All Forum Posts by: ButchLisa Wofford

Quote from @Adrian Stamer:

Diversify, do both 

 Yes, I agree.  We are already  heavily invested on properties with the 12 we own, plus the one we live in. We own a little bit of mutual funds and 403B plan (like 401K) through my employer. But we don't own stocks, so I'm thinking, we should start investing and start with this 207k cash we have; but we won't buy as one time purchase but buy over a period of  6 months (following dollar-cost averaging). I just hate to give up on this £200k property cuz I know we are getting it at slightly below market price because we are paying in cash. So before I give up this property, I just need to know that I'm giving it up for a better investment that would give a better/higher return. 

I intend to buy and hold. I am venturing in stocks from this point on. I have enough passive income from our 12 rental properties (including the one in the Philippines), so I will be investing stocks moving forward. But at the same time, I know this £200k ($244) 2 bedroom property is a good buy.  I don't know if it's just worth it to tie up the $244k, if I can make more returns in stocks in 20 years time. In 20 years this 200k property (UK property appreciation is not as fast as in the States) may be 400k worth then. I know I'm still getting monthly rent and rent appreciates too. But so do stocks. 

Copying and pasting here  the message I sent to David Greene . Hoping to get some thoughts/ideas here that would help me resolve my dilemma on how/where to invest the $300k cash we have  - Whether to buy a 2 bedroom  property in UK at £200k ($244k), with monthly rent of £1200 ($1470) .  I can't get a mortgage, so I need to pay it in cash. OR should I invest in STOCKS.  
Here's more details of my situation/dilemma

I've investing in properties since 2000. I am American who has been living in UK since 1999 because I have a good job working at U.S. Military base here.

I own 9 rental properties here in UK and in 2021 and 2022, I bought 2 properties  in Florida.

I have dilemma right now and am hoping you can give me your thoughts on it.

I have about 300k cash in my bank account. I don't want to buy a property in the States at the moment.

I want to buy another one here in UK where I leave because I get a good/guaranteed rental income with U.S. military members being stationed here. The U.S. military base pays for their housing here.

And there's less rental expenses here because it is the tenant who pays the property tax here, insurance is $200-$250/year, and the labor cost (to hire a plumber, handyman, builder, etc.) is much cheaper than in the States.

Recently I talked to someone who owned 14 rental properties and she decided to sell all properties back in 2014 because she doesn't want to deal with all the time/effort of managing them. She has been investing in stocks then and doing well.

So this got me thinking, may be I should start investing in stocks. I have a few mutual funds (not much, may be a total of $30k) and 403B plan with my work and have about 530k invested in growth funds.

Back to the 300k that we have at the moment. I got an offer accepted on a 2 bedroom property in UK for £200k ($244,000) . We'll get a rent of £1200 ($1470)/month. I'd buy this property but if we get a mortgage with the high interest, we won't make any income and we'll paying expenses out of pocket.  But even, if we want to  mortgage the property, I can't get a mortgage right now because of my credit score here in UK being adversely affected from £245( $300)utility bill that went into default. This does not affect my U.S. credit score, which is excellent. 

My question is, should I buy this £200k ($244k) 2 bedroom house, that would rent for £1200 ($1470)/month and use up most of my cash OR should I just invest in stocks over a period of 6 months (buying carefully selected stocks using dollar -cost averaging). OR should I just invest in stocks. I already started doing my reading and search on it and have someone I trust who has been investing in stocks for over 20 years now and is doing well.

Hope to get co-investors thoughts on these before making a decision... which is today or at the latest tomorrow

Quote from @ButchLisa Wofford:

Quote from @Samuel Leatherwood:

The retirement home sounds like a win to me @ButchLisa Wofford. Also, very familiar with the Lake Nona area and that has been a good market for appreciation. Lots of plans still in the works out there and long-term appreciation will likely continue. Keep it up!

Thank you. And you as well. You can’t go wrong with property with right location and reasonable price . 😊

Quote from @Samuel Leatherwood:

The retirement home sounds like a win to me @ButchLisa Wofford. Also, very familiar with the Lake Nona area and that has been a good market for appreciation. Lots of plans still in the works out there and long-term appreciation will likely continue. Keep it up!

Quote from @Samuel Leatherwood:

The retirement home sounds like a win to me @ButchLisa Wofford. Also, very familiar with the Lake Nona area and that has been a good market for appreciation. Lots of plans still in the works out there and long-term appreciation will likely continue. Keep it up!

Quote from @Drew Sygit:

You should share more info about your UK investing!

You might attract some US dollars to increase your portfolio:)

 Will do when I have time. Being the property manager for our 9 rental properties and working full time, I don't have much spare time:). I love watching property blogs/podcast though. On my way to and from work, it's what i listen to. I love  watching/listening to bigger pockets.  

Quote from @Henry Clark:

Not sure what you mean purchase price $710,000.  Later you state you purchased for $4xxk.

If this is purely a retirement home investment great job. If you're viewing this as a REI investment there are a couple of items to consider.
1.    Why such a large downpayment?

2.  You note 11 months rental.  Does this mean you live in it one month?  Also for analysis you should figure loss income for your one month, another month of loss income when you switch back to renting, include cleaning costs to get ready for next renter.  If total rent is $9k for two months lost versus cash flow of $.6k then you have negative cash flow to cover.   Assumes you’re maintaining your home in the UK.  
3.  Better investment?  If you have $2xx downpayment.  Have imbedded equity from downpayment of $2xx with equity increase from purchase of $4xx with say market value of $8xx.   That means you have $6xx equity not generating wealth.  

The only way this works is if the property appreciates more above the current market value.  Doesn’t work from a Cashflow analysis long term.

Works if this is not an REI investment but a great retirement home decision

Sounds like it was a fantastic deal. The question is going forward do you view this as an REI or a retirement decision.

Congrats on the overseas investments. BAH payments are gold.  

 There were some typo on my posting but don't know how to go back to make corrections.
1.We did purchase the house for $710,000. The listed price was $625,000, but there were over 50 offers within 2 days the house was listed back in June 2021. It was indeed a bidding war. The highest offer was $720,000 but the seller accepted our offer because we waived inspection and when he asked for 20,000 reservation deposit, we agreed. The 720,000 offer did not want to put 20,000 as earnest deposit. The property was appraised at $650,000. We had NO plans of renting it out, but we decided to rent it out a few months after the house being empty because some racoons and other animals were going into our backyard (the pool was open and  does not have an lanai). 
2. I am not familiar with REI. Why the large deposit? Our mortgage broker recommended putting a higher deposit so we don't fall under jumbo loan ( i don't remember know; but i think the interest is higher with a jumbo loan).
  The house was $710,000 and we got a mortgage for $518,000 at 2.62% rate. So we did put $192,000 down payment and the $8,000 went to closing cost. 
3. Like I said, if our plan was to buy an investment property, i.e. a rental property, we would not have chosen this house. It was meant for our retirement home, 7 years from now.  We were blest, because with the low interest rate, our monthly mortgage is about $1,500 per month. The lender required an escrow, so with the escrow to include the property taxes and home insurance, our monthly payment  from 2021-2022 was $3008 . This year it went up to $3112. Our rent is $4550 per month and after all the monthly expenses of about $680 (includes management agent fee, pool fee, landscaping fee, pest control fee), we still have a left over income of about $758/month and we are happy with that. Someone is paying for our mortgage (principal & interest), property tax, home insurance, and monthly maintenance expenses and we are still making some income. Even with the repair that we have spent on the house, we are still doing good because we have that $4550 monthly rent VS. us tapping our own money. 
$. We do have another property that we bought in April 2022 for $375,000 with a mortgage of 4.75% at a very prime/expensive location in Orlando, FL. It's at Lake Nona - a 2 bedroom townhome at a very exclusive gated community with a golf course. The HOA is steep at $300/month. We are renting this home at $2200/month. We could get $2400 for rent now, but we have a great tenant there so we won't raise their rent. We are paying out of pocket about $130/month, but that's okay. The mortgage is still getting paid off and principal is going down. The location is a prime location and the property will no doubt appreciate and we have no plans of selling it.
We never sell any rental property, except for the 2 properties we own here in UK that we sold in 2015. At the time, one of the U.S. military bases ( we have 3 U.S. military bases where I live)  was scheduled  to close by 2020. I did not want to be stuck with some of the houses when this base left. But as it turned out, they canceled the plans and the base remains open to this date.  I regretted selling these two houses as their price had gone up significantly from when I sold them in 2015. 

It makes it easy when you live in the area where you have your rental properties. I'm very busy because I manage all 9 rental properties, and I work full time too. 

When I have the time, I may share the advantage of buying rental properties here in UK and particularly in the area where I am at. 

Thanks for your input. 

Kind Regards,

Lisa

Quote from @Joseph M Limpert:

I don't know that I have all the details to say if it's cash flowing as you have it rented right now but assuming someone else is coving the utilities and your taxes and insurance aren't off the charts it looks like you have a decent cushion even considering capex, property management, etc.  If nothing else it's always a good deal to get your mortgage paid in the interim especially if you aren't making use of the property.

Cashflow is about $680 per month after all expenses- mortgage, property tax, insurance, HOA, monthly fees for agent, gardening, pest control, pool cleaning. Thank you . 

Quote from @Abraham Shamosh:

is this cutler Bay,FL ? 

Tampa. 33647 zip code