Forum Replies Created
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AuthorPosts
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Ren
Participant[quote=bearishgurl]
This is the internet, folks. If a Pigg puts it out there (and Ren DID) that he has house and car payments and minor children, lives in RIV Co (but wishes to move back to SD Co someday), works in SD Co, and is thinking of buying rental property in FL or maybe AZ, that’s all OUT THERE. It’s now fodder for a topic of discussion.
[/quote]Uh huh, lots incorrect there as usual – but I put it OUT THERE to be part of the conversation. I don’t have a problem with it being out there and talked about – what I have a problem with is you changing it and padding it with assumptions to make your argument, all in the most condescending way possible.
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Ren seems to be taking it personally by his name-calling and taking words out of my mouth that were never there. But that’s okay. I never stated Ren was “stupid.”
[/quote]Again, twisting the story to suit you. Everyone has read the thread and knows what was said and what wasn’t. I give only as good as I get – no more. As for your behavior, you do know that it’s possible to be insulting without name calling? Being arrogant and patronizing are far worse than explicit insults, in my opinion – they are seriously nasty personality traits. My kids get that lesson right along with the cussing, do unto others, and skin color speeches.
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There is nothing wrong with Ren’s current station in life.
[/quote]It’s genuinely funny that you don’t see a problem with this statement. Not the literal meaning of the words, which is all you’ve thought through, but the attitude and assumptions behind it, and why you feel the need to make it in the first place.
ParticipantOthers who agree – thanks for the support (public and PMs)!
Participant[quote=bearishgurl]
Ren, I don’t really care about any Piggs’ finances here. It’s not only me, but that old, crotchety Suze Orman would actually advise you not to pass go or collect $200 if you were carrying vehicle loan(s).[/quote]You’re doing that selective comprehension thing again. We don’t currently have car payments, but may very well finance the kids’ cars when it comes time for that. Suze Orman, as annoying as she is, has made a great living being a “financial advisor for dummies,” although she obviously can’t say that part out loud. Those of us who are smarter than her demographic target (which is to say, at least half the country) know to compare rates of investment return with the cost of debt.
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I often see and talk to these senior LL’s when they are working on their investment properties. One is taking care of their aunt’s rental house because she is now too old to work on it. They’re digging french drains and concreting over for flood control for the driveway, garage and foundation, replacing windows, building fences and patching the roof, etc, sometimes with the help of an adult child or other relative. And they actually just live two blocks or <1 mile away! Yes, at the age of 60-75, that's real life for them!The vast majority of the IE’s parcels within 20 miles of the SD County line (where you live) are less than 20 years old and this region went through a deep depression a few years back. Thus, the homeowners who bought there between 2000 and 2006 became deeply underwater … many more than 50%. ALL of their taxes were high until they were likely reduced wholesale by the RIV County assessor pursuant to Prop 8. Excepting for a few scattered disabled veterans, there are no owners within subdivisions in your area with property taxes of less than $750 per yr on improved property, unless they purchased a small cheap condo in distress within the last ~2 years.
[/quote]You’re using irrelevant statistics to categorize people into two distinct groups – those who invested a long time ago, and those who invested recently, the latter all being in danger of imminent financial ruin in your mind, and with no crossover between the two. You can’t assume that the experiences of the people you know match the experiences of the people I know or the millions of people you don’t know – many of whom have been buying property on and off for decades and are still buying them. You also can’t assume (although of course you do) that every one of those recent purchasers was too ignorant to buy at a decent price, and/or bought with none of their own money.
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If you think I’m pulling these numbers out of my ass, why don’t you start plugging in APN numbers off parcel maps which were platted (and built) more than 35 years ago and sold for no more than $20-$40K in 1978 and prior and have not sold since.
[/quote]I never said you’re pulling numbers out of your ass – but again, the numbers you are providing are irrelevant. So people who bought back then and held onto the properties are mostly unencumbered – I should hope so. Many of them have also bought recently and are profiting from it, even carrying mortgages. The most financially secure retired people I know have never sold a property, and are still buying, whether that’s every 2 years, 5, or 10. Of course they’re making more money off the first properties. The point is that tenants helped them then and are helping now.
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Here, I’ll help you get started with a link:[/quote]
Why would I do that when it has nothing to do with my own situation? I would, however, suggest you pay a visit to http://www.biggerpockets.com/forums/52-rental-property-questions-landlording-issues, though, where people who LL for a living tend to hang out. Tell them it can’t be done.
Participant[quote=bearishgurl]EconProf, Ren essentially stated here that he thought the monthly income from out-of-state rentals which he intended to buy with mortgages were going to pay for all his current and future personal expenses.
[/quote]Gotta love your straw man arguments – leaving out the part where we use a great deal of our own money as well.
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I stated at the end of my post that it was nothing personal. I was discussing that I felt that a family with minor children who are W-2 earner(s) could be voluntarily putting themselves in a position of potential hardship if they do this.No insult was intended towards Ren. He has also repeatedly stated on here that he would like to move to SD County.
Who knows? Maybe Ren won the lottery and has a mil in cash stashed away to “play with.”
[/quote]My finances are none of your business, but your number is close enough. We also have two white collar professional incomes, 750-820ish ficos, and no debt other than the primary mortgage. We buy Mazdas instead of BMWs (wifey has to reign me in on that one).
*SNIP* completely irrelevant anecdote of “VERY knowledgeable” families burying themselves via awful decisions…
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The two states Ren and others mentioned are trying to climb out of a VERY deep depression (FL especially, which went down in value 60-75% in most areas). The steady-paying, reliable and trustworthy tenants one (who is considering investing there) THINKS they will be able to repeatedly obtain are just not there, at least not consistently, IMHO. Ask yourselves, if a “rental grade” condo currently costs $20K to $70K in or near Orlando, FL and a “rental grade” house currently costs $70K to $220K in same location, why the locals who are currently renting there aren’t buying them. The REASON, IMO is because they have no credit established, they have credit issues AND/OR they don’t even have the necessary ~680ish FICO score and 3.5% FHA downpayment + closing costs with which to buy these low-priced properties.Those are your available “prospective tenants” in that location.
[/quote]Blanket statements like this are meaningless. As if there are no good tenants in an entire city, or strategies to location and pricing that attract good tenants, or reasons why an otherwise financially stable person would rent instead of buy (there are many, recently listed on this forum. I’m one of them).
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I feel that a family with minor children whose breadwinner(s) work in SD County and live in RIV County do so for a REASON. A family who has car payments has those payments for a REASON. 99% of the time, those reasons are financial. I don’t care how HOW MUCH their gross or net income from wages are. I just feel that this is NOT the type of individual who should be taking chances with their hard-earned cash buying out-of-state rental property.
[/quote]Apparently your arrogance knows no bounds. How about this for a reason – we live in Riverside county because everything is cheap there, from child care to hair cuts. Even adjusting for fuel, we save many hundreds of dollars/month doing so. I would think that someone who lives on expired food would understand frugality.
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Call it “paternal” if you will but it is my opinion that persons in the same station in life as Ren…
[/quote]If it wasn’t coming from an asperger’s sufferer, the class insults would really piss me off.
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If Ren or any other Pigg thinks I’m talking out my ass or giving bad advice, then they are free not to take it or post what they think is better advice.
[/quote]We do that all the time. Of course any opinion that isn’t yours is wrong.
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WTR ALSO stated that having (two?) rentals in PHX were not EASY for him and that they involved WORK.
[/quote]Gasp! Not WORK?! Say it isn’t so.
[quote=Ren] . . . You’re ignoring the enormous number of people who have been successful at rental investments, including those I know personally who did so in a variety of markets over the past 40 years. So they all just got lucky, and there’s no level of intelligence, knowledge, or income available that can give an advantage? That’s essentially what you’re saying, right? It’s a good thing we have you here to stop us from trying.[/quote]
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I’m ingoring no one, Ren. In CA, those `successful LL’s in a variety of markets over the past 40 years’ you speak of here bought their (SFR) rental properties for $20K to $90K and are currently paying $300 to $750 annual property taxes on them. Some inherited their rental properties, complete with low property taxes appurtenant thereto. They bought properties within 25 miles of their residence or the residence or business of a relative or longtime biz partner who is managing some or all of them…
[/quote]I don’t like to use this term much, but… LOL. You have a bad habit of describing in excruciating detail (including weirdly exact ranges) what you think happens to people, then applying them to an entire county and generation, as if everyone went through the same scenario. I live over here in Real Life, where every situation is unique.
Participant[quote=bearishgurl]
Ren, you were talking about purchasing several investment properties with mortgages to eventually pay off your residence, vehicles, children’s education and retirement. Since you will supposedly never sell them, you won’t be able to get the kind of cash flow you’re thinking of to do all of these things, IMHO.
[/quote]I wouldn’t buy a property unless I’ve done the necessary research and math. The right properties, with the right amount down, DO cash flow very well, and well beyond expenses. I’m not going to do the math for you, but I assure you I haven’t forgotten some aspect that will later result in a face palm. I’m smarter than that.
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And if you DO sell properties in those areas you mentioned even after holding them for 15+ years, you may or may not make a profit. A typical profit from sale of residential RE in those states isn’t what it is here …. and buying in “better” areas is more expensive. And you won’t be able to buy as many properties in “better areas” (to attract your “better tenant”) as you could in mostly rental areas.Of course, you “know all this” and have already figured everything out.
[/quote]No. Unlike you, I don’t know everything – but I do have YOU figured out.
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There are GOOD REASONS why residential RE is so much cheaper to buy and also rent in AZ, FL and even RIV County than it is in SD County. If one is thinking investing in rental properties out of state and doesn’t understand the fundamental reasons why the RE sales/rental markets are as they are in those states, then they don’t understand these markets well enough to invest in them, IMHO.
[/quote]There you go again, humbly assuming I’m blissfully ignorant. Markets in AZ and FL are priced appropriately for the location, number of units, and employment ($120k for 2,000sf which rents for $1,100-1,200, for example). Because you know everything, you know that there’s more risk AND better cash flow in those areas. I believe I can mitigate that risk through careful choices, as have many others before me.
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I also don’t think it’s that easy for an inexperienced investor (even with good credit) to get repeated non-owner occupied mortgages … at acceptable terms, anyway.
[/quote]Then you thought wrong. I’ve talked to several lenders, a few financial advisors, and our CPA about it. All my calculations assume 75% of rent counted as income, seasoned for one year (one property purchased per year, even though we can afford more). Slightly higher rates are expected. Requirements and rates will change beyond 5 properties, then again beyond 10. Taking this into account, we’ll pay off many of them early, just prior to retirement. Considering LLC, but there are good reasons not to. Again, not ignorant here.
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I’ve never had any problems here telling it like it is.[/quote]But you’re not telling it like it is. You’re ignoring the enormous number of people who have been successful at rental investments, including those I know personally who did so in a variety of markets over the past 40 years. So they all just got lucky, and there’s no level of intelligence, knowledge, or income available that can give an advantage? That’s essentially what you’re saying, right? It’s a good thing we have you here to stop us from trying.
Participant[quote=bearishgurl]
I have to question a few things mentioned here. Firstly, Ren lives in Riverside County, CA, no? If he is considering buying investment properties in these rather lower-end, “investor-type” areas in the (transient) cities of FL and AZ that he mentioned, he will attract marginal tenants, IMHO.
[/quote]There’s nothing humble about your opinion, BG. Arrogance is your calling card.
Do you know what your problem is? I mean besides pompous social ineptitude? It’s that you assume too much. You assume everyone who doesn’t agree with you is an idiot. You assume we didn’t do any homework whatsoever – in reality, anyone who goes 6 months without a tenant did everything wrong, beginning with location. It is possible to mitigate risk, you know.
For someone who spends such an inordinate amount of time here, you’ve got a lot wrong about me, including something I posted in this very thread. Even after reading that I have no intention of selling for a profit, half your rant was about that very thing (with liberal use of lol’s and smilies to make sure you put me in my place after my imagined misstep).
It isn’t about appreciation or selling – it’s about having the available income and cash to put a lot down on a lot of property (we do), cash flowing well beyond PITI, maintenance, vacancies, and management (if applicable), being smart about what, where, and when we buy, being smart about renting those properties, and living below our means. Selling property in 30 years won’t make a student loan or car payment when it’s needed, but cash flow will, if the numbers make sense before we buy. We also have no intention of buying when we move back to the coast.
Your endless, insulting, bizarre posts are the sole reason I don’t visit here much anymore, and I’m guessing the same holds true for others. I’m sure many would appreciate it if you found another hobby.
ParticipantIsn’t that what a 1031 exchange is for? I would never sell it, unless it was to buy other property.
ParticipantAgree with answers so far. I think many people believe that there is more to it – that either it can’t be as easy as it seems, or that it’s TOO difficult/risky. The truth is somewhere in the middle. The naysayers can be stubborn as hell about it, too – wifey was in that camp but I convinced her. We’re pulling the trigger next month, probably Orlando. Phoenix suburbs are actually still a decent buy.
I know a lot of part time landlords. If you ask all of them what their experience has been, the ones who give a glowing review of landlordship are the ones who bought at a good price and rent below market. The ones who warn you not to do it bought during the peak and think they have the best house in the neighborhood, which is their excuse to price it too high, which results in bad tenants (the good ones are getting a better deal from the aforementioned happy landlords). If you get a landlord story from someone, good or bad, get ALL the details.
Of course I look at the rate of return, but never count on appreciation. That’s just not the point – income is. I like to view the entire rent as adding to it. Someone else will buy me multiple properties – paying the PITI and maintenance for 30 years and then funding my retirement (not to mention my primary residence, the kids’ college, and all our car payments).
Oh and that depreciation deduction is huge.
Participanthttp://usatoday30.usatoday.com/news/washington/2009-12-10-federal-pay-salaries_N.htm
I especially like this part:
The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.
When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.
ParticipantIt was easier for a buyer to put in crazy offers during the bubble, when there was little or no money changing hands, and when they didn’t have any idea what was really happening. Now that the average intelligence of the people doing the buying is higher, and they stand to lose real savings, and the last burst is fresh in their minds, they’ll think twice. That will work against prices getting too bubblicious again.
ParticipantWe have a few households full of relatives in AZ, every one of them hate it there but are stuck for various reasons (military, pensions, child custody). All also plan to move to SD to retire.
You may think you can tolerate the heat, but you really need to visit Phoenix in late summer to experience it for yourself, if you haven’t already. You know how it feels when you get in your car after it’s been sitting for hours on a hot San Diego (90+) day. That’s exactly how it feels walking out of a building in Phoenix. No big deal if you’re just visiting, but imagine all those parking lot walks during all the errands you run as part of everyday life. It sucks the energy right out of you.
If it was just me, I wouldn’t put an AZ move completely out of the question, but I would never consider subjecting my kids to that (or myself to my kids as they go stir crazy indoors).
I do like the desert landscaping. As long as everything is neat and tidy, a dozen different shades of brown can look pretty good.
January 21, 2013 at 9:08 AM in reply to: Over 21% of homeowners in SD County have paid off houses #758135ParticipantI can see both sides. Without a catastrophic depression, more leverage (in real estate anyway) over decades will cause you to end up with far more assets and income than focusing on paying off the primary and a couple other properties. At the same time, having a nearly non-existent payment on a primary would enable you to live indefinitely (in a relatively nice place) on menial labor jobs alone, which a big mortgage would not allow. I won’t be sitting around sending out tech résumés for 7 years – I’ll be at the unemployment office asking for temp ditch digging or gas station work. When the entirely leveraged guy runs out of money in 10 years, he’ll be going home to the rented room (or 2-bedroom with roommate) that his minimum wage job permits.
Once our passive income is at a point where retirement is possible, we’ll start putting a lot of extra cash toward the primary.
Participant[quote=squat300]Would it pay to remortgage the house for fin aid purposes, invest the money? Would the difference between heloc interest and return be less than the inc. tuition?[/quote]
Why not buy a couple of rental properties now, and let someone else make the tuition loan payments?
I went along with starting a 529 to humor certain family members, but “saving” certainly won’t be paying for their college. Their books maybe (or phablets, or brainlets, or whatever they’ll be using in 14 years).
ParticipantI LOL’d at “->Pie”.
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