Another Auction --Heron's Watch 7 Condos

[egrp]

buying real estate with cash is the same as CDs...hope this helps

...i can't speak for shelly, but u r rite i'm dummer than a bag of hammers;-)

 

[flyforfun]

Shelly of course there is risk in RE for amateurs....absolutely there is. You need to stay out of it cause you don't know what you are doing. Stick with mutual funds and CD's. In the long run, RE on the beach does better than most. Sure this correction is been a tough one, and some people made some mistakes. However the longer you hang on to that piece of property, the more it will smell like roses. What is interesting to me is the positive spine you and your pals give stock investors, which I admit I am not cause there is just to many unpredictiable variables for me to be comfortable with. I don't trust 99% of the people in the investment advisor market who push stocks, mutual funds, etc.. But you know, I know more people who have lost their life savings in stocks than any other form of investing. The stock market is so volitale that if the President farts...stocks go down. Its almost a joke. People who make it their carreer watching the stock market 24 hours a day, do very well, but the rest...they become long term investments because short term they are a loss. Several years ago I had two friends who decided to quit practice and become "day traders"....within 14 months they were broke. Now some of the people who "play" the RE market down here really have some guts and take huge risks and their risk level is way outside my league. However, I would not call them stupid or foolish like I have seen you and others refer. I also don't like people who take advantage of people either it be real estate agents, brokers and mortgage companies. People who break the law need to go to jail in turkey!

 

[spinDrAtl]

Just like stocks it takes cash....working for banks and mortgage companies is not part of my process. I sit back and let you guys/gals slam the market down and then I pay cash. People who over leverage themselves in RE market, just like stocks, go broke every day! However, the stock market is full of people who are experts in moving money from your pocket into theirs. Cheating, dishonesty and cooking the books is all ok until you get caught, and too few every get caught. Good attorney and a paid off jury will get the stock crooks back to the beach of bahama's or Mexico while one enjoys their large nest egg. If you have not experienced the pain of playing the stock market either you have been lucky or have time to play it full time. I prefer RE, and will take my chances at the black jack table in Vegas over the stock market any day!

For someone who seems 100% certain that now is the time to buy, you are talking in generalities and in circles. Give some specifics - what are you buying, where, how much? What return are you looking for on your cash purchases? Over what time frame? Educate us.

I've been buying RE and stocks for 20 years and both have cycles and both have crooks. I'm doing just fine in both.

 

[fisher]

buying real estate with cash is the same as CDs...hope this helps

...i can't speak for shelly, but u r rite i'm dummer than a bag of hammers;-)

U almostt haave it write that buyin real estate wit cash are the same as CD's (oer time ur returns will be bout the same). The problem wit ur comments are that investors princepl are vertully 100% safe in CD's in the short and long term. Howeer, investors princepl ain't not safe in RE. Levrage are for dummiiees.

 

[rancid]

- Aviod the SFD! - Simple math, when you have a vacancy in a duplex, you only lose half the rent. Quad, even better. etc.


I have a couple of SFD in Atl and am looking at a quadraplex. I am hesitant b/c of dealing with 4 renters and the greater likelihood of problems and vacancies due to added variable of multiple renters.
Do you not think it is better to have one renter taking the chance that the SFD may be vacant at times?

 

[Searcher]

- Aviod the SFD! - Simple math, when you have a vacancy in a duplex, you only lose half the rent. Quad, even better. etc.


I have a couple of SFD in Atl and am looking at a quadraplex. I am hesitant b/c of dealing with 4 renters and the greater likelihood of problems and vacancies due to added variable of multiple renters.
Do you not think it is better to have one renter taking the chance that the SFD may be vacant at times?

Where we live/invest, it is a challenge to even find a SFD that will cashflow. The prices for a decent property are just too high. We find that for the same purchase price, we can get enough rent with multifamily homes to make it work. And yes, the other side of the coin is that you are dealing with more renters, more applainces, more toilets, etc..

For us, the more units we have rented, the less pressure we feel when one is vacant. Before we rent, we try to get each property up to a standard that will attract good tenants and require less day-to-day maintenance.

 

[Smiling JOe]

Another advantage to a quadplex over sfd is that it is easier to slightly raise the rent of four slightly to cover costs like increased taxes or insurance, rather than placing all of that burden on one rentor. You also have an advantage of dividing the cost of the land by four, lowering you land cost per unit, when compared to a similar parcel with only a single family detached home.

 

[flyforfun]

For someone who seems 100% certain that now is the time to buy, you are talking in generalities and in circles. Give some specifics - what are you buying, where, how much? What return are you looking for on your cash purchases? Over what time frame? Educate us.

I've been buying RE and stocks for 20 years and both have cycles and both have crooks. I'm doing just fine in both.

Spine doc, its all a matter of how aggressive you want to be in RE at the beach. You do good in stocks cause you follow it closely and probably do not depend on others to provide you with advice. I don't have that kind of time to watch the ticker tape, be that analytical and read the news and shift through the BS. Unless you have a good finacial adviser you can trust, then its a little easier.

Regarding RE down on the coast. There are lots of good buys but you first need a RE agent who works sowal full time (not part time or as a hobby), been there several years, has access to comps for 15+ yrs. and knows your comfort/risk/goals level. He/She should know contractors, zoning, good vs bad lenders, etc.. I don't buy anything that is not water front or view or not in a large development. Those properties always rebounds first when there is a slump and climb the highest in a good market. I also don't buy condo's that don't have onsite management. I choose not to be involved in several deals at once, so I cherry pick. I also like properties that need repair work that I can do myself. I like RE that is in need of redecorating or a new coat of paint. Otherwise, find a contractor who has been down there for 10+ years for larger stuff and has not lost his license a dozen times (use myflorida.com). I like to find properties who need to sell vs those who don't. If you don't need to sell, now is not the time to do it. I am not into flipping..it's just to risky for me but if I was going to do it, I would buy in the fall and be out of it by June. I like property that I can pay cash for, fix up, rent for a couple of years, take the depreciation and then sale when I can double my investment (which normally is within 5 years). Shelly gives all the negative national news and tries to apply it here at sowal. Unfortunately some of it applies, but not all. This market is different and that is why I prefer it over any other RE in the country. Considering what I am buying...I am cherry picking and don't want competition. As much as I like "fixer-uppers" they are hard to come by at the moment. I think anything on the south side of the bay and east of destin is a good buy especially if its within 5 miles of Seaside. Of course anything within walking distance to Seaside, has a pool is going to be a winner and I believe you can say the same about Rosemary. Now folks who purchased in the middle of the forest, outside a development, well they have a long term investment. If you are looking to retire within next few years and don't want water front, you need to look at Eden's Landing. Just a short drive to the bay or beach, zone x and price is right for the property. The developer has been in sowal for a while, has a long record of quality construction and its going to be a "green community". It's more affordable than the high end developments but has a good vision and worth the risk of buying into it. Regarding slowness of this recovery...that blame lies with the county commissioners who continue to bend over and allow for over development, have not adequately addressed the tax issue or the beach issues. In fact, they may have already killed the golden goose who laid the gold egg.

 

[egrp]

Your strategy of paying cash then renting a few years and selling only works in an environment of pretty good appreciation.

The upfront cash basically negates the return on a couple years of cash flow and the transaction costs will eat up profits if sold within 5 yrs in a period of normal appreciation (~2%).

The do-it-yourself fixer upper part of strategy is sound as is tax ad of depr.

In this environment I wouldn't want to count on substancial appreciation within 5 years to make an investment successful. Right now I'd make sure it cash flowed and I'd leverage it as high as possible to achieve decent returns on that cash flow...that being said that type of deal is rarely available in todays residential real estate mkt and is the main reason why i think more pain is in store for the housing mkt.

 

[SHELLY]

The stock market is so volitale that if the President farts...stocks go down.

I got some insider information that Pres Bush farted today--and the Dow (again) closed on a record high!! We must be having a correction...or at least a soft landing.


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