All Forum Posts by: Gretchen P.

We are interested in cash flow in a warm market, and plan to hold our properties for a long time. We may not make millions overnight, but unless rents go to about half of what they are now we will never need to reach in our pocket for repairs or a mortgage payment. We wouldn't invest in someplace unlikely to appreciate long-term, and have seen about a 35% appreciation in the properties we purchased and improved in 2017, which we don't plan on, but it sure is nice. I'm not a speculator, and that is what investing solely on appreciation is, our long-term strategy is to create a RE portfolio which can pay itself off in 12 years, which is around when we retire, so we have retirement income from RE. 

I might speculate once I have my long-term strategy in place.

Nicely done Omid! Those little houses look great, you probably got your pick of tenants as well which is priceless. 

@Dan Heuschele, I agree, politicians (and voters) seldom see long-term or unintended consequences of their actions. Someone who is appointed to the city council after 3 months probably has a short-term agenda or is highly ideologically driven. 

@Mike Dymski   ^ x 1000

Here's the thing, your uncle must have $550,000 in the bank if he can buy both properties for that much, why not just use his cash until you have actual equity? 

@Nick if you are self-employed and couldn't make your payments (not just on your real-estate, but on other debt and bills) for a few years without your income, I'd get short-term and long-term disability insurance in place for you and any other breadwinner if you don't have them, they are expensive, but will protect your assets and lifestyle for your family in the event that something happens, regardless of a downturn. Podcast 286 would be a good one to listen to, AJ Osborne recounts his experience with being comatose and having his net worth increase. Stuff happens. 

In very simple terms, unless your properties cash flow you are speculating, and you need to be prepared in the event that the housing market sees a downturn. Many people believe, based on historical events, that states with very high taxes and an unfriendly business climate will not have long-term growth due to out-flow of skilled jobs and people. CA is a state that companies with remote workers who have CA clients avoid hiring in because of the draconian taxes on employers. In an economy where white collar workers are moving to remote positions this doesn't bode well for that reason, and if you aren't tied geographically to your employer, why move somewhere where a 2200 sq foot house is $1 million when you can get a house that size for 350K in other areas without the congestion? There is nothing the matter with speculation, its just more risky, which certainly can garner more reward, but is difficult to sustain long-term. 

Everyone has a different outlook. Because my first primary residence was bought years ago before a down turn (when we were told "it can only go up") we know what can happen. Our investments are bought well, fixed up, and cash flow enough to pay themselves off in about 10 years. Appreciation is the icing on the cake. 

I am curious, are either of these properties rentals or are you counting on appreciation? Could you rent your primary residence out if your job situation or other personal factors forced a move and have cash-flow? 

Personally I haven't considered my primary residence an investment, probably because when I retire I will probably want a different type of home, but unless I move away I will likely spend as much on a replacement or more. What do others think?  

Hi Darren, Thanks for your reply, we decided not to make an offer, as we found another property that we think has a better long-term outlook. The seller provided and paid for the the engineer's report, but I wanted to know if there would be additional costs involved, assuming his estimate was within the ballpark. I'm not sure what accounts for the variance in cost for the piers in CO. 

@Mick Relef if I could find a 4-plex in my area for $170K that had a roof and walls I would buy it in a minute. 

That said, I think there is an adjustment going on in CO, not a crash, but prices are not going up at the insane rate they were. There are a lot of price reductions because people overpriced properties. The rental market is very strong, and if you are in for the long term as long as the cash flow isn't tight downturns can be weathered.