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Robert Leonard
Investor · Lafayette/Baton Rouge, LA · Member since 2013 · 1k+ posts · 915 votes
12y

@Pat Martin the 5% number is a stock market investing rule of thumb (yeah, they use those too).  Some people use 4 others use 5 as their percentage of stock market money that should be invested in any one company.  Any more than that suggests you are "over weighted" and over exposed to specific stock risk.  The corrective action would be to sell the excess and redistribute to other stocks to maintain a diversified portfolio of stocks.

I don't think it's a good transfer of that rule of thumb to say that anyone should limit their REI to 5% of their total investment portfolio. That's some conventional stock market thinking that just does not fit REI. IMO.

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  • Pat Martin
    OP
    Knoxville, TN · Member since 2014 · 116 posts · 57 votes
    12y

    Also check out this paragraph...

    "Don't go overboard. Investors should maintain a diversified portfolio that also includes stocks, bonds and cash. Single-family homes shouldn't exceed 5% of their investments, not including their primary residence, says Jeff Sica, president of Sica Wealth Management in Morristown, N.J."

    Did he pull this number from his magic hat???

    0Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    12y

    Can you post the entire article via copy and paste it here? 

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
    0Reply
  • Joshua D.Pro Member
    BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes
    12y

    Here's the active link:

    http://online.wsj.com/articles/new-ways-to-profit-...

    We can't allow the republication of the post here without the permission of the WSJ for copyright purposes.

    Podcast Guest on Show #100
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  • Robert Leonard
    Investor · Lafayette/Baton Rouge, LA · Member since 2013 · 1k+ posts · 915 votes
    12y

    @Pat Martin the 5% number is a stock market investing rule of thumb (yeah, they use those too).  Some people use 4 others use 5 as their percentage of stock market money that should be invested in any one company.  Any more than that suggests you are "over weighted" and over exposed to specific stock risk.  The corrective action would be to sell the excess and redistribute to other stocks to maintain a diversified portfolio of stocks.

    I don't think it's a good transfer of that rule of thumb to say that anyone should limit their REI to 5% of their total investment portfolio. That's some conventional stock market thinking that just does not fit REI. IMO.

    1Reply
  • Eddie T.
    Rental Property Investor · NY · Member since 2013 · 844 posts · 350 votes
    12y

    @Joshua D. so no way to view this article unless we subscribe to WSJ?

    0Reply
  • Pat Martin
    OP
    Knoxville, TN · Member since 2014 · 116 posts · 57 votes
    12y

    Yes you can.  I'm not a subscriber and read on there all the time.  Just copy and paste title of article in Google and click on link and it gives you a free pass to read article.  Over and over again.

    2Reply
  • Raymond B.
    FL · Member since 2009 · 2k+ posts · 357 votes
    12y

    @Pat Martin, 

    I tried this:

    Just copy and paste title of article in Google and click on link and it gives you a free pass to read article. Over and over again. 

    It didn't work.

    Raymond



    Subscribe to This Forum


    1Reply
  • Dan C.
    Milwaukee, WI · Member since 2013 · 384 posts · 109 votes
    12y
    Originally posted by @Pat Martin:

    Yes you can.  I'm not a subscriber and read on there all the time.  Just copy and paste title of article in Google and click on link and it gives you a free pass to read article.  Over and over again.

     Never knew this, but I just tried it and it works. Thanks for the tip!

    0Reply
  • Steve Veen
    Rental Property Investor · Eastvale, CA · Member since 2011 · 45 posts · 9 votes
    12y

    Funny how negative this article can be about renting out your own SFH....

    I love reading the comments below the article.... all talking about how horrible and risky it is to own a rental....   

     It is.... if you have no idea what you are doing.........

    Good stuff!!


    0Reply
  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
    12y

    Interesting article

    0Reply
  • Charmaine M.
    Queens NY, NY · Member since 2013 · 467 posts · 107 votes
    12y

    @Pat Martin... 

    I love reading the WSJ and this is a great way to get it.

    Much appreciated !!

    0Reply
  • Julia Blythe
    Real Estate Investor · Memphis, TN · Member since 2014 · 156 posts · 101 votes
    12y

    @Pat Martin, thanks for the heads up about how to view without a subscription.  It worked like a charm!

    0Reply
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    12y
    Originally posted by @Pat Martin:

    Chris Clothier and his company Memphis Invest are mentioned several times in this WSJ article.  Congrats to you!

    http://online.wsj.com/articles/new-ways-to-profit-...

     Thanks for the mention Pat.  That was a good interview, but you never know how the article is going to turn out.  IN the end, she pretty much wrote exactly what she said she was going to write.  I liked that she was willing to highlight alternative investments and the fact that land-lording and real estate investing can be two very different things.  We'll see if they keep writing more about this.

    All the best - Chris

    Podcast Guest on Show #224
    REI Nation4.576 Reviews
    WebsiteView Page
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