

I got an REO as well, but for only 50% off the 2004 price, so for me to live in it is better than renting. I wouldn't say that even at 50% off its high that the property would make a good rental.

Well, the first thing we have to do is make sure the home will cash flow. Doesnt mean u can't still get a good deal like you did. (owner occupied) But for me-investment property I will keep-first and foremost it must cash flo. I stopped buying in 2002 because home prices went up to high to cash flow- Now, i can find cash flow again!

 

[calmloki]

Not worth a whole new thread, but this article has one of the most reasonable assertions by a lawyer-type i've seen:

"Reardon said the attack was premeditated. Nobody brings a hatchet and wears rubber gloves to discuss rent at that hour of the morning, he said".

Landlord attacked with rusty hatchet

Never had a tenant meeting when a hatchet was involved - Nazis, a pistol, crazy people, and a guy that liked fighting in the punch-up for money bouts, yes, but no hatchets. Whew.

 

[Marcretire]

I replaced my old car at 18 years and ~72,000 miles.

My '86 Honda Accord has 165,000 miles and keeps going and going.

 

[Purron]

I buried mine in the backyard.