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Old 06-11-2016, 10:36 AM
 
28,119 posts, read 64,026,968 times
Reputation: 23290

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My point is the markets undulations were enough to motivate a shift in asset allocation to income producing Real Estate. Please realize the difference between Income producing and Speculation.

I did see my values drop significantly in some markets and at the same time my income increased... what is not to like?

The only investment I have ever had that became worthless is stocks...

I tip my hat to those that can pull it off... I can't.

I have never lost money on a car or real estate... both have appreciated very nicely. My collector vehicles also provide enjoyment and my real estate provides income... and both are insured against calamity.

Many of my co-workers were sitting pretty in 2006-07 and set to retire... the markets plummeted and not a single one was able to... in fact, some are just now at the point 10 years later where they are ready to try again.

I don't have the fortitude for Wall Street... simple as that.
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Old 06-11-2016, 11:09 AM
 
4,369 posts, read 3,761,733 times
Reputation: 2479
Quote:
Originally Posted by Ultrarunner View Post
My point is the markets undulations were enough to motivate a shift in asset allocation to income producing Real Estate. Please realize the difference between Income producing and Speculation.

I did see my values drop significantly in some markets and at the same time my income increased... what is not to like?

The only investment I have ever had that became worthless is stocks...

I tip my hat to those that can pull it off... I can't.

I have never lost money on a car or real estate... both have appreciated very nicely. My collector vehicles also provide enjoyment and my real estate provides income... and both are insured against calamity.

Many of my co-workers were sitting pretty in 2006-07 and set to retire... the markets plummeted and not a single one was able to... in fact, some are just now at the point 10 years later where they are ready to try again.

I don't have the fortitude for Wall Street... simple as that.
You don't have to fortitude to drop money in an account, collect dividend checks, and wait?
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Old 06-11-2016, 11:14 AM
 
28,119 posts, read 64,026,968 times
Reputation: 23290
My real estate has never been worthless... wish I could say the same for the stocks I own.
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Old 06-11-2016, 11:21 AM
 
Location: Los Angeles (Native)
25,303 posts, read 21,671,688 times
Reputation: 12319
Quote:
Originally Posted by Ultrarunner View Post
I work in the medical field and the Docs were picking up investment property left and right as a safe haven when the market was tanking...

Sure the investment property values were unstable BUT they made out like bandits in the income department... the yields after it was all said and done were 10 to 15 times money in the bank while the bottom fell out in the stock markets.

Can't speak for anywhere else... SF Bay Area is home and a lot of money flowed to Real Estate... over 40% of sales were all cash.

Amazing times to be sure...

There are still plenty I know that have sworn off the market forever... right or wrong... they will keep their rental properties that are paid for or have dirt cheap mortgages.
Yeah that sounds about right if bank was paying 1% they could get 10-15% return or cap rate.

The thing people neglect to understand when they compare stocks versus real estate is that most real estate is bought with leverage.

Also even during the housing crash, I'm thinking someone like a doctor with good credit would be able to get some kind of loan. Even if they only got a 60% LTV loan (they put 40% down) or something their returns would be even higher.

People mostly invest and put their faith in stock because their 401k administrators tell them to.
If employers told their employees they should invest their retirement in real estate instead then people would do that instead probably.
Also the media tells them that holding stocks long term is the way to wealth.

You really need to get lucky in the stock market to make great returns.

In real estate as you mentioned someone would of just had to bought a house in Oakland, Phoenix, Vegas or a number of other markets to make a huge return.
They didn't have to pick a particular home in those cities ,pretty much any decent home would of been ok.

I've heard tons of people say they lost a fortune in the stock market in various decades.

Sure people 'lost money' during the housing crash, but it was only a handful of years and if they did hold on they are probably in a better position now especially if they had some rental income during that time.

Another big advantage of real estate is you can purchase under 'market price' . People do it everyday.

With stocks its impossible to make an offer of 20% off Apple stock and actually get that price.
You can also improve a property. But you aren't going to have any power to get a company to improve.

Beyond this there are all kinds of strategies, low down payment loans and things that make real estate attractive.
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Old 06-11-2016, 11:44 AM
 
Location: home
1,235 posts, read 1,543,128 times
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Quote:
Originally Posted by Perma Bear View Post
But then you have to live in Texas
True. Which means you would have to absorb the cost of relocation to Texas unless your company offers to cover the expense.
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Old 06-11-2016, 12:04 PM
 
28,119 posts, read 64,026,968 times
Reputation: 23290
My good friend and retired Hospital Board Chairman of was wiped out... I mean totally wiped out aside of two real estate holdings... his personal home and a small medical office building where he started his practice 40 years ago.

He put everything with a guy named Bernie Madoff and was a happy guy in retirement... and so were a lot of his friends.

A lifetime of work and investment gone...

Growing up a family friend was an airline executive with PanAm... the world's greatest airline for decades... he lost everything... almost the same for another friend that was heavily invested in United Airlines.

Knowing people that lost fortunes in companies like Enron, Washington Mutual, Kodak and Polaroid shaped my thinking forever... and don't forget portrayals like the Wolf on Wall Street.

As a kid my Grandmother would point out homes in the neighborhood lost in the Stock Market crash... these were people that went all in on Stocks... she made it very real to an impressionable kid

Those companies are long gone... most of the people too... but the homes they owned endure.
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Old 06-11-2016, 12:42 PM
 
Location: Los Angeles (Native)
25,303 posts, read 21,671,688 times
Reputation: 12319
Also homes can go down a lot , look at Detroit .. But it doesn't happen overnight
With stocks it literally can
Everything seems fine then there is a headline of bankruptcy stock can go to nothing instantly
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Old 06-11-2016, 12:51 PM
 
28,119 posts, read 64,026,968 times
Reputation: 23290
I have nothing against anyone that puts their trust in Wall Street.

One of my friends is a retired Controller and CPA by profession... he has done exceedingly well and keeps very well informed as to his holdings... he did get out before the crash... about a year too early but still did really well... he also started to get back in just before the bottom and kept buying.

I will be the first to admit I am ill equipped or have the desire for this...

Been there done that as far as having stocks become worthless...

I'm just as certain there are many that don't have the aptitude for Real Estate... they don't understand the fundamentals and too easily overpay all around.

For the last 20 or years I have been gradually transitioning to commercial property... and let me tell you these are are all Triple Net Long term leases... NO ONE is going to call me about a roof leak or sink problem as the tenant is 100% responsible...
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Old 06-11-2016, 02:19 PM
 
4,369 posts, read 3,761,733 times
Reputation: 2479
Quote:
Originally Posted by Ultrarunner View Post
My real estate has never been worthless... wish I could say the same for the stocks I own.
If a diversified index fund drops to zero then... Well.... Your real estate won't be worth anything. Guns ammo and food will be the most valuable commodities
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Old 06-11-2016, 02:24 PM
 
4,369 posts, read 3,761,733 times
Reputation: 2479
Quote:
Originally Posted by Ultrarunner View Post
My good friend and retired Hospital Board Chairman of was wiped out... I mean totally wiped out aside of two real estate holdings... his personal home and a small medical office building where he started his practice 40 years ago.

He put everything with a guy named Bernie Madoff and was a happy guy in retirement... and so were a lot of his friends.

A lifetime of work and investment gone...

Growing up a family friend was an airline executive with PanAm... the world's greatest airline for decades... he lost everything... almost the same for another friend that was heavily invested in United Airlines.

Knowing people that lost fortunes in companies like Enron, Washington Mutual, Kodak and Polaroid shaped my thinking forever... and don't forget portrayals like the Wolf on Wall Street.

As a kid my Grandmother would point out homes in the neighborhood lost in the Stock Market crash... these were people that went all in on Stocks... she made it very real to an impressionable kid

Those companies are long gone... most of the people too... but the homes they owned endure.
Sticking all your money into one stock is dumb. You put your money into diversified index funds.
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