All Forum Posts by: David C.

Not a lawyer!  I was only thinking 'reputation risk'.

As 'not a lawyer' I don't see you predicting or guaranteeing anything, I'm not sure how reporting facts and opinions would expose you.  However, as 'not a lawyer' I'm not qualified to have an opinion!

To mitigate 'future loser' risk, put some dates in the letter.  All you are saying is she was awesome from 2008 to 2010, if she uses it in 2020, it may not mean much.

Copper thieves would love a website that listed vacant properties.  Maybe there could be an indicator if the copper was already harvested?  and one for the A/C unit?

Made you look!

@Pavel Sakurets 

I'm also surprised nobody knows this, just pull up Zillow and in the 'houses to show' click the 'Vacant' check box.

I finally updated mine to one from this decade.  I just can't get it centered, I get the + icon thing that looks like its going to shift it around, but it ignores me.  Still, an off center one is better than my joke picture from 1998.

@Matt R. - no doubt, plenty of people use leverage in stocks, and there are real estate investors who own their properties free and clear.

They typical is: unleveraged stock/mutual fund investors comparing returns vs. leveraged real estate investors.

Also, leverage in stocks is more expensive, at least more than personal residence loans, not more expensive than hard money or other lending options.

Options are fun and dangerous - I've lost a few bucks in the past few years buying LEAP's(very long term options - like 2 years) on BP, I can't believe how long that turnaround is taking!  I've had some of those go to zero, but I knew I was gambling on those, not investing.  Options can be a good way to generate income from your stocks, selling covered calls for instance - but then you give away surprise upside.

I think both are reasonable paths to wealth.  I see more risk in Real Estate, you end up liable for things you cannot know about or predict.  Your investments are typically far more concentrated in a single city.  Government shuts down the space shuttle program?  you live in Cleveland and all the plants close?  I'm sure there were quite a few landlords who had nice empires in Detroit, Cleveland, etc... who ended up wiped out.

For the additional risks in real estate, you should earn higher returns, and many people do.

So the question is: are you willing to take on some additional risk, and some additional work to earn those higher returns?  Personally, I am not.  If my situation were different - I would be.  I take great comfort in my lack of leverage, and my lack of tenants or previous buyers, my risk of being sued is dramatically lower with my choices - and that's worth a lower return to me.

The survivors on here, who are really good at their craft, are blowing away my returns - and with their knowledge - they are mitigating their risks, and hopefully buying insurance where they can't.

@Matt R. while stocks may have historically outperformed real estate as an asset class, the stability of house prices allows for low borrowing costs, and a more typical higher level of leverage than stock investors.  So given a slightly lower return with much higher leverage, I would think the average return for real estate investors is higher than stock investors.  But its with the additional risk of that leverage.

@Nicholas Miller I expect major corrections every few years, as long as you don't sell - who cares? they are buying opportunities.

We have massive survivorship bias here.  Those who overpay or mismanage, sell at a loss and don't participate.  Their leveraged return is massively negative.

Here's my personal net worth chart. It has gone down, but always come back up. That dip in 2008 sure looked bad when that's where the chart ended, now its just a minor bump in the road. Heck - even the 2004/2005 dip was dramatic and scary at the time, but now you can barely find it. I have only my personal residence and a small amount of REIT's - no leverage and not rental properties, flips, etc...

@Ibrahim Hughes that's great to hear, it would be a shame for all that nice work in the basement to end up ruined in a few years.

You should really be proud, you are making some money but also reviving the housing stock.  That place looks dynamite.