Stretch
Posted on January 25, 2007 - Filed Under Business |
A knock at my door was followed by an interesting question:
"Clifford, my dad is going to help me buy something. I’m debating between a condo and a house. What do you think?"
Welcomed diversion.
On his own accord, he decided to yield to the advice of a certain section of experts that believe now is the time to buy. I believe wholeheartedly this is a buyer’s market.
So my opinion spewed forth. But not in a manner he expected.
Clifford: How many times have you taken a landlord to court?
Buyer: Twice.
Clifford: How often do you call a landlord to fix your problems?
Buyer: Never.
Clifford: Then you should consider being a landlord.
The MLS had some properties in the Long Beach area that, with his dad’s financial assistance, would put him into positive cashflow by several hundred dollars. This is possible due to the properties having multi-unit housing. I told him that right now, the better idea for him would be to rent out the other units and live in one. He’s paying $1450/month in rent and if he lived in the other unit, that would reduce to $650/month.
The decision to forgo all talk regarding ROI, appreciation, tax write-offs, depreciation, etc was easy. He isn’t ready for that conversation, financially speaking.
My assistance was offered, in setting up a spreadsheet for him to run calculations. But I believe his mindset is correct for being an investor, and that’s why I agreed to help him. His thinking is not to find a reason NOT to buy but rather figure out how to buy.
This, I believe, is credited to his father. He owns multiple investment properties, purchased decades ago. From his father’s perspective, he has seen several real estate booms as well as flat periods (market corrections, bubble bursts or whatever other term may be applicable). After all this time his father is convinced real estate is a wise investment.
Even in today’s market.
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About on March 24th, 2008
My name is Clifford.
Crystal Ball on Mortgage Companies on November 14th, 2007
A stock market analyst I am not.
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