[quote=AN]That’s a pretty broad generalization. I don’t think anyone here think tract homes are better than custom homes. However, most of us here can’t afford those $2M+ custom homes.[/quote]
[quote=bearishgurl]We had an opportunity to buy a “probate-fixer” (heirs in MO) on my most coveted st. in 1994 for only $273K.[/quote]
AN, good opportunities, as shown above, sometimes arrive only once in a lifetime (maybe twice, if you’re extremely lucky). This particular property sold again in 2004 for $1.85M WITHOUT ANY CHANGES TO THE FOOTPRINT AND NO PERMITS DRAWN!
You don’t need $2M or the ability to qualify for a jumbo loan. You need to be able to act fast on your feet and make a deal with the owner(s) before they list the property. You need to have adequate savings and business savvy to craft a deal with the owner(s). You need to be street-smart and be able to do an adequate inspection on your own. You need to be highly familiar with the topography of the area. You need to be very handy and know a list of carpenters and other tradesmen who are reasonable. You need to be willing to live in a fixer for an extended period, if need be. You need to be able to “think outside of the box.” And possess a host of other attributes which have to do with perserverance and frugality. [end of lecture]
[quote=AN]Are you not truly wealthy if you live in a lower MC area, but have a lot of $ in savings, investments, and a pension that’ll take care of you for life? Do you have to have lots of equity in valuable properties to be truly wealthy?[/quote]
Yes, I posted earlier that there are many in SD that never had any desire to upgrade their living quarters and have a fantastic passive income now. There’s nothing wrong with this. They ARE “wealthy.”
[Quote=AN]If you have $10M in the bank, even making 3-5% in interest will mean your yearly income is $300k-500k. That’s a lot of income. There are passive and active income, but they all are income.[/quote]
Yes, active income and passive income are both incomes. However, active income can be fleeting and out of one’s control. Properly planned passive income is always there.
[quote=AN]AFAIK, income is what allow people to accumulate assets, so you can’t have assets w/out either having current or prior income.[/quote]
In most cases, this is true, AN, but many tens of thousands of property owners in CA inherited valuable propery and are living in it on a relatively low income and oftentimes on government assistance or SS. Many of these heirs never went to college and some never worked. Because they own free and clear, they could be considered to have a high net worth. As long as Prop 13 stays on the books the way it is written, this phenomenon will remain.
