All Forum Posts by: Chris John

And, for those interested in timeshares, but don't want all of the hassles and expenses, redweek.com has a listing of bookings that people have made that they are willing to rent out.  Honestly, many of them look much cheaper than a vrbo. 

As our children get older and quit joining us at the timeshare, I would definitely consider selling it and just renting weeks on redweek where and when it makes sense.

I'll be the contrarian.  I bought it "used" for $2500 and it came with 2 years of points.  It's a "points" system where you have to competitively log in at exactly midnight 13 months in advance to the day to get the "good/popular" resorts, which is kind of a pain, but we're both teachers and are very flexible during the summer. 

So, we're getting a 2br/2ba for a week in Marina Dunes for around 1k a year.  Plus, we've been able to book some of the other units for cash (very cheap) on days when they're not in use.

In the end, we couldn't hope to get something similar for this cheap in the area and we can definitely book Marina Dunes and then rent the week out for a tidy profit.  Also, we could rent points for around $700 from other members, book Marina Dunes, and make an even larger profit, but I haven't bothered with any of that yet as it seems like too much busywork.  I really should make my children do it for me and split the profits with them though...

Anyway, if you can 1) buy used; 2) get good at booking the tough to get resorts; 3) have a flexible vacation schedule in case it takes you 2 or 3 tries to get your reservation; and 4) have a place you want to go to for a week every year, then I think it could work for you. 

If any of those 4 don't apply to you, I'd definitely skip though.  I feel bad for anyone that buys from the resort though as they're paying over the odds.

@John B.

Can I ask what kind of loans you're getting with 15% down? I'm shocked to see such a low LTV. Thanks

@Sateesh Kumar

Two things to consider about your plan if you're not already:

1.  AB1482 (Rent control for 2+ unit residences)

2.  The differences in loans between a 1-4 unit residence and 5+

Be careful not to buy an asset that will lock you into low rents and accelerating mortgage payments upon each reset.

I was considering 5+ units in California (not the Bay Area though), but decided to buy 4plexes in Florida instead because of those 2 reasons.

Good luck!

@Justin Thind

You talk about a mortgage payment, but do you have a lender that will lend on such a low amount?  My guess is that this would be cash only or you'd be borrowing against a different property to finance this.

Please don't convince anyone else to move to the valley.  I can't get anywhere anymore because there's getting to be so much traffic!  haha.

@Myeasha Jones

In all seriousness, this thread hits close to home and gives me anxiety!  haha.  I've lived in the valley since junior high and got a finance degree almost 30 years ago (blech).  When I looked around for a job, the City seemed the obvious choice, but I couldn't bring myself to live in the city or to try the commuter lifestyle, so I didn't even look.  I ended up with a non-finance, valley job and supplemented my smaller income with real estate.  In the end, I'm happy with my decision, but I've always wondered what would've happened if I'd have given it a go and pursued my education.  Tough choice, for sure.  You definitely have my empathy having to make it! 

Regardless of what you choose, may God bless your path!

@Corey Duran

I'd be more concerned with getting a good deal over buying a specific type of property.  Besides the obvious of property location, affordability, condition, etc. I'd focus on:

(Monthly Income - Monthly Expenses) / Investment $

I know it's all pro forma and percents, but I like to have a general idea of how much return I can expect on each dollar I put into an investment.  Then, compare it to other options to select my best option.  For instance, I might calculate the money you are going to save on rent as part of the monthly income to help with the comparison.

Finally, I'd consider how you think the economy, interest rates, and real estate prices will change in the future.  For instance, I wouldn't buy an office property in San Francisco right now because I'm not sure that it would still be a good deal in a few years with what's going on there...

Good luck!

@Andrew Hogan

I'm not aware of that.  However, if it existed, they would be better off simply becoming turnkey operators and making a bigger profit for themselves, I'd think.  Having said that, good luck (and I'd be interested if they do exist and can provide this service.  haha).

@Vincent Plant

As others have mentioned, don't pay it off unless the rate is higher than you can earn with it.  I'm guessing if you did what @Mike Dymski said, you'd be able to arbitrage the interest that you earn on the 50k with the interest that you pay on your mortgage, making you a few bucks while maintaining liquidity...