All Forum Posts by: Jeff S.

@K S. you are assuming you are investing 100% cash into the stock market not diversified at all and just happened to get lucky with index funds.

Most investors overall compare equity return and not total return on the asset as you are doing. ROE is what most talk about.

I have never had $250k cash to invest in the market not that rich or high income but have accumulated with effort much more equity and then cash flow from years of ownership. For those that are rolling in cash as such high income earners the market has historically done well. No guarantees going forward.

One way to own RE is by buying stocks that own lots of RE. Warren Buffet owns Pilot Service stations and he mentioned all the prime RE they own across the country. Another is McDonalds who is a RE company that happens to sell hamburgers. Yes buy a good stock and hold forever a good thing, Has never worked for me.

@Eric Carr Another possibility is to start taking $ out of your 401k (or equivalent) at 59.5 an amount somewhat close to your RMD. I started doing this a couple of years ahead to reinvest and drain the taxable balance down.

@Eric Carr there a couple of ways to look at this. Find out what your SS will be and have either enough cash to cover the lack of that or work a little to compensate for the lack of SS until you can collect.

This assumes you can live off your income w/o your W2 when you start collecting. I retired quite a few years before SS and it was not hard to get by. SS is just a bonus!

@Dan H. 1031 I did to have one less Portland property going from a 100 year old duplex trading down to a 6 month old higher end condo. Got caught in that awful bidding war scenario but ended up happy with the results. Appreciation sure nice when older and then able if want to cash in or cash out however you want to look at it. Trading down in price was interesting able to get some cash and pay a small tax.

V.G Jason

#3 Real Estate Deal Analysis & Advice Contributor

• Rental Property Investor

Replied 2 hours ago

@V.G Jason I know if you hold long enough the rent will rebuy the property every couple of years in full.

Dan Heuschele Investor Poway, CA

• They have OK cash flow (using 50% rule, just over $11k/month) but historically have done great with appreciation. My worst appreciation property has appreciated $2700/month over its hold. My best appreciation is over $10k/month of appreciation over its hold.
  

Interesting never thought about monthly appreciation bought a duplex in 1990 for $48500 sold 2020 for $650k nice monthly appreciation plus increasing rents too. Wonder value in 30 years?

@Marcus Auerbach amazing Marcus and you are an agent. That is a first for agents around your area. Bring on the truth!

INVESTMENT, which means you are putting money in, not taking money out

@Mica Moore the question is why did you buy this property. If the reason you bought it has changed then changing the situation could make sense. If everything is the same then stay the course.

@Mike Dymski I wish I could do something like 20% going forward but these days not sure how to go about that without lots of work which does not sound appealing. I am investing in index funds so will see how that bubble holds up. I am with that "small and mighty" investor group little to no debt.

Like they say past returns not indicative of future returns. My past investments have skyrocketed but not feeling that in the future. Maybe picking up failed syndications?

Hi @Becca F.

I don't know anyone who retired early/quit W2 at the age of 40 from their stock portfolio. They're all working until at least age 60 and paying lots in federal taxes. I personally know 6 people who have quit the W2 jobs around the age of 40 (picked the right properties and benefitted from appreciation) and age 30 (high income earners who leveraged and scaled quickly) from real estate. I'm reminded from non-RE friends about how I take risks with real estate and I should be try to be mortgage free but when I look at my stocks, I have no control over the value other than to buy or sell.

My experience with RE and stocks is RE has been good to me and the stock market hasn't. Not everyone is cut out to be a property investor and not everyone does well in the stock market. I know people that worked great high paying jobs for 40 years and retired not that rich with a pension. Good job many times equates to a good lifestyle and there is nothing wrong with that.

I scraped together (not easily) a few dollars and leveraged RE and held it long-term with little turn-over but hands on from the start. Using PM now and enjoying it. My stock market investing when working was to accumulate a $100k (back when that was a respectable amount) over a 10 year period only to see a 40% drop. Did I sell? Yes each time a big drop I am not optimistic. I buy stock out of laziness but am more heavy into cash equivalents

RE is more fun IMO but I am more entrepreneurial. I am not corporate type. 

So if you are getting 8.5% on a large asset how does that compare to 10 or 20% on a small asset (stock equity)?