Why doesn't everyone buy rental properties? It seems like easy money if you buy cheap and it is 100% passive if you get a property manager. What are the downsides?
>>1248414
not paying the rent.
>>1248414
Unforseen expenses like repairs.
the downside is having niggers live in your rental-box
Moral hazard. Tenants can be stupid and wreck your place, using federal money to pay the rent, and leaving you with repair costs.
https://www.youtube.com/watch?v=Puc1CLwWNms
>>1248446
>section 8
>53 dollars a month
definitely not a normal situation.
>>1248414
Lots of people do google "bigger pockets"
>>1248414
This is supposed to be a business board but apparently most people don't realize that you can just invest in a liquid security that tracks housing instead of investing in an illiquid housing asset
This is seriously so basic I don't see how people don't get it. Unless you are strongly confident that housing prices in your area will beat housing prices all over America there is literally no benefit to buying a house over just investing in housing
>>1248414
Most people cannot afford to pay the deposit on a loan.
>>1248486
you won't get anywhere near the ROI and your net worth won't increase
>100% passive
you're retarded
>>1248446
that´s really bad, i rent to students never had anything this bad.
The worst is cleaning ladies telling me they find used condoms hidden.
>>1248491
I speak from experience. PM handles everything with the tenants and I get a called whenever repairs need to be done. Dumb cunt
>>1248446
Holy fucking shit.
A full blooded chimpanzee wouldnt trash a house that bad.
>>1248486
You get cash flow per door and the tenants pay the mortgage which is then equity you can cash out for more properties.
Real estate 101 , no idea why people on yhis board blah blah blah
Dikes live next door to me - they quite literally crush out their cigaretts on the Sheetrock walls.
>>1248486
How dumb are you? Nobody buys rental property for the have capital gains you fucking idiot. You buy them for the RENT.
>>1248414
Most people don't have the capital to invest in any property.
Those that have enough money to invest in some property can only afford cheap and low-income housing which has a large moral hazard problem as discussed in this thread.
Then finally the people who can afford to rent good housing either do so or are so wealthy they don't feel like the hassle--even if it is limited--is worth it.
Also, for the record, NOTHING is 100% passive. No property manager is going to pay for the 12 bedbug outbreaks in your apartment buildings across the city.
>>1248490
Won't even respond because you clearly don't even understand the terms you're using lol
>>1248556
>tenants pay the mortgage
So, just like using dividends to pay off the leverage on your REIT?
>>1248610
What are dividends?
For those of you who are still too stupid to understand the difference:
A. You can either put 100k down and borrow 200k for a small house, then you earn rent, and use the rent to pay off the 200k
OR
B. You can put 100k into a housing index, borrow 200k to also put into it, and use the dividends to pay off the 200k.
Except one of these options is better than the other
>>1248414
There's always a risk that the unit you buy is horrendously overvalued, you won't get tenants, that tenants trash the place and leave, that people sell drugs out of it, etc
What happens if you can't get tenants for three months? You still have to pay the mortgage, and it comes from your own pocket dipshit
It is by no means "easy money"
>>1248488
Yeah, try paying 2+ mortgages.
>>1248446
OP BTFO OF THIS UNIVERSE.
OP IS NOW IN 4D.
>>1248437
>Unforseen expenses like repairs.
I didn't know that repairs were unforeseen.
>20yr roof
>15yr windows
>5yr hot water tanks
Man, I wish there was some way of figure this out!
>>1248486
> leverage
>>1248922
Are you saying you can't get leverage in the financial markets? Fucking top cuck
Niggers. You get sued for discrimination if you don't rent to them, and your property gets trashed if you do rent to them.
>>1248610
this guy is a retard, in NZ (Auckland) houses have been going up 10% minimum year on year for the last 5 years. Plug that shit in your calculator faggot
>>1248492
Wtf? Why wouldnt they just throw them in the garbage?
>ill just toss this semen receptacle behind the couch
>so much easier than putting it into the trash can
>>1248446
Someone that does this shit does not deserve any help from the government at all.
>>1248934
You know that's what you call a bubble right?
You may get lucky and get capital gains from your house value but the cost of upkeep almost always balances that out. This leaves renting as the income.
>>1248911
water heaters last a lot longer than 5 years
>>1248939
Because people are trash
you need to pay taxes, insurance, utilities and maintenance or assessment if you buy a condo. if you don't pay with cash you also need to pay for your mortgage. add on the cost of a property manager and in many cases and markets you will either be making nothing or so little that one month of missed rent will take you months to recoup your the loss.
the problem with property managers is that they don't give a fuck about your property. if you want it to be as passive as possible then buy a condo so that you only need to worry about the inside of the unit and not the whole building as a whole.
>>1248627
There are tax advantages to owning the house rather than using the financial instruments you are recommending.
For example: a person who leases out houses that are nice enough that he would want to live in them himself can eventually sell the rental property and not pay any capital gains tax ($250K single person, $500K married couple) if he moves into the rental house and lives in it for two years.
Secondly, the financial instrument exposes the investor to management risk. That is, is the manager buying trash, committing a fraud, or overpaying himself? The person who buys the a rental property with a mortgage does not have that kind of risk. Of course, he has a different type of risk but it is a risk that is more easily observable and stopped.
Finally, what kind of dividends does the financial instrument have? I seriously doubt 10% cash-on-cash, which is what a carefully purchased house can yield in net income.
I'm not saying everyone should be a landlord and ignore the financial instrument. However, there is a price to be paid for purchasing the financial instrument and, for some people, it eats too much into a return. For those who don't want the hassle of being a landlord or even dealing with a property manager, the financial instrument is the way to go. However, for a skilled landlord, I believe owning the house is going to generate superior returns over a period of 10 - 20 years.
>>1249076
I think you are missing by far the largest advantage of a REIT fund which is diversification. You instantly have exposure to a broad range of property across an entire country/region/world. This significantly decreases risk.
Secondly it isn't so important about how large the dividends are vs rental payments. It is all about the total return of the asset. For example if you have a fund that has an equal total return to a physical rental property you can synthetically create dividends buy selling securities equal to the rental payments you would otherwise receive.
>>1248911
Yeah, only leaving out acts of god, the tenants that can do damage to your properties, code violations, unforeseen safety hazards like unsafe materials, new laws that force you to update your property. There are a million different things that can pop up when you're dealing with living spaces
>>1248829
>>1248636
>>1248627
Do you want to know how I know that none of you have ever owned property?
Hav any of you heard about insurance? Contracts with tenants? From the beyond stupid replies to this thread I can only imagine you are americans.
Property manager? Really? You can set up a contract on your own?
And to the moron who things investing in a fund is a better investment: please go back to grade school. From just one apartment I make 17 000 USD a year, on an investment of 262 k. Add to that the market value which has gone up with 62 k USD.
How utterly dumb you must be to think you can get those gains from investing in a fund. Why are you even here? Enjoy making tens and tens of dollars
>>1248934
Plus don't you or a close family member have to live in the house or you lose some of the capital gains to taxes
>take all your cash
>leverage it 5 to 1 for a single asset
>stick a scumbag renter in said asset to trash it
In bongistan there are tax advantages to BTL (buy to let), although the gubment is starting to crack down on it.
For instance you can offset mortgage interest against your income tax. You could also claim back 10% or something for 'repairs' without anyone really checking.
It's even better if you buy your own home, renovate, let spare rooms and/or sell it. rinse and repeat. you pay no tax whatsoever. (you can earn something like 7800 bongs this way from rental income before you have to pay tax)
My father coowns 3 complexes and it is an extreme amount of work on top of a full time job even after highering a manager. It took 2 years of repairs and getting tenants to finally start making profit for one if them.
because i work an 8 to 5 and dont want to owe money to the bank?
>>1249199
is 17k your profits or revenue?
17k on 262k is just above 6%
You cant count market value because it fluctuates and history shows property prices are supposed to be a flat line after taking inflation into account. Market value going up is just a bubble that cant last forever.
>>1248495
> I get a called whenever repairs need to be done
passive
>>1248414
b/c its stressful letting other people live in your house.
Also tennants have lots of rights
>>1248928
You can't leverage as much and it's is a lot riskier
>>1248437
>he doesn't portion off a part of the rent to go to repairs
>>1249162
>everything needs to be diversified
>>1249743
Well you can just say "take care of anything that costs less than xyz with the company credit card" and the like
Honestly if you had youre nest egg in vanguard funds youd be checking stock prices and finance news daily - amiright?
So youre kind of splitting hairs
>>1248627
No dude - so for commercial theyll lend max 80% in most cases residential you can do low / no down on the first few - you can buy a quadplex and still get an fha loan for instance.
So 100k can buy a half million dollars lets say as a multifamily - lets call it 10% cap rate , its a multi so 60% of that income is set aside for maintenance and then we pay the mortgage put of the other 4%
Seems shitty right? Like 2% return?
Except we leverages 100k into this half million dollar property so for 100k cash im getting 10k a year in hand year one (2% of 500k) after everything.
On top of that someone else (a lot of someones) works a 9 to 5 to pay off my mortgage building me equity I can use for more properties.
then the cherry on top - the properties value can go up without me doing anything (icing on top) and the properties value is telated to its cash flow so I can just raise rents every year and the properties value goes up.
Im making money hand over fist.
>>1248627
Same numbers but a half million dollar mobile home park? Noe my expenses are 30 or 40% instead of 60, I dont get much appreciation (its just land with uyilities attached) BUT the depreciation time frame on the capital expenditures is 10 to 15 years instead of 25 to 30 so I get to pocket almost all the lot rent tax free.
Its spitting cash at my eyes - also with a mobile home park it wouldnt be too crazy to find 12 to 15% cap rate - so we leverage that 100k into a 500k MHP and I take home 52.5k first year - thats qyite a fucking cash on cash return , lets see hmm, 52.5% or 7.7% from vanguard...which one should I choose...
>>1249199
>From just one apartment I make 17 000 USD a year, on an investment of 262 k
Oh shit guys, a 6.5% yield
>>1249909
No I don't. Not everyone has as little self control as you.
>buy house
>live in it for a while
>move and decide to rent it out
>third month no rent arrives
>go to see tenant
>meets me at the door with a gun
>takes six months to evict him
>sell house
I'd rather invest my money into powerball tickets
>>1250038
don't rent to niggers. problem solved.
>>1250051
Have fun getting sued for discrimination.
>>1250054
you can rent only to seniors
>>1249923
You think only your house goes up but a housing index won't? What? Also, call options exist for leverage, you can get MUCH MUCH more leverage with options than a bank would ever loan you
>>1249076
Tax advantages sure, but buying a house involves a transaction fee of like 6%, and there is a cost to liquidity. Net net I believe securities win
Management risk is irrelevant, you're confusing active management with passive management. I'm not talking about asking your local neighborhood wealth manager and his 2 person firm to hold your money lol
>>1249923
Call option m8, but desu I wouldn't expect the average /biz/ anon to understand options and how they affect leverage. Also, like the other guy you seem to think only your house will increase in value and not all houses (which would increase the value of the index)
>>1249199
lmao check the other responses to you
>>1248414
>Why doesn't everyone buy rental properties?
because everyone doesn't have enough money?
>>1250054
have fun getting your shit trashed.
>>1250211
How about I do neither, and put my money into much more sensible investments like index funds.
>>1250038
>not screening tenants
It's your own fault.
>>1248446
proper contracting solves most of these problems. This is an amateur landlord fucking up in the worst possible way.
Also section 8 is only viable in CBS houses that can't be destroyed.
>>1250054
as if theyd fucking know you were discriminating against them. just say you found a different renter.
id never rent to a minority, unless they were asian.
>>1248446
What is section 8?
Is it a USA government program where poor people rent properties that they can't afford, by paying a small part of the total while the rest is paid by the government?
At least that's what I got from that video.
Repairs
Shitty tenants
Razor thin margins made even more razor thin when you hire a property management company.
>>1250054
Its easy as fuck.
Don't rent to Criminals
Don't rent to people with bad credit scores
Don't rent to people with more than two children b/c occupancy issues.
The one black guy out of 100, oh we we found somebody else, we're looking for longer term but if you'd like to pay the short term lease premium of 20% higher etc...
$200 application fee, we're accepting applications for a move in next month, I'm sorry for the misunderstanding.
>>1250370
Government assisted housing program. Title IX Section 8 if memory serves. Any way Government subsidizes a set amount of rent based on market average, tenant pays like $50
It is a viable investment strategy provided some limitations.
Already in a Section 8 neighborhood.
Concrete building.
Contract cleaning and yard to keep an eye on the property
and appliances registered with Service America.
Talk to your local REIA and find the Section 8 guys, and ask for the horror stories and how they prevented them in the future and buy them lunch to look over your contracts, guide your tenant selection, and consult in general. Pay them handsomely and they'll hook you up.
The pros are government payments run like clockwork.
>>1250406
Thank you very much for your explanation. Very interesting.
I'm not from the US though, I was just asking for curiosity.
https://www.youtube.com/watch?v=aTXP_m8DuMg
Wooh
The horror stories abound. This one wasn't Section 8 but oh man. It pays to have a "cleaning service" on the books.
>>1250161
Call options - so financial gambling. Great ide
>>1249989
He said the last 2 digits was equity gain from value increase he didnt even do anything for
He probably put down 60k for the property
>>1248414
low liquidity, upkeep costs, managing costs, tax increases likely, 100annual return 0.2% in housing
>>1250523
Its not gambling when you set your success rate.
>>1248627
With buying a house, the mortgage gets you the 200k because you guarantee the loan with a property interest. If you can convince the bank to give you an unsecured 200k loan after sinking 100k of liquid capital into a futures market, you'd likely not need to do that anyway.
Also, I live in London. Property is going up by 10% a month here in some parts. My house went from £266,000 in 2009 to £555,000 now.
Because most fuckers can't save up for their own downpayment, much less several.
>>1250557
Hey Li, do you still have/mantain those .txt files with links to DL /biz/ tutorials?
Any new addition?
What is risk-adjusted return you spastic
>>1248610
REITs pay monthly dividends that if invested in a DRIP compound your principal. Fuck me you're a retard
You know, let me expound on this actually.
First, some upfront parameters.
>Base passive income from index funds averages ~10% annually
>Doubles every 8 years or so as a rule of thumb
>18% tax
Okay, by comparison:
>Put down 20%, say 30k, on a rental property
>Pay 15% of gross rent to professional property management so that the income is passive
>Pay mortgage
>Pay property tax
>Pay insurance
>No taxes on paying the mortgage, it's a special loophole
The above doubles the initial investment every four years. So in a couple of parallel timelines if you had 30k to put down, and in timeline A you put it down on a rental property while in timeline B you put it down on index funds, your rental would net you x3 on your investment without even factoring in fluctuating prices, while your index funds would only net you x2. On the other hand if you pull out the money in that rental property four years in and bought a second one after refinancing, you net x4.
Basically it's a very favorable way to make money passively, but you have to be playing around with enough money to afford regularly making down-payments on houses that people want to live in. There are other tricks to it as well, but if you want to get rich but don't have a million dollar idea real estate is the way to go.
What do you about squatters? Squatter's rights are pretty thorough, especially in California.
A renter can basically stop paying rent and stay in the property for free for as long as they want, and the landlord cant do shit.
In this is case, the squatter actually filed a restraining order on the landlord, and it was approved.
http://fox40.com/2016/05/12/alleged-squatter-staying-in-fair-oaks-house-files-restraining-order-against-homeowner/
>>1250643
>what do you do about squatters
Not live in a shithole like California or the UK.
>In AR you can be jailed for not paying rent
>>1250406
Are you a grill?
>>1249199
It depends. But from a pure investment standpoint. ROI & ROT the market is usually better. But if you're willing to venture into the higher levels and take a Little Time and put it into ROI, usually commercial, you can do pretty well.
>>1249199
If you took If you took 260k and invested in 1sd otm puts and transitioned them to covered calls as you built your core position. Pretty sure you'd have more than 17k dollars.
Say you had apple at 100 for most of the year.
Traded 60% of the portfolio for margin and reentering. The 1sd otm put is trading for $1.00 on apple. the 1 std dev put on apple is at $90
So total at risk capital is $157,200
Every 45 days you resell, So far we only could have entered a position on apple once on may 12.
Margin gets called at 2 std dev move or 70, 90-70 is $2000 margin. we can sell 78lot puts for $1.00
Jan 4 we collect 7,800 don't get called on exp friday
Mar feb 15 we sell 81lot 1 std dev puts for $8100
Apr 1 we sell an 86lot puts for $8,600
May 15th, we were really sweating, maybe we aquired a shit ton 8600 shares of apple on the 12th at $89 a share
and sold 86 97.5 calls for $1 collecting $8600 again at a 2 year low. or maybe we had strong hands may 12 and we can sell 90lot puts for $9000
ytd $24500 risking 60% of the capital with a pending 9000 or $8600 and 8600 shares apple at $89
trade fees $395, max ROC 15.33% ROI ytd 9%
Killing it.
This was 15 minutes of work the whole fucking year. and maybe a few moments of excitement when the ITM alerts made your phone buzz.
On the very worst day if you bought back at teh very bottom literally the unluckiest guy. you'd have lost 90-89.47= $4558. oh wait that's less than you collected making your loss a net gain. of drumroll $4042
still up $19,942
>>1250643
It's what liberals voted for. Just make sure you don't live in Cuckifornia.
>>1250595
sure man
not sure when the last time you dropped by was
http://dropcanvas.com/zpf5p
but I've added Ramit Sethi Money and Business essentials: PinchaPooRacingOnDesignatedStreets
&
Dynamic Hedging
&
Options as a Strategic investment
maybe tim ferriss: health wealthy wise
spirit animal.
>>1250686
I'll have to check with my archive which ones I don't have yet, but I think those are new for me.
Thank you very much for them.
Also, do you suggest one of them in particular to start watching from, for someone who's just starting and knows virtually nothing?
>>1250656
>the rental home owner is at any point risking anywhere near 60% of his risk capital
kek, nice fallacy faggot. 30% is probably worst case scenario outside of trap house niggers in video above. you're also assuming we always get stopped out at 70 which is not a reasonable assumption, if apple was trading 85 with our 90 puts on and then dropped to 60 on earnings we would've lost 240k.
go lie and shill somewhere else.
>>1250607
You are not comparing apples to apples. Even a moderately hedged and actively traded portfolio can destroy a passive fund and most residential real estate.
In RE you gain some useful skills in business, negotiation, contract law, and financing. Not to mention globe trotting. but it is a big time suck. This is coming from a guy who was a landlord for a time and those checks for pretty much no work were pretty sweet. Didn't break even though. Damn underclass tenants.
>>1250693
If you're interested in self employment at all
Eben Pagan: Self Made wealth first, (hustlemusclerehab) 4th if not
Ramit I will teach you to be rich
Ramit MBEssentials (PinchaPooRacingOnDesignatedStreets)
The Credit Secrets Bible & creditboards forums & FICO Score Effects
These should take 6-8 weeks for full implementation. Get it done fast but get it done right.
>Insert EBSMW here if wageslaving first.
Ramit How to find your Dream Job (triplemaximumwageslave)
Ramit How to earn $1k on the side 2.0 (2kshekels)
Ramit Instant Network (sINs of the poo IN loo)
Ramit OverNight Resume Makeover (Hiremeplz)
Tim Ferriss 4 hour life: healthy wealthy wise (spirit animal)
>>1250643
>tfw your state lets you evict within a week on nonpayment/lease expiration
based PA
>>1250735
>not comparing apples to apples
>actively traded portfolio can destroy a passive fund and most residential real estate
Who's not comparing apples to apples?
>>1250735
Thanks man, that list will be definitely helpful.
>>1250557
You know what , I was veing an edgy faglord.
You and guy I replied too should lay it down because now im curious
The who / what / where when etc of call options , I think its a worthy enough topic for a new thread even so whats the deal? Give us a breakdown
>>1250719
Simply untrue the home owner has 100% capital risk. especially if mortgaged. That 30% is simply deflationary risk. Built in insurance is a hedge.
There's all kinds of what ifs
>>1250719
1st) if $184B just up and vanished from the global marketplace it would be a great day for me.
2nd) the brokers would have stopped you the fuck out long before what is a 0.21% probability option.
>>1249162
The problem with a REIT, especially in this environment, is that yields are terrible thanks to twisted monetary policy.
Yes, you get diversification but, for a person who is a skilled landlord and has an eye for things, you end up getting the average return for real estate versus an exception return.
Of course, not everyone is going to be a successful landlord and many people do not want to be a landlord. But there are good reasons for not using a REIT, especially in this market.
>>1250370
Pretty much. There's an added bonus that the government uses it to increase diversity in areas. So they try to put section 8 renters in nice, all white communities instead of keeping them in ghettos with their kind. It means the government will pay even more for these peoples rent, and the quality of living in a nice place will be decreased.
>>1250161
The real estate agent's transaction can be reduced in certain ways. For starters, you can get your own license; it's not difficult. Secondly, holding a property for a longer time will reduce the bite the of the transaction fee since it allows greater time for property price appreciation.
As for management risk, management risk is management risk. The people running the REIT: How are you certain they won't abscond with your money instead of actually buying properties? Furthermore, even if they're honest, how can you be certain they won't make asset allocation mistakes, buying pigs in a poke?
The financial instrument gives you liquidity and, assuming good, honest management, less headache. However, such an investment always exacts a price: a lower total return. That is the nature of investment. If it weren't, only the most insane masochists would choose to be landlords rather than just passively investing in a REIT.
The reward for putting up with the extra work, headache, risk, and additional skills requirements for being a landlord is a higher rate of return. A higher rate of return is not guaranteed, of course, but landlording is not like buying stocks in companies as it does not require as broad and deep a base of knowledge to be successful.
>>1250768
>home owner has 100% capital risk. especially if mortgaged.
Yeh so - people with SFR rentals who got in at the peak of the bubble got owned , everyone else was fine - flippers , wholesalers , Multifamily / ommercial
See what im interested in is better than average (meaning mutual fund) returns for reduced risk using methods that can repeated , so real estate is perfect
You saying that under perfect conditions "call options are easy" is bs , how much have you made? Dont give me hypothetical apple examples tell me what youve done the last year
Otherwise it just sounds like you got burned in a bad market by shotty tenants and now youre chasing the next get rich quick scheme
>>1250643
>buy house in state with good rights for landlords
>rent it out
>rent house in California
>squat it out
>>1250793
Fuck, didn't believe you until I googled it.
Pic related.
>>1248414
Extremely low ROI
>>1248486
you're a complete retard. people buy rental properties because of leverage (often 5:1 with 20% down requirements), the few hundred bucks a month in cashflow for a single door, and the fact that someone else is paying hundreds of dollars a month that goes toward equity in an asset that is usually worth six figures.
>>1252201
Not saying that there are no benefits. Just that there are huge downsides that have to be taken into account, that make this a retarded idea.
>>1252827
What are the down sides?
>>1252228
How do you mean? The tenants pay off the mortgage whoch gives you money to leverage into new properties at the same time that each unit is giving you cashflow monthly + the asset can appreciate
>>1252449
And thats good for anyone who has cashed out - its gonna suck for the baggolders when the QE asset bubble pops
Meanwhile everyone who beought up rental properties after the housing collapse with short sales and such are sitting on an asset worth 5x what they owe on it that spits money at them every month
>>1250460
holy crap, that's some next level hoarder shit
>>1250589
yeah but that bubble wont last forever, Dont get me wrong its a great investment as long as you sell it before it plummets
>>1250643
wtf has this world come to that laws protect lazy people so fucking much
>>1248446
>mfw I work hardwood floors and seeing that floor
FUCK
>>1248446
Looks like my dad's house.
>>1253057
Liberals, niggers, women
>>1253012
The nigger infestation spreads? Crime spreads? Murders spread? Gang violence spreads? How would you like it if a family of 30 niggers moved in next to you paying $20 a month to live where you pay $1500? Then they steal your shit when you're at work and slash your tires?
>>1253021
>The tenants pay off the mortgage which gives you money to leverage into new properties
This works great until a you can't cover the interest expense from your small property empire ( i.e. during a property crash where rents plummit or when interest rates soar).
Although it may seem like an impossible scenario now you will certainly know about it when shit eventually hits the fan.
>>1253315
No thats an excuse. You pick one anecdote of why it wont work and throw the baby out with the bath water.
How often does that / has that happend? Show me examples
What if im all multifamilies and no singles? What if my strategy is only mobile home parks?
What if every 10 units I leverage I chill out and pay down half the debt?
Million ways to make it work and you focus on the one flaw - not going to get into it with you personally but thats a shotty attitude. Whats your magical investment vehicle?
Real estate is time tested and has sinple formulas and methods to follow - lets say worst case though...
>>1253355
All I'm saying is that your strategy is adopting a significant amount of risk that most people would not be comfortable with.
I'm not writing off property as an investment vehicle. I just wouldn't feel comfortable having >90% of my assets in one area which are all leveraged.
Yes this is a worst case scenario but unlike a share market crash where you might lose 30% of your investment you will face complete bankruptcy. Its something you should seriously consider.
>>1253355
Lets say I only do single families and have ten (hard to get loans after ten - first ten are the easy ones really)
Real estate collapse like 2008 style - and I purchased stupidly , market now has a glut of empty homes and I owe 70% on all mine whoch are now worth half what I paid. Simplicities sake lets say theyre worth 100k and I paid 200k with 20% down , so I owe 2 million and have a million in houses and im into these deals 400k , cant rent them out what do?
I flip houses - been done before , market changes then your strategy changes - I get private money and we buy other peoples foreclosures and short sales / REO's from the banks , fix and flip to ride out the storm.
You adapt to change - simple as that , im already networked in to do that shit right? Contractors / realtors etc
Now if your moneys in the market and it dives halfway like it did , well its a buying opportunity if you have cash but how do you switch strategies to ptofit from the market panic? You cant. Being a passive index fund investor doesnt give you any network or skills and if youre a day trader youre either bankrupt overnight or rich as hell.
>>1253361
S&P lost 50% of its value in 2008 so if youd retired and had 75% or even 50% of your nest egg in then thats quite a hit.
I can go bankrupt and rebuild with other investors money , if you lose your hat in the market after slowly building up over time then you now cant retire.
But yeh - ill meet you in the middle , all eggs in one basket is ludicrous.
My big thing? Unless your jacob lund fisket level frugal you simply cant get anywhere index fund investing on less than 6 figure income , plenty of folks in bad markets make good money in real estate starting in their twenties by the time theyre in their early or mid 30's. Very few people / no one can do so with passive fund investing
>>1253369
What's stopping an index fund investor from doing the exact same thing as your "rebuilding" with other people's money?
DUDE LOW INTEREST LOAN LMAO
Enjoy being cucked by the jews in your applicable central bank when they raise rates.
>>1253369
>I can go bankrupt and rebuild with other investors money
Its not going to be easy to get a loan if you have recently gone bankrupt. And if you do the lending rate will be way higher than before
>>1253012
Everything >>1253131 said
Growing up I've lived in bad and different neighborhood and know intimately people of all kinds. Trust me, you don't want hoodrats as your neighbors.
Luckily most people, unlike you, have some common sense, which makes them not want to live with shitty people like that. The result is that the properties in the nice areas will be worth less once the demand for them will go down because nobody will want to live in a hodlum-infested area.
Also people in nicer areas pay more taxes than those section 8 people, meaning that they will have better infrastructures (schools, hospitals, roads, parks, etc.) because they paid for it. If we start raising the percentage of people using said nice infrastructures that don't pay for it, not only we create an injust system of government-endorsed leeching, but that infrastructure (which will serve the same number of people) will go to shit because there will be less money (since there will be less people paying money for it, and also the people will be poorer because the rich will go elsewhere and less-rich people will move in because of the lowered property prices).
Also IIRC, that's what happened in many American cities... Suburbs were the place where wealthy people lived, until blacks and hoodrats started to move in, making everyone want to flee, then after all whites went to the inner city, the process repeated, until we have the current situation, where the inner city is full of poor people and the suburbs are full of rich people.
When Berg mates with slant eye, what's the children?
