Important decision: Rental real estate vs stocks

Member since 2016 · 14 posts · 6 votes

My wife and I have three houses that we rent out. This journey started about 10 years ago. We have 15-year mortgages on these. The houses are worth about $800K (TX). We are very happy with how these houses appreciated; we put very little money down and were rewarded handsomely. Of course, this was no bed of roses: we put a lot of work into these - roof leaks, flooded floors, painting, clogged toilets, annoying tenants - you name it.

Today, we are contemplating selling one house and putting the profits into SP500. What makes us contemplate this is some back testing. For example:
- The first house was purchased in 2013 for $145K. That house is now worth $280K.
- If I was to invest $145K in SP500 in 2013, I would have about $500K

I know that the past is not the prologue, but I also know that historically housing trails the SP500. That said, in 2013, we were fresh out of grad school and did not have $145K to invest in the market. So, buying a house with 5% down was the only option. Today, we could sell one house or more and invest a larger sum for the long haul.

We have tenants moving out in the spring and we are considering selling. The house in question happens to be a house we lived in recently and we could sell it and not pay taxes on the sale. Do you think we should pull the trigger and put the money into the market? Thank you for your advice.

Relevant details:

- Household income about $250K, which means that we cannot deduct rental losses

- All houses have 15-year mortgages , which means that they do not cash flow well. We are either in the red or breaking even depending on luck in a given your. Tenants are paying off our mortgage.

- We could also sell, invest the money, and buy another rental (re-leverage)

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Brad S.

Investor · Pasadena, CA · Member since 2017 · 613 posts · 523 votes

I'm not a stock guy, so can't offer much insight there, but I don't you see you taking leverage into account.

You mentioned you put 5% down, since you couldn't afford to pay $145k cash. So, using your #'s provided and not accounting for costs, cashflow, etc, here's how it would've looked:

Stocks
$145k invested to get $500k = 245% gain

Your House
$7,250 invested to get $135k in equity = 1,762% gain

**********************
Now, if you had $145k and split it into 20% or 25% down payments, this is what it would've looked like:

20% down
$29k down, 5 houses, $135k equity each house = $675k gain, 366% gain

25% down
$36,250 down, 4 houses, $135k equity each house = $540k gain, 272% gain

and of course you have costs, maintenance, etc., but you also have depreciation, equity paydown by tenants, tax benefits (1031 deferral), and you own a bundle of commodities as an inflation hedge, cashflow, etc, etc.

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Michael Gansberg
Investor · New York City, NY · Member since 2015 · 388 posts · 563 votes
3y
@Marek Kucharski - good work on your accomplishments. Investing without much money can be challenging. One of the benefits of real estate investing is the protection from our instincts to sell at the worst time- when things are tough. There were plenty of investors who sold stocks in 2009 at exactly the wrong time, all it took was the click of a button. When you invest in a house(or other RE asset,) when things are challenging, you can't click a button and escape it- you have to fix the problems. And then the asset is better for it, and so are you(financially, anyway. The headaches may not be worth it.) If you're a shareholder in some company in the S&P 500, you will have no ability to fix their issues. I believe this inability to sell quickly when times are rough gives RE investors an advantage. There was an interesting study showing that while stocks rose sharply over some long time period, individual investors made approximately zero percent over the same time period. The authors concluded that it was likely because investors sold out of fear and often at the wrong time.
I suggest fixing the problems that bother you the most. It sounds like you don't like dealing with tenants(join the club) and you don't like the zero cash flow situation. You seem to be in the most active area of RE investing- direct ownership and direct management. Slightly more passive would be hiring out a manager(not always practical, and a bad manager can be worse than no manager) or buying a condo and renting that out. You could 1031 into a condo and defer your taxable gains. Condo ownership tends to be a bit easier than a house- usually the common area maintenance, like snow removal/lawn care, and external repairs(roof, facade) are handled by the condo board. Further into the passivity spectrum are investments in a syndication(something I've never done) or investments into Delaware Statutory Trusts(something I've done plenty of.) In these investments, you won't ever hear from the tenant, but you also don't control the investment. At the extreme end of the passivity spectrum are things like private and public REITS. I suspect your cashflow situation would improve if you invested in any of these vehicles, and your tenant headaches would vanish.
I believe both stocks and real estate should occupy positions in any investor's portfolio. Good luck with it.
1 Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
3y
Quote from @Marek Kucharski:

Quote from @Joe Villeneuve:

Quote from @Marek Kucharski:

My wife and I have three houses that we rent out. This journey started about 10 years ago. We have 15-year mortgages on these. The houses are worth about $800K (TX). We are very happy with how these houses appreciated; we put very little money down and were rewarded handsomely. Of course, this was no bed of roses: we put a lot of work into these - roof leaks, flooded floors, painting, clogged toilets, annoying tenants - you name it.

Today, we are contemplating selling one house and putting the profits into SP500. What makes us contemplate this is some back testing. For example:
- The first house was purchased in 2013 for $145K. That house is now worth $280K.
- If I was to invest $145K in SP500 in 2013, I would have about $500K

I know that the past is not the prologue, but I also know that historically housing trails the SP500. That said, in 2013, we were fresh out of grad school and did not have $145K to invest in the market. So, buying a house with 5% down was the only option. Today, we could sell one house or more and invest a larger sum for the long haul.

We have tenants moving out in the spring and we are considering selling. The house in question happens to be a house we lived in recently and we could sell it and not pay taxes on the sale. Do you think we should pull the trigger and put the money into the market? Thank you for your advice.
Relevant details:
- Household income about $250K, which means that we cannot deduct rental losses
- All houses have 15-year mortgages , which means that they do not cash flow well. We are either in the red or breaking even depending on luck in a given your. Tenants are paying off our mortgage.
- We could also sell, invest the money, and buy another rental (re-leverage)
You're initial assumptions are way off (math), and just gets worse from there.

Assumption #1 = "If I was to invest $145K in SP500 in 2013, I would have about $500K"
Fact #1 = If you invested $145k in RE in 2013, it would be worth $725k in 2013.

Assumption #2 - "All houses have 15-year mortgages , which means that they do not cash flow well"
Fact #2 - The poor cash flow was more likely due to the 15 years mortgage than anything else. Why would you do a 15 year mortgage when you could have gone with a 30 year mortgage, with a lower monthly payment? You said yourself, "...Tenants are paying off our mortgage".

Perhaps I did not phrase things clearly enough. I am fully aware of the fact that I did not have $145K in 2013 and I know that in 2013 RE was the correct choice. No question about that. But the point is that now I would have a larger amount to invest if I sold the house.
As for the 15-year mortgage, this was a conscious choice as I wanted $ to go to principal. If I count the principal being paid-off, perhaps the cashflow is not that bad. With a 30-year mortgage, I would be paying off interest in the first decade or so.
Lastly, some of you suggested that I purchase another property. (This is what my wife prefers.) It seems to me that with, now, much higher rates, making the math work is MUCH more difficult. Am I wrong on this?
I hate to tell you this, but you're wrong on all accounts.
1 - You misunderstand what I said.
2 - You're tenant is already paying off your loan. When you go to a 15 year mortgage, you are adding to the cost of the property because the extra money that's paying off the mortgage is coming from you now. You'd be better off with a 50 year mortgage. In any case, you're not the one paying the interest.
3 - Buying or not buying a property shouldn't be based on the rates. Buying or not buying should be based on the cash flow and/or equity build up/profit.

Deals are made based on two things:
1 - The least amount of cost to you. Your cost is ONLY the cash that comes out of your pocket,...which should be restricted to the DP.
2 - The terms of how the rest of the cost is paid for by someone/something else.

The role of the CF in the beginning is to QUICKLY repay your cost (cash). The faster the better. The role of equity is to build up and then sell the property to access it (as cash now) and use it on the next property. The true ultimate cost of the property is the equity. What the equity buys is both property value and cash flow.

If you put 20% down on a $100k property, your cost for that property is $20k...and the true value of that equity is $100k. That's 5 times the cost. When the property appreciates $20k, the PV goes up to $120k, and the equity also goes up that same $20k...to $40k. Sounds great right. Not so. Your equity is only buying a property that's now worth $120k, but you're spending $40k on it. That means your equity is now only worth 3 times its face value.
Now, sell that property, and use the equity as a DP on another property (maybe one just like the one you sold) and you could buy two properties...each worth $100k by putting $20k down on each. The total PV is now $200k (not just $120k) and you could come close to doubling your cash flow. The equity?...is the same,...just split into two properties instead of just one.
0 Reply
Bill F.
Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
3y
@Marek Kucharski
You've gotten a lot of different opinions, so why not throw one more onto the heap! Here's how I've thought about this as I made a similar call last year.
1. What is the goal for these funds and the time horizon?
The answers changes if you want to use these for retirement in 30 yrs or your kids college in 5 yrs. Lets assume 10yrs
2. How much work do you want to put in for these returns?
Owning SFRs is far more work than owning a stock, thus you should get some sort of premium for the work you put into RE. Your mileage may vary, but I'd need at least 5% to make the work and time away from family worth it.
Next I'd benchmark my RE returns. Based on the data you provided I figure you got an IRR of 9-11% on an all in basis from your first house. The total SP returns for that period were 10.7%, so congrats on keeping up with the SP in what was a wild ride.
Next, we have to ask what do we think the SP returns will be for the next 10 yrs? If I could tell you that answer, I 100% wouldn't be on this forum so maybe we answer an easier question, do we think they will be greater or less than 10%? Still hard, but a bit easier. Given the average 10yr return of the SP has been 12% for its lifetime and 10% for the last 25 yrs, I think we can say it will be around that +- 2%, so somewhere in the range of 8-12% for a base case.
This leads to the final question: Since the RE return we need is +5% over the SP (13-17%) can you find a RE investment that yields that in your market and your niche?
Adjust up or down for your own variables and your bear/bull case.

Best of Luck.
5 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
3y

If you were 'fully aware' of this, you would've said $x down on a house in 2013 became $x in net equity (after sales costs) for a return of x%. The SP500 would've returned x%.

Then house apples + work and tenants and indigestion at times could be kinda compared to stock market apples.

Bottom line is headache factor and how good you are at real estate. If not so much, divest into S&P.
0 Reply
Elliot Shoener
Real Estate Broker · Atlanta, GA · Member since 2019 · 34 posts · 23 votes
3y
Investing and building wealth in a long term approach. This question 12 months ago, I would have told you to refi, take the 30 year mortgage at low 3% and cash out equity. Take that equity and place it into the S&P fund which historically should yield you 8% to 10%. This way you'd keep both and remain diverse. The cash out rate would not have been more than the average return on the S&P so you'd benefit from the spread or be better off. In today's world rates are high and the market is likely to head more south before north. I can tell you what I am doing personally. Because we feel real estate will go down before it returns (Atlanta Market), we are placing our cash into stocks, cost averaging in over the next 6-8 months, buying the dips in well known companies. This means we'll keep our current 22 home LTR in tack, as selling would be at a discount to future pricing, but putting our money to work. We also converted 2 LTR to STR which has been amazing, but that is market specific. If you're on a 15-year, then I assume you're not going for cashflow, but the higher ROI on the STR could allow some investment in stocks. Again, stay diverse. Ultimately, Pain = higher ROI. So tenant can be tricking, and STR tenants can be more so, but the reward is better. You need to decided if you want to take on a little pain now, for a better future ahead. Happy to jump on call to discuss more what I am doing, buying, investing in if interested.
1 Reply
Tony Kim
Rental Property Investor · Los Angeles · Member since 2018 · 844 posts · 1k+ votes
3y
Quote from @Marek Kucharski:

My wife and I have three houses that we rent out. This journey started about 10 years ago. We have 15-year mortgages on these. The houses are worth about $800K (TX). We are very happy with how these houses appreciated; we put very little money down and were rewarded handsomely. Of course, this was no bed of roses: we put a lot of work into these - roof leaks, flooded floors, painting, clogged toilets, annoying tenants - you name it.

Today, we are contemplating selling one house and putting the profits into SP500. What makes us contemplate this is some back testing. For example:
- The first house was purchased in 2013 for $145K. That house is now worth $280K.
- If I was to invest $145K in SP500 in 2013, I would have about $500K

I know that the past is not the prologue, but I also know that historically housing trails the SP500. That said, in 2013, we were fresh out of grad school and did not have $145K to invest in the market. So, buying a house with 5% down was the only option. Today, we could sell one house or more and invest a larger sum for the long haul.

We have tenants moving out in the spring and we are considering selling. The house in question happens to be a house we lived in recently and we could sell it and not pay taxes on the sale. Do you think we should pull the trigger and put the money into the market? Thank you for your advice.
Relevant details:
- Household income about $250K, which means that we cannot deduct rental losses
- All houses have 15-year mortgages , which means that they do not cash flow well. We are either in the red or breaking even depending on luck in a given your. Tenants are paying off our mortgage.
- We could also sell, invest the money, and buy another rental (re-leverage)

If you are able to take advantage of the IRS Section 121 exclusion, then selling is a great option!
With that said, since you obviously don't need supplemental cash-flow, how many more years do you have left on the mortgages? 10 or so years from now, you might be very happy with three paid off houses providing you with very nice monthly income for your retirement. I understand that historically speaking, a stock index investment will probably yield a higher unrealized gain, but it would be exactly that.... an unrealized gain. With your three paid off homes, you'll be establishing generational wealth that will provide you with very good cash-flow for as long as your family owns and manages them properly.
Also, since you make a healthy income, why not DCA into the stock market without selling your homes?
2 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

I agree with your plan and I actually going to that route as well, reason is becoz index and bond is way way way too cheap right now so it has room to expand. Real estate not so much, but it wouldnt crash either too.
A 10% return in REI is much better than a 20% return in the Stock Market. Using percentages to make decisions regarding REI is at best misleading,...and most likely a lie
that I agree to certain points.....
What points are uncertain?

1. the repair cost dude........The hidden untangible cost that kept coming at me LOL LOL,

also another thing:
2. when rental price goes down, I can not hedge it. With portfolio of investment I can hedge it so I am not losing money LOL

How do you "hedge" declines in stock investing? Your saying playing options?
When you long 100 stock you are 1.0 delta ; to hedge it buy 2 atm put ( delta 0.5 * 2) ; so the delta becomes 0 , we call it delta neutral.
If delta is 0, if stock market crashes 99% you don't lose money lol :)
1 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

I agree with your plan and I actually going to that route as well, reason is becoz index and bond is way way way too cheap right now so it has room to expand. Real estate not so much, but it wouldnt crash either too.
A 10% return in REI is much better than a 20% return in the Stock Market. Using percentages to make decisions regarding REI is at best misleading,...and most likely a lie
that I agree to certain points.....
What points are uncertain?

1. the repair cost dude........The hidden untangible cost that kept coming at me LOL LOL,

also another thing:
2. when rental price goes down, I can not hedge it. With portfolio of investment I can hedge it so I am not losing money LOL
1 - Repair costs are minor items compared to the gains from appreciation and added cash flow when you move the equity forward...before big repair costs hit.
2 - Why would rental prices go down? If you have a lease, the rents stay the same.

If you start with the same amount of cash, and you invest in either the stock market of RE, you are automatically ahead with RE at that start.

meaning rental home price.

if I have negative equity, there's no way I can hedge for home value dropping. With index it's itsy-bitsy. If one is smart and quick enough, the chance of losing money is smaller.
0 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
This is the concept that people in biggerpocket doesn't understand. Exactly at your point.

So how come housing trails SP500. Seems crazy right, who is the input and what's the input.

The dark secret is the following.

Fed prints money at certain percentage, we call it M2 money growth, usually it grows by 5-6% during QE normal times. Because of this new dollar circulation, it goes to banks. From the bank, that money is reinvested into stock market AND real estate. That's why at typical year home appreciation is 6-7% per year and s&p is also growing at 7-8%.

When Fed burning the money, you see the same effect like today where index dropping and home price relatively flats.

So both investing at index and RE has its pro and cons. The major question is actually, in what sector you're good at ???
If you are expert at both, you can do so many wonderful things LOL
2 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

I agree with your plan and I actually going to that route as well, reason is becoz index and bond is way way way too cheap right now so it has room to expand. Real estate not so much, but it wouldnt crash either too.
A 10% return in REI is much better than a 20% return in the Stock Market. Using percentages to make decisions regarding REI is at best misleading,...and most likely a lie
that I agree to certain points.....
What points are uncertain?

1. the repair cost dude........The hidden untangible cost that kept coming at me LOL LOL,

also another thing:
2. when rental price goes down, I can not hedge it. With portfolio of investment I can hedge it so I am not losing money LOL

How do you "hedge" declines in stock investing? Your saying playing options?
When you long 100 stock you are 1.0 delta ; to hedge it buy 2 atm put ( delta 0.5 * 2) ; so the delta becomes 0 , we call it delta neutral.
If delta is 0, if stock market crashes 99% you don't lose money lol :)

To be fair, 99.8% of readers here have zero clue what you just said. It could be re-written under a post of "How to fly a King Air" and most would equally accept it.
When most hear of playing the market in decline, they go to either (a) margin account for div position and hope n pray to avoid margin call's, or (b) playing options. And as we know, most should NOT play options, it is playing with nuclear power. When it goes good it can be so good, when it goes wrong, and it's soooo many times more easy to go wrong then right, it's bad, so very very bad, like entire portfolio destroying bad.
As i mentioned before in NYSE investing, it's about commanding knowledge to act as own active trader.
Mutual funds are trash! All the time, every time, TRASH. We know this. And that's the level of capability most have. So MF vs REI, it's not even close, Real Estate by a mile.
And don't touch on bonds, it's simple for those in command of the knowledge but most are not, too many get into horrible bonds of various assortment. And let's not even touch on "Financial "NON" Advisors" which is like calling an insurance sales person a "disaster mitigation advisor".
0 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

I agree with your plan and I actually going to that route as well, reason is becoz index and bond is way way way too cheap right now so it has room to expand. Real estate not so much, but it wouldnt crash either too.
A 10% return in REI is much better than a 20% return in the Stock Market. Using percentages to make decisions regarding REI is at best misleading,...and most likely a lie
that I agree to certain points.....
What points are uncertain?

1. the repair cost dude........The hidden untangible cost that kept coming at me LOL LOL,

also another thing:
2. when rental price goes down, I can not hedge it. With portfolio of investment I can hedge it so I am not losing money LOL

How do you "hedge" declines in stock investing? Your saying playing options?
When you long 100 stock you are 1.0 delta ; to hedge it buy 2 atm put ( delta 0.5 * 2) ; so the delta becomes 0 , we call it delta neutral.
If delta is 0, if stock market crashes 99% you don't lose money lol :)

To be fair, 99.8% of readers here have zero clue what you just said. It could be re-written under a post of "How to fly a King Air" and most would equally accept it.
hahaha what if we say the wall st guy is not stupid they know how to protect assets, options are just like insurance premium to insure when the unexpected happen real estate, the question would be are you using ACV or replacement cost method LOL

it's in all those details sometimes we found opportunities, both in real estate and stock index.

The good thing about real estate is, many opportunities can't be seen by many potential buyer; while in stock vesting, opportunity is grabbed so quickly by machines, money managers,etc. it's much easier to buy low and sell high in real estate as the competition is smaller and the time gap is smaller. not so much for the stock, sometimes opportunity only available in one day.
i agree stock is not for most people, its out of their reach.
2 Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
3y
Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

I agree with your plan and I actually going to that route as well, reason is becoz index and bond is way way way too cheap right now so it has room to expand. Real estate not so much, but it wouldnt crash either too.
A 10% return in REI is much better than a 20% return in the Stock Market. Using percentages to make decisions regarding REI is at best misleading,...and most likely a lie
that I agree to certain points.....
What points are uncertain?

1. the repair cost dude........The hidden untangible cost that kept coming at me LOL LOL,

also another thing:
2. when rental price goes down, I can not hedge it. With portfolio of investment I can hedge it so I am not losing money LOL
1 - Repair costs are minor items compared to the gains from appreciation and added cash flow when you move the equity forward...before big repair costs hit.
2 - Why would rental prices go down? If you have a lease, the rents stay the same.

If you start with the same amount of cash, and you invest in either the stock market of RE, you are automatically ahead with RE at that start.

meaning rental home price.

if I have negative equity, there's no way I can hedge for home value dropping. With index it's itsy-bitsy. If one is smart and quick enough, the chance of losing money is smaller.
The only way you should have negative equity is if all three of the following happens:
1 - You buy the property at full value, with no discount
2 - You buy the property with no DP or very small one
3 - The property Value goes down immediately after you buy it.
...and, it only matters if you plan on selling the property when the PV went that low. If you are not planning on selling, then you just keep taking the CF and wait until the PV returns or is at least not negative, then sell and move on.
1 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

I agree with your plan and I actually going to that route as well, reason is becoz index and bond is way way way too cheap right now so it has room to expand. Real estate not so much, but it wouldnt crash either too.
A 10% return in REI is much better than a 20% return in the Stock Market. Using percentages to make decisions regarding REI is at best misleading,...and most likely a lie
that I agree to certain points.....
What points are uncertain?

1. the repair cost dude........The hidden untangible cost that kept coming at me LOL LOL,

also another thing:
2. when rental price goes down, I can not hedge it. With portfolio of investment I can hedge it so I am not losing money LOL
1 - Repair costs are minor items compared to the gains from appreciation and added cash flow when you move the equity forward...before big repair costs hit.
2 - Why would rental prices go down? If you have a lease, the rents stay the same.

If you start with the same amount of cash, and you invest in either the stock market of RE, you are automatically ahead with RE at that start.

meaning rental home price.

if I have negative equity, there's no way I can hedge for home value dropping. With index it's itsy-bitsy. If one is smart and quick enough, the chance of losing money is smaller.
The only way you should have negative equity is if all three of the following happens:
1 - You buy the property at full value, with no discount
2 - You buy the property with no DP or very small one
3 - The property Value goes down immediately after you buy it.
...and, it only matters if you plan on selling the property when the PV went that low. If you are not planning on selling, then you just keep taking the CF and wait until the PV returns or is at least not negative, then sell and move on.

looking at RE market value vs the index that already rebounds today.
it seems to buy a house with cash and sell it in 2026-2027 would be a good idea, easy 100k to be made in a few years.
0 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

I agree with your plan and I actually going to that route as well, reason is becoz index and bond is way way way too cheap right now so it has room to expand. Real estate not so much, but it wouldnt crash either too.
A 10% return in REI is much better than a 20% return in the Stock Market. Using percentages to make decisions regarding REI is at best misleading,...and most likely a lie
that I agree to certain points.....
What points are uncertain?

1. the repair cost dude........The hidden untangible cost that kept coming at me LOL LOL,

also another thing:
2. when rental price goes down, I can not hedge it. With portfolio of investment I can hedge it so I am not losing money LOL

How do you "hedge" declines in stock investing? Your saying playing options?
When you long 100 stock you are 1.0 delta ; to hedge it buy 2 atm put ( delta 0.5 * 2) ; so the delta becomes 0 , we call it delta neutral.
If delta is 0, if stock market crashes 99% you don't lose money lol :)

To be fair, 99.8% of readers here have zero clue what you just said. It could be re-written under a post of "How to fly a King Air" and most would equally accept it.
hahaha what if we say the wall st guy is not stupid they know how to protect assets, options are just like insurance premium to insure when the unexpected happen real estate, the question would be are you using ACV or replacement cost method LOL

it's in all those details sometimes we found opportunities, both in real estate and stock index.

The good thing about real estate is, many opportunities can't be seen by many potential buyer; while in stock vesting, opportunity is grabbed so quickly by machines, money managers,etc. it's much easier to buy low and sell high in real estate as the competition is smaller and the time gap is smaller. not so much for the stock, sometimes opportunity only available in one day.
i agree stock is not for most people, its out of their reach.

Wow, yeah, HFT has TOTALLY changed how I trade and invest on the market, damn machines! For example, I barely touch options anymore, I almost exclusively just sell options now. The bot's own the street now. And I am 90%+ div investments, when it comes to the "street".
REI, I can do SO much more. It's much more comprehensible for the "average "Doe's"". The speed of action is much more attainable and actionable for most. And what i consider most important, RISK exposure, far better in REI then the market.
I play both, but, I am more of what I would call a "blood" investor because i only buy "when there's blood in the streets".
0 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y

There's a pattern in this SF i NorCal market, all home prices are adjusted -150k to -200k in one single year, I see this as buying opportunity similar when SPX is at 3600...

The difference between the two is, the SPX stays at 3600 only in few days ; but home with so much discount is there available in Zillow for months.

blood is everywhere now, be a vampire :)
0 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

I agree with your plan and I actually going to that route as well, reason is becoz index and bond is way way way too cheap right now so it has room to expand. Real estate not so much, but it wouldnt crash either too.
A 10% return in REI is much better than a 20% return in the Stock Market. Using percentages to make decisions regarding REI is at best misleading,...and most likely a lie
that I agree to certain points.....
What points are uncertain?

1. the repair cost dude........The hidden untangible cost that kept coming at me LOL LOL,

also another thing:
2. when rental price goes down, I can not hedge it. With portfolio of investment I can hedge it so I am not losing money LOL
1 - Repair costs are minor items compared to the gains from appreciation and added cash flow when you move the equity forward...before big repair costs hit.
2 - Why would rental prices go down? If you have a lease, the rents stay the same.

If you start with the same amount of cash, and you invest in either the stock market of RE, you are automatically ahead with RE at that start.

meaning rental home price.

if I have negative equity, there's no way I can hedge for home value dropping. With index it's itsy-bitsy. If one is smart and quick enough, the chance of losing money is smaller.
The only way you should have negative equity is if all three of the following happens:
1 - You buy the property at full value, with no discount
2 - You buy the property with no DP or very small one
3 - The property Value goes down immediately after you buy it.
...and, it only matters if you plan on selling the property when the PV went that low. If you are not planning on selling, then you just keep taking the CF and wait until the PV returns or is at least not negative, then sell and move on.

looking at RE market value vs the index that already rebounds today.
it seems to buy a house with cash and sell it in 2026-2027 would be a good idea, easy 100k to be made in a few years.

Mama said, never give away something of value. I am gonna break that rule here, hand away one of my "secret recipes".
If you want "easy" quick $ in Real Estate TODAY, NOW, in THIS market; buy entry level / affordable housing in solid B class SATELITE markets, when the trendline paces behind the primary market, and you do your acquisition assessment utilizing replacement cost value for a baseline, and your purchasing BELOW that baseline. It's a simple play on time, gravity is going to pull that price up outpacing standard appreciation. Make sure it does not have a significant net outflow of population, that it's stable. And to really hit the bullseye, know the vectoring of inventory and get in as that existing stock inventory is starting or soon to "wash-out". NOT after, BEFORE.
Satellite markets are where the big $ will be made the next 18 months.
That's my 1 "freebie".
3 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

I agree with your plan and I actually going to that route as well, reason is becoz index and bond is way way way too cheap right now so it has room to expand. Real estate not so much, but it wouldnt crash either too.
A 10% return in REI is much better than a 20% return in the Stock Market. Using percentages to make decisions regarding REI is at best misleading,...and most likely a lie
that I agree to certain points.....
What points are uncertain?

1. the repair cost dude........The hidden untangible cost that kept coming at me LOL LOL,

also another thing:
2. when rental price goes down, I can not hedge it. With portfolio of investment I can hedge it so I am not losing money LOL
1 - Repair costs are minor items compared to the gains from appreciation and added cash flow when you move the equity forward...before big repair costs hit.
2 - Why would rental prices go down? If you have a lease, the rents stay the same.

If you start with the same amount of cash, and you invest in either the stock market of RE, you are automatically ahead with RE at that start.

meaning rental home price.

if I have negative equity, there's no way I can hedge for home value dropping. With index it's itsy-bitsy. If one is smart and quick enough, the chance of losing money is smaller.
The only way you should have negative equity is if all three of the following happens:
1 - You buy the property at full value, with no discount
2 - You buy the property with no DP or very small one
3 - The property Value goes down immediately after you buy it.
...and, it only matters if you plan on selling the property when the PV went that low. If you are not planning on selling, then you just keep taking the CF and wait until the PV returns or is at least not negative, then sell and move on.

looking at RE market value vs the index that already rebounds today.
it seems to buy a house with cash and sell it in 2026-2027 would be a good idea, easy 100k to be made in a few years.

Mama said, never give away something of value. I am gonna break that rule here, hand away one of my "secret recipes".
If you want "easy" quick $ in Real Estate TODAY, NOW, in THIS market; buy entry level / affordable housing in solid B class SATELITE markets, when the trendline paces behind the primary market, and you do your acquisition assessment utilizing replacement cost value for a baseline, and your purchasing BELOW that baseline. It's a simple play on time, gravity is going to pull that price up outpacing standard appreciation. Make sure it does not have a significant net outflow of population, that it's stable. And to really hit the bullseye, know the vectoring of inventory and get in as that existing stock inventory is starting or soon to "wash-out". NOT after, BEFORE.
Satellite markets are where the big $ will be made the next 18 months.
That's my 1 "freebie".

hahaha lol so what my mama teaching me is right, buy when there's blood in the street, just keep it for few years, discount is everywhere.
you are super right on b class.
i am only confused about where to buy, James; shall I buy in California, Hawaii or Minnesota :)
0 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
3y
Quote from : James Hamling

If you want "easy" quick $ in Real Estate TODAY, NOW, in THIS market; buy entry level / affordable housing in solid B class SATELITE markets, when the trendline paces behind the primary market, and you do your acquisition assessment utilizing replacement cost value for a baseline, and your purchasing BELOW that baseline. It's a simple play on time, gravity is going to pull that price up outpacing standard appreciation. Make sure it does not have a significant net outflow of population, that it's stable. And to really hit the bullseye, know the vectoring of inventory and get in as that existing stock inventory is starting or soon to "wash-out". NOT after, BEFORE.
Satellite markets are where the big $ will be made the next 18 months.
That's my 1 "freebie".

Completely agree. Bonus if you are buying and or re-purposing assets not even on other's radar.

2 Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
3y
Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

I agree with your plan and I actually going to that route as well, reason is becoz index and bond is way way way too cheap right now so it has room to expand. Real estate not so much, but it wouldnt crash either too.
A 10% return in REI is much better than a 20% return in the Stock Market. Using percentages to make decisions regarding REI is at best misleading,...and most likely a lie
that I agree to certain points.....
What points are uncertain?

1. the repair cost dude........The hidden untangible cost that kept coming at me LOL LOL,

also another thing:
2. when rental price goes down, I can not hedge it. With portfolio of investment I can hedge it so I am not losing money LOL
1 - Repair costs are minor items compared to the gains from appreciation and added cash flow when you move the equity forward...before big repair costs hit.
2 - Why would rental prices go down? If you have a lease, the rents stay the same.

If you start with the same amount of cash, and you invest in either the stock market of RE, you are automatically ahead with RE at that start.

meaning rental home price.

if I have negative equity, there's no way I can hedge for home value dropping. With index it's itsy-bitsy. If one is smart and quick enough, the chance of losing money is smaller.
The only way you should have negative equity is if all three of the following happens:
1 - You buy the property at full value, with no discount
2 - You buy the property with no DP or very small one
3 - The property Value goes down immediately after you buy it.
...and, it only matters if you plan on selling the property when the PV went that low. If you are not planning on selling, then you just keep taking the CF and wait until the PV returns or is at least not negative, then sell and move on.

looking at RE market value vs the index that already rebounds today.
it seems to buy a house with cash and sell it in 2026-2027 would be a good idea, easy 100k to be made in a few years.
Why would you pay full price for a property when you can buy it for 20%?
1 Reply
Joshuam R.
Rental Property Investor · FL · Member since 2016 · 271 posts · 92 votes
3y
@Marek Kucharski
75% RE

15% Stocks

10% fun and shenanigans
0 Reply
Mohammed Rahman
Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes
3y
hey @Marek Kucharski - congrats on both you and your wife's journey so far, seems like you've made a ton of progress and have been enjoying the passive (minus the headaches) income that comes with it.
If you're wanting exposure to the stock market, have you considered just refinancing the properties and then using the cash to invest into the SP500? You can't tax borrowed money.
There's more than one way to approach this scenario and no answer is wrong - just depends on what you're wanting to accomplish. It could be that both of you are no longer wanting the headache and responsibility of being a landlord, and in that case it makes most sense to just start selling your properties and putting the money into the market.
0 Reply
Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
3y

Risk tolerance factors.
Need to know more about YOU and YOUR wife. Don't answer any of the following questions.

What is your age?

Do you have kids?  Is College fund set aside?

Do you own your house?

How stable are your jobs?

What are your investments? Any retirement plans?

Are you tired of REI?

You joined BP in 2016 and this is your only post. You have three REI investments, so you are a Seasoned SFH investor. Timing was great for making the investments.

etc etc.

Investment Strategy Past:

Real Estate:  All of your calculations you didn't tax effect your returns. I love the 2 primary out of 5 years no taxes on your property. Can't beat that with 5% down and no taxes. $280k today, less 2013 cost $145k (downpayment plus debt)= $135k less the original say $7k downpayment= $128k x at 0% Tax= $128k. Go live in your other properties for 2 years each. Thats a guaranteed return.

Stock Market:  Let's use the DOW 2013 say 13,000 for easy math. Today 34,000 for easy math. $10,000 say down payment (5% for easy math), but you invested at Dow 13,000; becomes $26,000 less the original $10,000 = $16,000 gain, then you pay taxes.

Normally, you can never go back in history, but. I'll give you the Dow performance, which no one would have ever imagined and give you the $16,000 return, if you will give me the REI return of $128k. I'll even pay you an extra $50k.

Investment Strategy Future:

Stock Market:  To get the same Dow performance going forward from 34,000 that you realized since 2013; it has to go to DOW of 89,000. But as @Joe Villeneuve would say don't follow the percentages. Use dollars, so this is probably not comparable. But you're looking for returns and probably thinking percentages. Will the DOW get to 89,000 in the next 10 years (2013 to 2022 comparison)?
REI- Sell all of your houses and achieve say the $128k for each. Might pay taxes or not depending on if you live 2 years in them. Let's say $128k x 3= $384k. But we don't know if you will live there, so say $250k cash. Now you have many options. 1.  Sit tight for just 6 months and pick up distressed properties.  Know people say you can't time the market, but I disagree for the next six months. 2.  Interest rates are too high, use the cash to pay down your upfront collateral to get your payment lower. Which I disagree with. 3. Move up to an MFH., 4. Take some cash off the table to your items noted above., 5. If it was me, I would take the $250k and triple it in the next 5 years in REI. Or Quadruple in 2 years, depending on the REI product. (Look at Commercial). If you stick with houses, you will need your $280 house to rise to $540k ($280k/$145k x $280k) in the next 10 years. Say interest rates stay in the 6% range for the next 10 years; don't think it will make it to $540k. Plus, Wood and Steel prices have come down to about 1/3 from a year ago. Builders should start to add to inventory, reducing pressure over the next 10 years. Plus, Baby Boomers will be (are) moving out of houses into Rest Homes at a larger rate than new 20's-to-40-year Olds join the population, adding to the housing inventory.
Current Negative Cash Flow- You shouldn't personally care financially. Your making $250k per year. The three properties at 15 year loans, say 4% interest should be around $3,500 per month. You should be able to handle if no tenants. But with tenants, you're paying down the debt and banking around $2,800 per month. And as you have mentioned you're not paying the $2,800; your tenants are. You can go through the weeds and get more precise figures.
Current Negative Cash Flow- if your concerned about it from a management success standpoint, just refi to a lower payment. You're not the typical investor that has to make each deal Cash Flow, especially when your banking $2,800 per month. You only have 6 more years to go on your 15-year terms.
Recommendations:
What I see is your tired of REI. Sell and get out.
Or your tired of REI plus your Day Job. You're at that magical point where you quit your day job and go full time into REI. Yes, you might take a pay cut initially, but this might be a great time depending on your life status. Be careful though. Was it just dumb luck on your REI timing or was it your REI experience. Remember this is your only post on BP since 2016.
Congratulations on your success. Stop and enjoy your success. Thats my pineapple growing below (I'm in Iowa). I could have re-invested, but decided to buy something I enjoyed.

0 Reply
Jay ThomasPro Member
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
3y
The idea of selling a property to reinvest in another may sound good in theory, but often the market is unpredictable, and the return on investment may not be as profitable as you had initially thought. Additionally, real estate transactions are expensive and time-consuming; with 15 year mortgages and holding for 10 years, there’s a risk that you will have spent more money than you could ever gain, even if the property is worth five times what you paid for it. Therefore, while there are great potential gains to be made from investing in real estate, it’s important to weigh up all of the risks and costs involved before making a decision. Ultimately, you may find that investing in the stock market is a more secure and less expensive option.
[email protected]832-889-5607
0 Reply
Marek Kucharski
OP
Member since 2016 · 14 posts · 6 votes
3y
Quote from @Henry Clark:

Risk tolerance factors.
Need to know more about YOU and YOUR wife. Don't answer any of the following questions.

What is your age?

Do you have kids?  Is College fund set aside?

Do you own your house?

How stable are your jobs?

What are your investments? Any retirement plans?

Are you tired of REI?

You joined BP in 2016 and this is your only post. You have three REI investments, so you are a Seasoned SFH investor. Timing was great for making the investments.

etc etc.

Investment Strategy Past:

Real Estate:  All of your calculations you didn't tax effect your returns. I love the 2 primary out of 5 years no taxes on your property. Can't beat that with 5% down and no taxes. $280k today, less 2013 cost $145k (downpayment plus debt)= $135k less the original say $7k downpayment= $128k x at 0% Tax= $128k. Go live in your other properties for 2 years each. Thats a guaranteed return.

Stock Market:  Let's use the DOW 2013 say 13,000 for easy math. Today 34,000 for easy math. $10,000 say down payment (5% for easy math), but you invested at Dow 13,000; becomes $26,000 less the original $10,000 = $16,000 gain, then you pay taxes.

Normally, you can never go back in history, but. I'll give you the Dow performance, which no one would have ever imagined and give you the $16,000 return, if you will give me the REI return of $128k. I'll even pay you an extra $50k.

Investment Strategy Future:

Stock Market:  To get the same Dow performance going forward from 34,000 that you realized since 2013; it has to go to DOW of 89,000. But as @Joe Villeneuve would say don't follow the percentages. Use dollars, so this is probably not comparable. But you're looking for returns and probably thinking percentages. Will the DOW get to 89,000 in the next 10 years (2013 to 2022 comparison)?
REI- Sell all of your houses and achieve say the $128k for each. Might pay taxes or not depending on if you live 2 years in them. Let's say $128k x 3= $384k. But we don't know if you will live there, so say $250k cash. Now you have many options. 1.  Sit tight for just 6 months and pick up distressed properties.  Know people say you can't time the market, but I disagree for the next six months. 2.  Interest rates are too high, use the cash to pay down your upfront collateral to get your payment lower. Which I disagree with. 3. Move up to an MFH., 4. Take some cash off the table to your items noted above., 5. If it was me, I would take the $250k and triple it in the next 5 years in REI. Or Quadruple in 2 years, depending on the REI product. (Look at Commercial). If you stick with houses, you will need your $280 house to rise to $540k ($280k/$145k x $280k) in the next 10 years. Say interest rates stay in the 6% range for the next 10 years; don't think it will make it to $540k. Plus, Wood and Steel prices have come down to about 1/3 from a year ago. Builders should start to add to inventory, reducing pressure over the next 10 years. Plus, Baby Boomers will be (are) moving out of houses into Rest Homes at a larger rate than new 20's-to-40-year Olds join the population, adding to the housing inventory.
Current Negative Cash Flow- You shouldn't personally care financially. Your making $250k per year. The three properties at 15 year loans, say 4% interest should be around $3,500 per month. You should be able to handle if no tenants. But with tenants, you're paying down the debt and banking around $2,800 per month. And as you have mentioned you're not paying the $2,800; your tenants are. You can go through the weeds and get more precise figures.
Current Negative Cash Flow- if your concerned about it from a management success standpoint, just refi to a lower payment. You're not the typical investor that has to make each deal Cash Flow, especially when your banking $2,800 per month. You only have 6 more years to go on your 15-year terms.
Recommendations:
What I see is your tired of REI. Sell and get out.
Or your tired of REI plus your Day Job. You're at that magical point where you quit your day job and go full time into REI. Yes, you might take a pay cut initially, but this might be a great time depending on your life status. Be careful though. Was it just dumb luck on your REI timing or was it your REI experience. Remember this is your only post on BP since 2016.
Congratulations on your success. Stop and enjoy your success. Thats my pineapple growing below (I'm in Iowa). I could have re-invested, but decided to buy something I enjoyed.

My wife and I are government employees. We expect to get state pensions. Mine will be about 90% of highest average salary, hers will be about 75% at 62- no COLA for either one of us. We max our ROTHs every year and put away 10% of our income to our 403Bs. We are both 40. Household income about $250K mid-cost of living area. My primary residence is not paid off - 2.85% mortgage does not make me eager to pay it off quickly.

If I was to go the stock route, I would simply put the $ away in an index for two decades and forget about it.

I am not tired or RE - my wife and I manage everything ourselves. I do most of the repairs, she does the rest. If I thought that I could repeat what I did in RE in the last 10 years, I would never ask about stocks. I would just stick to RE and, possibly buy more rentals. However, when I look at what is available in my local market, the prices and rates, the math does not seem to work out that well.

Somebody here mentioned buying RE at a deep discount - say 20%. How do you pull that off? That could make the math work.
1 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

Quote from @Joe Villeneuve:

Quote from @Carlos Ptriawan:

I agree with your plan and I actually going to that route as well, reason is becoz index and bond is way way way too cheap right now so it has room to expand. Real estate not so much, but it wouldnt crash either too.
A 10% return in REI is much better than a 20% return in the Stock Market. Using percentages to make decisions regarding REI is at best misleading,...and most likely a lie
that I agree to certain points.....
What points are uncertain?

1. the repair cost dude........The hidden untangible cost that kept coming at me LOL LOL,

also another thing:
2. when rental price goes down, I can not hedge it. With portfolio of investment I can hedge it so I am not losing money LOL
1 - Repair costs are minor items compared to the gains from appreciation and added cash flow when you move the equity forward...before big repair costs hit.
2 - Why would rental prices go down? If you have a lease, the rents stay the same.

If you start with the same amount of cash, and you invest in either the stock market of RE, you are automatically ahead with RE at that start.

meaning rental home price.

if I have negative equity, there's no way I can hedge for home value dropping. With index it's itsy-bitsy. If one is smart and quick enough, the chance of losing money is smaller.
The only way you should have negative equity is if all three of the following happens:
1 - You buy the property at full value, with no discount
2 - You buy the property with no DP or very small one
3 - The property Value goes down immediately after you buy it.
...and, it only matters if you plan on selling the property when the PV went that low. If you are not planning on selling, then you just keep taking the CF and wait until the PV returns or is at least not negative, then sell and move on.

looking at RE market value vs the index that already rebounds today.
it seems to buy a house with cash and sell it in 2026-2027 would be a good idea, easy 100k to be made in a few years.

Mama said, never give away something of value. I am gonna break that rule here, hand away one of my "secret recipes".
If you want "easy" quick $ in Real Estate TODAY, NOW, in THIS market; buy entry level / affordable housing in solid B class SATELITE markets, when the trendline paces behind the primary market, and you do your acquisition assessment utilizing replacement cost value for a baseline, and your purchasing BELOW that baseline. It's a simple play on time, gravity is going to pull that price up outpacing standard appreciation. Make sure it does not have a significant net outflow of population, that it's stable. And to really hit the bullseye, know the vectoring of inventory and get in as that existing stock inventory is starting or soon to "wash-out". NOT after, BEFORE.
Satellite markets are where the big $ will be made the next 18 months.
That's my 1 "freebie".

hahaha lol so what my mama teaching me is right, buy when there's blood in the street, just keep it for few years, discount is everywhere.
you are super right on b class.
i am only confused about where to buy, James; shall I buy in California, Hawaii or Minnesota :)

If those are the 3 options, CA, HI or MN, it's a no-brainer; MN all the way!
CA is "the" land of decline. It's an ocean of issues dotted by decent areas, that's No Bueno for this Whetto.
HI is paradise..... with some lava thrown in, lol. It's also land of competition. I don't like having to fight a mountain of competition.
MN has more going for it then I can list here, what matters it's out performed 9/10 locations for a very long time, and that strength keeps growing. There is both one of the top tourist economies AND natural resource economy, where does 1 find that? Then throw on top being a "Mecca" of Bio-Tech, HQ of countless in the medical, financial and insurance industries, and a "capital" location for engineering. There is a economic diversity hard to match. That is why TC is set to over-take Chicago as capital of Midwest in rather near future.
And while the "core" cities of Mpls and St Paul are D-dominated, there circled by deep DEEP red cities, counties and populous making for very LL friendly environment is the places worth being a LL.
As for STR, someone say water front? MN has more miles of waterfront then the next 4 states COMBINED. That's right, MORE then CA, MORE then FL, MORE then them both COMBINED.
MN has vibrant summer economy, vibrant fall economy, vibrant winter economies, and has put in the work to emphasize each individually making for a "beast" of an economy on the whole. hence why it's known as "Good Ole Reliable".
REI wise, one can clear better profit margins on 1 deal vs 4 in OH. That means 1/4 risk, hassle, headache exposure for the same $. If not better.
0 Reply

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