/biz/ - Business & Finance

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Anonymous Sat Aug 2 01:09:00 2014 No.431346 [DELETED]

I've been thinking quite a bit and it seems as if property is the most surefire way for the average person to become wealthy.

In essence the bank loans you seed money to invest (good luck getting that amount of money for any other type of investment or business enterprise) in an asset with an average yearly return of 5%. In addition the asset provides returns at an average of 1% of the value of the home per month if it is rented. This will easily cover taxes and mortgage payments, with the excess available to reinvest. Over time, as the mortgage is paid down and the value of the house rises you have ever increasing equity to invest in new property. 20 years of prudent buying and renting and you are easily a millionaire. All you need is an initial downpayment on that starter property and a steady job.

Am I missing something? You have to have money to make money, and this seems like the only way a normal person can get that initial chunk of money to invest.

Anonymous Sat Aug 2 01:44:20 2014 No.431373
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>>431346
Yes, your missing fucking everything.

Houses cost money to maintain, this is a nontrivial expense, annualized.

Houses do not provide a guarenteed return. Many studies have shown lots of housing returning inflation, annualized. You can absolutely make money buying and selling real estate(those transaction costs), or by slumlording, but you -DO NOT- make money off of your own godamned shelter. Don't expect it, be happy if it happens.

The interest rates of today(I locked in 3.25%) are un-fucking-heard of, and likely won't exist in the future. Even then, it's still greater than inflation, so buyer beware.

Housing also has opportunity costs. Local area employment is shit and want to move?
http://www.citylab.com/work/2013/05/link-betweeen-high-levels-homeownership-and-unemployment/5520/

If you sell your house, that brings those transaction costs. If you get a tenant management firm to take over, then they take their cut.

There is a case to be made for owning a house, but no, it's not the "Path to prosperity". The middle class of the US, who fucking loves houses so godamned much, has swallowed a godamned lie. They treat(ed) their houses like credit cards, oversized them according to their wants instead of to their needs(pic related), believed that housing "could only go up", and would've been better off putting it in stocks, or bonds, or fucking any other actual productive asset.

Anonymous Sat Aug 2 01:48:08 2014 No.431376

>>431373

You're retarded. There's costs in everything.

Real estate is the only way a middle class person can become extremely wealthy because you can leverage up so high. As long as you buy in an area that has positive outlook for 30 years and you can attract tenants, you will most likely make money.

>>	Anonymous Sat Aug 2 01:51:10 2014 No.431377 >>431376 >extremely wealthy I shed a tear.

Anonymous Sat Aug 2 01:59:56 2014 No.431388

>>431373
>but you -DO NOT- make money off of your own godamned shelter.
....no shit.

I thought I made it clear that I'm talking about purchasing property as an investment.

>>431376
That's what it seems like. It's really the only means for a non-wealthy person to secure loans in the hundreds of thousands, build up equity, and secure more credit.

Anonymous Sat Aug 2 02:04:21 2014 No.431393

>>431376
>as long as you can accurately predict the future it's good
Uh everything in finance is the same
Also leverage does not imply wealth and costs of investing in real assets are much higher than in financial products. His point stands: you can't just throw out revenue figures as returns, you need to include expenses to get to net income.

People were going broke in real estate long before 07 and will continue to do so.

>>	Anonymous Sat Aug 2 02:13:53 2014 No.431399 >>431393 The important difference between investing in real estate and investing in finance is that, with real estate, you can invest 10x by getting a loan. That is what allows you to become wealthy.

>>	Anonymous Sat Aug 2 08:29:42 2014 No.431540 >>431377 Ever heard of Donald Bren?

>>	Anonymous Sat Aug 2 13:16:40 2014 No.431662 I think something like 85% of millionaires got that way because of real estate As an RE investor myself, I can tell you it's extremely powerful if done correctly

>>	Canaduhfag. Sat Aug 2 13:46:41 2014 No.431682 >>431662 >citation needed

Anonymous Sat Aug 2 14:14:35 2014 No.431708

>>431346
Everyone thinks this stupid line of thought...

"Hurr, I can just mortgage 80% of a home's value and then I'll find some sucker to rent my place for more than my mortgage + property tax."

Nope. If you buy a home on a mortgage, plan on paying out of pocket for it for at least 5 years until the property value goes up (hopefully) enough where you can rent it at a slight profit.

But then there are maintenance costs associated with the place, turnover costs when you change tenants, and sunk costs when you are between tenants. That's assuming you do all the property management yourself; if you have a job, which you will need, you'll have to hire a property manager who also has monthly fees.

Then after the mortgage is paid, you get something like $20-30k/year per rental home depending on where you live before any expenses and taxes are deducted. After it's all said and done, you're looking at $15-20k in income for each rental investment.

Residential rental properties are long-term investments and the yield is low compared the vast amount of capital you have to sink into them. They also take time to actively manage them.

So yes, they are relatively 'safe' investments, but they're also relatively low yield for the amount of capital it takes to put into it.

Anonymous Sat Aug 2 14:20:42 2014 No.431716

>>431708
I crunched the numbers in my area and to just break even on 1 property, assuming it's mortgaged @ 15years, would take approximately 20 years. After the 20 years it will yield $30k in 2014 dollars for one of the most expensive places to live in the country.

Anonymous Sat Aug 2 14:43:45 2014 No.431746

>>431708
This thread has had some really douche-y responses and a lot of people expressing their opinions without knowing anything about what they're discussing...but this guy gets it.

My two cents is that a single-family home is a poor investment in the long term. You're more likely to maximize your profits by buying a 4-plex or above. It's almost certainly going to cost more but you can charge more and the locations of these things are generally a bit better than investing in just another suburban colony that's glommed onto the success of an adjacent city. Research the area and it's average market cap rate, run background / credit checks on all prospective tenants.

Anonymous Sat Aug 2 14:58:26 2014 No.431764

>>431708
>>431716
Some of us don't live in shitholes like commiefornia where property is expensive as fuck.

Where I live (upper NE) you can get a duplex w/ 2 beds/1 bath in each unit for 100k. Average rent for each of these units is around 900-1000 dollars a month.

$2000 in rent - ($900 mortgage + $200 maintenance + $300 taxes/insurance + $100 property management) = $500 a month and that is a conservative estimate.

Anonymous Sat Aug 2 15:26:10 2014 No.431781

>>431764
There is no way that you are renting out a residential property for twice the mortgage. You are either drastically over-estimating how much rent you'll get from a $100k duplex or drastically under-estimating how much that duplex costs. Probably both.

Think about it: why is someone going to pay you $900/mo to live in a rental when they can purchase a place for that much?

It's not a matter of living in an expensive area, it's a matter of whether you have the capital to buy the home vs. mortgage. If you are mortgaging the property, as some people are claiming you can do, you are not going to recouperate that value on the property for quite some time. And after the mortgage is up, in a place with lower property values, the property will net you closer to $10-15k instead of $25-30k.

Anonymous Sat Aug 2 15:39:36 2014 No.431793

>>431781
>why is someone going to pay you $900/mo to live in a rental when they can purchase a place for that much?

>purchase a place for that much
>get a mortgage for a place for that much

You're confusing the two because you're a semi-well off white male with long term planning ability.

Why do I have people paying off the mortgages on rentals? Because they have shit credit history. Because they work for cash. Because they're illegals. Because they're criminals. Because they can never save a down payment if their lives depended on it. Because they have no plans to live in that area for years. Because they don't want the liability and maintenance responsibilities of home ownership. Because the thought of paying "the jew banks" interest bothers people, but building no equity due to rent doesn't because they're idiots. Because they know a bank will kick their non-paying asses out but that I somehow won't (it's actually faster and easier for me to, 4 months vs 9 months usually unless the state has non-judicial foreclosure).

Really, you basically asked "Why are people stupid?" if a round about way.

Anonymous Sat Aug 2 16:04:35 2014 No.431816

>>431793
You obviously don't actually rent to anyone. If you did, you wouldn't be claiming that you extort broke people for more cash.

The point I was making before is that there is no way that he gets a 2-family property for only $100k net value and proceeds to rent it for 2 * $900/mo. If property values are really that low, which really only exists in poor-as-fuck southern rural areas, the going rate for a rental would be $400-600/mo.

Anonymous Sat Aug 2 16:48:30 2014 No.431857

>>431816
>You obviously don't actually rent to anyone.

Really? Do you? Or even know anyone that does? Because I do, and a good chunk of my family does across a fair amount of the country and a few spots outside (though that's very limited). And if not, then what the fuck do you really know....

>If you did, you wouldn't be claiming that you extort broke people for more cash.

The stupid and the poor, they're the bread and butter for most industries. You talk about it like it's an impossibility, but it's the reality of rental market. It's almost exclusively a bad idea to rent yet there's something like a 100mil renters in the US.

From the way you talk you talk you probably think I'm making this up too but there's places where you can rent furniture and household goods, popular too among renters, where they charge so much that realistically you could outright purchase the stuff in 4 months, but they'll "rent" it in perpetuity.

Or how about a place where you can walk in, and they'll just give you money, not a lot, maybe a pay check or two worth of cash, but the rate they slam you with, it's great. 4%. Not so bad, right? Yah, that's not yearly, that's the daily rate. 600% APR.

Now these are two industries that as you so eloquently put it, rely purely on "extorting broke (and stupid) people for more cash". Hard to believe, but they exist, and they do well. Renting? Not all that different.

And where did I say broke though? Aside from the few that think cheating a landlord is easier than a bank, I didn't list them as equally significant reasons for rental. Really is it comes down to a mix of bad credit & inability to produce a down payment, and really it's down payment that's probably the bigger issue, but I've never done extensive polling on the issue. Neither mean broke. Average American has like $4k in a bank account, how the fuck are those kinds of people supposed to pony up at least at absolutely bare minimum $25k realistically.

Anonymous Sat Aug 2 16:53:10 2014 No.431864

>>431816

And as for the other guy's numbers, I would need to look at his figures closely, probably do some research though to figure out if they're odd. Doubling your ins is a little out of skew, if the mortgage is small is it because of a big down, gotta account for that lost value on money. I only say out of skew, not impossible, because there are areas like that. I deal with single family houses, so I don't know duplexes. I also deal with central Florida, not the north east, but I have family that do, so I could find out if there's areas ripe forit.

Anonymous Sat Aug 2 18:52:36 2014 No.431955

>>431857
> And where did I say broke though?

You implied it when you wrote:

> Because they have shit credit history. Because they work for cash. Because they're illegals. Because they're criminals. Because they can never save a down payment if their lives depended on it.

All of which are qualities of someone who is broke most of the time.

The rental business is significantly different than the payday loan business.

For starters, when a broke person decides to stop paying rent, it is a long and painful process to evict them. All the while you aren't collecting any money from them, yet spending money to get a court order to make them leave.

And once you do evict them, you have little recourse to recouperate the lost rent. You can take them to small claims court, assuming the rent is < $5k total, but because they are illegal immigrants or work on-and-off, there's nothing the court can do to make them pay. That's if you can actually track them down after you boot them.

Smart rental property owners stay away from the people you describe for that reason. They want tenants who will reliably pay the rent because it takes a ridiculous amount of resources to evict and recouperate payments from a non-payer.

Anonymous Sat Aug 2 19:41:59 2014 No.432002

>>431955

I think we just have different definitions here of broke versus someone who is just poor. What I wrote there to me is poor, I'm not sure what your definition of poor is if not that. And the great part is poor people have money too, and it gets spent of bare essentials first, so food and shelter, which is where I come in.

>The rental business is significantly different than the payday loan business.

Eh, not to me. Most people are dumb, poor, and fairly shitty to deal with. Squeeze them for whatever you can. And shit credit is just par for the course. You know what the average credit score is for Americans 18-45? 620. Yah, let that sink in. You are not getting shit from a bank based on that. Not necessarily broke, just poor.

>For starters, when a broke person decides to stop paying rent, it is a long and painful process to evict them.

This is extremely state dependent. There are liberal shit hole states, sometimes cities (Austin comes to mind) where it's ridiculous (4 months). You know what? You don't skim off these kind of people there. You know what it's like in some glorious states? You can give them a few days notice, serve them, 5 days to respond, and usually a court order within 2 weeks after that, and the sheriffs around here love moving out people, so you get same day turnaround on that shit. Total process cost: ~$250, involving about 3 forms you can file yourself. Total time? Good odds you can boot them out before the first of the next month rolls around. You know the best part? They can't even defend themselves in court unless they deposit the contested rent with the court first, so you basically get default judgements.

On top of that, it's not hard just getting these people to leave when they don't pay. I'm not sure why people think it's some crazy long painful or expensive process, unless you're in some liberal shit hole. A good majority know they'll be out on their ass within a month.

Anonymous Sat Aug 2 19:50:05 2014 No.432010

>>431955

And there's always fun stuff like the AC "breaking" all of a sudden. Enjoy that sweltering 110 degree heat. I have a month to fix it realistically, but by then they're out on their asses anyway.

As for recouping the lost month or two of rent, you're right, it's a waste of time chasing that shit, retarded even. You know what's the fixer for that? No security deposit returns. Always stuff to find messed up. You won't hear from these people for it back, and it's great getting calls about "Well my lawyer is going to be hearing about this." Yah, right, I'm sure "your lawyer" is going to get right on it. That's like the ultimate poor people code word, "MUH LAWYER". Oh god.

>Smart rental property owners stay away from the people you describe for that reason

Man, there's banks that give personal loans for 9%. Then there's place that give loans for 600%. I don't think either is dumb if they're making money hand over fist. You can cater to whoever you want in a market, but for renting, you want poor fucks to squeeze, trust me. Well off people will bitch and moan every fucking month about this or that being wrong with the house and them? Yah, they will actually go look up *A* lawyer, pay him, and get him involved...

>>	Anonymous Sat Aug 2 19:50:41 2014 No.432011 >>431764 Don't forget taxes. Everything this kind of thread pops up people forget about taxes.

Anonymous Sat Aug 2 19:57:59 2014 No.432016 [DELETED]

>>432010

>>And there's always fun stuff like the AC "breaking" all of a sudden. Enjoy that sweltering 110 degree heat. I have a month to fix it realistically, but by then they're out on their asses anyway.

I got nothing against how someone makes a buck.. but lets be real, you're a slumlord.

Its not the route OP was suggesting to make money in real estate.

Anonymous Sat Aug 2 20:02:58 2014 No.432022

>>432010

>>And there's always fun stuff like the AC "breaking" all of a sudden. Enjoy that sweltering 110 degree heat. I have a month to fix it realistically, but by then they're out on their asses anyway.

I got no problem with how somebody makes a buck... but lets be real, you're a slumlord.

Its just not something most people want to deal with.

Anonymous Sat Aug 2 21:42:30 2014 No.432135

>>432022

What's best is that they can't even open their windows either without clouds of mosquitoes eating them. Houses in Florida tend to not have window screens.

>you're a slumlord.

I see no reason to ever shed a tear for dead beats. That isn't something that happens if they pay their rent, but when they don't, why does anyone care? As far as I'm concerned, rent is a day late? Guess what, that means you're trespassing, and I should be able to just go and shoot them. The fact that they get a month is stupid enough.

Anonymous Sat Aug 2 21:57:15 2014 No.432150

>Someone breaks in and wrecks the home
>Tenant is a closet crackhead and tears the place apart
>The builder installed shitty pipes and flooded the home
>Tornado (or regionally applicable natural disaster) turns the home into scrap wood

You're ignoring some serious risks and when you're levered $200k+ they can be ruinous to you.

Also:
>value of the house rises
What the fuck kind of house RISES in value after it's been used? What buyer is going to pay extra for used and damaged property? Extremely naive perspective, OP.

>>	Anonymous Sat Aug 2 22:29:08 2014 No.432189 >>432150 Quite often it's location that matters most. Property is almost always an appreciating asset. This is indisputable.

Anonymous Sat Aug 2 22:33:24 2014 No.432193

>>432150
>What the fuck kind of house RISES in value after it's been used?

Every single one! What are you retarded? Houses are not like shoes they don't depreciate once they are "used". My parents bought there 1 story ranch in the suburbs for 140k in 1995, it got reappraised by the town a few years ago at 300k. So in less then 20 years their home value doubled.

You seriously must be retarded or 17. Home/land prices rarely depreciate unless you buy in niggerville, or your decent area somehow turns into niggerville.
>Tornado (or regionally applicable natural disaster) turns the home into scrap wood

That is why you have home owners insurance. It is usually included in your mortgage payment, if you own the home outright you pay it yourself.

So I guess all of those reasons you listed are reasons you yourself will never own a home? Any house can get broken into or wrecked, crackheads will break into any dwelling looking for shit to steal or places to squat, anyone can hire a shitty builder/repairman, that is part of life.

Anonymous Sat Aug 2 22:43:16 2014 No.432206

>>432193
Land and property may rise in value but the building never will. I'm also not trying denounce owning a home, I'm trying to denounce using residential properties as investments. You'll be heavily levered and exposing yourself to uncertain risk that can send you to foreclosure.

I also don't understand how you can say every single property in existence rises in value over time because people would never bother investing in any other asset if that was really the case. Are you telling me if I bought land all up and down Detroit 20 years ago I'd be a rich man now? What if I took out a $1,000,000 loan to buy land all over the Sahara desert to build homes? Would I be rolling in dollars in my lifetime?

>>	Anonymous Sat Aug 2 22:49:22 2014 No.432217 >>431373 big houses fuck yeah

>>	Anonymous Sat Aug 2 22:57:54 2014 No.432231 what's the best real estate analysis spreadsheet? I just want to do a discounted cash flow analysis. I could make the spreadsheet myself, but there has to be one a good one that's already pre-made.

Anonymous Sat Aug 2 22:58:46 2014 No.432235

There are a lot of idiots in this thread.

>>431376

Who says high leverage is only specific to real estate?

>>431399

>The important difference between investing in real estate and investing in finance is that, with real estate, you can invest 10x by getting a loan.

Leverage is not specific to real estate. One can easily gain leverage through equities, derivatives, all asset types, really.

> That is what allows you to become wealthy.

Leverage is good...until it's bad.

A common misconception is that real estate will always go up. This was the exact belief that prevailed before the '07 crisis. It's also important to note that, over long time horizons, RE returns are lower than returns on, say, stocks.

Anonymous Sat Aug 2 23:01:50 2014 No.432238

>>432150

Not really sure if troll or confused???

>insurance
>insurance
>insurance + lawsuit
>insurance

As for
>What the fuck kind of house RISES in value after it's been used?

Houses aren't like cars. The cars generally depreciate over time, the houses generally appreciate over time. There are exceptions and regional trends will effect them both, but the general trending is that.

Anonymous Sat Aug 2 23:22:51 2014 No.432273

>>432206
>Land and property may rise in value but the building never will.
The house is on the property retard. If the land value goes up everything goes up. If you buy property you are buying the land, and any building upon it. Even if it's a delapated barn, you are paying x amount of dollars for it, and will demolish at your own cost. It's all inclusive.

>You'll be heavily levered and exposing yourself to uncertain risk that can send you to foreclosure
This is why stupid, poor people don't/shouldn't invest. Before you do any kind of investing you need a personal safety net should you lose your job(3-4 months). When you decide to invest in property you need to have an additional emergency fund setup for unforeseen circumstances. If you rent a house for $1200 and your mortgage is $1000, you don't say yay $200 profit. You put that money into your emergency fund until you have at least 6 months of mortgage payments saved up in case of anything. That is a conservative way of doing it, some people are more risk averse others less.

>Are you telling me if I bought land all up and down Detroit 20 years ago I'd be a rich man now?
If you go back to what I wrote about "niggervilles" you will see I already pointed out that it's never smart to invest in ghettos or if the area could become a ghetto. Detroit was a niggery ghetto 20 years ago....and still is so you shouldn't invest there. But the suburbs all around Detroit have gone up.

>I'm trying to denounce using residential properties as investments
>$1,000,000 loan to buy land all over the Sahara

Yes. Buy land in one of the most arid places on earth. You will be rolling in dough like all of those colored boys on your mtv channel.

>>	Anonymous Sat Aug 2 23:52:14 2014 No.432328 >>431346 I bought my condo in 2011 for $71K and sold it this year for $125K so there is money to be made but it is only sightly better than pure speculation.

Anonymous Sun Aug 3 00:11:25 2014 No.432353

>>432235
>Leverage is not specific to real estate.
It is if you aren't wealthy. There is NO other way a person making 50k a year can get such a large loan with so little down payment at such a low interest rate.

>RE returns are lower than returns on, say, stocks.
hurr no shit dumbfuck. See above. A 5% return on a 200k investment (plus rent) is better than a 7% return on a 20k investment.

>>	Anonymous Sun Aug 3 02:26:20 2014 No.432366 >>432193 A few years ago? Like 2006?

>>	Anonymous Sun Aug 3 03:27:04 2014 No.432404 >>432366 In what retarded world does "a few" mean 8? A few usually means 3. A couple is 2, a few is 3. That is the best definition of "a few" as I have known it. I want to say 2012 it was reappraised, but I don't recall exactly.

>>	Anonymous Sun Aug 3 04:56:58 2014 No.432453 >>431346 Your missing a lot of variables that are unknown to you plus haven't considered the hard work that will come with it. Aside from that it's roughly the same chance as stock speculation.

>>	Anonymous Sun Aug 3 05:22:01 2014 No.432466 >>432453 >Aside from that it's roughly the same chance as stock speculation. See >>432353 The bank won't give you 200k to invest in stocks but it will give you 200k to invest in housing. That's the important difference.

>>	Anonymous Sun Aug 3 06:30:07 2014 No.432487 >>431346 >I've been thinking quite a bit and it seems as if property is the most surefire way for the average person to become wealthy. You haven't been thinking enough, shithead.

>>	Anonymous Sun Aug 3 06:34:39 2014 No.432488 >>431346 No youre on the right track. But /biz/ is cancer. Google "biggerpockets"

>>	Anonymous Sun Aug 3 06:43:24 2014 No.432495 >>432487 Your advice is to.....? Buy shitcoins like a good little goyim?

>>	Anonymous Sun Aug 3 09:10:09 2014 No.432546 >>432135 >>432135 >>432135 so edgy, back to /b/ with your property owning fantasies. confirmed for never being in the real world, and handed everything in a silver platter.

>>	Anonymous Sun Aug 3 10:37:37 2014 No.432579 >>432488 this. you are right OP, don't listen to the shitposters in this thread. housing is an essential basic need for all of us and with increasing population and limited land, housing is only going to increase in demand and price.

Anonymous Sun Aug 3 10:45:44 2014 No.432581
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>>432353

>There is NO other way a person making 50k a year can get such a large loan with so little down payment at such a low interest rate.

It's pretty evident that you're not familiar with futures or options, because your argument that leverage is only specific to real estate if you aren't wealthy is not true at all.

>hurr no shit dumbfuck. See above. A 5% return on a 200k investment (plus rent) is better than a 7% return on a 20k investment.

And this proves that you have absolutely no idea what you're talking about. Over the long run, a 7% return is MUCH better than a 5% return, no matter the principal.

Please just stop posting. You're spreading misinformation.

Anonymous Sun Aug 3 11:21:38 2014 No.432597

Renting is not the best way to start making money through Real Estate. In fact renting is only profitable in the long-term or if you are already wealthy and can afford to invest in multiple properties.

The reason Real Estate investment is seen generally as a safe bet is that it offers short-term and long-term opportunities. As with all investments short-term profit can be found by identifying under-valued properties that came about due to foreclosure / elderly home-owner being taking in to care and the family wanting a "quick sale". Homes are frequently being quickly sold well under their market value and seriously are not that difficult to spot.

I cannot believe this thread for the most part has revolved around renting.

>>	Anonymous Sun Aug 3 11:50:40 2014 No.432612 >>432002 You've clearly never had a tenant fuck up a property in vengeance yet, but you will. That $250 will be a drop in the bucket.

>>	Anonymous Sun Aug 3 12:23:44 2014 No.432625 >>431346 assuming your tenants pay rent on time...

Anonymous Sun Aug 3 13:08:12 2014 No.432650

>>432010
> AC magically stops working
> Nigger you're renting to trashes the place
> You can't sue him because he's poor

Yea, I bet you do this.

>>432193
>>432353
Houses in America rise at the rate of inflation long-term, which makes property value a net 0. The value of a rental property comes from collecting rent, not the rise in the value of the land.

Flipping houses and condos in a speculative market is a different animal.

>>432597
Agreed. And the money is a lot easier to be made on undervalued properties if you can do your own construction.

>>	Anonymous Sun Aug 3 13:25:39 2014 No.432670 >>431346 I just realised that everyone here is full off shit. Previously I thought I could get good advice here on this board but I was even more full of shit than the rest of you lot, now I'm mid tier full of shit and I'm proud of that.

>>	Anonymous Sun Aug 3 13:41:24 2014 No.432686 >>432581 7% APR on $5,000 won't provide you with food and shelter for the year. 5% on two properties valued at $350,000 each will.

>>	Anonymous Sun Aug 3 13:48:59 2014 No.432693 >>432686 The key phrase is "over the long run." Over 30 years would you rather gain a 1% annualized return on a principal of $500,000 or a 10% annualized return on a principal of $50,000?

Anonymous Sun Aug 3 14:07:26 2014 No.432711

>>432693
"Over the long run" I'd rather be able to feed myself.

"Over the long run" people need to be saving somewhere around $10-15k a year into retirement in order to live comfortably from 62 to 85, that's about 33% of the median income of a college graduate.

7% is higher than 5%, but as it was mentioned above no one's going to loan you $300k to put into a retirement account.

Anonymous Sun Aug 3 14:38:09 2014 No.432734

>>432581
>Over the long run, a 7% return is MUCH better than a 5% return, no matter the principal.

>Long run
>125 years to equalize

Yah, I'm making decent money with renting and it's how my family makes money. No one's making more land, and it's created untold wealth for a sea of people, but keep trash talking it, I don't care, more for me.

>>432612
>You've clearly never had a tenant fuck up a property in vengeance yet
>>432650
>Nigger you're renting to trashes the place

Holy shit I didn't think /biz/ was this dumb. It's on par with the other autistic who thinks homes are risky because a tornado could destroy them...

>What is insurance? Derp

You don't own a personal home without an owner occupant insurance policy, why the fuck would you be in the commercial rental business without a landlord liability insurance policy w/ rental extension? It's like I'm on crazy pills reading this shit.

Anonymous Sun Aug 3 14:59:54 2014 No.432753

>>432734

>It's like I'm on crazy pills reading this shit.

He may be wrong in the details, but he's right that you're massively underestimating the impact of expenses. If you're not accounting for at least 50% of your gross rental income to be spent on maintaining the property, insurance, taxes, etc. you're going to learn a hard lesson.

Anonymous Sun Aug 3 15:20:39 2014 No.432779

>>432753
>etc.

What's your etc? Also, I never discussed any figures of what my in/out breakdowns are, some other poster did. Past maintenance, insurance and taxes, there's the mortgage, hoa, and I pay the water bill because I lock the sprinkler and drench the lawn all year so it doesn't need resodding in between tenants who wouldn't keep it up.

50% or more on maintenance, insurance + taxes it a little ridiculous. Excluding vandalism which insurance covers, those 3 work out to about 35 to 40% of my gross based on property.

Anonymous Sun Aug 3 15:59:41 2014 No.432820

>>432581
>It's pretty evident that you're not familiar with futures or options, because your argument that leverage is only specific to real estate if you aren't wealthy is not true at all.
No, it's evident that you aren't familiar with futures or options if you believe there is any way for the average person to invest such a large amount of money in them (as one can with real estate) without having the adequate capital.

>Over the long run, a 7% return is MUCH better than a 5% return, no matter the principal.
No shit dumbfuck, but how long is it going to take that 20k to overtake that 200k? Do the math.

>Please just stop posting. You're spreading misinformation.
The sad part is you aren't even trolling.

Anonymous Sun Aug 3 16:24:26 2014 No.432838

>>432820

>No, it's evident that you aren't familiar with futures or options if you believe there is any way for the average person to invest such a large amount of money in them (as one can with real estate) without having the adequate capital.

Adequate capital? You can open up an options account with a few thousand dollars. That's a lot less than what a 20% down payment on an attractive property will be.

>No shit dumbfuck, but how long is it going to take that 20k to overtake that 200k? Do the math.

I understand the math because I understand the time value of money, a concept that many posters in this thread, including you, don't seem to be aware of.

>The sad part is you aren't even trolling.

The sad part is that a lot of /biz/ posters don't know any better and will believe your bullshit. How old are you, seriously? Do you not remember '07-'08? A lot of people in the run-up to the financial crisis believed the *exact* same nonsense you're spewing in this thread. And look how that turned out.

>>	Anonymous Sun Aug 3 16:30:20 2014 No.432842 >>432838 >I understand the math Not really. The other shit aside, it would take 125 years for the for 7% on 20k to overtake 5% on 200k.

Anonymous Sun Aug 3 16:31:55 2014 No.432844

Just posted in another thread.

At the end of this year I will be inheriting £30/$50k-ish.
I have no idea what to do with the money, except for using it and my current job to purchase a property with the intent of renting it out to others.

One of the things that strikes me as a potential cost? Damages, Insurance, Upgrades & Inability to lease the property.

Is there a surefire way to protect against this or do you just take a chance?

>>	Anonymous Sun Aug 3 16:32:51 2014 No.432845 >>432838 Save the effort, brah. There are so many lost causes on /biz/. It's more fun if you just skim these threads and laugh at all the retards.

Anonymous Sun Aug 3 16:44:54 2014 No.432859

>>432581
>It's pretty evident that you're not familiar with futures or options, because your argument that leverage is only specific to real estate if you aren't wealthy is not true at all.

How are options leveraging? Your return is related to the trending of the underlying commodity, but in the end, your ROR is totally based on your cash settlement of the options purchase. Unless you're talking writing naked calls, but then again, that requires a margin account, thus enabling true leverage. Just buying covered calls isn't really leverage in the true sense from the perspective of ROR amplification.

Anonymous Sun Aug 3 16:56:20 2014 No.432864

>>432845

Sound advice, thanks.

>>432859

Anytime you purchase or sell an option contract, you are necessarily employing leverage. A stock option gives you exposure to 100 shares of the stock at a fraction of the price it would take to outright purchase 100 shares of the stock. That's leverage.

>>	Anonymous Sun Aug 3 17:30:30 2014 No.432889 >>432820 >how long is it going to take that 20k to overtake that 200k 201.07^x=2001.05^x log20+xlog1.07=log200+xlog1.05 xlog1.07-xlog1.05=log200-log20 0.00819x=1 x=122.03 122 years and 13 days

Anonymous Sun Aug 3 17:59:26 2014 No.432939

>>432838
>Adequate capital? You can open up an options account with a few thousand dollars. That's a lot less than what a 20% down payment on an attractive property will be.
It's amazing to me that you STILL don't get what the issue is.

The big benefit of real estate is the fact that you CAN invest large sums of money that you wouldn't otherwise be able to through an options account.

>I understand the math because I understand the time value of money, a concept that many posters in this thread, including you, don't seem to be aware of.
...except you can reinvest the higher initial wealth you gain from housing to leverage yourself even further. In practice your investment will never outperform a property investment with 10x the initial starting value unless you get extremely lucky.

...and the WHOLE POINT OF THIS THREAD is to discuss how an average person - not exceptionally gifted or lucky - can best get wealthy.

>>432845
>muh buttcoins
>muh penny stocks
>muh microhomes

>>	Anonymous Sun Aug 3 19:14:16 2014 No.433075 >>432670 it is curious how they know all the mambo jambo of stocks and "finance" but their opinions seem to be based off reading other's experiences and or articless

>>	Anonymous Sun Aug 3 21:05:50 2014 No.433224 >>432328 What's your location?

>>	Anonymous Sun Aug 3 21:09:14 2014 No.433227 >>432844 That's way too much risk if those are your only assets. You're better off paying off any debts you may have and just indexing the rest.

Anonymous Sun Aug 3 21:12:27 2014 No.433236

>>431376
>Real estate is the only way a middle class person can become extremely wealthy

define middle class.
depends on how much money said person saves, i know people who make 300k a year, and only spend 30k a year in food/utilities/mortgage/etc. I also know idiots who only make 100k, and spend 60k a year.

define extremely wealthy.
define type of real estate.

Anonymous Sun Aug 3 21:16:10 2014 No.433239

>>431764
california also has one of the highest real estate price increases as well, you tard.

For most rental house properties, you're looking to lose money on your mortgage and property tax despite having renters for at least the first 5 years of ownership if you take a 15 year loan option. And that's extremely lucky if you can break even at the 5 year mark.

With that being said, just look at the housing market 5 years ago to now in California. If you had bought a house 5 years ago, you'd be selling it for tons of fucking profit, for only holding the property for 5 years.

>>	Anonymous Sun Aug 3 22:13:44 2014 No.433312 >>433236 How about I put it this way: A person making 50k a year with 10-20k saved up at age 35 will make more in the next 30 years of their lives investing in real estate compared to investing in stocks.

Anonymous Sun Aug 3 22:32:58 2014 No.433341

>>433239
>For most rental house properties, you're looking to lose money on your mortgage and property tax despite having renters for at least the first 5 years of ownership

Where are you getting this information from, I think it was mentioned in the thread already? Especially rent not even being able to cover mortgage+prop tax. Just picking some random zip codes I can't seem to find an area without rental property prospects. Do you have some specific examples?

Anonymous Sun Aug 3 23:03:00 2014 No.433401

>>433312
>making 50k a year
>only saving up 20k at age 35.
you might as well kill yourself, cuz no fucking bank is going to give you a loan if you're only putting 20k down. Unless of course you live in fucking the middle of nowhere and land is dirt cheap. In that case don't expect that land value to rise to a significant amount til your 3rd generation of children.

>>433341
of course i'm speaking for experience for developing real estate areas all over california, mostly inland empire (really developing hard right now, finally back on track after '08 housing crash).

Anonymous Sun Aug 3 23:09:31 2014 No.433409

>>432686
this is bullshit argument though.
cuz it's actually more comparable to 7% of 100k vs 5% of 350k, though.
The difference is the 100k is gunna be a constant withdraw, while 350k is going to be lump sum when you sell. The problem with this is also you're required to pay taxes on that 350k when you sell your property, (unless you reinvest same amount into another property), in that case you have very little liquid cash flow.

No bank is gunna give you a loan (unless you have like 800+ credit score) without at least 30% down payment. If you have 750+, and have strong income then you could maybe get it down to 20%

>>	Anonymous Sun Aug 3 23:11:44 2014 No.433410 >>433409 I meant 20%****

Anonymous Sun Aug 3 23:19:11 2014 No.433423

>>433401
>you might as well kill yourself, cuz no fucking bank is going to give you a loan if you're only putting 20k down.
Alright man that's enough. You've gone to far. It's now abundantly clear you know absolutely nothing about the topic. Jesus christ...

Anonymous Sun Aug 3 23:27:15 2014 No.433433

>>433423
lol, name me a situation where a guy who makes 50k a year, only 20k saved up, is going to get a loan to buy any real estate (that actually has potential to increase in value that's worth investing),

No fucking bank in the world is dumb enough to give a guy only making 50k, with 20k in downpayment a loan over 100k. Good luck trying to find property worth actually buying with only 120k. rofl.

Anonymous Sun Aug 3 23:34:34 2014 No.433439

>>433433
Depending on his credit he could easily get a 200k loan from a private company...

...but if you weren't a COMPLETE fucking retard you would also know about FHA/Fannie Mae/Freddy Mac loans which require downpayments of less than 5%.

>Good luck trying to find property worth actually buying with only 120k. rofl.
How disconnected from reality are you? In 80% of the country you can buy a great deal with 120k...and even 120k is a much larger initial investment with much greater potential than throwing that 20k into an index fund.

Fuck you are stupid, god damn.

Anonymous Sun Aug 3 23:43:44 2014 No.433447

>>433439
>120k
>finding property that'll actually see foreseeable growth with in 10 years.
laughinggurls.jpg.

>getting 200k from private company
>expecting to make returns while paying out the ass in interest rate
>all while making only 50k a year.

it's like you don't even live in the real world of reasonable investment.

Anonymous Mon Aug 4 00:48:10 2014 No.433523

>>433447
>laughinggurls.jpg.
Find me some evidence that property in the 100k-200k range has lower relative returns.

Go ahead.

>it's like you don't even live in the real world of reasonable investment.
You can get much more than 200k from a private company easily.
Property appreciates at a value around or slightly above inflation.
50k a year is a pretty average salary which is the ENTIRE point of this fucking thread.

Take your muh buttcoinz 300k starting math penny stock memecore shit to another thread faglord.

>>	Anonymous Mon Aug 4 01:11:30 2014 No.433544 >mfw my parents bought a house for 40k and sold for 120k 80 thousand dollars plus 20 years of no rent.

>>	Anonymous Mon Aug 4 01:12:20 2014 No.433545 >>433523 >Implying the alternative to real estate is penny stocks or buttcoinz Nigger, you get the fuck out.

Anonymous Mon Aug 4 01:14:00 2014 No.433547

>>433523
50k a year might be average, but with 20k for downpayment? fucking hilarious.

>Find me some evidence that property in the 100k-200k range has lower relative returns.
it's a matter of finding any housing real estate that you can get within that range. Considering average US home prices is around 330k.
https://www.census.gov/construction/nrs/pdf/uspricemon.pdf (for citation).
Grats looking for a house in the first place with your budget, secondly better luck looking for a place that's actually got projected property value increase. The real estate that gets more expensive right now, are real estate that's already insanely pricey. Any real estate that you can get for 100k- 200k, won't have projected growth til 10-20 years later, depending on location, due to requirement of actual communal growth to achieve market value gains outside of inflation.

Now if you're looking to just have your money hold value, instead of risking it in stocks, or letting it waste around in a bank account, then yes, use that 20k and buy whatever real estate you can, cuz you'll be holding value.

unfortunately people seem to forget that OP is talking about INVESTMENT. with actual returns to become a millionaire, not just holding money value.

>>	Anonymous Mon Aug 4 01:17:42 2014 No.433554 >>433547 >average US home prices is around 330k You gotta be shitting me. Maybe it's because of where I'm from but that sounds absolutely absurd.

>>	Anonymous Mon Aug 4 01:30:39 2014 No.433563 >>433554 shows how unaware you are of real estate prices are.

>>	Anonymous Mon Aug 4 02:12:34 2014 No.433580 >>433563 Sure, the average is about 330, but the median is still around 275k. Median is a better estimate of what is really going on in housing market because we don't want 1 McMansion counting for 18 shit houses.

Anonymous Mon Aug 4 02:14:39 2014 No.433582

>>431346
>average yearly return of 5%

Do you even 2008 m8? No such thing as a safe investment. Good luck betting your entire future on the most illiquid investment you can make though. Maybe it'll work out for you.

The only sure way to make money in this world is by providing value to others. Everything else is gambling.

Anonymous Mon Aug 4 02:41:48 2014 No.433598

>>433547
>Considering average US home prices is around 330k.

Oh man, this is so many levels of dumb and wrong... Other guy is right that you can get a decent home in the 150k range if you can scout deals. There has been like a 25k pop in prices just over the span of a year though so it's a much more challenging price point, but no one's fucking buying $350k homes in droves, just isn't happening.

1) What are you even looking up in your pdf? Price of 4 family homes? 20 family? Why does that matter when most people would be interested in the price of a single family home.

2) Median is a much better measure for what you're after

2) Why are you looking at *NEW* home pricing? Something around 5% of home sales are new homes.

Anyway, only retards buy homes between May an Aug, to see what a home is realistically worth in an investment/commercial setting check it's pricing in Jan/Feb, so for the US that would be this:

>The median existing single-family home price was $189,200 in February, up 9.0 percent from a year ago.

http://www.realtor.org/news-releases/2014/03/february-existing-home-sales-remain-subdued

Anonymous Mon Aug 4 02:45:21 2014 No.433600

>>433582
THANK YOU!!!! How do people still have this view that Real Estate can only go up Post 2007? I mean, I can even understand people forgetting these lessons that could be learned during the Depression because it happened over 80 years ago... But fuck, the WHOLE FUCKING WORLD ECONOMIC SYSTEM fell apart because the United States housing market collapsed. Less than 10 years ago. What are you idiots thinking?

Anonymous Mon Aug 4 02:55:03 2014 No.433604
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>>433600
>How do people still have this view that Real Estate can only go up Post 2007?

Because we're back to owners buying homes, not 3 month hold and flippers. We're back to nominal historic pricing averages. Maybe there's a little bit up or down left, but real estate is back to acting like it normally does. So you're either looking at slight growth when you account for inflation, or fun bubble growth. Either way it's a good time to get into real estate. It's not a bubble top, there is no 60% downside risk like there was in 2007, it's kind of obvious the previous instance was a bubble. I don't think anyone thought otherwise, it was just deciding whether you felt you could be greedy and flip one more property before shit normalized.

Anonymous Mon Aug 4 03:01:31 2014 No.433609

>>433547
>implying that the price of NEW homes (ie your link) is the same as the average price of ALL types of homes
This is just getting sad. It's more than a matter of differing opinions - you've repeatedly demonstrated a complete lack of knowledge in regards to this issue.

>>433554
>>433580
See above. He is a fucking retard who doesn't even understand his own sources.

>>433582
It isn't an issue of safety, but an issue of leverage. You can invest more in a house than you can in the stock market with the same amount of starting capital. What the fuck don't you people get about this?

>>433600
Us "idiots" are looking at historical trends rather than short term alarmist thinking.

>>	Anonymous Mon Aug 4 03:12:20 2014 No.433615 >>433609 Leverage isn't free, and home prices aren't guaranteed to go up. Yes, if you want to gamble and you have no money then you're right, buying a house is about the only way to do it. But why would you want to?

Anonymous Mon Aug 4 03:29:08 2014 No.433629

>>433609
Don't get me wrong. I am not saying that anybody who invests in real estate now is an idiot or that it is innately unsafe. What I am asserting as idiotic is that people still hold the idea that, to quote OP:
>property is the most surefire way for the average person to become wealthy
This is the kind of pie in the sky emotional attitude that was probably on 80% of peoples' minds who have gone through foreclosure over the last 5 years or so.

Real estate can be a good investment.
It can be a way to earn passive rental income.
There are definitely bargains to be had, especially now post-crash when prices are dropping and interest rates are rock bottom.

But it is by no means a sure fire way to get rich. That's what I was referring to as idiotic.

In terms of leverage, it's a great double-edged sword. The less skin you have in the game, the greater the multiplier your gains/losses bring. This is why high margin trading on some market (Stocks, Futures/Options, Real Estate) is often at the heart of these financial collapse situations. The more you margin, the less your "investment" looks like one and the more it looks like rolling craps at the casino. Even though I can tell you're sophisticated enough to know better, people like OP should remember this when they throw around words like "sure fire".

>>	Anonymous Mon Aug 4 03:30:54 2014 No.433632 >>432002 >>431857 >>431793 Holy fuck I bet you're my landlord you wop piece of shit. I bet you wear a toupee.

Anonymous Mon Aug 4 03:33:47 2014 No.433635
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tl;dr

Real estate is an investment like any other, it's just that for a while (no longer though) the banks were pushing through bad loans, and then placing bets on them.

Buying a house (or 3) for yourself and your family is all well and good, but unless you find an area in which property is undervalued...it's a fool's game.

Let's say that Detroit could get on par with New York City in 20 years though...if that were the case and someone invested right now, yeah, they'd be loaded.

>>	Anonymous Mon Aug 4 03:37:34 2014 No.433637 >>433604 So much this. Fuck the youngins on biz really don't know shit.

Anonymous Mon Aug 4 03:57:49 2014 No.433655

>>433632
>Holy fuck I bet you're my landlord you wop piece of shit

Don't sugar coat it now, tell me how you really feel...

What's holding you back from home ownership btw? Credit? Income? Down Payment? If it's the last one there's ways to get bridge financing if you're creative with the accounting. No bank is going to be super happy if your down payment was a loan, but there's way to frame it so it's workable.

Anonymous Mon Aug 4 04:41:42 2014 No.433690

>>433655
I'm a NEET with $1530 in liquid assets/cash, and ~$3000 hard assets on welfare. I play guitar on the street for money, buy and sell things.

I owe one bank $300.
I owe the government approximately $1000(?) for various fines and an income tax audit from when I was 17.

Anonymous Mon Aug 4 10:48:24 2014 No.433820

>>433615
>Leverage isn't free, and home prices aren't guaranteed to go up.
No shit it isn't free. It is, however, much more readily available which is the whole point of the thread and which you still, for whatever reason, do not get...and of course home prices aren't guaranteed to go up. No investment is guaranteed. How in the fuck is that an argument against investing in anything?

>But why would you want to?
To obtain more wealth. Why else?

>>433629
>This is the kind of pie in the sky emotional attitude that was probably on 80% of peoples' minds who have gone through foreclosure over the last 5 years or so.
Even if 80% of people fail to become wealthy from property investment it would still be accurate to say that it is the most surefire way to become wealthy. It's relative.

>especially now post-crash when prices are dropping and interest rates are rock bottom.
Well maybe in 2010 but prices and interest rates are rising again - still much cheaper than it was in 2006 though.

>But it is by no means a sure fire way to get rich. That's what I was referring to as idiotic.
Again, notice my phrasing. In order to understand the English language you need to be able to appreciate the difference between "the most surefire way" and "a surefire way". One statement is relative and one is absolute.

>The more you margin, the less your "investment" looks like one and the more it looks like rolling craps at the casino.
Well, I'd argue that there is innately less risk when investing in real estate for the simple reason that it's value is never really going to go down to zero or close to it (which is somewhat more common in regards to stocks). At most you are going to see a 50% decline (and that's on the extreme end) followed by a steady rise in value. There are exceptions obviously, as some others have pointed out if minorities take over your neighborhood then the value will stay suppressed but you still won't lose everything.

Anonymous Mon Aug 4 10:51:30 2014 No.433823

>>433635
tl;dr you are a fucking idiot

It amazes me how many of you are completely unable to get the point.

The difference between real estate and any other investment is that the bank will give you a lot of money to invest in real estate but it won't give you a lot of money to invest in stocks.

Get it yet? Or is that still too complicated?

Anonymous Mon Aug 4 11:26:11 2014 No.433852

>>433823
they will give you a lot of money to start a business too, which is arguably a better way to get rich because it has cashflow creation potential that depends on multiple someones (your clients/customers) rather than just one family/person (your tenant)

historically, housing returns are very weak, so the fact that they have a vague floor value of "not 0" has little to do with wealth creation potential. even if we assume you are purchasing multiple homes with 5-10% down, annualized ROA near inflation implies real returns of ~10-20% with a single 10% drawdown wiping out your gains. it's not even "the most" surefire way.

Anonymous Mon Aug 4 12:14:38 2014 No.433889

I didn't read the majority of this thread because I didn't see anyone that actually owns properties, but I'll answer any questions you may have as to how I got started. Real estate can be very different from place to place so keep that in mind, but I've networked with people from some of the most expensive metros to smaller rural cities and they ALL can still make money

I started investing about 6 years ago. I control 3 duplexes and 5 houses, so I have 11 units total.

>>	Anonymous Mon Aug 4 12:39:24 2014 No.433901 >>433889 How much money did you start with?

>>	Anonymous Mon Aug 4 12:56:35 2014 No.433911 >>433889 I had about 5-6k to my name when I bought my first duplex.

>>	Anonymous Mon Aug 4 13:01:49 2014 No.433914 >>433901 I had 5-6k to my name when I started

>>	Anonymous Mon Aug 4 13:24:15 2014 No.433926 >>433914 How much money do you have now?

>>	Anonymous Mon Aug 4 13:51:38 2014 No.433941 >>433926 I have over 6 figures in equity and net ~40k a year fairly passively.

>>	Anonymous Mon Aug 4 14:31:51 2014 No.433973 >>433941 where did you invest?

>>	Anonymous Mon Aug 4 14:39:28 2014 No.433977 >>433941 >>433941 i am interested as to how you were able to make 6 figures and net ~40k a year in 6 years can you explain it in a nutshell?

>>	Anonymous Mon Aug 4 14:40:22 2014 No.433978 >>433973 In the Memphis and North Mississippi area.

Anonymous Mon Aug 4 14:40:55 2014 No.433980

>>433690

Wow, that's um, not so great. Sounds like you're mid 20s at the oldest so you have time to fix that up though.

>>433889

1) What's the eviction process like where you are? It's glorious here in Central FL. Wondering if you're stuck in liberal shitholes

2) What are the assets worth realistically? Your equity seems oddly low after 6 years since your loans are probably 15/20 yr. Although you probably did most of your purchases recently.

>>	Anonymous Mon Aug 4 14:42:04 2014 No.433982 >>433980 he just said memphis and north mississippi area

>>	Anonymous Mon Aug 4 14:42:39 2014 No.433983 >>433980 22, yeah :/ I'm working on it. The $1500 I have was made just in the last couple months so I think I've been applying more effective moneymaking strategies.

>>	Anonymous Mon Aug 4 14:44:36 2014 No.433985 >>433983 how do you manage those houses, if you dont mind me asking.

Anonymous Mon Aug 4 14:45:16 2014 No.433986

>>433820
>"the most surefire way" and "a surefire way"
Uhhh....
>sure-fire
>adjective: surefire

>def: certain to succeed.
>"bad behavior is a sure-fire way of getting attention"

Thanks, goog. So, what you're saying is that, even though there's risk, even though people have gone bankrupt in droves within the LAST 10 YEARS, that this is the most "certain to succeed" way to become rich? You don't think this is naive? You don't see the stupidity of this statement? Even when we're talking "most certain to succeed" compared with other investments, there's still an implied attitude of "this cannot fail". This is the attitude that caused 2007, baby...

>At most you are going to see a 50% decline
Yeah, this is probably true.... However, it shows to me that you haven't really considered the possible downsides of Leverage. If you were to buy a 100k house outright for 100k. It goes down 50% down to 50k. You've lost 50% of your investment.

Now, let's say you have a 100k house and you pay 10k on it. 10% down would be pretty typical of a pre-2007 loan. Now the house goes down in value by 50% down to 50k. So now, you've lost 500% of your initial investment. At least a compulsive gambler in the casino can only lose the cash he has on hand (100%) if he leaves his credit cards at home. In this situation, you not only lose your initial investment, but you're in debt for home equity that has evaporated. You see what I mean?

Like I said earlier. I'm not saying that everybody who invests in Real Estate is an idiot and sure to lose money. It can be a very smart investment. You have to take it seriously. It's a decent way to bring up your net worth and maybe bring in small amounts of rental income over time. It's not a sure-fire get rich quick scheme. Ask every person who bought a house in 2006 whether or not they think that Real Estate is the most surefire way to get rich....

Anonymous Mon Aug 4 15:02:59 2014 No.434003

>>433986
>This is the attitude that caused 2007, baby...

No it's not. The B2B sales that caused the bubble weren't driven by people blind to the circumstances. Short holdings of RE were profitable. You bought, improved, sold. That was it, people weren't getting into RE commercially long 06 to 09.

>Ask every person who bought a house in 2006 whether or not they think that Real Estate is the most surefire way to get rich....

They were idiots then if they were long RE, the play was flip it within 3 to 6 months, and those people saw gains pretty much even during the downturn.

This is about being long RE though, so see my post in >>433604 for a cursory analysis of why RE is a decent idea, and fairly surefire honestly. Which do you honestly think is more likely? That houses go up 50% or down 50%? I personally feel single family homes going for 90k median nationwide is basically impossible. 25% +/- is the same, 10% is fairly certain to the upside as well, you start getting smaller values before you get a real chance of any decline. We could have a year that sees Y/Y declines of 1 to 3% but double digit or 50% declines are just pie in the sky fantasy. You'll never pick up a home for 75k or so.

Anonymous Mon Aug 4 15:04:30 2014 No.434006

>>433977

I bought my first duplex with a no money down federal loan. I knew nothing at the time about it owning one, but my friend owned it and sold it to me due to his moving out of state for about 80k. It was worth about 105k and was in terrible shape. I lived in one side, fixed it up, rented the other to cover the mortgage plus put a little in my pocket each month. I started attending REIA meetings and learning more, found a mentor, volunteered labor in exchange for being taught the business.

Most of the equity was acquired on the buying of properties for 70-80% of their retail value. You won't find those deals without either networking or pounding pavement and looking for unkempt/overgrown houses. Duplexes are great for cashflow so are triplex and 4plex because those are still considered residential. After 4 units you have to get commercial financing which is a totally different animal.

As far as how I get the cashflow.. well I try to make at least $200-300 a door after PITI and forecast expenses. It's easy to do with duplexes, SFR is a little more difficult (for me, anyway)

Anonymous Mon Aug 4 15:15:57 2014 No.434017

>>433985
I managed them myself at first by acting as the 'property manager' it was easier to tell them bad news that way instead of being the dick landlord they were much more responsive.

>>433980
1) It's not bad from what I've read and talked to others, but I haven't had to do it personally. It's $500-1000 bucks a a month or two. If I run into it, I'm just going to personally try to tell them, "Hey, you're behind on rent, I'll give you $400 if you're out the door by Monday"

2. They really aren't worth much compared to most areas. Property is cheap here. Nice homes go for $150k. I figure if I were to sell them as a portfolio of rentals maybe somewhere around 800k for a quick, easy sale to another investor I haven't ever really considered it. Most of my loans are 30 year notes actually. I like the extra cashflow for the time being.

Anonymous Mon Aug 4 15:18:10 2014 No.434018

>>434003
Assuming you mean the securitization of the Mortgage Backed Securities being sold around to banks and investment firms being responsible for the global financial meltdown when you speak of "B2B sales", then I would say you're only partially right.

After all, all those Mortgage Backed Securities would still be worth something today if it weren't for the droves of subprime foreclosures. So, what caused the droves of foreclosures? It's the attitude that was held by most amateur real estate investors at the time. It goes something like this: "For the last 10 years, real estate holdings have been doubling every few years. I would be stupid to not get in now." At the heart of this is the attitude, "Buy, fix, flip. This is the surefire way to get rich." See how it all flows back to that same attitude?

Anonymous Mon Aug 4 17:43:06 2014 No.434171

>>434018

No, you're jumbling a few different issues together here, in terms of what caused the bubble and what caused the crash. Surefire get rich quick investors didn't really get hurt here or cause the upside or downside.

B2B sales are business to business. Where a flipping investor sells to another flipping investor and all parties have 0 real interest in the property for meaningful time frame. This can only go on for so long, eventually a property isn't picked up at fire sale prices and reaches consumer prices and requires an actual buyer, not someone looking to get rich quick, but someone that needs a roof over their head. That's where subprime came in.

Subprime lending initiated the bubble. Banks were forced to lend to less than qualified buyers, which suddenly punched up demand so prices started going up fairly strongly year over year. Without banks giving out way too many loans flippers wouldn't have anywhere to unload inventory to. Subprimers became a great sink for overpriced houses. They were coming from shit ghettos and didn't care as long as the bank gave them the money.

Investors and 3 month flippers aren't going to be financing these transactions with subprime mortgages dude, are you kidding me? Fees aside, they take too long to process from both ends. Always cash, that's what these transactions were on both ends. No bank to clear a mortgage pay off to, no bank to wait on a mortgage approval, it's how you generate velocity. And they held properties for so little time that even the pop didn't cause them much harm, they saw it coming and just unloaded that much faster on subprimers. No one that was looking at real estate as a get rich quick was in it as a long position. Fix & Flip, that's it. Even amateurs got it down pat fairly easily.

Also, RE didn't double every few years, over the span of a decade you saw *A* doubling. Prices weren't that crazy.

Anonymous Mon Aug 4 21:38:40 2014 No.434493
File: 27 KB, 420x470, success.jpg [View same] [iqdb] [saucenao] [google]

>>431708
I've bought three rentals over the past two years and am an accountant with an economics degree. I'll weigh in on my experiences by using my real figures.

All three cost me a total of $163k to acquire, rehab including labor and supplies, closing costs, etc. I'm grossing $2,375 a month and rent goes up on two of the units later this year to make the three produce $2,700-$2,750.

PITI mortgages are just under $1k combined and even with subtracting hypothetical opportunity cost on my cash OOP + amortizing future remodeling, major system repairs, etc. I'm making over $10k per year. That's before the $35k+ of capital gains over the past 27 months, but those cannot and should not be relied upon. It's worth noting that long term inflation is on my side since I have cheap 30 year debt on one.

You have some good general words of warning, Anon. Too many people think Rent - Monthly payment = PROFIT and they're wrong. But when RE is done right it's an awesome wealth building tool. Just have to buy ones with a 1-2% monthly gross, and that requires patience and the right market.

Anonymous Mon Aug 4 21:45:19 2014 No.434502

>>434006
dude kudos to you, i mean youre still young, youll learn a lot more in the next 5 years and who knows how much more youll make and/or have. how did you got about asking for prices, and how did you go about asking for prices and meeting the ppl? and im guessing your life revolves around these properties? or do you have a steady job on the side or the job is primordial and the real estate business is your side job to get some extra cash and net worth? Sorry if im getting to personal.

>>	Anonymous Mon Aug 4 21:51:14 2014 No.434508 >>434502 silly me repeated the same question "how did you got about asking for prices"

>>	Anonymous Mon Aug 4 22:19:25 2014 No.434544 File: 111 KB, 1000x805, 1389177138480.jpg [View same] [iqdb] [saucenao] [google] >>434493 >All three cost me a total of $163k to acquire Damn. What area you in?

>>	Anonymous Mon Aug 4 22:26:31 2014 No.434549 >>431662 Anything you could share that has helped you succeed? I plan to buy my first 2-unit rental property this year

>>	Anonymous Mon Aug 4 22:28:42 2014 No.434553 File: 1.06 MB, 2592x1936, IMG_20120226_130609.jpg [View same] [iqdb] [saucenao] [google] >>434544 Orlando FL 32806 & 32817, working class neighborhoods but not sketchy enough to scare away quality tenants. Pic related.

>>	Anonymous Mon Aug 4 22:48:03 2014 No.434565 So everyone thinks the Fed is going to raise rates next year. Do you guys know what happens to REITs when rates go higher? They get killed

>>	Anonymous Mon Aug 4 22:49:56 2014 No.434567 >>434553 Nice. I'm from NJ and everything is so goddamn expensive IDK how or where to get started. Did you find yourself a real estate mentor when you were starting out? That is one of the things bigger pockets guide recommends.

Anonymous Mon Aug 4 23:09:20 2014 No.434581
File: 1.25 MB, 944x714, Screen Shot 2014-08-04 at 11.08.07 PM.png [View same] [iqdb] [saucenao] [google]

>>434567
Yeah, I'm lucky to be in Central Florida. It's tougher in the Northeast to make a buy and hold strategy work.

Nope, no mentor. But I do have a bunch of friends and acquaintances that I can bounce ideas around with. My only somewhat-mentor is a good friend my age who has a few places.

Advice: BP is a good resource. Don't become afflicted with analysis paralysis like I did at first. As long as the big picture makes sense just try stuff, make mistakes, and the rest figures itself out. That said, keep track of everything and know your way around a spreadsheet.

Pic related: $5k repair I don't lose sleep over since it scares most people away from a deal.

>>	Anonymous Mon Aug 4 23:16:39 2014 No.434590 File: 50 KB, 589x600, ornah.jpg [View same] [iqdb] [saucenao] [google] >>434581

>>	Anonymous Mon Aug 4 23:26:08 2014 No.434598 File: 15 KB, 478x156, lol tenant Screen Shot 2014-06-10 at 11.36.47 AM.png [View same] [iqdb] [saucenao] [google] >>434590 Here's one of my tenant's Google Voice texts to me last month... permastoned chill black guy. I kekd.

>>	Anonymous Mon Aug 4 23:27:10 2014 No.434599 >>434598 Scratch that, looks like it was from June

>>	Anonymous Mon Aug 4 23:39:14 2014 No.434608 Andrew's renting to a drug dealer.

>>	Anonymous Mon Aug 4 23:39:56 2014 No.434610 >>434565 Yeah if you're invested in them on the market. If you yourself are physically investing in real estate so what? You're locked in in terms of interest rates..

>>	Anonymous Mon Aug 4 23:44:55 2014 No.434617 >>434608 We're at 88% approval for medical marijuana passing this November. He's a man ahead of his time.

>>	Anonymous Mon Aug 4 23:50:22 2014 No.434623 >>434617 oh yah FL, hopefully here in NY too, as long as he pays his rent and wont bitch when it goes up, its all good

Anonymous Tue Aug 5 00:08:45 2014 No.434632

If you are in the central florida area, look at Daytona Beach's properties to shoot up in the coming years.
Legalized gambling is on the horizon in Daytona. They are revamping the racetrack to be able to host football events and more stuff.
They are building a multi-million dollar plaza full of upscale night clubs and shops called One Daytona.
The Hard Rock is building a hotel and the existing big hotels are pre-wired for casino floors.
The boardwalk/Oceanwalk area has had a huge resurgence this summer hosting a bunch of bands every weekend.

But those are just my 2 cents, I'm no real estate agent.

Anonymous Tue Aug 5 00:22:12 2014 No.434651

>>434632
Nice summary, and yep it's still priced for the overall shitty place that it is today.

I've seen lots of good buy and hold deals further south on I-4... been considering Debary/Deland for the next SFR I pick up. But as a small timer for now it's nice to be 20 mins or less from what I have.

>>	Anonymous Tue Aug 5 01:44:08 2014 No.434695 >>431376 >Real estate is the only way a middle class person can become extremely wealthy There's plenty of ways to become wealthy, nitwit.

>>	Ben Garrison's 1488 Inch Dick(...) Tue Aug 5 02:17:04 2014 No.434710 File: 28 KB, 396x385, nogs.jpg [View same] [iqdb] [saucenao] [google] >>432546

>>	Ben Garrison's 1488 Inch Dick(...) Tue Aug 5 13:08:58 2014 No.435120 >>433823 your VAR is much higher for real estate than stocks

Anonymous Wed Aug 6 17:58:45 2014 No.436657
File: 60 KB, 600x800, The_Light_Inside_Has_Broken.jpg [View same] [iqdb] [saucenao] [google]

>>435120
VAR is higher for real estate than stocks? Please explain, given the structure of rental property are able to be insured against damage and market prices for rent and property experience fewer peaks and troughs than equities?

Anonymous Thu Aug 7 16:57:53 2014 No.437751

>>434502
Shit, I can't believe this is still going, but I'll be glad to answer some more if you're still around.

There is still a lot to learn, and as the other guy said its not just Rent - Monthly payment = profit. There's work and expenses, and it can hurt some months but luckily those months don't happen as often as the good months.

As far as prices, I basically just go around looking for shitty/neglected properties. I write down the address, find out who owns the property thru the property assessor office and handwrite them a letter basically saying, "I see that you've got the property, would you be interested in selling it, etc, etc" Usually, when people have let the property go they'll be tickled to get ANY offer.. so I get it appraised at its current value and then offer ~75% of what its appraised and negotiate from there. Most of the time after I fix the property up it becomes worth more since the low value is usually due to neglect. I don't always get these properties because some people have high mortgages and I'm not going to overpay (which is your biggest mistake in real estate, imo).

Meeting the people is not too difficult. Just going a Real Estate Investor group around your area.. or start one. There's usually something along those lines and introduce yourself, offer some free work/labor/service to them, and then you have a connection.

My life doesn't really revolve around the properties. I have GOOD property management finally, so that takes some stress off. I do also have a job. I work 3rd shift at a factory, so it allows me to make some extra money while still being able to schedule things during the day involving my real estate if need be. It works pretty well for me since I have no kids/wife.

Anonymous Thu Aug 7 18:07:50 2014 No.437835

>>437751
> My life doesn't revolve around the properties
How passive would you say Real Estate is? How much time does it really take from you day/week/month? I've been looking for an easy way to coast through my life (in regards to supporting myself) so that I can focus on my actual aspirations. Do you think Real estate might be viable for this?

Anonymous Thu Aug 7 21:19:42 2014 No.438047

Let me tell you plebs something. You aren't EVER going to be wealthy doing real estate unless you already HAVE substantial wealth. It's all about OPM -- other people's money. To get access, you have to be smart, hardworking, and clever. You also need to work in the industry (CRE or finance). This way, you rub elbows and meet with a bunch of rich fucks and if your'e lucky and in the right place at the right time, you can get paid to manage other people's real estate protfolios. Then, when you have enough years (15+) in the industry, then people will trust you enough to listen to YOU and throw their money at you. All you need are some partners, luck, and a plan. Thats how you make money in real estate. That's how you become wealthy. Not renting a shitty house out to Tyrone.
TL;DR: get rich with other people's money

Anonymous Thu Aug 7 22:29:25 2014 No.438106

I have a question…

There is a house that has been neglected in a nice part of town. The owner owes the bank 40k on the mortgage. All the other properties for sale around the area (same style) are listed at between 110k-140k. The owner has asked me to inject 20k of my own capital into restoration as she does not have any liquid to spend on improvements. As soon as the house is re-modeled the house will be listed and hopefully sold in the price range of the similar styled houses in the neighborhood.

First her mortgage gets paid in full, then a return on my investment, third we split the remainder of the money.

Taxes/fees paid by her.

Binding legal contracts in full effect.

Should I do it?

>>	Anonymous Thu Aug 7 22:31:23 2014 No.438111 as someone from british columbia, all you people are dumb as hell

>>	Anonymous Thu Aug 7 22:37:15 2014 No.438115 File: 56 KB, 337x367, Say What?.jpg [View same] [iqdb] [saucenao] [google] >>438111 Don't bother to elaborate….we all understand what you mean

>>	Anonymous Thu Aug 7 22:48:07 2014 No.438127 >>438115 EVERYONE here thinks that they're going to get rich through real estate and there's a huge bubble right now. it's wrecking housing prices and causing people to take on enormous amounts of debt and is generally just awful

>>	Anonymous Thu Aug 7 22:52:04 2014 No.438133 >>438047 http://www.fifighter.com/ This dude nearly has a 1mil net worth and like 6 properties under his name and he's not even 30 yet. He does make a decent engineer's salary though.

Anonymous Fri Aug 8 09:00:56 2014 No.438541

>>437835
I spend somewhere around 10-15 hours a month just looking over all the reports from the property management, keeping in touch with other investors, real estate agents, etc. I probably spend another few hours a month looking over potential deals that get slipped my way. If I am rehabbing or really involved with buying a property then its substantially more.

It's very viable to achieving what you want but please don't fool yourself into thinking that it's easy. It's a business, and you have to treat it as such. It can be made completely passive, but you have to put systems in place to get to that point.

>>438106
What happens if you can't sell the house? It seems like you have more at stake than she does. How do you know this person? Personally, I wouldn't touch this deal as such. I always want control of my property. So, my suggestion would be to work a 'Subject To' or get a buy option with her after the work is completed...something that cuts her control.

>>	Anonymous Fri Aug 8 09:05:09 2014 No.438543 tfw all i need is 30k to get started. tfw can't think of any ideas other than saving 30k.

>>	Anonymous Fri Aug 8 09:15:14 2014 No.438547 I love how rent is just a given in all these calculations.

>>	Anonymous Fri Aug 8 09:18:52 2014 No.438550 >>431793 and this trash is gonna be in the house you bought

>>	Anonymous Fri Aug 8 09:26:47 2014 No.438553 >>434581 Do you know home repair?

>>	Anonymous Fri Aug 8 09:48:25 2014 No.438571 Anyone have experience with weekly rentals? For example I live in a city by the beach in the south, summer is huge for short term renting

>>	Anonymous Fri Aug 8 13:08:06 2014 No.438724 >>438127 You're speaking for everyone? I never said I'd get rich in real estate.

>>	Anonymous Fri Aug 8 13:09:34 2014 No.438726 >>431793 students rent out in groups for way more than that...

Anonymous Fri Aug 8 17:45:02 2014 No.438987
File: 60 KB, 620x620, successful_black_guy.jpg [View same] [iqdb] [saucenao] [google]

>>438547
>I love how rent is just a given in all these calculations.

What's insane is that I have >100% occupancy. How? An option in my leases whereby a tenant may provide sufficient notice, pay the equivalent of one month's rent, then legally exit the lease early. I got this idea from a friend who owns a few rentals.

The serious answer is that financial projections should be based upon 90% occupancy. The landlord must also have sufficient capital reserves to make debt service payments to be ready for occasional long term vacancy and the like.

Anonymous Fri Aug 8 17:52:02 2014 No.438996

>>438571
>Anyone have experience with weekly rentals?

It's a lot more management hassle but it has the potential to make you more money.

I'm a cheap, perfectionist bastard and I do much of the turn-around work to clean up after tenants leave. So you'd either need an affordable and reliable housekeeper or just not mind doing the work yourself several times a month.

Also check the squatter rights laws where your property is located. In many jurisdictions if the person is there for 30+ days you'd have to go through the eviction process. You could be arrested for simply entering/dumping their Gypsyshit on the curb or physically threatening them.

Anonymous Fri Aug 8 18:02:04 2014 No.439008
File: 93 KB, 1000x642, HST_Puerto_Rico_Rum_Diaries.jpg [View same] [iqdb] [saucenao] [google]

>>438553
>Do you know home repair?

Definitely not. I do know the basics of what to look out for and roughly how much things cost to fix or replace.

When I see an issue I find a friend who knows about that particular trade and have him take a look. Do that before buying and before hiring pros and you'll be fine.

>>	Anonymous Fri Aug 8 19:30:21 2014 No.439088 File: 61 KB, 490x420, make hay while the sun shines.png [View same] [iqdb] [saucenao] [google] >>438133 >fifighter.com Thank you for sharing this, Anon. I relate a lot to this guy and can see myself being on his level within a few years.

>>	Anonymous Sat Aug 9 00:26:32 2014 No.439290 >>439008 Isn't this terrible for the lower back?

>>	Anonymous Sat Aug 9 01:22:05 2014 No.439322 >>431662 >As an <insert vehicle here> investor myself, I can tell you it's extremely powerful if done correctly Well duh.

>>	Anonymous Sat Aug 9 11:40:44 2014 No.439563 File: 16 KB, 250x251, hst.jpg [View same] [iqdb] [saucenao] [google] >>439290 >Isn't this terrible for the lower back? I don't think Hunter S. Thompson gave it much thought.

Anonymous Sat Aug 9 12:34:28 2014 No.439604

I've got 3 acres in Michigan near a bunch of lakes and vacation areas.
I have to break ground and build the property still but I was wondering about making some rentals on it.
Since I live out of state in Iowa Im thinking the logistics of maintenance and finding tenants would kill anything I make.
Anyone got tips for out of state real estate?

>>	Anonymous Sat Aug 9 16:08:41 2014 No.439785 >>439604 Why not sell your Michigan land and buy some income property in Iowa?

Anonymous Sat Aug 9 17:08:22 2014 No.439835

Haven't read the entire thread but you can just become a middle man instead.

Offer your services to manage other people's property.

Being a landlord sucks ass, it really does. Tenants can be real cunts, nothing is ever as straight forward as buying a property and letting it out.

That's where you come in. Manage the property of other people, you have no overheads other than yourself effectively, and you take an agreed cut of the income the property owner generates.

Anonymous Sun Aug 10 05:27:28 2014 No.440518

>>431793
>Because they have shit credit history.
Enjoy having your house destroyed by the alcoholics you have living there once you evict them. My dad used to do evictions back in 08 and it's just horrid what people do to these houses. I used to go along as "the muscle" because these people were often pretty explosive. Eventually we figured out it was just cheaper to offer them a few hundred bucks to leave immediately, but because we have shitty protections for land lords up here they are usually aware that they can freeload off our housing without paying rent for at least 6 months.

Never had anything like a gun being pulled on us (we were in Canada so not as common a situation I guess) but I've heard worse stories than the ones I got.

You don't just rent to anyone. If they can't be trusted by a bank to pay a mortgage, you can't trust them to pay their rent. Just shut the fuck up and stop assuming you know everything about an industry you've never been involved in.

>>	Anonymous Sun Aug 10 05:33:37 2014 No.440526 >>432135 >Guess what, that means you're trespassing, and I should be able to just go and shoot them. lol bretty gud / 10 I even read all your posts. >>>/b/ >>>/middleschool/ >>>/being13/

Anonymous Sun Aug 10 08:37:58 2014 No.440608

>>431346
>in an asset with an average yearly return of 5%.
Citation needed. AFAIK, historical returns on real estate are really fucking shitty and 100+ year periods of prices not going up isn't uncommon.

>You have to have money to make money, and this seems like the only way a normal person can get that initial chunk of money to invest.
Wrong. You get that money by not wasting it on consuming, push all your extra dollars into stocks and enjoy becoming rich.

Real estate is hit and miss, since you effectively bind up a huge amount of your wealth to ONE country, ONE location, into ONE asset (RE). Sounds like a shitty business plan. Also, you rely on the property value rising, and since you can't really predict the future when it comes to property prices, you most likely won't be getting the returns you expect.

Anonymous Sun Aug 10 09:01:10 2014 No.440619

>>439604
Build some inexpensive A-frames (Michigan has a few manufactured home places that do this), furnish them, and then rent them out on cl, airbnb, homeaway, etc. I have no idea what their cuts are but you would also have to find a cleaning and maintenance crew.

Anonymous Sun Aug 10 21:02:12 2014 No.441185

>>440608
The 5% quote is based on recouperating 5% of the property's value in rent every year.

In other words, if you have a $200k home, you should be able to rent it for at least $850/mo.

The actual value of the property rises at the rate of inflation over the long term, but if you know that there's a good reason why property is about to go up then it can be a pretty safe and lucrative investment.

>>	Anonymous Mon Aug 11 10:06:56 2014 No.441796 >>432150 >having to worry about tornados sometimes it feels good to not be a burger

>>	Anonymous Mon Aug 11 10:17:33 2014 No.441807 >this entire thread Real estate threads are normally nowhere near this terrible, this is fucking awful

Anonymous Mon Aug 11 14:29:30 2014 No.441989

>>441185
>The actual value of the property rises at the rate of inflation over the long term
With "long term" sometimes meaning 100+ year gaps where the asset value only drops/doesn't beat inflation.

>but if you know that there's a good reason why property is about to go up then it can be a pretty safe and lucrative investment.
It's still a guessing game.

>>	Anonymous Tue Aug 12 16:00:11 2014 No.443410 Land only > real estate

Anonymous Wed Aug 13 02:13:00 2014 No.444122
File: 35 KB, 642x390, wat.jpg [View same] [iqdb] [saucenao] [google]

>>443410
Raw land is a highly speculative investment with low liquidity. It's a bigger gamble and harder to finance than, say, a SFH.

Most real estate being discussed ITT is held primarily for rental income, and therefore more akin to medium-risk stocks paying dividends or bonds yielding interest.

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