Real estate discussion

wait a second…

I was 1 of 4 offers submitted on the first day for property A. It was listed with no seller’s disclosure and has a private septic original to the 1970’s. I was told the owner went with a “cleaner” offer, where-as my only contingency was an inspection of the septic. Onto the next.

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I’ve been in Real Estate for many years and have owned homes since college.

At the end of 2021, I sold my primary and became a renter for the first time. I could buy, but the house I rent would cost OVER DOUBLE to buy today with a decent size down payment. Why would I buy now? The down payment cash is earning yield, and I don’t have to worry about repairs.

Then I found this site, and now I leased cars and am selling the ones I own, because it worked out cheaper to rent cars vs own.

Maybe that “you will own nothing and you will be happy” thing is becoming a reality.

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A title deed is only as good as your rights to claim and defend that property.

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Leasing cars is only worthwhile if you switch em often and you have good income/savings.

For most financially prudent people, buying is still absolutely the way to go.

Though having said that, I lived in London for 5 years and enjoyed owning no cars, relying on public transport and car sharing (Zipcar/Enterprise) instead.

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I did that in 2007, watched the crash happen, then started loading up on cheap r/e starting in 2010.

Key is to know when to jump back in otherwise it’s all for naught.

Also you will own nothing doesn’t apply for Klaus. He will still own stuff. They key is being part of the small percent of people who own the stuff that others rent. Being a renter is a bad long term strategy for real estate. For cars? Sure those are depreciating assets. Don’t confuse them with real estate.

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Doing the same thing with my cars. I had to own them for tax credit flips with the old EV tax credit scheme. About to get rid of my last vehicle that I own so I can exclusively lease. Ownerships sucks in the sense that I am worried about loss of value with a fender bender or a hailstorm (very common here in CO). Plus I own the risk of depreciation and need to trade my car to the same dealer I am buying another one from to keep rolling my sales tax. Lease is the ultimate luxury because it gives you the freedom and shifts the risk of deprecation to the financing company.

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Isn’t the rule to rent depreciating and by appreciating?

I started leasing because I wanted lower payments for more vehicle… knowing I could buy/finance on the back end if I really liked the vehicle.

Turned out I preferred jumping from car to car and my leases got shorter and shorter. Now I won’t lease anything beyond 24 months… esp EVs.

Real estate is a different story. I did too much settling in the past looking for the best bargain even if it was bad micro location or not the exact floorplan I wanted. Turns out that little extra to get the exact location and home is worth it even if you plan to sell in 5-10 years because that equity will translate to the next buyer.

There’s the other side too where you chase perfection that doesn’t exist. It is a cliche but location location location. Always buy the cheapest house in the best neighborhood, never the other way around.

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Oh yes. Agreed.

I have a guide for the location, location, location rule:

Macro location is tops (like what city, state), then meso location (like neighborhood (southside, eastside) and micro location (backing street, corner lot, etc) are tied for something you can settle on. If you are going for the best hood, then you can probably get a less than ideal micro location, but if you are going to be in a lesser desired meso location, you got to have a corner or elevated lot.

So one of three doesn’t have to be perfect but the macro should be.

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Generally, I agree. Only thing I’d add is that the lack of some desirable micro locations (e.g., cul-de-sac vs T-intersection) usually isn’t a deal breaker, some negative factors (such as backing up to a major road, train tracks, highway, etc) can be a deal breaker for many and be tough to sell during balance or buyers housing markets

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And there there are micro-locations that are a toss up. Some people like being next to a school if they have kids. Others with no kids may hate it having the noise. Same with a park across the street. Things like that.

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Generally speaking, we look at the following criteria for single family property investments:

Absolute must - good comps, positive cash flow, good school area, low crime rates, commutable distance, near transport links (highways, key roads)
Great to have - low property tax, no HOA, scenic view/green spaces

Cap rates are low, but IRR tends to be high because people are always looking for good school districts

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How realistic is positive cash flow in booming areas these days on single family with rates the way they are?

Or am I just jaded by where I live in NY? I’m sure it’s possible, but seems very hard around here. I’d be happy to just be cash flow even.

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South California is the same. Near impossible it seems. I am even seeing flippers losing money around me by buying too expensive.

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The fallacy in this is when no one can afford to pay you…or your property is confiscated. History…

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Or you can get denied accommodation/be evicted for having or voicing the wrong opinion (social credit score)

Yes… that’s why the macro is pretty consistent, everyone want to live in the best city/state that suits them.

But meso and micro have personal factors that differ by buyers… or governed by Feng Shui :slight_smile: .

We thought we wanted to live in an elevated lot but after living there for a bit, we didn’t like the seclusion (who thought?) and the inconvenience of distance from everything. So we moved to a central location but although the lot was gigantic, we were too close to a busy street (we felt the pro of the lot size would offset the con of proximity to noise). We finally ended up with still a central location but a smaller lot and not close to a busy street. Not perfect… but the journey helped us decide what we could and could not live with. And at least the floorplan is great… I think the way the space it laid out is undervalued as many just go for size or room count. Separate master closets is a must. :slight_smile:

IMHO you’re nuts if you want to be a landlord in a place like NY. The laws are virtually all in the tenant’s favor and as a LL you have next to no rights. See also Seattle, San Francisco, etc.

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Just drive to me and I can find you a 200k (with closing costs and basic repairs) home with 2k in monthly rent. HOA of $210 a month, insurance of $600 and taxes around $300 a month. 8.65% cap rate. Great School District, and Section 8 Approved. Looks to be around 20% IRR with a 20% down conventional mortgage at 7% rate. Decently Landlord Friendly part of NJ as well.

Pros: Money

Cons: I’m your neighbor

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