jg, I made a 530% profit on the downpayment money invested in my house in just under 6 years.
Thanks for the question about my website. I can see you are very anxious, and I appreciate that and hope you will like it.
The question in this thread was who is a good market timer, and I tookt he liberty of excluding myself and real estate bloggers. Yes, Roubini is excluded too.
I’ve posted many many times, that I missed out on participating in the greatest real estate boom in recent history. I did not know about exotic lending or real estate cycles. I didn’t know I could buy 5 rental properties with no money down. I didn’t know neg-am loans existed. I had no clue about stated income. I’d been scared off by family members who said real estate is a messy investment, filled with deadbeat tenants, expensive repairs, a lot of oversight, and small profits. So I put real estate into a back burner and invested only in the equities market. Consequently, I missed on the real estate and gold booms.
I’ve also repeatedly thanked Rich (and my brother) for showing me there was a bubble. I think many times people who spot a bubble decline to participate in it, and thus miss out on the profits. Like I did not catch the Dow wave, because I thought it was overvalued. So my brother and Rich did not buy real estate in this boom, because they saw the bubble. Dean Baker warned of a bubble for many years, while it was still going higher and higher. None of us understood at the time that there would be plenty of time to get out, that real estate is very sticky on the way down. We are all learning.
I was just talking to EH, a 50-something real estate investor at the gym, who doesn’t want to sell any of his San Diego rentals, because they are paid off and he makes money on the cash flow. He doesn’t need the money. I asked him why he doesn’t cash out, and he said, “then what would I do with my money?” He told me he earned 11% annual over the past 20 years in his real estate deals, made 16% last year in 2nd deed trusts, and 11% last year in his stock market portfolio. He bought his house with money he made in the dot com bubble, because he cashed out every time the stock doubled. His secret he says is discipline and a system: he buys one house ever year, regardless of the market. History has been kind to his approach. He’s a real nice guy, and even if his properties drop in half, he’ll still make money on the rental stream. Now he’s buying commercial builder loans, subordinated to banks.