Investing 102

[Vince@Meanstreets]

Originally Posted by GregWeld

It's these kinds of tales that keep me out of the individual unit investments.... I invest in large apartment LLC's that are professionally managed -- get really nice returns (7 and 8% annual cash interest) ... upside cap, if any when they're sold... income tax depreciation.... and no phone calls about someone's toilet plugged up!

That's where investing into an organized property maintenance company would come into play.

With proposition 19 in play back in 2010 your other reference would have been a great move but you would have to keep it low key. I was planning a nice 10,000 sq ft green house where we would cultivate "artichokes" and sell to whole sale sellers. Since 19 failed I will not risk the move. I love my guns too much on that risk. I haven't been a user since the 80's but I think it could have been a good cash crop.

Since we are on a commercial flow, what would you do with 12 acers of high desert just out side of Lancaster? 5 miles from hwy 395 and hwy 15?

Mini-mall? Retail coops? Self Storage complex?

[GregWeld]

Originally Posted by Vince@MSperfab

Since we are on a commercial flow, what would you do with 12 acers of high desert just out side of Lancaster? 5 miles from hwy 395 and hwy 15?

You don't even want to hear what I think about investing in Landcaster, or that area, let alone investing in ANYTHING that's in California...

I love California - but not as an investor. Way too many tree huggers and laws there. The criminals have "rights" - the renter that doesn't pay has "rights" - the border hoppers have "rights". No thanks!

Dump the property and buy some good stocks....

[Bucketlist2012]

Originally Posted by GregWeld

You don't even want to hear what I think about investing in Landcaster, or that area, let alone investing in ANYTHING that's in California...

I love California - but not as an investor. Way too many tree huggers and laws there. The criminals have "rights" - the renter that doesn't pay has "rights" - the border hoppers have "rights". No thanks!

Dump the property and buy some good stocks....

Haha....No doubt...That is why I will one property...The one I live in..I may move in the next few years to my forever home, but I will not keep this one..
Mainly for the reasons you mentioned..

I don't need a squatter laughing at me while he doesn't pay for several months...My health cannot take the stress and I won't do the jailtime for what I would do...

I would still stay in California due to family, but I don't have the stomach for the laws and rights given to squatters...

[glassman]

Some of my clients that are high end boutique resalers have said there are two California's for investing, coastal and "other". They've all said stay away from " other". There are exceptions to that of course, but when were in the game of numbers...

[frankv11]

When I buy such property. I have already taken into account eviction , holding time , repairs etc... All that has to be factored in. As long as the numbers make sense and oppurntunity strikes and if I have the means I'll be all in.

For example on above mention property. If there is no drastic change in market. I should get all of my investment back in six months. it will pay for it self while generating a profit and if there is a bit of room maybe ill pay my self a bit on the front end. With today's interest it would be a sin not to keep it. If I could keep one or two of those a year. Maybe I'll be able to get a professional management firm when I'm 45
Plan C , which is not really in my plans would be to sell and profit an avarage of $70k before taxes.
Now that is just my point of view we are all at a different stage,money wise career, family goals etc... So most definitely not for everyone but do what you know works for you.

[GregWeld]

Good post Frank... and the part I like the best is that you understand that everyone has differences. So ideas are just that... ideas -- and they can be
modified... used in part or in whole etc.

Doing what someone understands and has intimate knowledge of - to me - is the best way to invest. They see and understand the pitfalls. They have a better sense of changes - good or bad etc.

The main part of this entire thread is just to get going and do SOMETHING - save - invest - start early. Make your own "luck".

[Vegas69]

I like your statment about making your own luck.

I was speaking to a physician client of mine yesterday and he was talking about how lucky he is to have his position. Then he started talking about all the training, meetings, interviews, and decisions he made over the years.

I went on to tell him luck likely had some play but a majority of his luck was self made. You don't get lucky being a couch potato.

If you want things to change, YOU must change. Whether it's you skill set, education, health, relationships, finances, whatever....

[slow4dr]

I have been lurking in this thread for a while but I figure now is as good of time as any to join in and contribute anything I can (which is minimal).

What I've done may be considered crazy to some but when you have minimal cash flow you really have to think outside the box. The old saying of be aggressive when others are scared and be scared when others are aggressive has worked for me. I had some great help from not only my boss who also has rentals but a great family friend who at his peak had over 20 SFR's being rented.

BTW: I fit the "other" classification that 'glassman' mentioned above since I am 70 miles East of L.A.

Just a little back story:

*Bought my first house in 2001 with a 80/10/10 loan (primary residence)

*Refi'd house #1 in 2002 to a 15 year loan compiling all 3 loans (rates had dropped far enough that my payment stayed the same)

*Refi'd house #1 again in the Summer of 2010 (this is where many would call me crazy but I went back to a 30 year loan to keep cash flow more positive).

*We bought a bigger primary residence (house #2) with only the minimum required for an FHA loan in December 2010. Using an FHA loan allowed me to keep more cash in hand. IMO too many people are hung up on saving just enough to have 20% down and then they don't have any cash left over for back up. I'd rather not tie up that cash (since I didn't have a lot of it). This was my first swing at a rental property so I was preparing myself for the worst. I wasn't in a position to wait while I saved more any longer because my local market had already started climbing back up by this time.

*I was able to rent house #1 within a few days of listing it. It is a house I am familiar with since I lived in it for 10+ years so I know it inside & out. It is a great SFR with RV storage, 800 sq ft air conditioned shop, big easy to maintain yard. Which made it easy to pretty much have the pick of the litter when it came to applicants.

*The rent payment for house #1 was making the P&I payments on both #1 & #2 houses plus a little extra.

*The newest little bonus came about a month ago. I was able to refi house #2 at a point and a half lower rate AND the house had appreciated enough to get rid of PMI. This dropped the total payment including PMI roughly 20%.

*I've had a few little hiccups at house #1 over the last 2 years. Clogged kitchen sink (plumber called), water heater was leaking from the valve (just needed to be tightened down LOL), I had to replace a garage door spring and I had a leaking stand up shower that I ended up upgrading to a tub (full bath now instead of a 3/4) anyway but overall nothing too crazy. Should the proverbial poop hit the fan I still have the money I didn't spend on the down payment as a cushion.

*I would love to pull the trigger on house #3 as an upgrade for my family and then rent #2 but there just isn't enough inventory right now in my area. For instance there have been less than 10 listings matching my search criteria in the last 90 days. My current residence is very similar to the original only bigger, RV storage, shop, and of course a big easy to maintain yard so renting it should also be no problem either.


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Up until this thread I never thought I would ever invest in the stock market. I would like to thank all involved and especially Greg for the ever-so influential way of putting things into perspective. I not only have been researching stocks the last few months but have also gotten my rather stubborn on the subject wife to come on board as well. She would have laid over dead before investing in the stock market but she has read through most of this thread and is now asking me how much a week we should be investing.

I am starting to familiarize myself with the Yahoo & Google finance pages to find my comfort zone and follow basic trends. However, there is one small thing I've noticed that is different between these two sites and that is the Dividend. The Yield is always the same but the Dividend amount is always substantially higher on Yahoo's page. I am sure it is just some small difference in the way it is written but for this reason I have leaned towards Google instead (mainly because Greg has posted specific amounts and they have matched Google exactly). If anyone can explain the difference so I can understand it would be much appreciated.

-J

[JKnight]

J - Yahoo quotes dividends as an annual amount, whereas Google shows what you are "expected" to get on a quarterly basis.

[slow4dr]

Originally Posted by JKnight

J - Yahoo quotes dividends as an annual amount, whereas Google shows what you are "expected" to get on a quarterly basis.

I figured it was something simple, thanks.