All Forum Posts by: Shanti S.

I'd be interested to see what you found; it's one of many, many subjects I'd like to research thoroughly but there just isn't enough time in the world.

So Tim, even if you're not opening a storefront, will you be buying gold at a discount?

Hi Vince do you have a focus as far as what type of property you want to buy, in what area, and what you want to do with them? Do you have the money or financing set up so that the only thing stopping you is your own decision?

It is good to have options but there are so many options in real estate I think it can be overwhelming to newbies.

I can't help but think that if you're having that much trouble finding an honest and competent PM that there's quite an opportunity there to start such a service :-) We are negotiating a multiple property deal with some owners here who have done just that - after managing their own properties for years, they started doing it for others and the demand for their services is exploding. Multiple streams of income...

There is always a lot of hype about gold....and I think it's a bad investment, compared to something like real estate certainly, which has tax advantages and can be purchased with leverage and can earn you income, etc...

The folks pushing gold ought to take a different stance, in my opinion - stop trying to sell it as an investment where “the prices are just going to go through the roof any day now, just wait and see.â€

Sell it as what it is, a relatively liquid form of money that has universal value across the globe and is great insurance against inflation.

Conspiracy theory - folks that buy it for insurance want to take possession of it for the same reason that they don't want to invest in stocks - they want to be in control of something real and that can be traded privately and quickly if needed away from the prying eyes of government. Many also feel that the precious metals market is manipulated in much the same way as stocks and barrels of oil.

You don’t get any of the same satisfaction from viewing pixels on a screen of your investment status as you do from seeing a closet full of canned goods and critical supplies all stocked up at home, or admiring the luster and weight of a .999% pure, precious metal coin in your hand. Investing isn't always about ROI and security isn't always about insurance and the promises of the govt and the legal system.

For those of us in this thread, like myself, that don't have the option of owning enough free and clear properties to survive off the rental income if needed; I'm interested in their best strategies as well.

My plan -
- sell my luxurious, too large primary residence this year and move into a unit of an investment multifamily that I'm purchasing. This should reduce my housing expenses by about 80% - and motivate me daily to step up the investing so I can get back to a private home :-)
-Purchase more investment properties at the highest leverage fixed rate financing I can manage to find.
-Keep working my job in the meantime
-Keep gardening and cooking more at home rather than eating out
-Have my emergency funds (untouchable, lost my job or in a crisis type of funds) in physical precious metals - liquid, but not too liquid, and protected from inflation
-Have investment property reserves in the bank where it will make my creditors happy to see it
-Continue to stock up on tools, food, household supplies, ammo, etc - commodities that store well and for which prices will continue to soar.
-Continue to drive my humble old paid-for car, secure in the knowledge that I can buy another if it lets me down, without breaking a sweat

Critique please! :-)

Edit - also reduced my 401k contribution a while back to the minimum that will allow me to get the full matching contribution from my employer - I'm basically expecting it to be seized at some point in my future

Prices will probably go up in inflation, yes - but if you have 100% equity in a $200,000 house and it inflates to $300,000 - you now have 66% equity and it's in deflated dollars that will buy much less. If you took a 75% loan at single digit fixed 30yr rates, I think the picture is much better depending on where you put that $150k in tax free refi income you pulled out initially....

Couldn't agree more with your get into fixed rates warning to folks Eddie...

Free and clear sounds nice but Mike do you think inflation is coming, and that it will probably hit hard?

If so, aren't you concerned that the value of all that equity in your free and clear properties will be cruelly devalued? Yes, you'll still own the properties free and clear, and the "values" will probably go up, as will rents, but the pre-inflation crisis dollars you invested in having those properties free and clear will be savaged.

How about leaving a conservative amount of equity in each, pulling out tax free refi dollars, and investing those dollars in something better suited to weather the storm? More investment properties financed at today's fixed rates, or at the very least some kind of insurance like precious metals?

Rich, I read a really interesting article on Greece the other day - how basically most of them pay a tiny percentage of the taxes they are supposed to pay, and how the govt only investigates those who pay, not those who don't. No wonder they are in the tank!

"In the wealthy, northern suburbs of [Athens], where summer temperatures often hit the high 90s, just 324 residents checked the box on their tax returns admitting that they owned pools.

So tax investigators studied satellite photos of the area — a sprawling collection of expensive villas tucked behind tall gates — and came back with a decidedly different number: 16,974 pools.

Various studies, including one by the Federation of Greek Industries last year, have estimated that the government may be losing as much as $30 billion a year to tax evasion — a figure that would have gone a long way to solving its debt problems.

When tax authorities recently surveyed the returns of 150 doctors with offices in the trendy Athens neighborhood of Kolonaki, where Prada and Chanel stores can be found, more than half had claimed an income of less than $40,000. Thirty-four of them claimed less than $13,300, a figure that exempted them from paying any taxes at all. "

http://www.nytimes.com/2010/05/02/world/europe/02evasion.html

A typical property management fee would be 8-10% of collected rents. They'll advertise your rentals, screen your tenants, collect rents, handle any maintenance or have their subcontractors do it, and evict and deal with tenant issues if needed. Well worth it if you ask me. Your tenants wouldn't even know how to get in touch with you.

If you purchase properties correctly, it's just a cost of doing business, included in your calculations.

If you have more money than time, hire good property managers and focus your limited time on becoming a more educated investor and finding the best new deals.

In your situation, personally I would diversify across several markets in the country for a balance of security and appreciation - plenty of smart investors buy properties and have them managed without ever even seeing the properties first.

Also educate yourself on proper insurance and asset protection if you haven't already. Happy reading and investing!

So a month later here, sorry for the delay, but I did say I'd report back - talked to B of A, it was a basic refi offer, $2k-$2500 closing costs and they will refi me at 5%, will roll closing costs into the loan.

No deal I think since I don't plan on keeping this house for too much longer.

On the bright side, I sat and chatted with a LOCAL bank manager for 2 hours yesterday while we opened up my new accounts and chatted about the housing market and my business plans. She's introducing me to the VP's of residential and commercial mortgages for her bank and they keep many loans in house for local properties. After I sell this house, B of A and the huge banks will get no more of my business!

Oblio and Arrow reference?