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Old 12-19-2014, 07:52 AM   #21
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That would be speculating, not investing. Similar to 'investing' in fine art. And every investor has their pain thresholds and acceptable returns. You were actually a real estate developer.

For most of the US, Real Estate historically has only returned slightly better than inflation. Factoring in taxes, selling costs, risks, etc. It rarely beats most much safer investments. If you actually live in a home, you get many intangibles that might make the investment worth it.

Buying land outside of a metro area, or next door to an expanding business, can be good. Buying apartments and changing the clientele from a class D apartment to a class C or B can be another way to get quick appreciation.

For someone that is deciding to sell or rent a second home, appreciation is likely not going to be the deciding factor.

actually i was just a small investor who bought a share in a partnership . it was no speculation in my mind. it was a calculated investment that i had to go into using almost all the cash i could muster and then borrowed the rest.

with the tenants being of retirement age , the area by central park being sooooo expensive to live logic told me many who would retire could not afford to stay there with no pay checks.

i was right and except for 2 all jumped at the deals to relocate and take the money. it was only a question of how many took it. but all i needed was one sale to pay back the money i borrowed .

to make the really big bucks in real estate i found it is a professionals game. these folks are privy to deals that never hit the streets or they make very creative deals.

i was lucky and my partner was real estate mogal bernard spitzer. he recently died but our partnership ended in march with the sale of the lease rights we held.

in a very creative deal when bernie took the building co-op in the 1980's , he cut a deal to the co-op board and offered a cheaper price for those buying apartments providing he retained the lease rights to collect the rent on the commercial spaces for 50 years.

who knew central park real estate was going to shoot up like crazy.

so with only 20 years left before it goes back to the co-op board an investor group bought the rights from us.

it was quite a deal. if anyone wants to read the details i can post a link to the story as it is all over the real estate news for nyc.

we bought in as a partner about 12 years ago.
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Old 12-19-2014, 09:38 AM   #22
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to make the really big bucks in real estate i found it is a professionals game. these folks are privy to deals that never hit the streets or they make very creative deals.
That is the name of the game. Either find the deals yourself, or get the pocket listings from people you know or can partner with.

I found most of my deals myself. If you buy retail (i.e. MLS), like most people, it is hard to get any deals. People make money all the time in RE, but it is not usually from buying and re-selling on the MLS a few years later.
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Old 12-19-2014, 10:58 AM   #23
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well thats the point. folks think because they buy an investment property or rent out a property that the riches roll in.

to make alot of money takes contacts,skills and knowledge that most of us mortals do not have.

i realized that learning from our former head partner who is one of the most successful real estate investors in nyc history.

he was worth hundreds of millions and did it through ny real estate..
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Old 12-21-2014, 12:54 PM   #24
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We went from owning our own home and looking for a location in which to buy a second home for vacation/rental to selling our own home and not buying a second home. We now rent

Saved a good deal of money on operating costs, got a much better return on our equity in the market over the past 30 months, and the economics of buying vs. renting our condo simply did not compute. Could be the specific market that we are in.

Bottom line....love the independence and flexibility that this has given us. And it made financial sense for us.
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Old 12-22-2014, 01:23 PM   #25
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If you're looking to keep the second home for your use (along with the second place) ... I would run it as a vacation rental. Check vrbo and homeaway for competition in your area. You'll be able to assess rental rates and occupancy (via the online calendar).

FWIW our lake house costs us nothing even thou I block out several weeks for family traditions.
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Old 01-04-2015, 03:34 AM   #26
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If you're looking to keep the second home for your use (along with the second place) ... I would run it as a vacation rental. Check vrbo and homeaway for competition in your area. You'll be able to assess rental rates and occupancy (via the online calendar).

FWIW our lake house costs us nothing even thou I block out several weeks for family traditions.
Thanks for the suggestion. We are big VRBO users, but our HOA requires a 12-month lease.
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Old 01-04-2015, 03:43 AM   #27
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So I started a spreadsheet, and from a numbers view, it would probably be best to keep our place and rent it out. However, now that we are FI and ER'd, the painful renting issues that everyone mentioned have weighed heavily on our decision.


Since we are now dealing with some MIL care issues that have escalated since the original post, adding any additional stress does not make any sense at all. When you are already FI, ER'd, and happy, why complicate life any further?


This same issue is probably going to drive us towards not selling as well, at least in the short term. We may reconsider the selling part after life stabilizes, but this care issue may be a long ride.
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Old 01-04-2015, 07:02 AM   #28
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So I started a spreadsheet, and from a numbers view, it would probably be best to keep our place and rent it out. However, now that we are FI and ER'd, the painful renting issues that everyone mentioned have weighed heavily on our decision.
It is not painful if you have a decent property, and get good tenants. Getting good tenants is a simple cookie cutter approach.

Identify your tenant selection criteria before you even start to advertise. Then, stick with it. And do a proper background check. Do not skimp, buy the best package that is offered. Never think a property management company has a better way of doing things than you do. They are in the business of making money for them, not you.

If you ever decide that you want to rent to a person that does not met your criteria, just give them the house instead.
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