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Real Estate
Reply to "Better investment options than Real Estate?"
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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]If you had to pay a ~ transaction cost of ~6% when buying/selling AND pay ~1% of the portfolio value every year, just to hold it, AND spend ~0.25-0.5% on "maintaining" them every year... Guess where the S&P 500 would be if those were the rules....One guess. Down in the dumps. Now, rental properties are different. The math on them gets seriously complex, but if all you are looking for is "investment", equities, and other financial products are MUCH better investments. But, you know why most people don't do the above but "invest" in real estate instead?? One word. LEVERAGE. If you're putting down 5% and are able to get a house, that's a 20x leverage. Show me a stock broker that will allow that level of leverage and I'll show you the bridge I'm selling. This is the ONLY reason "small" investors play more in the real estate markets. Blackrock? It goes out and sells a bond for $30B and has fun with the proceeds.[/quote] Citigroup and other places will allow 2 percent down on stocks. Always had. Just need to be a qualified investor. That said cash is king to buy rentals. Hard money discount. I recall I dated a girl her mom had around 200 properties. 199 paid for cash. What she did was mortgage prior purchase to buy next first few. From there she used cash flow to buy more. She buy cheap. All her transactions are like straight transactions. She never actually records the rent. She lets it pile up then buys another house. It was truly hilarious out of a movie. She take one of her large sons on rent day but both busy I went with hey and collected at least 90 rent payments nearly all cash. Once in a while check made to cash. No one had a lease. A lot were illegals or poor credit from kid. That day in 1995 we picked up around $80,000 in rent. She was a character. The town newspaper was calling her out on suspicion so she bought town newspaper. She also randomly collected stuff. Like tiny weird small run down commercial properties if she knew developer was trying to build. She also had a realtor license and own real estate business. She is still alive as I see her on Facebook. When she dies that will be interesting. She has four kids and multiple grandkids so assume she knowing her is transfering properties. Even in 1996 she had ski houses, Florida condos, her crown jewel 200 buildings on a rich Long Island town. She literally owns 10 percent of town but through lllcs and stuff who knows she started this in 1972. My cousin on other hand legally owns 3,000 homes [/quote] What does this tirade have to do with an "investment" analysis??[/quote] This person shows up in every post to tell stories about Long Island back in the '90s.[/quote]
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