Stocks vs real estate


#442

Agree. I expect our end state to be something as follows:

RE - generate income
Index funds - diversity of assets, oh shits reserves if something goes sour
Cash on hand - emergence reserves, spending cushion for big ticket items/repairs

Can’t be over invested in any one category.


#443

Quality vs Quantity…


#444

Index funds/ ETFs pay dividends too. You can choose to DRIP or as passive income just like RE :slight_smile:

Assuming some of your houses are pretty old, would you re-build or 1031 to maintain a relatively young RE portfolio?


#445

well current plan (and everything is subject to change) is to wipe all our current places and 1031 to a bigger complex. so by the time the clock runs out on our updates and repair bills start to mount, I am assuming we will be moving the portfolio.


#446

But your come back as a ghost every time (ep 8 for example)…


#447

If you kept moving though, it would hit your property tax and transaction costs… that’s also my concern even though 1031 saves tax.


#448

You have done it very nicely !


#449

@BA_lurker - Are these all 4 or more units? No duplexes I assume? Those would be ideal cities for me as well except replace San Mateo with maybe a Central SJ one :slight_smile:


#450

At this rate, there won’t be enough MF for you guys :grinning:


#451

I still fail to see the attractiveness of multi-family. I like to buy SFHs much more…


#452

Multi-family is always good cash flow, but when you buy those in good school location, the appreciation maintains like SFH long term.

If you plan to hold for long term, say 20 years, go for multifamily, excellent cash flow.

Always prefer 4 Plex or bigger as long as you are ready to take care tenant and other hassles of rental homes.

The only issue here is you are competing with fellow cash rich investors, hard to get in desirable locations, easy to get during down turn period.


#453

The sfh rentals as a business is a new phenomenon. It really didn’t exist before the 2008 crisis. Homeowners would always bid house up to make the cap rate too low. If you want high caps, meaning high profits, the mf is the way to go. I have made ten times my money on refis and cash flow on my Sacramento mf. Probably another 10 times equity left.
How many houses will return 20x. The recent phenomena will revert to norm. It is already happening.
BA rents are flat since 2015


#454

True.

See how this person (ex-VP/director oracle) turned into RE investor. The lowest studio rent is appx $2300 range in San Mateo.

https://sridharequities.com/case-studies/


#455

"
When I asked about a well-read opinion piece by Don Lindsey, an influential landlord’s advocate in Alameda, that charged Sridhar with “acting out of panic” by quickly issuing the mass evictions last month, Sridhar lashed back. “He’s small-time. I don’t care about what he thinks.”
"


#456

Yes, Sridhar Equities is not good with tenants, they squeeze them and have lot of disputes.

I am not showing him as example for good landlord, but showing how much he is using apartments/multiplexes to gain wealth.


#457

So Sridhar is more manch and less dragonboy?


#458

he’s more of an asshole. successful asshole investor.
i am small time, so what i say has no bearing


#459

I think you overstated the quality of multi-family homes and understated the quality of SFHs. If you want high caps, you can always go to a lower end neighborhood, purchase condos, or do both. That is what I have done and so far it has worked out for me handsomely. I was able to achieve cap rates of over 10 for some of the condos and SFHs that I purchased in the East Bay. Not sure if you can say the same about multi-families…


#460

Do you mean,
(assholeness? manch sfdragonboy)


#461

Just because dragon wasted money buying his tenants useless Christmas gifts? Pleeeeeaaaase.