What % of your investment assets = hard assets (ex, Real Estate) | TigerDroppings.com

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Sternocleidomastoid
LSU Fan
La Northshore
Member since Apr 2010
214 posts

What % of your investment assets = hard assets (ex, Real Estate)


And, yes, I am including equity in your primary residence.








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I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
31958 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


95%. Foolish or not, I don't like to invest in things that are not tangible.

I'd be willing to bet my ROI for real estate smokes any of the stock gurus here. I bought another house this year as my primary residence. I utilized a $100 down payment program offered by HUD. The house was picked up for $52,000 with $12,000 more dedicated to repairs(new windows, refinishing the hard woods, new appliances, etc.)

I could sell the house tomorrow for $125,000 or wait a few months and get closer to $135,000.

So I only put $100 of my own money into a tangible asset that I can sell tax free in two years or less (if certain requirements are met) and make a profit of near $50,000 - $60,000 dollars.

I've done numerous deals like this and so can anyone else. The average Joe can find great RE deals if they are patient but I feel like even the most seasoned stock investor can easily get burned.



This post was edited on 8/11 at 11:18 am


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raw dog
LSU Fan
Baton Rouge
Member since Nov 2011
314 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


How did you buy the house for so cheap? Also, what was the time frame from purchase, repairs, available to sell for $100,000+? Really curious, almost sounds like one of those too good to be true deals.





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I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
31958 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


quote:

How did you buy the house for so cheap?


Having knowledge of the local real estate market. I bet I looked at 12 before I found this one. The struggle was finding a solid house in a solid neighborhood. In Birmingham you can buy houses all day for less than $15,000 but you have to worry about getting shot. I'm less than 2 minutes from Mountain Brook, one of the wealthiest suburbs in America.

HUD Homes are always available to owner occupants before investors. There are not a lot of people who qualify for loans that are shopping in the $50,000 price range. They are looking for something more expensive. It's a niche I've been exploiting for years.

The entire process has taken me about 8 months. Mostly due to incompetence at HUD, Wells Fargo and my contractors.



This post was edited on 8/11 at 11:31 am


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raw dog
LSU Fan
Baton Rouge
Member since Nov 2011
314 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


So these homes have previously been foreclosed on and are available at a discount price for potential occupants only?





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I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
31958 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


Yes. If no owner occupants bid on the home, they are turned over to investors.





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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
29688 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


quote:

The average Joe can find great RE deals if they are patient but I feel like even the most seasoned stock investor can easily get burned.


Real estate is an area where you actually can know more about an investment that someone else. This is far less likely to be true for stocks. So yes, the patient investor can do well.

The other difference of course is the amount of time you have to put into it.






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NC_Tigah
LSU Fan
Member since Sep 2003
50585 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


~25%





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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
80167 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


quote:

The house was picked up for $52,000

quote:

Alabama


Were all the tires flat?






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NC_Tigah
LSU Fan
Member since Sep 2003
50585 posts

re: What % of your investment assets = hard assets (ex, Real Estate)








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I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
31958 posts

re: What % of your investment assets = hard assets (ex, Real Estate)








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Fat Bastard
New Orleans Saints Fan
Paradise
Member since Mar 2009
15628 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


quote:

ROI for real estate smokes any of the stock gurus here.


what is your return annually on your RESIDENTIAL rentals? not commercial, not fix and flips, not foreclose and flips. Those returns are astronomical(types of flips). Just give me the residential rental return rate you get annually. I want to compare it with mine. Oh and it has to be a property you have financed,20 to 25% down, not one you bought all cash.



This post was edited on 8/11 at 2:03 pm


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I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
31958 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


I'll try to break it all out later but my last deal wasn't near the homerun. Still better than the market though...

Bought a townhouse for 45k
Put 10k down
3k in new floors, interior and exterior paint.
Current value is 65k

It rents for $600 a month with my monthly at $300.




This post was edited on 8/11 at 3:05 pm


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Fat Bastard
New Orleans Saints Fan
Paradise
Member since Mar 2009
15628 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


quote:

I'll try to break it all out later but my last deal wasn't near the homerun. Still better than the market though...

Bought a townhouse for 45k
Put 10k down
3k in new floors, interior and exterior paint.
Current value is 65k

It rents for $600 a month with my monthly at $300.





nothing wrong with that. I want to say based on what i put down, right now, last two properties combined as an example, my average return annually based on PCF is around 33 or 34%. Like you stated, the market cannot touch that.







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BestBanker
New Orleans Saints Fan
stuck in a moment
Member since Nov 2011
3060 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


About 1/2, not including residential real estate at all because it is not an investment. It's an expense.





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beaverfever
Arkansas Fan
Little Rock
Member since Jan 2008
7634 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


quote:

95%. Foolish or not, I don't like to invest in things that are not tangible.

I'd be willing to bet my ROI for real estate smokes any of the stock gurus here. I bought another house this year as my primary residence. I utilized a $100 down payment program offered by HUD. The house was picked up for $52,000 with $12,000 more dedicated to repairs(new windows, refinishing the hard woods, new appliances, etc.)

I could sell the house tomorrow for $125,000 or wait a few months and get closer to $135,000.

So I only put $100 of my own money into a tangible asset that I can sell tax free in two years or less (if certain requirements are met) and make a profit of near $50,000 - $60,000 dollars.

I've done numerous deals like this and so can anyone else. The average Joe can find great RE deals if they are patient but I feel like even the most seasoned stock investor can easily get burned.
I'm becoming increasingly convinced that smart money should start looking at hard assets. 95 percent is alot but I get what you're saying. The profit from selling a hud house is tax free? And are you just talking about picking a foreclosed house up cheap and making it look respectable before selling it?






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dat yat
LSU Fan
Chef Pass
Member since Jun 2011
1364 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


quote:

The profit from selling a hud house is tax free?

Any house that is was your primary residence for two years is not taxed on gains, within limits.
With HUD you have to live in it for one year before you can rent or sell, if you but it as an owner occupant.

I bought a duplex from HUD as an investor after the intro period was up for owner occupants. I am not allowed to flip it or do a cash out refinance for 90 days.

I'm at about 75% real property.



This post was edited on 8/12 at 11:38 am


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Latebloomer
LSU Fan
Passing through
Member since Jul 2012
151 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


Go to areas that have been in a downturn and are starting to come back. I'm closing on a rental house this week that is selling nearly 40% below its original price and only 9 years old and in great shape.





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NC_Tigah
LSU Fan
Member since Sep 2003
50585 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


quote:

Go to areas that have been in a downturn and are starting to come back. I'm closing on a rental house this week that is selling nearly 40% below its original price and only 9 years old and in great shape.
It's an interesting market.









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tirebiter
LSU Fan
ATL
Member since Oct 2006
5135 posts

re: What % of your investment assets = hard assets (ex, Real Estate)


Close to 18% RE excluding personal residence (commercial and residential, directly owned, not REITs), 40% public equity, 5% small business, and the rest in cash to short duration fixed income, and ~ 90 lbs silver/gold.

I'm not knocking the flipping as being single and able to move easily is one thing, but it would be so cumbersome to move out of our existing house to go flip an owner occupied investment property I would not consider it and my wife would say F no regardless.






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