“INVESTORS” who haven’t learned their lessons?

[Bob]

[quote=wannabe2077]I visited a friend in Inland Empire. he lives in a place with a lot of foreclosures.

Rents have dropped from $2000 to $1500 for 3 bedroom home in a decent neighborhood[/quote]

I’ve experienced the same thing in the Temecula Valley. As investors continue to purchase there, it has created an increase in the supply of rentals at a time when purchasing is actually cheaper than renting. The result is lower monthly rentals.

[patientrenter]

[quote=peterb]Speculation and investing are the same thing. Man, some people just dont get it. No one can predict the future. [/quote]

peterb, I think sdr was drawing a distinction between people who buy assets for the future income they can produce (for them) without selling the assets, versus people who buy assets for the purpose of selling them to someone else for more than they paid.

I know that assets bought for one reason can end up being sold or kept for the other reason, and some assets may end up producing some income and a nice gain on sale, but I think sdr describes a valid difference. Anyone who buys gold (other than jewelers or others who process it) is a speculator by this definition. It’s harder to find an asset that can only be used for investment by this definition, since virtually any asset that produces income can be sold, and so could be used by speculators.

In any case, I buy stocks almost always for the dividends they produce, and would only buy real property for the net income it produces. Those assets form what I think of as my ‘real’ permanent investment account that I rely on. I have a separate account, about 10% of my net worth, that I use to buy and sell assets based on what I think prices will do in the next few days or few years. I think of that as as my ‘hedge fund’, and I don’t rely on it, and I do consider it purely speculative.

[patientrenter]

[quote=peterb]Speculation and investing are the same thing. Man, some people just dont get it. No one can predict the future. [/quote]

peterb, I think sdr was drawing a distinction between people who buy assets for the future income they can produce (for them) without selling the assets, versus people who buy assets for the purpose of selling them to someone else for more than they paid.

I know that assets bought for one reason can end up being sold or kept for the other reason, and some assets may end up producing some income and a nice gain on sale, but I think sdr describes a valid difference. Anyone who buys gold (other than jewelers or others who process it) is a speculator by this definition. It’s harder to find an asset that can only be used for investment by this definition, since virtually any asset that produces income can be sold, and so could be used by speculators.

In any case, I buy stocks almost always for the dividends they produce, and would only buy real property for the net income it produces. Those assets form what I think of as my ‘real’ permanent investment account that I rely on. I have a separate account, about 10% of my net worth, that I use to buy and sell assets based on what I think prices will do in the next few days or few years. I think of that as as my ‘hedge fund’, and I don’t rely on it, and I do consider it purely speculative.

[patientrenter]

[quote=peterb]Speculation and investing are the same thing. Man, some people just dont get it. No one can predict the future. [/quote]

peterb, I think sdr was drawing a distinction between people who buy assets for the future income they can produce (for them) without selling the assets, versus people who buy assets for the purpose of selling them to someone else for more than they paid.

I know that assets bought for one reason can end up being sold or kept for the other reason, and some assets may end up producing some income and a nice gain on sale, but I think sdr describes a valid difference. Anyone who buys gold (other than jewelers or others who process it) is a speculator by this definition. It’s harder to find an asset that can only be used for investment by this definition, since virtually any asset that produces income can be sold, and so could be used by speculators.

In any case, I buy stocks almost always for the dividends they produce, and would only buy real property for the net income it produces. Those assets form what I think of as my ‘real’ permanent investment account that I rely on. I have a separate account, about 10% of my net worth, that I use to buy and sell assets based on what I think prices will do in the next few days or few years. I think of that as as my ‘hedge fund’, and I don’t rely on it, and I do consider it purely speculative.

[patientrenter]

[quote=peterb]Speculation and investing are the same thing. Man, some people just dont get it. No one can predict the future. [/quote]

peterb, I think sdr was drawing a distinction between people who buy assets for the future income they can produce (for them) without selling the assets, versus people who buy assets for the purpose of selling them to someone else for more than they paid.

I know that assets bought for one reason can end up being sold or kept for the other reason, and some assets may end up producing some income and a nice gain on sale, but I think sdr describes a valid difference. Anyone who buys gold (other than jewelers or others who process it) is a speculator by this definition. It’s harder to find an asset that can only be used for investment by this definition, since virtually any asset that produces income can be sold, and so could be used by speculators.

In any case, I buy stocks almost always for the dividends they produce, and would only buy real property for the net income it produces. Those assets form what I think of as my ‘real’ permanent investment account that I rely on. I have a separate account, about 10% of my net worth, that I use to buy and sell assets based on what I think prices will do in the next few days or few years. I think of that as as my ‘hedge fund’, and I don’t rely on it, and I do consider it purely speculative.

[patientrenter]

[quote=peterb]Speculation and investing are the same thing. Man, some people just dont get it. No one can predict the future. [/quote]

peterb, I think sdr was drawing a distinction between people who buy assets for the future income they can produce (for them) without selling the assets, versus people who buy assets for the purpose of selling them to someone else for more than they paid.

I know that assets bought for one reason can end up being sold or kept for the other reason, and some assets may end up producing some income and a nice gain on sale, but I think sdr describes a valid difference. Anyone who buys gold (other than jewelers or others who process it) is a speculator by this definition. It’s harder to find an asset that can only be used for investment by this definition, since virtually any asset that produces income can be sold, and so could be used by speculators.

In any case, I buy stocks almost always for the dividends they produce, and would only buy real property for the net income it produces. Those assets form what I think of as my ‘real’ permanent investment account that I rely on. I have a separate account, about 10% of my net worth, that I use to buy and sell assets based on what I think prices will do in the next few days or few years. I think of that as as my ‘hedge fund’, and I don’t rely on it, and I do consider it purely speculative.

[temeculaguy]

[quote=wannabe2077]I visited a friend in Inland Empire. he lives in a place with a lot of foreclosures.

Rents have dropped from $2000 to $1500 for 3 bedroom home in a decent neighborhood

[/quote]

Well I rented in one of the nicest places in the I.E. for the last couple of years and paid 1500 for a 3 br 3 ba, I just checked, rents haven’t budged in my old place. My anectdotal story vs yours, was the 2k rent overpriced? Be careful of basing economic conditions on a visit to friends house.

On the investor discussion, there are many people who choose to invest in R/E with no plan to ever sell, this may shock you but they are a chunk of the mom and pop investors. It also happens to be my plan. Let’s pull a Chris berman and go “inside the numbers,” not the marco economic numbers but the micro personal finance numbers. My anectdotal friend/relative story, retired couple with cash in cd’s, frustrated with current yields, fearful of inflation, decide to plunk down 130k to pay cash for a rental that rents/is rented for $1500 with $400 carry costs (hoa, taxes, maint reserve), so their yield is $1100 a month instead of 300 or 400 that they were getting. Ignoring appreciation entirely, the ability to triple or quad their cash flow makes it a wise choice, is it speculation? maybe, but for them it’s a bottom line decision to go with a better yield, if it goes up in value in ten years, that’s just a bonus but it’s not the plan. If cd rates hit 10%, then that cash would have been better left alone, so it is a bet, but a fairly safe one for someone with cash and retired, rents track inflation fairly well. They aren’t speculating with borrowed money, they own their primary outright, have a nice balanced portfolio and income stream as retirees, they just made a decision to place their bet with some of their cash, maybe they are the only ones out there in that situation but I have suspicion they aren’t, that there are many wise, prudent and conservative folks out there going against the grain, like they always have and it will likely work like it always has before.

[temeculaguy]

[quote=wannabe2077]I visited a friend in Inland Empire. he lives in a place with a lot of foreclosures.

Rents have dropped from $2000 to $1500 for 3 bedroom home in a decent neighborhood

[/quote]

Well I rented in one of the nicest places in the I.E. for the last couple of years and paid 1500 for a 3 br 3 ba, I just checked, rents haven’t budged in my old place. My anectdotal story vs yours, was the 2k rent overpriced? Be careful of basing economic conditions on a visit to friends house.

On the investor discussion, there are many people who choose to invest in R/E with no plan to ever sell, this may shock you but they are a chunk of the mom and pop investors. It also happens to be my plan. Let’s pull a Chris berman and go “inside the numbers,” not the marco economic numbers but the micro personal finance numbers. My anectdotal friend/relative story, retired couple with cash in cd’s, frustrated with current yields, fearful of inflation, decide to plunk down 130k to pay cash for a rental that rents/is rented for $1500 with $400 carry costs (hoa, taxes, maint reserve), so their yield is $1100 a month instead of 300 or 400 that they were getting. Ignoring appreciation entirely, the ability to triple or quad their cash flow makes it a wise choice, is it speculation? maybe, but for them it’s a bottom line decision to go with a better yield, if it goes up in value in ten years, that’s just a bonus but it’s not the plan. If cd rates hit 10%, then that cash would have been better left alone, so it is a bet, but a fairly safe one for someone with cash and retired, rents track inflation fairly well. They aren’t speculating with borrowed money, they own their primary outright, have a nice balanced portfolio and income stream as retirees, they just made a decision to place their bet with some of their cash, maybe they are the only ones out there in that situation but I have suspicion they aren’t, that there are many wise, prudent and conservative folks out there going against the grain, like they always have and it will likely work like it always has before.

[temeculaguy]

[quote=wannabe2077]I visited a friend in Inland Empire. he lives in a place with a lot of foreclosures.

Rents have dropped from $2000 to $1500 for 3 bedroom home in a decent neighborhood

[/quote]

Well I rented in one of the nicest places in the I.E. for the last couple of years and paid 1500 for a 3 br 3 ba, I just checked, rents haven’t budged in my old place. My anectdotal story vs yours, was the 2k rent overpriced? Be careful of basing economic conditions on a visit to friends house.

On the investor discussion, there are many people who choose to invest in R/E with no plan to ever sell, this may shock you but they are a chunk of the mom and pop investors. It also happens to be my plan. Let’s pull a Chris berman and go “inside the numbers,” not the marco economic numbers but the micro personal finance numbers. My anectdotal friend/relative story, retired couple with cash in cd’s, frustrated with current yields, fearful of inflation, decide to plunk down 130k to pay cash for a rental that rents/is rented for $1500 with $400 carry costs (hoa, taxes, maint reserve), so their yield is $1100 a month instead of 300 or 400 that they were getting. Ignoring appreciation entirely, the ability to triple or quad their cash flow makes it a wise choice, is it speculation? maybe, but for them it’s a bottom line decision to go with a better yield, if it goes up in value in ten years, that’s just a bonus but it’s not the plan. If cd rates hit 10%, then that cash would have been better left alone, so it is a bet, but a fairly safe one for someone with cash and retired, rents track inflation fairly well. They aren’t speculating with borrowed money, they own their primary outright, have a nice balanced portfolio and income stream as retirees, they just made a decision to place their bet with some of their cash, maybe they are the only ones out there in that situation but I have suspicion they aren’t, that there are many wise, prudent and conservative folks out there going against the grain, like they always have and it will likely work like it always has before.

[temeculaguy]

[quote=wannabe2077]I visited a friend in Inland Empire. he lives in a place with a lot of foreclosures.

Rents have dropped from $2000 to $1500 for 3 bedroom home in a decent neighborhood

[/quote]

Well I rented in one of the nicest places in the I.E. for the last couple of years and paid 1500 for a 3 br 3 ba, I just checked, rents haven’t budged in my old place. My anectdotal story vs yours, was the 2k rent overpriced? Be careful of basing economic conditions on a visit to friends house.

On the investor discussion, there are many people who choose to invest in R/E with no plan to ever sell, this may shock you but they are a chunk of the mom and pop investors. It also happens to be my plan. Let’s pull a Chris berman and go “inside the numbers,” not the marco economic numbers but the micro personal finance numbers. My anectdotal friend/relative story, retired couple with cash in cd’s, frustrated with current yields, fearful of inflation, decide to plunk down 130k to pay cash for a rental that rents/is rented for $1500 with $400 carry costs (hoa, taxes, maint reserve), so their yield is $1100 a month instead of 300 or 400 that they were getting. Ignoring appreciation entirely, the ability to triple or quad their cash flow makes it a wise choice, is it speculation? maybe, but for them it’s a bottom line decision to go with a better yield, if it goes up in value in ten years, that’s just a bonus but it’s not the plan. If cd rates hit 10%, then that cash would have been better left alone, so it is a bet, but a fairly safe one for someone with cash and retired, rents track inflation fairly well. They aren’t speculating with borrowed money, they own their primary outright, have a nice balanced portfolio and income stream as retirees, they just made a decision to place their bet with some of their cash, maybe they are the only ones out there in that situation but I have suspicion they aren’t, that there are many wise, prudent and conservative folks out there going against the grain, like they always have and it will likely work like it always has before.

[temeculaguy]

[quote=wannabe2077]I visited a friend in Inland Empire. he lives in a place with a lot of foreclosures.

Rents have dropped from $2000 to $1500 for 3 bedroom home in a decent neighborhood

[/quote]

Well I rented in one of the nicest places in the I.E. for the last couple of years and paid 1500 for a 3 br 3 ba, I just checked, rents haven’t budged in my old place. My anectdotal story vs yours, was the 2k rent overpriced? Be careful of basing economic conditions on a visit to friends house.

On the investor discussion, there are many people who choose to invest in R/E with no plan to ever sell, this may shock you but they are a chunk of the mom and pop investors. It also happens to be my plan. Let’s pull a Chris berman and go “inside the numbers,” not the marco economic numbers but the micro personal finance numbers. My anectdotal friend/relative story, retired couple with cash in cd’s, frustrated with current yields, fearful of inflation, decide to plunk down 130k to pay cash for a rental that rents/is rented for $1500 with $400 carry costs (hoa, taxes, maint reserve), so their yield is $1100 a month instead of 300 or 400 that they were getting. Ignoring appreciation entirely, the ability to triple or quad their cash flow makes it a wise choice, is it speculation? maybe, but for them it’s a bottom line decision to go with a better yield, if it goes up in value in ten years, that’s just a bonus but it’s not the plan. If cd rates hit 10%, then that cash would have been better left alone, so it is a bet, but a fairly safe one for someone with cash and retired, rents track inflation fairly well. They aren’t speculating with borrowed money, they own their primary outright, have a nice balanced portfolio and income stream as retirees, they just made a decision to place their bet with some of their cash, maybe they are the only ones out there in that situation but I have suspicion they aren’t, that there are many wise, prudent and conservative folks out there going against the grain, like they always have and it will likely work like it always has before.

[scaredyclassic]

seems unlikely a 130k house would rent for 1500 for long.

[scaredyclassic]

seems unlikely a 130k house would rent for 1500 for long.

[scaredyclassic]

seems unlikely a 130k house would rent for 1500 for long.

[scaredyclassic]

seems unlikely a 130k house would rent for 1500 for long.

[Author]

Posts