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Agree...once you're in you're in. You will take too large a hit to get out.
Not true, you can move over to a self directed IRA and invest in real estate or any other legitimate financial instrument if you choose.
Where the hell is E-man getting 11-12% annually?
Scagnetti
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2012 Oct 11, 5:20am
Agree...once you're in you're in. You will take too large a hit to get out.
Not true, you can move over to a self directed IRA and invest in real estate or any other legitimate financial instrument if you choose.
Where the hell is E-man getting 11-12% annually?
Admittedly, I really should know more about my retirement account through work than I do. My retirement account through work is called a thrift savings plan. In effect, it seems to me to be the same as a 401k. The company does matching up to a certain point, with a bump on the max percentage if we make money. My understanding is I can't roll the account over into a true IRA until I quit, get fired, or make it to retirement. That being the case, I have certain funds I can select through the broker my company goes through. I believe the only way I could get access to the money, without cashing it out and leaving a lot of money on the table, would be to take a loan out against it. Although I would have to show "financial hardship" to even do that.
Eman
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2012 Oct 11, 7:15am
Where the hell is E-man getting 11-12% annually?
Bob, I love you. :)
That was an analysis to know what kind of a return I need from the IRA to match my RE investment. How can I consistently earn 11%-12% return? My take is convert it to a SDIRA and buy notes and tax liens. Is this the right idea? I'm heavily leaning toward this option. :)
Converting my IRA to a SDIRA to invest in RE is not the best option FOR ME because I lose a couple of things:
1) I cannot leverage like I can with what I'm doing now, which significantly reduces my return.
2) I lose the depreciation tax advantage.
3) There are fees associated with having a SDIRA, which would cut into my profit.
As you already aware, the cashflow in CA is not the same as fly-over states. That's why leverage, borrowing at 4%-4.5%, increases our return.
Hope all is well. Cheers.
Eman
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2012 Oct 11, 7:22am
Bob,
On another note, 1/2 of my portfolio consists of dividend stocks to yield an average return of 5.5% even when the other 50% is sitting in cash. You already know most of the stocks that I own since we have this exchange before.
Last year wasn't that good for me, but YTD has just over 20% return in my IRA with 25% sitting in cash now. This is purely luck as you know I'm not a stock wizard, but I do quite well with RE. I can make $100k with 2 RE deals, but how much can I really make with trading and investing in stocks? For that reason, I will eventually convert my IRA to a SDIRA to buy tax liens and notes. In the mean time, I just leave that money alone.
B.A.C.A.H.
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2012 Oct 11, 3:05pm
How can you compare our situation to Japan?
You can't. They won't allow the kind of immigration that they need for growth. And they're not having a good time over there, with such a low birth rate and aging population. Our situation is that the floodgates are open to immigrants, and our population of non-immigrants is also growing.
From a context standpoint, RE in Japan has appreciated over 250% from the 80's to mid 2000's, and over 300% from the 80's to now.
The value of the yen has nearly tripled from what it was in the '70s (220/$ -> 80/$). If you had the foresight to convert your dollars to yen and buy residential property in Japan in the mid-1970s, you're still sitting on a handsome profit even after Japan's two decades of stagnation.
Today the pace of Japanese RE's decline is gentle enough that even though the value of your house is going down every year, you're "paying" less than you would be spending on rent. It's an unusual form of stability, but I like it more than old-style booms and busts.
Eman
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2012 Oct 11, 5:20pm
If you had the foresight to convert your dollars to yen and buy residential property in Japan in the mid-1970s, you're still sitting on a handsome profit even after Japan's two decades of stagnation.
That's exactly what the Japan real estate graph indicates. Due to the magnitude of the Japan bubble, it's easy for the 300%+ in housing appreciation over a period of 20 something years to be overlooked.
Are you planning on moving back to America one of these days, or is Japan your permanent residence?
To echo what BACAH said above, do you know why the birth rate is low in Japan? Does it have anything to do with the cost of living, etc?
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I was wondering if anyone is changing their investment strategy given the present conditions of the market? The DJI and the S&P seemed to be sliding somewhat following a tremendous recovery signaling things to come. The election is on the near horizon and the fiscal cliff is just a stones throw away. China's growth is continuing it's downward trend and the IMF is warning of a new recession.
I find there are some savvy people on this forum and would appreciate any thoughts you may have as far as getting out of stocks, into bonds, shorting the market, playing wait and see, etc.
#investing