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surveyor
Participantnope
I should specify. When I say “my” group, I actually have no ownership of it whatsoever. I am just a member (lisa vander, our figurehead, calls us her students). I participate in the network, but all of the properties are owned by their respective owners. No one “corporation” holds it. It’s not a real estate investment group where we all pool money together. We all do our own thing.
Nope, I’m a regular person, working a job, and also doing real estate as well.
Also, we just learned about a great real estate tax deduction – apparently it’s called “chattel appraisal depreciation”. Got to research it.
Participantabsentee ownership
I did some preliminary recon in the San Antonio market about three months ago, but decided the hassles involved with being an absentee owner weren’t worth it.
While I do not have any property in San Antonio, my group is doing fairly well there. Most properties there break even but we are seeing about 20% to 30% returns on investment there.
As for whether being an absentee owner is worth it or not (the path to getting rich is not necessarily easy), at least the ability to lower my taxes by a huge degree is worth it to me.
(an absentee owner x3)
Participanthahaha
ya i know that water park they’re doing. we were asked to bid on it but our price was too expensive. there’s really nothing stopping it, the city of temecula seemed to be enthusiastic about it.
i heard about this a few months ago, when money was fast and loose. there is probably some financial pressure on it now and they are shopping for cheap engineering and surveying for it. I saw some preliminary plans. Seemed nice. Would have been an interesting project for us to do.
Still, 0.25 miles away is not too bad. Next door it might be seen as a negative, but it’s far enough away so that it’s listed as an asset but not as a negative.
Participantpeanut comment
I am in very much the same boat as you and getting a new wife is not an alternative.
Classic. =nyuck= =nyuck=
Participantcmr
The website says they are tri-plex condominiums, so they look to be expensive. I believe the project is being built on the former golf driving range for the CMR Golf Course.
So they look like they’re fairly overpriced.
Participantitemized miscellaneous deductions….
under itemized miscellaneous deductions, yes you can. Here is a faq:
Unreimbursed Employee Expenses
You can deduct only unreimbursed employee expenses that are:Paid or incurred during your tax year,
For carrying on your trade or business of being an employee, and
Ordinary and necessary.
An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense does not have to be required to be considered necessary.
You may be able to deduct the following items as unreimbursed employee expenses.
Business bad debt of an employee.
Business liability insurance premiums.
Damages paid to a former employer for breach of an employment contract.
Depreciation on a computer or cell phone your employer requires you to use in your work.
Dues to a chamber of commerce if membership helps you do your job.
Dues to professional societies.
Home office or part of your home used regularly and exclusively in your work.
Job search expenses in your present occupation.
Laboratory breakage fees.
Legal fees related to your job.
Licenses and regulatory fees.
Malpractice insurance premiums.
Medical examinations required by an employer.
Occupational taxes.
Passport for a business trip.
Repayment of an income aid payment received under an employer’s plan.
Research expenses of a college professor.
Rural mail carriers’ vehicle expenses.
Subscriptions to professional journals and trade magazines related to your work.
Tools and supplies used in your work.
Travel, transportation, entertainment, and gift expenses related to your work.
Union dues and expenses.
Work clothes and uniforms if required and not suitable for everyday use.
Work-related education.Participantperry:
Property management fees are only 10%. And I’m not the only one who’s been able to make an out-of-state property cash flow. You just have to find the properties that will cash flow and avoid the ones that don’t. With the Internet and cell phone, you don’t really have to travel back and forth to that property that often.
I’ve mentioned before that I have a south carolina property that cash flows at about $300/mo. (bought it for $230k). It has a property management fee of 8%.
Every property is different, but if you find a good property, analyze the numbers, some will cash flow, some will not.
Obviously everything in California does not cash flow. However, that is not true in all locations.
Participantcaveat: completely insane suggestion….
certainly not for the conservative lifestyle – you could agree to buy it for $325k, and ask for a loan that reflects 80% of the probable appraised value of $469k (which is about $375k).
Take the cash from the closing (probably around $50k), buy a cash flowing investment property (suggestions: tennessee, missouri, nc, sc or georgia). For $50k, you can probably get a $200k four-plex that cash flows around $500/month.
So your estimated mortgage payment for the $325k is around $2100. Your $50k is generating around $500/month in cash flow. Actual mortgage cost (not even counting taxes, hello), is around $1600. This $1600 is actually lower if you compensate for the tax refund you would get (my estimate is around $3000/year if your tax rate is around 33%, which translates to 250 per month).
Your actual mortgage could be around $1350.
Did I mention that this would be risky?
It’s what I’d do though. (heck it’s what I’ve been doing, hahaha).
Of course, everyone thinks I’m crazy…
Participantdilemma…
Based on what you’ve said, I’d buy it. The rent cost/buy costs are almost equal, and you could probably even lower the cost of ownership some by accessing some of the useful tax deductions, such as the home-office tax deduction (if you have your own business).
As long as you can afford the expenses, you should be fine. If you can’t hack a 30 year amortized, go for a 10 year interest only.
As far as getting a larger home in the future, if you can’t sell it, you can rent this house out and get the tax deductions for depreciation (which would produce a small amount of cash flow), and then get the larger home (and you would even be able to justify the larger home’s home-office tax deduction).
I think you’ll be fine, but think long term in terms of your loan. As long as you can keep it up, you will be able to get ahead. Having a house isn’t guaranteed wealth, but it does allow you to access the best tax deductions.
Participantoutsourcing article:
Here is an interesting article regarding outsourcing.
MYSORE, India (AP) – At the heart of the sprawling corporate campus, in a hilltop building overlooking the immaculately shorn lawns, the sports fields and the hypermodern theater complex, young engineers crowd into a classroom. They are India’s best and brightest, with stellar grades that launched them into a high-tech industry growing at more than 25 percent annually. And their topic of the day? Basic telephone skills.
“Hello?” one young man says nervously, holding his hand to his ear like a phone. “Hello? I’d like to leave a message for Number 17. Can I do that?”
Nearly two decades into India’s phenomenal growth as an international center for high technology, the industry has a problem: It’s running out of workers.
There may be a lot of potential – Indian schools churn out 400,000 new engineers, the core of the high-tech industry, every year – but as few as 100,000 are actually ready to join the job world, experts say.
Instead, graduates are leaving universities that are mired in theory classes, and sometimes so poorly funded they don’t have computer labs. Even students from the best colleges can be dulled by cram schools and left without the most basic communication skills, according to industry leaders.
So the country’s voracious high-tech companies, desperate for ever-increasing numbers of staffers to fill their ranks, have to go hunting.
“The problem is not a shortage of people,” said Mohandas Pai, human resources chief for Infosys Technologies, the software giant that built and runs the Mysore campus for its new employees. “It’s a shortage of trained people.”
From the outside, this nation of 1.03 billion, with its immense English-speaking population, may appear to have a bottomless supply of cheap workers with enough education to claim more outsourced Western jobs.
But things look far different in India, where technology companies are spending hundreds of millions of dollars in a frantic attempt to ensure their profit-making machine keeps producing.
“This is really the Achilles heel of the industry,” said James Friedman, an analyst with Susquehanna Financial Group, an investment firm based in Bala Cynwyd, Pa., who has studied the issue.
“When we first started covering the industry, in 2000, there were maybe 50,000 jobs and 500,000 applicants,” he said. Now there are perhaps 180,000 annual openings, but only between 100,000 and 200,000 qualified candidates.
For now, industry is keeping up, but only barely. A powerful trade group, the National Association of Software Services Companies, or NASSCOM, estimates a potential shortfall of 500,000 technology professionals by 2010.
On the most basic level, it’s a problem of success. The high-tech industry is expanding so fast that the population can’t keep up with the demand for high-end workers.
Tata Consultancy Services, for instance, India’s largest software company, hires around 3,000 people a month. The consulting firm Accenture plans to hire 8,000 in the next six months and IBM says it will bring on more than 50,000 additional people in India by 2010.
A shortage means something feared here: higher wages.
Much of India’s success rests on the fact that its legions of software programmers work for far less than those in the West – often for one-fourth the salary. If industry can’t find enough workers to keep wages low, the companies that look to India for things like software development will turn to competitors, from Poland to the Philippines, and the entire industry could stumble.
The responses range from private “finishing schools” polishing the computer skills of new graduates to multimillion-dollar partnerships spanning business, government and higher education. The biggest companies have built elaborate training centers. The Mysore campus, for instance, was little more than scrub-filled fields when Infosys, India’s second-largest software firm, based in the nearby technology hub of Bangalore, began building here in earnest three years ago.
In America, the campus would be nothing unusual. But in India – with its electricity outages, poverty and mountains of garbage – the walled-in corporate fantasyland, watched over by armed guards, is anything but normal.
It has 120 faculty members, more than 80 buildings, 2,350 hostel rooms and a 500,000-square-foot education complex. There’s a movie complex built inside a geodesic dome. An army of workers sweeps the already-spotless streets and trims the already-perfect lawns.
Month by month, it’s getting bigger. Today, some 4,500 students at a time attend the 16-week course for new employees. By September, there will be space for 13,000.
Infosys spent $350 million on the campus, and will spend $140 million this year on training, said Pai, the human resources chief.
“This is the enormous cost we have to pay to ensure we have enough people,” he said.
They’re not the only ones.
IBM’s technical skills programs reached well over 100,000 Indians last year, from children to university professors. At Tata Consultancy Services, measures range from a talent search as far afield as Uruguay to having executives teach university classes – all designed simply to make people employable.
Most industry leaders believe these investments will pay off, and India will remain competitive. But most are also guarded in their optimism.
“We should be able to get through this year, but if we don’t get things like finishing schools into place we’ll see an actual shortage,” said Kiran Karnik, the NASSCOM chairman.
Much of the problem is rooted in a deeply flawed school system.
As India’s economy blossomed over 15 years, spawning a middle class desperate to push their children further up the economic ladder, the higher education system grew dramatically. The number of engineering colleges, for instance, has nearly tripled.
But the problems have simply grown worse.
India has technical institutes that seldom have electricity, and colleges with no computers. There are universities where professors seldom show up. Textbooks can be decades old.
Even at the best schools – and the government-run Indian Institutes of Technology are among the world’s most competitive, with top-level professors and elaborate facilities – there are problems.
The brutal competition to get into these universities means ambitious students can spend a year or more in private cram schools, giving up everything to study full-time for the entrance exams.
Instruction is by rote learning, and only test scores count.
“Everything else is forgotten: the capacity to think, to write, to be logical, to get along with people,” Pai said. The result is smart, well-educated people who can have trouble with such professional basics as working on a team or good phone manners.
“The focus,” he said, “is cram, cram, cram, cram.”
People can take what they will from this article. They can say, well why bother getting into a technical or working hard to get into college and get good grades if there are legions of not very well qualified Indian engineers to take my place. Or maybe they will say, look, if I work hard, get a good degree, keep in mind that there are going to be many baby boomers retiring in the next few years, and if I position myself to take over those positions, then my future is looking good because there are not many people in India who can do what I can do.
IMHO, there is no country in the whole that can match the U.S. in ingenuity, drive, and opportunity. In the U.S., you can go from dirt poor to stinking rich. There is no country that makes that easier than the U.S. Yes, there are flaws, yes, it’s not easy. But nothing beats the U.S. as long as we remember that.
And that’s what I tell every young person I encounter.
Participanttax impact on savings
FSD:
totally agree, I would rather feed my Roth IRA and 401k instead of my savings because of the tax impact. Besides, there are ways to get money out of those two if you’re in enough trouble.
Participantbirds of a feather?
There was an MSNBC article awhile back about how super-earners were getting married and creating a new crew of rich people. Supposedly it was a matter of like-minded, successful people naturally congregating together.
As for me, I do not make $100k, but I do come close. For a land surveyor, that is pretty good. My wife makes over $100k as well, and she is an electrical engineer.
We don’t actually know a lot of people who make more than $100k, we are the exception in our circle of friends and family (admittedly, though, we don’t socialize much outside of that circle). In fact the only person we know who makes over $100k is a rich uncle lawyer who works up in San Francisco. All our other family members are working class and have been that way for several years.
I can’t really say that we are modest in our lifestyle, because we do eat out every week, but we have a modest home, a minivan and a station wagon (honda & saturn). Is that modest nowadays? Our one luxury is a plasma tv (our old tv was dying). Bought it on credit, but it had a one year no interest thing, so it was paid off before they charged me interest. Bwahahaha.
Participantdetroit vs. san diego
in terms of real estate, san diego is a completely different animal than san diego. detroit has a historical tendency to appreciate less than inflation. san diego has a historical tendency to appreciate more than inflation.
in terms of economic activity, san diego beats detroit hands down, with a much more diversified economy of defense, tech, biotech, tourism, and even some agriculture. detroit only has the auto industry and maybe some tourism.
also, in terms of tech, while we are losing our edge, we are still ahead of china and india. detroit lost its auto industry edge to japan a long time ago.
detroit vs. san diego? asinine indeed.
Participantjuice
word…
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