Tidal Fish Forum banner
21 - 26 of 26 Posts

·
Registered
Joined
·
531 Posts
[Q]captaingeorge originally wrote:
[Q]Scott_nra originally wrote:
6% of $200,000 is larger than 10% of $20,000…how hard is that to understand?
[/Q]??? What do those numbers mean?
And, by the way, a saavy investor has BOTH real estate AND investments in the market.
[/Q]

Jeez George get a calculator.

$200,000 X 6%=$12,000
$20,000 X 10%=$2,000
$12,000 is more money than $2,000
6% is the national average of real estate growth. (Below our market)
10% would be a very good average return on a stock portfolio

If you take $20K and use it as leverage to buy a $200K house as an investment, your investment is WAY better than stocks. (You get to use $198,000 of other people's money to invest with)

More proof for the calculator challenged:
Take the same $20K and invest both ways with annual compounding. After ten years your real estate investment is worth $337,896. Your stock investment is worth $47,159.

$337,896-$47159=$290,737 GREATER GROWTH of the investment.

The math is not too hard to understand huh? If you still don't like or trust real estate that's ok too. It's not for everyone. You have to be able to manage your money and your own affairs and it is certainly not for the lazy. Besides we all need renters.

Just about everyone has stocks due to company 401K plans or something else. As for Savvy, I would say that one would have to be mathematically challenged to continue dumping money into stocks (Other than 401K or other employer plans) instead of going after a plan that makes such a greater return.

Stock can and do go backwards in value. Real estate does not. It might level off for a year or so, but it does not go back.
 

·
Registered
Joined
·
2,539 Posts
Real estate is not for everyone. It may not go backwards, but it does stop. I have a 700k spec house that has been sitting since aug. thats 2500 dollars a month in interest.

I recently found out that one of my rental units was running a chop shop in the back yard. It took 3 roll-offs and 3 tow trucks to clean the back yard.
 

·
Registered
Joined
·
8,432 Posts
[Q]Scott_nra originally wrote:
If you take $20K and use it as leverage to buy a $200K house as an investment, your investment is WAY better than stocks. (You get to use $198,000 of other people's money to invest with)
[/Q]Maybe you should check the battery on YOUR calculator. That would be 180,000 wouldn't it? 180K of debt, by the way. (I also notice that your calculations left out something: Do these "other people with money" let you borrow 180K for free)? Anyone with sense will tell you that one of the first steps towards real wealth is getting RID of debt, not getting more.
You clearly know alot about Real Estate. If you spent even half as much time studying other investments, you would realize how close-minded and foolish you sound. I would never advise anyone to exclude Real Estate from their portfolio. Nor would I advise them to use it exclusively.
 

·
Registered
Joined
·
1,333 Posts
[Q]Scott_nra originally wrote:

Jeez George get a calculator.

More proof for the calculator challenged:
Take the same $20K and invest both ways with annual compounding. After ten years your real estate investment is worth $337,896. Your stock investment is worth $47,159.

The math is not too hard to understand huh?

Stock can and do go backwards in value. Real estate does not.
[/Q]2 things,

1. Your math doesn't include making payments on the $180,000 loan for 10 years.

2. Real Estate has gone down in the past, and will again.
 

·
Registered
Joined
·
4,995 Posts
The banks I have worked with will lend with a down payment of 10% only on a primary residence. For flip or rental they require at least 30% and for that you'll need a successful track record.
 

·
Registered
Joined
·
1,333 Posts
[Q]Scott_nra originally wrote:
As for the debt that is what renters are for. Yes I know that everything is not always roses, but heck, when is it?
[/Q]When a renter calls you to come fix the toilet, it's not an investment, it's a second job...
 
21 - 26 of 26 Posts
Top