Hello BP Friends - Not sure where to post this, and looking for feedback. We are a couple of newbies ages 50 and 54, residing in NYC, and have been advised by an experienced investor (from BP) that we're too old to be getting into the game. He suggested that we take 500k in IRA money and roll it into a Roth IRA funded by notes (from his company). Next, completely divest ourselves from the stock market and invest the rest (about) 400K in various note funds, which return a minimum of 12%. Finally, keep $100k as cash reserves. He says this is the wisest thing to do because the returns are better than rentals, without any of the headaches. He says we're too far along in our timeline for buy and hold. Regarding any other strategies, he says for every "success story" on BP, there are 50 people you don't hear about who lost their shirts. Am I missing anything in this equation? All feedback greatly appreciated!

LOL. It's never too late...unless you don't start at all. Let me put it another way. 2 years from now, if you're asking that same question, you should feel ashamed. Let me repeat. It is never too late...unless you never start. You are most definitely not to old for buy and hold. I can show you where you can start getting cash flow in less than a month, and never have to spend your money...you will be using it though...many, many times. It doesn't take that long to get into it and there are so many different ways to do it, you just follow the one(s) that work for you. Oh, and age has nothing to do with "losing your shirt". Whether you are 54 or 24, if you you lost your shirt, you would still need to get dressed again.

@Daphne Barber - First forget the age thing your never too old - there are these companies called property management firms that actually exist and can handle your rental portfolio for you. Really - they exist. I am a note investor and yes you can get 12% return (or potentially more if you invest in NPN's). While notes are great, having a balanced portfolio would be my recommendation. I started with BRRR properties and still have several rentals, which will be paid off in 15 years and essentially I put no money in them as I cashed out refinanced. If you bought a $250k property, put 20% down and financed 15 years, say the property did not cash flow - at the end of 15 years you would have a property free and clear. That same 50k over 15 years would be $270k making 12% year over year. Would the property appreciate 10% over 15 years? There is no right or wrong answer, it is more what your preference is and where your comfortable investing your $. Having someone tell you one is better than the other is their personal preference. I would talk with several investors and understand the process of each and do what suits you best. Just my 2 cents.

Newbies with money and the sharks are circling. First of all being a poster on an open web site doesnt mean squat in terms of credibility. Invest with me. You can make 12% or 100%!! Anyone heard of Bernie Madoff? If returns were so assured with no risk why would anyone invest in anything other than what these guys are peddling? There are a million ways to make money. All have risks. There is no single best way to invest. Educate yourself and make your own decisions. Never put more than 10-20% of your nest egg in any one investment. 50 is not too old to invest but it is too old to take stupid risks based on "well known" personalities on a web site.

I don't think Jeff is a big deal here on BP at all. I wasn't going to say anything, but after restating it a few times I have to say not all are in awe. LOL Anybody who has only one pony that can only do one trick isn't that impressive. Why not a stable of thoroughbreds that can do all kinds of things? When he recommends someone bet their nest egg on his one little pony? My opinion did not rise, that's for sure. Joe and Andrew are far more impressive to me than Jeff. If one rushes this RE thing, they are bound to stumble. When you're swinging for the fences, you strike out a lot. Do what makes sense to you and learn about it first. You have time. Lastly, you mentioned wanting to hit an after tax number monthly. Lending and flipping are the highest taxed activities you can do. I had to go over this same thing with my bro in law, who is a high income earner. Complains about taxes, then tells me about his latest sale and new developments. How he flipped that. Dude- build an apt bldg and hold it. Cost segregate if you want. Do a monetised installment sale, maybe. Gotta hold for 366 days with rental intent then the tax gifts rain upon you. Holding inventory takes you to the same tax slaughterhouse as all your w-2 frends. Earning interest is worse. Learn and diversify. Keep it simple. Welcome to BP and the wonderful world of RE!

Notes are a % of return based on one use of the funds you use to get in. You do with notes the same things you do with properties. You can hold them, flip them, even rehab them. If you just buy them to hold, however, any return on investment is an illusion. Notes are exactly like properties (minus the tenants), but you still need to move your cash "through" them and not just "to" them. In other words, your cash can't just stop there...or you are losing. Whether you ride the note or the property bus, the money must be moving in and out of the different buses, and every time you get off you have to take a new "friend" with you...in the form of cash profit or cash flow. That's the real secret to building cash flow fast....keep your seed money moving through one vehicle through the next...and not stopping in any of them to enjoy the view. Never spend your seed money...use it an infinite number of times though. This way, your returns are faster and not restricted to 12% per year. You're going to say I'm nuts, but do it right and your should have over a 100% Cash on Cash return per year.

https://itunes.apple.com/us/podcast/old-dawgs-rei-... Description Welcome to the Old Dawg's REI Network where cash flow is king, real estate investing the means, so you can enjoy your retirement dreams! Your host is Bill Manassero who started investing in real estate at the youthful age of 58 years. In this show, he will share his real-life successes and blunders as he seeks his quest to acquire 1,000 doors/units in 6 years. This podcast is a fun, information-packed program that features knowledgeable, engaging guests who will provide practical and easy-to-understand tips on how to succeed in real estate investing. Geared toward 50plusers seniors who are approaching retirement or already there, each episode addresses real estate investing in light of the challenges of retirement living and fixed incomes. No affiliation but heard a few episodes. Good Luck!

50 too old for REI - Notes vs Rentals vs ?

Karen O.

NYC, NY · Member since 2016 · 617 posts · 456 votes

9y

This was a great thread. Thanks, Ms. Barber.

There are other note and note fund guys on BP. No harm in consulting with one or two more.

I happen to agree that all the eggs in the basket, at our age, is just as scary a proposition as another market correction/collapse as we near retirement. As a relative newbie, I think diversification is still key.

Also, did you mean to move into an SDIRA or a SDRoth? Move to a SDRoth if you're able to pay the taxes on the IRA conversion then all interest would be tax free. Move to SDIRA to invest in RE notes, frnds, crowdfunding, private lending, etc. Taxes paid upon distribution.

50 too old for REI - Notes vs Rentals vs ?

Most Popular Reply

99 Replies