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Thanks! I don't hate people, I just get tired of lots of people around me and need the solitude of my office. My timeline is 10 years or less and I could, like

Thanks! I don't hate people, I just get tired of lots of people around me and need the solitude of my office. My timeline is 10 years or less and I could, likely, add 50K a year. I don't have a penchant for gambling, I traded twice in ... ugh... 15 years or so. I stopped because I figured I didn't know enough and wasn't capitalized well. Real estate is great long-term. There are some awesome deals to be had in Tenerife as a lot of people are giving up their speculatively bought houses. You can buy a 1-bedroom apartment in a well-travelled tourist area near the beach. This will cost less than 100K in foreclosure. Buying one apartment a year and renting it out to tourists is a great option, so long as the market has hit bottom, more or less. I don't think the Spanish real estate market has hit bottom, though.

vessenes 16y ago
No problem, I understand completely, and sorry to call you out on gambling, incorrectly.. : ) You might like this book: http://www.amazon.com/Retire-Early-Live-Million-Dollars/dp/1580622011 http://www.amazon.com/Retire-Early-Live-Million-Dollars/dp/1... He gives some advice about real estate investing for income, and suggests that a 'safe' amount of margin is 50% if you may want income from them to live off. So, you could possibly buy two of those apartments now. If the market drops 30% next year, and you have another 50k, buy another one. The first two are still going to cashflow, and you're making a long-term bet here. In my experience, it's hard to time the market, really any market. I remember being desperate to buy a place in Cambridge, MA while the housing boom was going on in the late '90s. 800 square foot condos were selling for $500k+, in two to three days. Now, 10+ years later, you might have made a little money, net. Meanwhile, in 2008, real estate looked 'risky'. Thinking about asset value first, market pricing second can fundamentally change one's decision matrix; this is one of the big points that Value Investors make, repeatedly.
roel_v 16y ago
If they are that cheap, don't buy one paid in full, but buy three with 60% leveraged. Try to rent them out to long term tenants, or at least two of them, and maybe try your hand at the tourists with the third one, see if it can make a significantly higher ROI and get a feel for how much work it is. With real estate, you need to be in it for the long haul. Let your tenants pay the mortgage and put the bit you have left over away so that you can buy a new unit every year or two. Real estate will appreciate with inflation and after 20 or 30 years (or 15 if you want to pay off aggressively) you'll be mortgage free and can retire on the rent. Or you can finance new properties with a mortgage on the equity in the other ones in 5 years... Real estate is awesome like that, but you'll get burned if you see it as a get rich quick scheme.
- wagerlabs 16y ago
  Agreed. My edge here is that my wife (receiving travel agent) gets a flow of tourists that need accommodation. It's not even necessary to rent the units long-term, packing the summer and a few winter weeks, for example, should pay the mortgage.
tansey 16y ago
> My timeline is 10 years or less and I could, likely, add 50K a year. Just a quick note here: With 100k in year 1, plus 50k per year after, for a total of 10 years, you need to get about 11.5% annualized return after taxes and fees. Good luck. :)
- vessenes 16y ago
  $50k plus an additional 50k per year at 10% = $1,006,245.8 (compounded annually). What fees are you referring to? Different investments carry different loads, including nearly no load (or one included in calculations), for say real estate or direct stock purchases.
  - tansey 16y ago
    Ah, yeah I was assuming he meant this year (0% interest) plus 9 additional years of x% interest. I see now that I should have given him another year. Okay, so he only has to return 10% annually. Still extremely difficult. :)
    - vessenes 16y ago
      Many, many value investors have easily beat 10% p.a. over extremely long investment periods. Very very few people who market themselves as investment advisors successfully deliver these returns to their clients, net of fees and taxes.
      - tansey 16y ago
        Maybe from 1950-1999. I do not know of many value investors who returned 10% annual over the last 10 years.

vessenes 16y ago

No problem, I understand completely, and sorry to call you out on gambling, incorrectly.. : ) You might like this book: http://www.amazon.com/Retire-Early-Live-Million-Dollars/dp/1580622011 http://www.amazon.com/Retire-Early-Live-Million-Dollars/dp/1... He gives some advice about real estate investing for income, and suggests that a 'safe' amount of margin is 50% if you may want income from them to live off. So, you could possibly buy two of those apartments now. If the market drops 30% next year, and you have another 50k, buy another one. The first two are still going to cashflow, and you're making a long-term bet here. In my experience, it's hard to time the market, really any market. I remember being desperate to buy a place in Cambridge, MA while the housing boom was going on in the late '90s. 800 square foot condos were selling for $500k+, in two to three days. Now, 10+ years later, you might have made a little money, net. Meanwhile, in 2008, real estate looked 'risky'. Thinking about asset value first, market pricing second can fundamentally change one's decision matrix; this is one of the big points that Value Investors make, repeatedly.

roel_v 16y ago

If they are that cheap, don't buy one paid in full, but buy three with 60% leveraged. Try to rent them out to long term tenants, or at least two of them, and maybe try your hand at the tourists with the third one, see if it can make a significantly higher ROI and get a feel for how much work it is. With real estate, you need to be in it for the long haul. Let your tenants pay the mortgage and put the bit you have left over away so that you can buy a new unit every year or two. Real estate will appreciate with inflation and after 20 or 30 years (or 15 if you want to pay off aggressively) you'll be mortgage free and can retire on the rent. Or you can finance new properties with a mortgage on the equity in the other ones in 5 years... Real estate is awesome like that, but you'll get burned if you see it as a get rich quick scheme.

wagerlabs 16y ago
Agreed. My edge here is that my wife (receiving travel agent) gets a flow of tourists that need accommodation. It's not even necessary to rent the units long-term, packing the summer and a few winter weeks, for example, should pay the mortgage.

tansey 16y ago

> My timeline is 10 years or less and I could, likely, add 50K a year. Just a quick note here: With 100k in year 1, plus 50k per year after, for a total of 10 years, you need to get about 11.5% annualized return after taxes and fees. Good luck. :)

vessenes 16y ago
$50k plus an additional 50k per year at 10% = $1,006,245.8 (compounded annually). What fees are you referring to? Different investments carry different loads, including nearly no load (or one included in calculations), for say real estate or direct stock purchases.
- tansey 16y ago
  Ah, yeah I was assuming he meant this year (0% interest) plus 9 additional years of x% interest. I see now that I should have given him another year. Okay, so he only has to return 10% annually. Still extremely difficult. :)
  - vessenes 16y ago
    Many, many value investors have easily beat 10% p.a. over extremely long investment periods. Very very few people who market themselves as investment advisors successfully deliver these returns to their clients, net of fees and taxes.
    - tansey 16y ago
      Maybe from 1950-1999. I do not know of many value investors who returned 10% annual over the last 10 years.