Time to Stop Investing.?

Question

I am 73 this year.  I was a real estate agent for several years. When I got my commission, I bought a new pair of shoes, and put the rest in the bank. My back up job was RN.  When I retired in 2000, I moved to the poor part of Santa Barbara County, namely Santa Maria. I dropped my R E Lic.

I bought a new built home for less than half price, of Santa Barbara prices.  That was in 2003. Then the bubble burst,...in 2009 I purchased  the foreclosure next door for less than half price, of the original sale price .  I have consistently  purchased a single family , in the same area , I now own a total of 6 homes.  I have come to the point where I can hire property management , with a good cash flow for my retirement.   I am tempted to purchase a new build, at the same price as older homes are selling. I will require a loan this time< the question is   SHOULD I STOP??

Pat L. · Answer

I always thought when we hit 40+ properties it would be time to stop & that was quite a few years ago. However, we did give up financing anything we bought.

So last week I bought a farm ... (in fact we stole it) & our youngest will live there & run it.

At this stage (of our lives) it's the challenges & winning the bid(s) that make life interesting & the constant cash-flow provides for a heck of lot of security.

So short of stringing yourself out too thin financially, DON'T EVER SLOW DOWN !!!

Good luck

J. Martin · Answer

@Lin Vanderhook

I grew up in Nipomo, then up the Central Coast before moving to the Bay. I'm bullish on the market down there too. But you have to make your own assessment of the long-term prospects.

Congrats on all the prior success, and buying when things were low.. My answer to your question would depend on your personal goals, what your lifestyle is like, your risk tolerance, and what your goals are for passing assets to your heirs.. Do you feel comfortable having a new loan in retirement? Are you doing it just to do it and taking risks you don't need to? Or would it be a meaningful benefit for you, and a tolerable risk? If not, maybe not for you..

I've just seen too many people risk a comfortable situation for never-ending growth for unspecified amounts of cash flow or wealth, without a lot of clarity in why they are doing it. Are you clear about why you are doing it, and how it fits into your lifestyle, goals, and plans? (Beyond being able to do to it, because you can get a loan, and have a property manager and experience..) If so, maybe you want to jump for it!

Hope those questions help, and good luck!

Jeff S. · Answer

I am in the same boat, don't need to do anything but looking anyway. I want to sell anything more I buy though. Have lived through too many bad economic times and have had vacancies that take months to fill after large reductions.

Our market is smoking hot too but insane building everywhere and in everything.

We are just now having $1,000,000 tear downs.

Why do you want another rental?

Jeff S. · Answer

Six is a good number of rentals.  Can you afford a vacancy with a loan? If so then maybe, if not I'd be a little uncomfortable.

Time to Stop Investing.?

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