re: Investment advice

A balance between at least some real estate and some securities are nice. Securities are certainly easier.

Any way, your South Florida cash on cash described, would you mind telling me at what price point and what rent level you achieved this. Most "investors: down there, if that's what you'd call them, are speculating on values increasing, very few have positive cash flow.

I do, but I think you know what I'm talking about. My least expensive condo in Broward I bought for $80K, and is on a canal with one fixed bridge, than intercoastal, than ocean. And the fixed bride isn't one where the boats can lower their masts to get under.

So anyway, what I'm getting at is Investopedia would say cash on cash is cash laid out for a downpayment and p&i payments. They'd be wrong, as sometimes experts are. Many times actaully.


Seasonal rental in Miami Dade where you're at is going to have 6% right off the top going to the government. It's closer to 18%, as it is in Broward County, but let's just use the 6% figure that Miami Dade states.

You're subject to state sale's tax in Miami Dade as well.

If you're talking about your property South of 5th, the cheapest, and I mean the cheapest thing there is probably ocean place. Price tag about $525K. Maintenance fees at least $600 monthly. There are some cheaper, but there are rent restrictions. The rents over there are seasonal (if you can even rent seasonal) are about $4 per sq, foot, so $1900.00 to $3800.00 for the $525K unit. Probably in hte middle.

One of two ways to borrow money on this as an "investment" or a "second" home. Both require a down payment, probabaly between 10-20% depending on your credit worthiness, and if you have above average credit, you should be able to borrow fixed for 30 years at below 3%.

The numbers don't add up with this borrowing situation.

The second way to borrow is 100% on your signature, and you should be able to do this on a 7 year balloon, with a 30 yr. amor schedule. Probably in the 2% range as an unsecured signature loan is always less expensive than a mortgage if you have a strong signature, and a relationship with a smaller bank who routinely does these kinds of loans in South Florida.

Go to a larger bank and try to get this done? Can't do it, they are too smart, and have to be careful due to all the bad loans they made, so a smaller bank has more capacity, and would be more user friendly. So a bank in Iowa as an example would lend me the $525K, no down payment, no mortgage, no collateral for 2ish percent.

So using the best way to buy, you're at $1,950 P&I at a realistic 2ish percent rate (realistic to some of us) per month gross rents, and less for an annual rental, before 6-15% t Miami Dade, $600 monthly for the association dues, non resident property taxes, insurance (which you need in addition to the association's). Property management fees. Vacancy allowance. They are vacant during the summer, unless you have a secret that I'd like to know about.

Now I'm not busting your chops Bigfella, I actually like you. You're kind of a say it all type of guy much like myself. What I'm trying to do is figure out your secret so I can make my properties perform better down there.

I in no way, shape or form cash flowed anything down there, except the first one described above, for several years. And I bought right. I own mostly Intracoastal and Ocean views/access. But I also stay away from seasonal, and stay away from overvalued areas. So I'm in Pompano, LBTS, LP, etc.

But back to topic, a nice balance of all asset classes in a good things. And off topic, please share with me some of your secrets, becuase you have me really curious.

My one mistake down there? I never sold at the top of the market. Did I learn? Yes, I took profit on the equity market run up a long time ago, and I am now selling some of my Florida property. I'll always keep some of both, but every asset class after a run up, I now take profits off the top, and let the rest ride.