In escrow

[SD Realtor]

I agree on congratulations. Sticking to a long range plan is not easy to do. In no way are rental properties a get rich quick scheme. I think of my rentals as a single component to a retirement strategy that also includes other components such as securities and bonds. Living in California, especially Southern California means you live with earthquakes. I agree you are far more likely to be killed in an auto accident yet we all get in our cars and drive to work daily. I don’t believe letting mother nature dictate a retirement strategy is beneficial. Moreover I know of people who went to Louisiana a few weeks after Katrina to purchase real estate. Retirement strategy should be based on risk/reward (or return) on equity investments sans mother nature.

[scaredyclassic]

watches probably are a bad investment for the future, unless you arereal lucky and pick the right watch.

i happen to think Nomos brand are a good shot because the movements are not generic, they are entirely handmade. The price they charge for that much cooolness doesn’t strike me as excessive. still it’s a dumb retirement plan.

http://www.watchbuys.com/store/pc/nomoswatches.asp

More likely, you can buy the watch, wear it ten years, insure it, have it cleaned, and then sell it for a bit more than you paid for it, or maybe the same, if you are lucky. my best guess.

rolexes, now they seem priced pretty damn high for what they are.

inicedentally if you are looking for a non-fake rolex that looks a lot like a rolex, I wouldrecommend a sterile dial Parnis, based on watch chat group concensus.

buy that for a $100, save $6000 on a rolex, and put the 6k towarda rental property:

http://www.ebay.com/itm/PARNIS-40MM-CASE-PVD-SEA-DWELLER-Sea-Gull-movement-men-watch-/180835843273?pt=Wristwatches&hash=item2a1aa7fcc9

but really, only a wannabee would wear that.

the right property at the right price is probably about as good a place to put your money as any.

[hmc]

I guess I didn’t get my message across.

We are talking about real estate here. I think most people don’t put all eggs in real estate (I am not talking about this kind of diversification). I never meant earthquake is the only risk people have to face. Risks like car accidents are under different context, comparing them with earthquake is like comparing apple and orange).

My point is that I would diversify locations for investment homes, for both income and appreciation.

[spdrun]

Then again, there’s an argument for not diversifying too far. Most management companies are total f–king crooks, and having to buy a plane ticket to fix a running terlit doesn’t seem worth it 🙂

[hmc]

There are a lot of choices other than Temecula, within driving distance. Arizona is not known for earthquakes and even San Diego is much safer than Temecula, in terms of earthquake, for example.

[spdrun]

Arizona has other problems, like not having a real economy in the Phoenix area — a lot of Phoenix’s economy was due to the city building itself outward rather than any constructive activity. Plus there’s long-run risk of water shortage. San Diego could be hit by a large tidal wave. All areas have their risks and rewards.

[hmc]

That’s why we need diversification.

[thejq]

Congrats! Hopefully you don’t have to commute to Carlsbad every day. Interestingly, one of my offers in Temecula also got approved (after 5+ months) and escrow opened last Friday. Coincidence? 🙂 I was there doing inspection in the weekend and had a chance to visit the city for the first time and really liked it. Good luck with moving and land-lording! It may sound intimidating, but with hand-on management and good timing (sounds like you got the latter already), I see owning rentals to be the safest way to retirement. Imagine in 15-20 year, you’ll own them free and clear.

[carlsbadworker]

Thank you, everyone. Just got back from vacation and did the inspection today.

hmc, I can understand your principle of diversification. In fact, real estate is one of my 3-legs diversification strategy. The other two are equity and start-up. I tried to allocate my after-tax savings accordingly. Unfortunately, I am mostly just inline with market return with my equity investment and I think US stock market is over-valued. So I don’t want to invest more at the current moment. And my startup idea never took off from the project stage. So I am stuck.

Again, I said I understand diversification in principle but in real life, no one can be truly diversified. For example, how diversified are you if you only buy properties in US? There are always costs associated with diversification and unlike equity market, diversification is very hard to do elsewhere. It is often said “Put all your eggs in the one basket and — WATCH THAT BASKET” because one may not have the energy to carry a true diversification strategy. Thinking you can diversify away risks is often an illusion.

Buffett says, “Diversification is protection against ignorance.” I would rather buy some places where I know the risks than getting myself into a total ignorance of the associated risks. My strategy may not be the best, but it’s the one that I feel more comfortable given my limited energy.

Part of me just wants to put this into bed so that I can focus my energy to see if I can take the startup idea into the next level. Just like four years ago, I want to buy the property so that I can spend more time studying investing. And once I had the first rental property, things can start manage on itself … at least I hope.

Like I said, I spent quite some time studying investing in the last few years. So if you want to debate the investment strategy, I am very happy to do so.

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