All Forum Posts by: Eric C.

@Account Closed : One additional point would be that you should never be 100% in equities as you get closer to retirement.  Follow the "golden rule" of X % equities/ Y % bonds as you get closer to retirement.   Also, if you held on (which is of course another golden rule) to your portfolio, you would have come out of the recession just fine.  

If you really need money from your 401k, you can always take a loan up to 50k (of course with some caveats).  

And, if you invest in the proper % of stocks/bonds based on age, then you really are guaranteed to make money in the long run.  RE, not so much...   

Some food for thought.  If you had invested in an index fund at any point during the past, you would be positive today without doing anything.  Now if you had purchased rental property, this definitely cannot be said.  You could have easily lost money and definitely wasted a lot of time.  There are many examples of properties being sold for the exact same amount or less after a 5, 10, 15 year+ period.  Of course this doesn't include all the fees, maintenance, property taxes, etc. that the investor would have incurred.  There are so many ways to lose money in RE and you really need to put in the work if you want to make money.  

 The problem with these topics is that it's really an apples and oranges comparison.  I would say for the average joe, it's better to stick with index funds with dollar cost averaging.  Pretty hard to lose over the long haul (even statistically impossible).

@Michael Ndjondo makadi : Maybe.  See answer from Intuit - unless you are a Real Estate Professional, the cost of researching a new property is not a deductible rental expense. These expenses may be considered acquisition costs to be added to the basis of the property.

Everyone should just reference a basic domestic index fund for the purposes of this discussion and general real estate averages.  It's point less to cherry pick specific examples to make a case for either investment route.  RE requires much more time, research, effort and luck.  Investing in index funds is dummy proof and takes no skill or effort.  If you invested in index funds at any point in time in the past, you would be positive today.  Now the same can't be said about RE...  

I would say the buyer agent commission % doesn't matter as much as they used to.  Especially in areas where it is a seller's market.  If standard is 2.5%, and you drop it down to 2%, chances are it will have no effect especially due to the low inventory in hot markets.  Obviously, don't drop it down to 1%.  Buyers have more information at their fingertips now and can easily make their own decisions and see what's available in the market place.  The ability to "steer" their clients away from a 2% to a 2.5% listing is something that can not be easily done without real justification.  

Of course, in high inventory, buyers markets, the buyer agent commission % will make a huge difference.  

Find an agent who is willing to work with you on the commission.  I found an agent that I could pay a fixed dollar amount per offer/counter offer he writes up and then an hourly rate for misc. things he does "behind the scenes" (which in reality isn't much).  In the end, I expect to pay maybe $2-3k for the transaction, but then will get the remaining commission back.   

I think what needs to change is the PM cost structure.  % of monthly rents is an antiquated method of charging for PM services.  Technology has significantly brought down the amount of work required to effectively manage a property.  Add that to the fact that rents have been rising faster than inflation these past few years and the result is investors getting over charged for PM services.

I have seen some PM companies already adopt new pricing structures which actually reflect the amount of work done.  If all they do is collect rent and deposit the check, why should they get paid 10% of gross rents ?   On the flip side, C class properties that rent for $500, PM services should definitely cost more than 10% of gross rents.  

With a "pay per use" model, I think the argument this thread discusses is no longer valid.  Pay a fee to get your unit rented and then pay a fee for each call that the PM handles.   Ticketing systems are a dime a dozen and tracking this info and sending monthly invoices can easily be automated.  This model really resonates well with Millennials and hopefully more PM companies will change their pricing structure in the near future.

I got 25% off my escrow fees with a cash buyer.  This benefit never even crossed my mind when I selected the cash buyer.

Check out the 2nd google search result for her.  That should be enough of a warning if I ever saw one...

Most general notaries will not notarize real estate closing documents.  Make sure to find one that specializes in real estate closing documents or you might waste time at the last minute.  Check with local escrow / title companies.