- This topic has 48 replies, 13 voices, and was last updated 16 years, 11 months ago by
PerryChase.
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May 23, 2007 at 9:30 AM #54477May 23, 2007 at 9:30 AM #54490
AK
ParticipantOh, and I didn’t see any mention of the true “drank the Kool-Aid” solution to their problem … take out a reverse mortgage to cover the carrying costs on the investment properties.
May 23, 2007 at 9:30 AM #54479sdrealtor
ParticipantPerry
One quick comment re your point“These people are real estate agents so they can be considered “professionals.” Do you think that other agents throughout the country have invested in real estate as well? You betcha.”
I think you might have this backwards to a lagre extent. It is not only the case that Realtors become investors but also Investors become RE agents to save on transaction costs. Our own SD R is a perfect example.
May 23, 2007 at 9:30 AM #54492ParticipantPerry
One quick comment re your point“These people are real estate agents so they can be considered “professionals.” Do you think that other agents throughout the country have invested in real estate as well? You betcha.”
I think you might have this backwards to a lagre extent. It is not only the case that Realtors become investors but also Investors become RE agents to save on transaction costs. Our own SD R is a perfect example.
May 23, 2007 at 11:20 AM #54493Cow_tipping
ParticipantNet worth of 1.6 million … You mean their purchase prices of the properties that their payments to the banks are based on = 1.6 million. AKA their debt = 1.6 million. The aren’t worth 1.6 mill, they owe 1.6 mill. They are worth what the properties can be sold for after they pay the banks off AKA – selling price – 1.6 million.
If they sell for 1.6 million they are essentially at 0. Sell for less and their net worth is negative.
So the media is also confused between debt and wealth.
Cool.
Cow_tipping.May 23, 2007 at 11:20 AM #54506ParticipantNet worth of 1.6 million … You mean their purchase prices of the properties that their payments to the banks are based on = 1.6 million. AKA their debt = 1.6 million. The aren’t worth 1.6 mill, they owe 1.6 mill. They are worth what the properties can be sold for after they pay the banks off AKA – selling price – 1.6 million.
If they sell for 1.6 million they are essentially at 0. Sell for less and their net worth is negative.
So the media is also confused between debt and wealth.
Cool.
Cow_tipping.May 23, 2007 at 2:00 PM #545374plexowner
ParticipantI am surprised that anyone refers to these people (or others like them) as ‘investors’
An ‘investment’ provides a return on the money invested
If you are taking money out of your pocket on a monthly basis for the right of owning real estate, you are speculating NOT investing
OK, you want to argue that the capital gains provide the return on investment – let’s go down that road
What you are saying is that you don’t need monthly income because you are going to make so much money on capital gains that the monthly alligator in your shorts is OK
Isn’t counting on capital gains speculation? What happens if the capital gains don’t occur? How long will you let that ‘investment’ drive you towards the poor house?
Assuming that there are any capital gains, how are you going to access them? Sell? Refi/cashout? Transaction costs? Tax consequences?
Anyway, my point is that we are flattering these people by calling them investors.
May 23, 2007 at 2:00 PM #54550ParticipantI am surprised that anyone refers to these people (or others like them) as ‘investors’
An ‘investment’ provides a return on the money invested
If you are taking money out of your pocket on a monthly basis for the right of owning real estate, you are speculating NOT investing
OK, you want to argue that the capital gains provide the return on investment – let’s go down that road
What you are saying is that you don’t need monthly income because you are going to make so much money on capital gains that the monthly alligator in your shorts is OK
Isn’t counting on capital gains speculation? What happens if the capital gains don’t occur? How long will you let that ‘investment’ drive you towards the poor house?
Assuming that there are any capital gains, how are you going to access them? Sell? Refi/cashout? Transaction costs? Tax consequences?
Anyway, my point is that we are flattering these people by calling them investors.
May 23, 2007 at 2:14 PM #54543(former)FormerSanDiegan
ParticipantNet worth of 1.6 million … You mean their purchase prices of the properties that their payments to the banks are based on = 1.6 million. AKA their debt = 1.6 million. The aren’t worth 1.6 mill, they owe 1.6 mill. They are worth what the properties can be sold for after they pay the banks off AKA – selling price – 1.6 million.
If they sell for 1.6 million they are essentially at 0. Sell for less and their net worth is negative.
So the media is also confused between debt and wealth.Though I’d agree that the media are usually are confused, you are incorrect.
If you read the article there is a column on the right-hand side listing assets and liabilities.
Net worth = Assets- liabilities.Assets were estimated at nearly 2.4 million
Liability (primarily mortgage debt) was ~ 750KYou could argue that their assets aren’t worth as much as they estimate. But please get the facts straight before typing.
May 23, 2007 at 2:14 PM #54556ParticipantNet worth of 1.6 million … You mean their purchase prices of the properties that their payments to the banks are based on = 1.6 million. AKA their debt = 1.6 million. The aren’t worth 1.6 mill, they owe 1.6 mill. They are worth what the properties can be sold for after they pay the banks off AKA – selling price – 1.6 million.
If they sell for 1.6 million they are essentially at 0. Sell for less and their net worth is negative.
So the media is also confused between debt and wealth.Though I’d agree that the media are usually are confused, you are incorrect.
If you read the article there is a column on the right-hand side listing assets and liabilities.
Net worth = Assets- liabilities.Assets were estimated at nearly 2.4 million
Liability (primarily mortgage debt) was ~ 750KYou could argue that their assets aren’t worth as much as they estimate. But please get the facts straight before typing.
May 23, 2007 at 2:19 PM #54547ParticipantI guess they didn’t figure out that they could also lose 100K without batting an eye.
May 23, 2007 at 2:19 PM #54560ParticipantI guess they didn’t figure out that they could also lose 100K without batting an eye.
May 23, 2007 at 3:17 PM #54561no_such_reality
ParticipantImbeciles.
I’m not sure if you mean the couple or the magazine publishers who think someone with $1.6 Million in EQUITY is going broke.
May 23, 2007 at 3:17 PM #54574ParticipantImbeciles.
I’m not sure if you mean the couple or the magazine publishers who think someone with $1.6 Million in EQUITY is going broke.
May 23, 2007 at 3:32 PM #54564Fearful
ParticipantNot sure who the bigger dumbasses are, the wife who vacantly expresses “attachment” to a $900K spare house, or the Money writers and editors.
They also do not need the life insurance.
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