Is my uncle a RE investor?

Question

Christmas dinner with the family. Talked with my uncle. He has a rental that used to be his primary residence. He bought it in the mid 80's for 175,000, paid off. It's now worth about 650k(no equity extraction). He rents it out for 3k a month(though it must have been less earlier). It's only been vacant one month in 14 years. He lives off this, SSI, and his 401k. His primary residence is paid off. He doesn't spend a lot of money. His wealth increases every month even though he doesn't work.

Now of course he technically is a RE investor in as much as someone who got company shares is a stock investor. Would you consider him a RE investor?

In large part this example is why I'm trying to get into RE. If he had just purchased one maybe two additional homes like this he'd be doubly/triply as set as he is now.

Stephen McKee · Answer

The man has a rental. It is paid off and covers his living expenses. You can call him what ever you want. I call him smarter than 95% of America.

Mat Lewczenko · Answer

Why does the "title" matter to you so much?

If you admire and respect his finacial position then great(I admire his position, and hope to be in a similar position too).

I follow Buffet and Gates, for their insight into business and finance, but I'm not trying to be a "Programer" or "Fund Manager", I'm just trying to be the best "Me" that I can be.

I think Will has a great point, you can be involved in many different things, the titles matter least. I'm sure your uncle could care less what you call him.

He probably calls himself "at ease".

I guess the question to ask yourself, is what does "RE investor" mean to you, personally. This will be very important in setting your goals ahead, especially if you want to be a full time investor yourself. If your uncle doesn't fit in that definition, does that weaken his accomplishements? I would think the answer would be, no.

I think this post is good, especially for you to be able to find out your big "why".
Just my opinion though. I would pick your uncles brain for all the things he did right, and especially for what he thoght he did wrong.

Will Barnard · Answer

There are two kinds of investors (RE or otherwise) and they are: 1. Active investors and 2. Passive investors.
In case 1. (as I am), I operate a full time (can be part time) RE investment company in which I buy many properties. These investments are the main source of my income. In case 2, a passive investor relies on others to do the daily operations of the business, they only invest their capital and let the others do the work.

That said, if a person buyes one home and rents it out, I would not classify them as a RE investor. They have one RE investMENT.
I own some stock, but I would not classify myself as a stock investor.

Jordan L. · Answer

That's a good question. I guess, I'm trying to get affirmation on my own strategy. I'm certainly not getting anywhere close to the 2% or 50% guidelines as recommended by the RE investors here. More than a few suggestions to sell of my existing portfolio have been made and to start to over. As a newbie, I appreciate the advice. If my investments are bad, they're bad and I'm glad people here can teach me something. That's why I'm here. But selling an investment to me is not like going to my etrade account and clicking a few buttons. It takes quite a bit of steering to right this ship. But before this board, my only example of RE investors(they were all full time engineers) are my relatives who were all passive investors and basically bought one property and paid it off, but are now doing well. Thus I have fashioned a similar model in hopes of replicating their results, with hopefully a few multiples.

Mike McKinzie · Answer

According to Will, I guess I am either a "Passive/Active" investor or an "Active/Passive" investor.  I am always looking for deals, making deals, but I don't collect rent or unclog toilets.  I bought five "long term hold" properties last year.  I did the research, made the offers and bought them, but I don't manage them.  They were bought for the purpose of renting them and giving me 'passive' income.  But I had to be active to acquire them.

Stephen McKee · Answer

The man has a rental. It is paid off and covers his living expenses. You can call him what ever you want. I call his smarter than 95% of America.

Jordan L. · Answer

What if at the time that he bought his primary residence he also bought the 2 other similar homes in the neighborhood and hired a PM to manage them. He didn't see positive cashflow for the first 10 years, but now is receiving his windfall(3 properties paid off receiving 9k net a month). Now mind you, he had a well paying job and never intended RE to be his full time gig. 2 questions:
1. Is he an RE investor now?
2. Did he make a good investment?

Chris Martin · Answer

Regarding "Would you consider him a RE investor?" I would consider him retired.

Mike McKinzie · Answer

Technically, he has a real estate investment but he is not a real estate investor.  A Real Estate investor is someone who specifically buys a piece of property as an investment, speculating that s/he will get some kind of return for it.

Is my uncle a RE investor?

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