A must have in a Portfolio

[pyriel]

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I've been reading alot of post here and I had never read anyone bring up real estate as part of their portfolio. We've all talked about gains and losses, short term and long term holds but no one really ever mention real estate as part of their portfolio. I wonder why? I have had gains of as high as 30% cash on cash return per year on my real estate. Does anyone have real estate in their portfolio? How are they faring agains their stocks. I got a 300% cash on cash return on my last deal (last year) and I still have the property. Can someone tell me their experience? I hope that I am not bringing a topic that is not allowed at this site. It is just that real estate is part of my retirement portfolio and would like to hear from others as well.

 

[tsptalk]

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pyriel -
This is a great place to talk about real estate. I had mentioned last spring about the building I was buying. I have to run so I'll just repost it. The only change from the initial post is that I did not rent it out, but rather I ended up putting an art gallery/ antique gallery in it. That was so I can get an SBA loan and my wife and I always wanted to own an art gallery...


Posted: Sat May 29th, 2004 06:40 pm

thinks wrote: [/b]

Tom, it would be interesting to hear about your real estate plans for investments... maybe starting another thread? Are you thinking along the lines of renting or more like a 2nd home, land or something else? I'll have to look at that link when I get time and look into getting his books.

thinks -
For about a year now my wife and I have been toying with the idea of buying somesort of investment property. Wefound areally neat100+ year old retail building in the downtown area where I live. Italso has a couple of apartments in it. We plan to lease it out and maybe use the retail spaceourselves someday if we can retire from our day job while we're still young.

I'm noreal estate investment guru but I've been reading about thebenefits ofRE and so we decided to take the plunge. We still haven't closed on the deal. It's been one of those catch 22 situations. I don't want to get tenents to sign leases because I don't officially own the building yetthe bank is hesitant to lend money without leases signed. I have people interested and I just need to get them to sign letters of intent.

It's a much bigger hassle than investing in stocks, but it's that OPM that I like.

 

[pyriel]

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Tom, thanks for letting me know that I am not off the wall on this subject. I'd like to tell you my experience on a property I just acquired recently. I bought a foreclosed8 unit apt for $240K. I offered 10% down ($24K). I didn't have the money so I went to my other bank and borrowed $25K (OPM) for downpayment. The bank who owned the apt gave me a mortgage for $216K (OPM) for 15 yrs and 7.5 interest. My monthly payment came up to $2003.00 plus car, car insurance, apt insuranceand yard cleaning monthly and expenses, I have expenses of about $4k. I researched Section 8 (GHURA) with the government in which they subsidized low or no income people. Rent is paid automatic to my checking account. I averaged about $5600.00. So I have + cashflow of $1600.00 per month or $19,200.00 per year with zero money coming off my pocket. I went ahead and put back the $19,200 I earned last year for renovation. I am currently refinancing for $300K and I only owed $200k on the property. I plan to use the $100K to buy more property later. Now, that is alot better return than any of our stocks combined together. I also bought the property when the market and economy islow. So if it goes up, I should be able to get more rent out of the apartment. By the way, it also helped me out big time with my tax last year.

I wish I can read others experience and start to network with them. I would love to learn their pros and cons as well...