Another reason why real estate > stock market | TigerDroppings.com
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I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
33777 posts

Another reason why real estate > stock market

Ok..now that I baited you in, here me out. I was looking at a prospective rental property two weeks ago when I saw a decent house two doors down that was all grown up and looked vacant. I asked a lady across the street what the deal was and she said the owner died about 3 years ago and it has just been sitting there.

I pull up the tax records and find the current owner lives a few states over(guy that died son). I mail them a letter telling them I would like to buy it for a rental and heard back from him today.

We haven't closed on it yet so it could fall through, but I offered him $20,000 cash and he agreed(should have said 15k...frick). The home is worth about $40,000 - $45,000 as is. I'll put about $5,000 in it to get it rent ready and rent it for $700 a month.

Point I am trying to make is, anyone can make easy money in real estate. My gains in the stock market are MUCH slower than that.



This post was edited on 1/5 at 2:40 pm



foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
31305 posts

re: Another reason why real estate > stock market
quote:

I offered him $20,000 cash and he agreed


quote:

rent it for $700 a month.


quote:

anyone can make easy money in real estate.


Being a slumlord isn't easy.


I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
33777 posts

re: Another reason why real estate > stock market
middle class neighborhood. All white.



LSURussian
LSU Fan
Member since Feb 2005
85143 posts

re: Another reason why real estate > stock market
I would not want to have to deal with the type of tenant who rents a house that was recently sold for only $20,000 and can only afford to pay $700/month for a HOUSE.

F that crap.


LSURussian
LSU Fan
Member since Feb 2005
85143 posts

re: Another reason why real estate > stock market
quote:

middle class neighborhood.

quote:

$20,000

Does not compute.

quote:

Alabama
Well, okay......maybe it does.


Janky
LSU Fan
Team Primo
Member since Jun 2011
10161 posts

re: Another reason why real estate > stock market
I chuckled.
This post was edited on 1/5 at 2:48 pm


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yellowfin
Illinois Fan
Coastal Bar
Member since May 2006
75174 posts

re: Another reason why real estate > stock market
My stock isn't gonna call me in the middle of the night when the toilet is overflowing


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rmc
LSU Fan
Zachary, LA
Member since Sep 2004
22717 posts

re: Another reason why real estate > stock market
quote:

Being a slumlord isn't easy.


I can't imagine it is. I do work for a few. One of them manages his own properties as his full time work. He makes damn good money, but he has learned how to handle this stuff for the past 20-30 years.

I know the OP has been in the business for at least a few years now. I don't think its for everyone.

Also, if the OP had owned 20k in Netflix on 1-2-13 it would be worth close to $80k right now.
This post was edited on 4/14 at 10:40 pm


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I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
33777 posts

re: Another reason why real estate > stock market
quote:

I would not want to have to deal with the type of tenant who rents a house that was recently sold for only $20,000 and can only afford to pay $700/month for a HOUSE.


I guess this mindset is why I don't have more competition. I'm up to quite a few rentals now and none of my tenants make less than $40,000 a year. Only had 4 calls of problems since 2008.

Just bringing up discussion that there are other investing and retirement avenues than the stock market. You bring knowledge about stocks, I'm just trying to do the same with RE.


LSURussian
LSU Fan
Member since Feb 2005
85143 posts

re: Another reason why real estate > stock market
quote:

none of my tenants make less than $40,000 a year.
And you believe that is 'middle class'???


I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
33777 posts

re: Another reason why real estate > stock market
In north Alabama, without question.

I equate slumlording with section 8 rentals. Non existent in this neighborhood.

I don't mind sharing the neighborhood.

Brookline Drive
Huntsville, AL
This post was edited on 1/5 at 2:57 pm


LSURussian
LSU Fan
Member since Feb 2005
85143 posts

re: Another reason why real estate > stock market
quote:

In north Alabama, without question.
Ho-lee crap!!

It's worse than I thought!


I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
33777 posts

re: Another reason why real estate > stock market
Estimated median household income in 2011: $45,018 (it was $41,074 in 2000)
Huntsville: $45,018
Alabama: $41,415


Estimated median household income in 2011: $36,894 (it was $30,368 in 2000)
Baton Rouge: $36,894
Louisiana: $41,734



Please bring something to the conversation other than flaming and ignorance.


LSURussian
LSU Fan
Member since Feb 2005
85143 posts

re: Another reason why real estate > stock market
quote:

Please bring something to the conversation other than flaming and ignorance.



quote:

Estimated median household income in 2011: $45,018 (it was $41,074 in 2000)
Huntsville: $45,018
Alabama: $41,415


Estimated median household income in 2011: $36,894 (it was $30,368 in 2000)
Baton Rouge: $36,894
Louisiana: $41,734
Link, please?


I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
33777 posts

re: Another reason why real estate > stock market
First google hit.

LINK

If you have something more up to date, post it. I'm just making a point that $40,000 isn't poor. I even posted the neighborhood. I'd have no problem living on that street. My house isn't much nicer than those.


bamafan425
Colorado State Fan
Denver via Chattanooga
Member since Jan 2009
24755 posts

re: Another reason why real estate > stock market
From the census. 2008-2012.

Huntsville: $48,632
Alabama: $43,160

Huntsville

Baton Rouge:$38,974
Louisiana: $44,673

Baton Rouge


I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
33777 posts

re: Another reason why real estate > stock market
Thanks for the links. The point of the thread is kinda getting off track.

We discuss a lot of retirement options on this thread with very little RE talk. I'm just bringing something new to the table for discussion. The average Joe can make much more money in real estate I believe.


Janky
LSU Fan
Team Primo
Member since Jun 2011
10161 posts

re: Another reason why real estate > stock market
Good find and interesting idea. Do you find lots of these kinds of situations?


I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
33777 posts

re: Another reason why real estate > stock market
I wish I could say I did. I've sent a few letters in the past with no luck.

However, almost all of my rentals have come from distressed properties.

My real estate buddy told me,(I guess you could call him my "mentor")To keep it simple, he said his investment criteria is the 2% rule. If you can rent a house for 2% a month (or more) of the purchase price, he buys it. He is one of the richest people I know and it has worked for me so far.

This one is almost a 3%er. Home run for me.
This post was edited on 1/5 at 3:32 pm


barry
Cincinnati Fan
Location, Location, Location
Member since Aug 2006
39913 posts
Online

re: Another reason why real estate > stock market
quote:

The average Joe can make much more money in real estate I believe.


They can but are you paying cash for these properties? Real Estate is all fine but it can be a balancing act when you have loans out for all these properties. They downside risk is larger and it involves way more of your time.

That being said, I do "live in" flips and its enough for me because i like to do the renovations myself. My wife wants to flip a secondary house though.


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