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Re: Selling Residential Rentals, Going Liquid
Old 07-12-2005, 04:49 PM   #41
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Re: Selling Residential Rentals, Going Liquid

Quote:
In other words, we would make no loans.

Ha
Ha,

I concur--ha ha ha ha.

If I ever make a RE loan to anyone, I certainly invite you to steal away the DW, run off to Argentina with her, and put her to work in the Salsa trade. I would loan you the money to do that . . . maybe. She can't dance though; it's one of the primary reasons for marrying her. She mostly thinks it's goofy wiggling around. I have caught her dancing with the dog once or twice though. But she swore she was just looking at the poodle's front feet to see if something was wrong. Now that I think about it, I'm worried. Never mind.
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Re: Selling Residential Rentals, Going Liquid
Old 07-12-2005, 05:36 PM   #42
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Re: Selling Residential Rentals, Going Liquid

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Originally Posted by Apocalypse . . .um . . .SOON
Well, I see your point, but leverage has built fortunes (many).* Would
you prevent somehow people from loaning/borrowing?* Besides, people
would get into trouble anyway.

JG
Quote:

I'm an incrementalist at heart.* If you're not fairly sure what you're doing will work, then don't drag others down with you.* If I were in charge :, I think 5% down, minimum, on a home mortgage would be appropriate.* This zero down stuff is getting crazy.* Commercial property requires 25% down, for the most part.* When people don't have money in the game, the craziness really starts.* Home prices, like stock prices, are set on the margin.* Cooling the margins a bit wouldn't hurt.* Protecting people from themselves a bit isn't neccesarily a bad thing.* Protecting innocent people is a good thing.*

Unbridled free enterprise isn't a good thing.* I'd like to see the brakes put on somehow befor the bubble pops, mildly.* Greenspan is an idiot:* Fixing the problem after the damage is done is pure craziness.* That's my story, and I'm sticking to it.

--Greg
NO NO NO! Let the "market" control this stuff. Some will prosper. Some will
go bust. That is how it should work. Don't protect the unlucky, dumb
and/or those without creativitry and/or foresight. Keep government out of it.
Dog eat dog.............live or die..............every man/woman for him/her self.
This PC/protect- everyone- from- their- own- ignorance has gone way too far.
Not what this country was founded on and I doubt the founders ever
even considered such thoughts.

JG
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Re: Selling Residential Rentals, Going Liquid
Old 07-12-2005, 06:15 PM   #43
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Re: Selling Residential Rentals, Going Liquid

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NO NO NO! Let the "market" control this stuff. Some will prosper. Some will
go bust. That is how it should work. Don't protect the unlucky, dumb
and/or those without creativitry and/or foresight. Keep government out of it.
Dog eat dog.............live or die..............every man/woman for him/her self.
This PC/protect- everyone- from- their- own- ignorance has gone way too far.
Not what this country was founded on and I doubt the founders ever
even considered such thoughts.

JG
You're right! Now that I think about it, we should eat our young too.

I believe the Preamble to the Constitution says "to ensure domestic tranquility." So one of the guiding principles that our forefathers used in shaping the Constitution was . . . ? So what part of the Constitution or Preamble don't I understand? What part of the Constitution says we need to institutionalize and perpetuate a dog eat dog world. That we should continuously be vigilant in our quest for animalhood?

I'm not interested in a snake fight though.

--Greg
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Re: Selling Residential Rentals, Going Liquid
Old 07-12-2005, 06:29 PM   #44
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Re: Selling Residential Rentals, Going Liquid

Quote:
Originally Posted by Apocalypse . . .um . . .SOON
[
NO NO NO!* Let the "market" control this stuff.* Some will prosper.* Some will
go bust.* That is how it should work.* Don't protect the unlucky, dumb
and/or those without creativitry and/or foresight.* Keep government out of it.
Dog eat dog.............live or die..............every man/woman for him/her self.
This PC/protect- everyone- from-* their- own- ignorance has gone way too far.
Not what this country was founded on and I doubt the founders ever
even considered such thoughts.

JG
Quote:

You're right!* Now that I think about it, we should eat our young too.

I believe the Preamble to the Constitution says "to ensure domestic tranquility."* So one of the guiding principles that our forefathers used in shaping the Constitution was . . . ?* So what part of the Constitution or Preamble don't I understand?* What part of the Constitution says we need to institutionalize and perpetuate a dog eat dog world.* That we should continuously be vigilant in our quest for animalhood?

I'm not interested in a snake fight though.

--Greg
Me neither, I happen to believe strongly that everyone is better off if
each of us pursues our own happiness. Happiness is not guaranteed,
only the pursuit of it. I say, get government out of the way and let
people work out their own way. Some will fall through the cracks and
at some point must be protected. Otherwise, some will prosper, some will
not. Some will be rich. Some will be poor. That is nature at work.
Survival of the fittest and all that. It worked for thousands of years until
PC/bleeding heart liberalism took root. End of rant!

JG
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Re: Selling Residential Rentals, Going Liquid
Old 07-12-2005, 06:44 PM   #45
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Re: Selling Residential Rentals, Going Liquid

John, I just logged in as my DH and fixed his quotes. You and Greg are having troubles lately quoting. Do you want me to fix your's too? I'll need your password, which might be fun.
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Re: Selling Residential Rentals, Going Liquid
Old 07-12-2005, 06:54 PM   #46
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Re: Selling Residential Rentals, Going Liquid

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Originally Posted by Martha
John, I just logged in as my DH and fixed his quotes.* You and Greg are having troubles lately quoting.* Do you want me to fix your's too?* * I'll need your password, which might be fun.*
Martha, there is hardly anyone that I would prefer messin' with my quotes.
I am quite serious. OTOH, I think it might be safer if we all got into a hot tub and bared our feelings. When is good for you?

JG
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Re: Selling Residential Rentals, Going Liquid
Old 07-12-2005, 06:55 PM   #47
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Re: Selling Residential Rentals, Going Liquid

Quote:
Originally Posted by Apocalypse . . .um . . .SOON
Ha,

She can't dance though; it's one of the primary reasons for marrying her.
It's you who can't dance, silly boy. And I thought you married me because I ate my vegetables.

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Re: Selling Residential Rentals, Going Liquid
Old 07-12-2005, 06:57 PM   #48
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Re: Selling Residential Rentals, Going Liquid

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Originally Posted by MRGALT2U
Martha, there is hardly anyone that I would prefer messin' with my quotes.
I am quite serious. OTOH, I think it might be safer if we all got into a hot tub and bared our feelings. When is good for you?

JG
Greg and I have the laptop in the hot tub right now. Come on in. :P
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Re: Selling Residential Rentals, Going Liquid
Old 07-12-2005, 07:05 PM   #49
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Re: Selling Residential Rentals, Going Liquid

Quote:
Originally Posted by Apocalypse . . .um . . .SOON
You're right!* Now that I think about it, we should eat our young too.

I believe the Preamble to the Constitution says "to ensure domestic tranquility."* So one of the guiding principles that our forefathers used in shaping the Constitution was . . . ?* So what part of the Constitution or Preamble don't I understand?* What part of the Constitution says we need to institutionalize and perpetuate a dog eat dog world.* That we should continuously be vigilant in our quest for animalhood?

I'm not interested in a snake fight though.

--Greg
Hey, this reminds me of a quote I like.............

"The (fill in the blank) would rather eat their children than part with money,
and they love their children."

JGF
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Re: Selling Residential Rentals, Going Liquid
Old 07-13-2005, 08:03 AM   #50
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Re: Selling Residential Rentals, Going Liquid

"The (fill in the blank) would rather eat their children than part with money,
and they love their children." Smiley

JGF

You're baiting me, right? I've rarely seen a better set up.

Martha--The laptop isn't working. Do you think it's wet? .

--Greg
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Re: Selling Residential Rentals, Going Liquid
Old 07-15-2005, 06:17 PM   #51
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Re: Selling Residential Rentals, Going Liquid

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Originally Posted by Charles
We own three rentals, two in Phoenix (huge appreciation in the last 18 months), and one in Portland, OR (healthy appreciation).

Reading the Shiller thread, and considering the natural, normal illiquidity of real estate, we're considering sale of all parcels. *Doing so would end our nice monthly net rental income of $1,900, and incur cap gains taxes of roughly $110K. *Would leave us with $900K in liquid assets, plus a paid off home (fmv $320K).

Torn. *The real estate appreciation has been great, they're paid off, so little downside in terms of cash flow, though having the personal home paid off and nearly $1M in the "bank" would be attractive. *And, rentals can throw a few curves at you. *Your views would be helpful. *Thanks.
I vote for sell. It reminds me of the tech stock bubble. I was enjoying the ride up, up and up so overlooked one important factor: I had enough to ER comfortably at 33. Whether it was the top or not needn't have mattered. Instead I waited another 4 years and ER'd with far less in savings. (But was still able to do it by 37 due to the healthy real estate market ironically). If you can meet your lifestyle goals with a million bucks in the bank and a paid off primary residence, then do it.
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Re: Selling Residential Rentals, Going Liquid
Old 07-15-2005, 11:01 PM   #52
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Re: Selling Residential Rentals, Going Liquid

So far, the media has only examined the rising prices in certain sectors and the amount of speculation underway in housing. I believe the ARM rate increase and default trigger is next year's front page. The credit quality for first time and many newer mortgage slaves has rapidly declined.* I predict that REO inventories will swell in the current "hot spots" such as "SanAngeles" and the New York - Boston corridor over the next 36 months.* No one believed the tech bubble would blow.* Try being a real estate nay sayer and you will be treated as if you have declared Santa dead to a bunch of four year olds in early December....sure sign of emotions trumping common sense....Sell while the gettings good.
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Re: Selling Residential Rentals, Going Liquid
Old 07-16-2005, 06:13 AM   #53
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Re: Selling Residential Rentals, Going Liquid

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Originally Posted by LEX
So far, the media has only examined the rising prices in certain sectors and the amount of speculation underway in housing. I believe the ARM rate increase and default trigger is next year's front page. The credit quality for first time and many newer mortgage slaves has rapidly declined.* I predict that REO inventories will swell in the current "hot spots" such as "SanAngeles" and the New York - Boston corridor over the next 36 months.* No one believed the tech bubble would blow.* Try being a real estate nay sayer and you will be treated as if you have declared Santa dead to a bunch of four year olds in early December....sure sign of emotions trumping common sense....Sell while the gettings good.
I kind of agree, but in my case, I never owned RE in the "hot spots", or either
coast, not even an REIT. As I've said before, I've never lost a dime on RE
in my life (net, net, net) and have owned just about every kind you can name.
That said, I fully expect what we have now (not much) to appreciate
steadily and indefinitely. Great locations and bought right. Getaway-
vacation destinations for Chicago and Dallas (and about the same distance
now that I think about it). Double digit jumps in value are still possible
for us.

JG
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Re: Selling Residential Rentals, Going Liquid
Old 07-16-2005, 07:18 AM   #54
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Re: Selling Residential Rentals, Going Liquid



Charles,

When in doubt sell half. Take some money off the table. Wait a while and see how you feel then.



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Re: Selling Residential Rentals, Going Liquid
Old 07-17-2005, 11:04 AM   #55
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Re: Selling Residential Rentals, Going Liquid

JG,

I don't know how much of your net worth is tied up in real estate, but based upon your initial post, it sounds as if most of it is.* If most of your investment portfolio is tied up in the residential real estate, I would definitely recommend you diversify your portfolio.* However, I also agree with some of the other posts that selling your properties over several years would probably be the best route.

After using the proceeds of selling the first house or two to diversify into other income oriented investments and equities, you can also use any future sales proceeds to stay invested in real estate.* For the passive investor, mutual funds specializing in REIT's are excellent ways to participate in the real estate market.* A caveat about current REIT valuations: if investing new funds now, I would suggest dollar cost averaging into them over the next 12 to 24 months.* REIT valuations have gone up significantly over the past 36 months and they might cool off.

Even better: invest in REIT mutual funds inside an IRA or Roth.* Dividends tend to be about 50% of the long term return for REIT's.* Putting the REIT's inside a Roth or IRA eliminates current taxation of the dividends.

Just some thoughts.

bhowell
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Re: Selling Residential Rentals, Going Liquid
Old 07-17-2005, 11:28 AM   #56
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Re: Selling Residential Rentals, Going Liquid

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Originally Posted by bhowell
JG,

I don't know how much of your net worth is tied up in real estate, but based upon your initial post, it sounds as if most of it is.* If most of your investment portfolio is tied up in the residential real estate, I would definitely recommend you diversify your portfolio.* However, I also agree with some of the other posts that selling your properties over several years would probably be the best route.

After using the proceeds of selling the first house or two to diversify into other income oriented investments and equities, you can also use any future sales proceeds to stay invested in real estate.* For the passive investor, mutual funds specializing in REIT's are excellent ways to participate in the real estate market.* A caveat about current REIT valuations: if investing new funds now, I would suggest dollar cost averaging into them over the next 12 to 24 months.* REIT valuations have gone up significantly over the past 36 months and they might cool off.

Even better: invest in REIT mutual funds inside an IRA or Roth.* Dividends tend to be about 50% of the long term return for REIT's.* Putting the REIT's inside a Roth or IRA eliminates current taxation of the dividends.

Just some thoughts.

bhowell
Thank you. 50% is real estate, but still not all that much money. I suspect if I had a lot
more money it would still be 50%. IT's my investment of choice.
Always has been.

JG
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Re: Selling Residential Rentals, Going Liquid
Old 09-01-2005, 02:58 PM   #57
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Re: Selling Residential Rentals, Going Liquid

Getting ready to unload a rental home in California...
What is the capital gain tax rate there right now?
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Re: Selling Residential Rentals, Going Liquid
Old 09-01-2005, 03:35 PM   #58
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Re: Selling Residential Rentals, Going Liquid

California doesn't distinguish between capital gains and income tax rates.

I suspect that (for California) any gains will be taxed at the 9.3 Percent rate. (This is the bracket for singles with ~$39k of income and marrieds with ~$78k of income

If your maximum Federal and state brackets are 25 and 9.3 % respectively. And since state taxes are deductable on your federal income,

Then you'll pay 21.975 % total taxes on any gains ==>15% [federal] + (100-25)(9.3%) [state]= 21.975 % total

If your bracket numbers are different then just plug in the correct ones into the formula above.
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Re: Selling Residential Rentals, Going Liquid
Old 09-01-2005, 03:59 PM   #59
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Re: Selling Residential Rentals, Going Liquid

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Originally Posted by MasterBlaster
California doesn't distinguish between capital gains and income tax rates.

I suspect that (for California) any gains will be taxed at the 9.3 Percent rate. (This is the bracket for singles with ~$39k of income and marrieds with ~$78k of income

If your maximum Federal and state brackets are 25 and 9.3 % respectively. And since state taxes are deductable on your federal income,

Then you'll pay 21.975 % total taxes on any gains ==>15% [federal] + (100-25)(9.3%) [state]= 21.975 % total

If your bracket numbers are different then just plug in the correct ones into the formula above.
Masterblaster - I was afraid that they wouldn't distinguish...
Thank you for doing the formula... that deduction does help don't it...
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Re: Selling Residential Rentals, Going Liquid
Old 09-02-2005, 08:15 AM   #60
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Re: Selling Residential Rentals, Going Liquid

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15% [federal] + (100-25)(9.3%) [state]= 21.975 %
Add a 5% realtors commision and 1-2% tax stamps and it's easy to see why many just keep them for the rents.

Also it you get caught in the federal ALT MIN tax, 15% can shoot up. I paid closer to 18% the year I got hit.
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