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Re: Investing in real estate - what is your opinion?

Posted: Sat Oct 17, 2020 12:55 pm
by abuss368
I have always liked real estate as an asset class. Always owned my own home and invested in REITS for 20 years years. I don’t have a problem as long as you really read up and study real estate.

Another option is crowdfunding which is a gaining a lot of momentum.

Re: Investing in real estate - what is your opinion?

Posted: Sat Oct 17, 2020 6:01 pm
by phxjcc
Pikachu0550 wrote: Sat Oct 17, 2020 12:57 am
DesertDiva wrote: Thu Oct 15, 2020 12:54 pm Have you read the Bogleheads wiki?

For your convenience, I pasted The Bogleheads® Philosophy here:

1 Develop a workable plan
2 Invest early and often
3 Never bear too much or too little risk
4 Never try to time the market
5 Use index funds when possible
6 Keep costs low
7 Diversify
8 Minimize taxes
9 Keep it simple
10 Stay the course

Start at the beginning with a plan: ... _statement

Then consider if/how real estate investment will meet your needs. Don't buy real estate for investment because everyone else seems to be doing it and appears to be successful at it. That's the biggest trap I see in those blogs.
Of course I read! I think I have the basics covered - I first put my finances in order. I don't have any debt beside the mortgage. Every $ is accounted for. I am saving as much as I can. I am happy with my AA. Not much I can do with taxes, as a W2 person. I max out my Roth and 401K. I also buy regularly in my taxable account.
I was looking into what I can do to speed this up. I first looked into starting some sort of a business. But the idea of real estate investing appeals to me more. I've been reading and educating myself on it, so thats why this exploration.
retire2022 wrote: Thu Oct 15, 2020 8:29 pm The current tax laws disfavors leverage and HCOL cities where real estate values have gone up.

The State And Local Tax SALT is another fancy way of increase the cost of real estate.

Not really worth it.
Why? I thought the SALT only affected real estate that one owns
manuvns wrote: Fri Oct 16, 2020 1:13 am if you choose to buy investmnt proerty ( which is not for the faint of heart ) i recommended buying it within 1 hour driving distance of your primary home . if something goes wrong you should be able to get there quickly .

I live in Bay Area, CA. The real estate market prices here are insane, so buying locally is not an option.
phxjcc wrote: Thu Oct 15, 2020 11:43 pm Otherwise, do not UNDER ANY CIRCUMSTANCES believe ANYTHING the real estate professionals (snort!) tell you.
So you wouldn't trust any turnkey provider?
flaccidsteele wrote: Fri Oct 16, 2020 12:18 am During this crisis I literally started on social media (was never on Facebook, Twitter, etc) and now have 55k followers who watch my content regularly

Of course to do this, one must have something valuable to say and not be scared to say it. Most people who trade their Life for money at a job tend to prefer to stay “under the radar” because they fear the judgment of fellow employees
Yeah... Good for you! Its not my jam. I wish.
Wricha wrote: Fri Oct 16, 2020 8:03 pm My experience (sample size 1) is real estate has been very good to me. I did it as a side business to augment my consulting business. Long story short I invested in commercial real estate (with partners) and the rent more then fully funds a fairly high lifestyle in retirement. My advise is to find good partners with different skill sets to share the risk and have fun with it. Never ever (25 years) been called out in the middle of the night to fix anything.
Tal- wrote: Fri Oct 16, 2020 9:52 am With all of that said, let me share some specifics. I believe that a reasonable total aggregate return for money invested in a good rental property purchased today over the next 10 years is between 5% and 20%/year. However, this may include actual returns ranging from -100% to +30%. The math is also super complicated - and don't let someone show you a five item pro forma and think that they are capturing everything - there are hidden costs galore. And while I expect many rentals to outpace stocks/bonds, it is certainty not a silver bullet where anyone can "make their money."

There is also the risk that you're simply too late. My perception is that the real estate market today is nearly saturated with both home buyers and landlords - meaning prices are high to purchase and low to rent.

So, I encourage you to tread lightly here...
Good points! Thank you. And yeah, I also wonder if its too late to enter this game.

Again, even this thread highlights the complexity of the RE investing - there are so many angles to look at this from. So many variables and unknowns. Can be a success story or a nightmare. Ugh...
"So you wouldn't trust any turnkey provider?"

By definition, a "provider" is providing a service for a fee.

I am not confident that when a conflict arises between what is best for the provider and what is best for me, that the provider will choose what is best for me.

Am I cynical or cautious?

I would prefer, "experienced".

Re: Investing in real estate - what is your opinion?

Posted: Sat Oct 17, 2020 9:43 pm
by abuss368
retire2022 wrote: Thu Oct 15, 2020 3:18 pm
Pikachu0550 wrote: Thu Oct 15, 2020 2:37 pm
Have you been investing since you were 2 years old? :))
Pikachu, I'm 60 not everyone is your age, don't assume everyone is :)

I started when I was 26, in 1986.

I am a child of single parent, immigrant who made $20 per week or 6K per year, I escaped poverty, and I consider myself a middle class person who is part of the American dream.
Incredible story and congrats!

Re: Investing in real estate - what is your opinion?

Posted: Sat Oct 17, 2020 9:44 pm
by abuss368
Pikachu0550 wrote: Thu Oct 15, 2020 7:56 pm
gougou wrote: Thu Oct 15, 2020 7:28 pm Not worth it in the current environment because REITs are selling at significant discounts to NAV. Why would you buy the underlying at full price when you can buy REITs at a discount, and get strong management and diversification for free?
Because REITs are just papers, while RE is actual physical asset. Plus I don't get any tax advantages with REITs, and can't use mortgage as a leverage. Or am I wrong?
REITS have return of capital from depreciation.