Thats what I am finding here, in the New Haven ghetto you can get stuff that on paper puts out nice cash flow. But you need a Glock to collect rent, or visit.


2-3 family prices in Milford need to fall 50% to get cash flow, or you have to get lucky and find a steal.

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2006 CL500
2009 C300 4matic
1969 280SE
2023 Ram 1500
2007 Tiara 3200

I wish you didn't have to keep insinuating that I am insinuating that I am an investment genius, because the thread hasn't taken a nasty turn as far as I can tell.

I am in a business where when I get an unexpectedly good result for someone, instead of charging a value added service tax like some I know, I may receive professional good will. Sometimes it is the writing off of a 'not paid by insurance doctor bill', a tip on a house, an investment opportunity, car, ect.....

I'm trying to do a spec, I was shooting for this year but I don't know if thats going to happen. You have to really watch every cent in this market and build them cheap. This year we are going to see some record low prices for new construction. There was a time that you couldn't touch new for under $400k, but were going to see some $300k-$325k this year.

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2006 CL500
2009 C300 4matic
1969 280SE
2023 Ram 1500
2007 Tiara 3200

I think that is a horrible idea, Hatt. The only reason for you to do a spec house is if you and some pals had the money laying around to invest and were maxed out on traditional tax sheltered savings vehicles and one of you knew how to build a house.

Mark my words, if you are even able to build a spec house at this stage, I bet you will be paying for it (not the other way around) for ten years.

Buy a ****ty duplex, live in one side and learn how to fix it up yourself. Pay it off and move on.

I'm looking to build a business, I want to build things. Larger projects would be more fun but a spec house is a good start. I don't plan on living with it, heck I'll have it on the MLS as soon as I got the land. I need to raise capital, capital to do larger developments, golf courses, and shopping malls.


I see my other family members slamming down these huge profits on spec homes, I want a piece of the action.

As for the money it would be with cash, mine and my dads who has done some building.

As soon as I am done with school and move out I'm getting a 2-3 family. I found a pretty decent 2 for $300k that is in a really, really good area. So it would probably be a good long term buy.

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2006 CL500
2009 C300 4matic
1969 280SE
2023 Ram 1500
2007 Tiara 3200

We're a bit off track.

I was referring to your original comments regarding investment returns in a SEP.........using the stock market or other traditional vehicles.

You offer some unexpectedly good results from tip via a client or a situation that is not available to the general public. Naturally, your return can be significantly higher than a traditional investment.

You would be an investment genius if you managed the same return via the market...........

Exactly, especially with the current market situation.

Bravo for wanting to build a business, but you have champagne tastes on a beer budget at this point in your career/life.

A spec home in this market? Good luck with that.

Tip: Never believe what anyone tells you about how much money they made on their latest real estate deal. 9 out of 10 people (including family members) are likely lying!

It's not a deliberate lie. They are comparing the purchase price of the real estate with the selling price. When one looks at the two numbers, the profit is huge.

The devil is in the details. Carrying costs, repairs, maintenance, commissions, taxes...........all serve to reduce the profit. These are conveniently forgotten in casual discussions.

Edzachery

Depends on to whom you are talking! I've talked to a fair number of "big hat, no cattle" folks over the years (some friends, some neighbors, some acquaintances, even some family) who like to blow their horns about being some amateur real estate tycoon.

A quick check w/ the county assessor or sometimes MLS will let you know what that person really paid for that home and what they really sold it for.

I don't talk to such people. They most likely drive $hitboxes and I can't stand to be in the same room as them.

Brian,

Berkshire-Hathaway has been banging-down over 20% a year for it's investors, averaging close to 24% for 42 years.

http://www.berkshirehathaway.com/letters/2006ltr.pdf

My Mom & Dad built, owned and operated a 4-plex and a 6-plex in Omaha, NE for over 30-years. Dad was Mr. Fixit on weekends and was a self-employed sales rep. M-F. The LARGE cash-flow stream starts as soon as you pay-'em off. They are a rock-solid way to insure your family has a cash-cow if you don't get carried-away on debt.

I attach the Berkshire-Hathaway vs. S & P 500, since you brought it up.
Berkshire is where I plowed most of my extra working income money since the early '80s.

Yes, it can now cash-flow my lifestyle, and I'm in my mid- 50s.

Do I like real estate? Absolutely, if you either do the necessary work yourself, or can hire a lot of the tradesman work.

What's interesting about Berkshire-Hathaway is the following chart is AFTER taxes for Berkshire, unlike the S & P 500 Index.

Berkshire’s Corporate Performance vs. the S&P 500
Annual Percentage Change
in Per-Share in S&P 500
Book Value of with Dividends Relative
Berkshire Included Results

Year (1) (2) (1)-(2) BERKSHIRE: S & P 500:
1965 .................................................. 23.8 10.0 13.8
1966 .................................................. 20.3 (11.7) 32.0
1967 .................................................. 11.0 30.9 (19.9)
1968 .................................................. 19.0 11.0 8.0
1969 .................................................. 16.2 (8.4) 24.6
1970 .................................................. 12.0 3.9 8.1
1971 .................................................. 16.4 14.6 1.8
1972 .................................................. 21.7 18.9 2.8
1973 .................................................. 4.7 (14.8) 19.5
1974 .................................................. 5.5 (26.4) 31.9
1975 .................................................. 21.9 37.2 (15.3)
1976 .................................................. 59.3 23.6 35.7
1977 .................................................. 31.9 (7.4) 39.3
1978 .................................................. 24.0 6.4 17.6
1979 .................................................. 35.7 18.2 17.5
1980 .................................................. 19.3 32.3 (13.0)
1981 .................................................. 31.4 (5.0) 36.4
1982 .................................................. 40.0 21.4 18.6
1983 .................................................. 32.3 22.4 9.9
1984 .................................................. 13.6 6.1 7.5
1985 .................................................. 48.2 31.6 16.6
1986 .................................................. 26.1 18.6 7.5
1987 .................................................. 19.5 5.1 14.4
1988 .................................................. 20.1 16.6 3.5
1989 .................................................. 44.4 31.7 12.7
1990 .................................................. 7.4 (3.1) 10.5
1991 .................................................. 39.6 30.5 9.1
1992 .................................................. 20.3 7.6 12.7
1993 .................................................. 14.3 10.1 4.2
1994 .................................................. 13.9 1.3 12.6
1995 .................................................. 43.1 37.6 5.5
1996 .................................................. 31.8 23.0 8.8
1997 .................................................. 34.1 33.4 .7
1998 .................................................. 48.3 28.6 19.7
1999 .................................................. .5 21.0 (20.5)
2000 .................................................. 6.5 (9.1) 15.6
2001 .................................................. (6.2) (11.9) 5.7
2002 .................................................. 10.0 (22.1) 32.1
2003 .................................................. 21.0 28.7 (7.7)
2004 .................................................. 10.5 10.9 (.4)
2005 .................................................. 6.4 4.9 1.5
2006 .................................................. 18.4 15.8 2.6
2007's gain........................................... Will be off the Richter Scale.....

Compounded Annual Gain – Berkshire: 1965-2006 21.4% S & P 500: 10.4% 11.0

Overall Gain – 1964-2006 Berkshire: 361,156% S & P 500: 6,479%

Notes: Data are for calendar years with these exceptions: 1965 and 1966, year ended 9/30; 1967, 15 months ended 12/31.
Starting in 1979, accounting rules required insurance companies to value the equity securities they hold at market
rather than at the lower of cost or market, which was previously the requirement. In this table, Berkshire’s results
through 1978 have been restated to conform to the changed rules. In all other respects, the results are calculated using
the numbers originally reported.
The S&P 500 numbers are pre-tax whereas the Berkshire numbers are after-tax. If a corporation such as Berkshire
were simply to have owned the S&P 500 and accrued the appropriate taxes, its results would have lagged the S&P 500
in years when that index showed a positive return, but would have exceeded the S&P 500 in years when the index
showed a negative return. Over the years, the tax costs would have caused the aggregate lag to be substantial.

__________________
'06 E320 CDI
'17 Corvette Stingray Vert

Uh, okay. I do not always get to choose whom I associate with. Most of the time, but not always. *grin*

I do.