patrick.net

surfingerman says

hooliganism

“The original hooligans were a spirited Irish family of that name whose proceedings enlivened the drab monotony of life in Southwark.”
Can’t rent to the Irish either. You know how they are. Never will be civilized! Their skin is weirdly pale though, except for the freckles, which just proves they’re not really white…

Damn right! No FUCKING IRISH!

Mere ownership of land is not productive, but creating and/or maintaining a building to live in is a real value added to the community. I always say the answer to most economic problems is the single tax on land.

If there were a single tax on land there would be no "fortunes in real estate" since the capital return of real estate would be just that, return on the depreciated value of the capital improvements, not what the market can bear as it is now.

These "fortunes in real estate" everyone loves is simply the wealth transfer from the laboring to the rentier non-laboring, thus every "fortune in real estate" is the simple theft of wealth from the productive to the unproductive.

Landlordism is one of the greater social evils in our system. In the Bay Area the housing stock here is simply atrocious, yet the rents are high because that's what the market will bear, or is subsidized to bear.

A 10.0 quake would do this place a lot of favors, failing that changing Prop 13 to only protect commercial buildings over their depreciated life would be an acceptable alternative.

I used to live in the Richmond Annex and worked for the City of Richmond for almost 12 years. That neighborhood I wouldn't touch with a ten foot pole. There are nicer neighborhoods in Richmond, that's for sure. North and East of of the old City Hall (McDonald and 27th) are better. If you go further East into the hills it gets better yet. But the West side of Richmond is pretty much a slum, at least it was a few years ago.

Troy says

These “fortunes in real estate” everyone loves is simply the wealth transfer from the laboring to the rentier non-laboring, and every “fortune in real estate” is the simple theft of wealth from the productive to the unproductive.

Yes, to the degree that it's just about the land ownership. And yes, it would be harder to make a fortune in real estate, because the land rent would all go to to pay the land tax, and only the rent for the building itself would be kept by the landlord, to cover maintenance and profit.

So it sounds like you agree exactly with the Georgist single tax as a solution.

yes, yes I do. The day I discovered the Georgist argument that disentangled land from capital in late 2002 was the day that a lot of things became a lot clearer to me.

Georgism is attractive for its agreement with my libertarian sensibilities and for the fact that it appears workable in the real world, kinda a rare combination actually.

knewbetter says

Rental companies also make a deal with the owner: This is what we will give you, and if we make more/less its up to us. So the owner get’s a fixed return while the management company looks to raise rents and go after non-payment.

I didn't know that. I thought they all operating on a percent-of-rent basis. Might be worthwhile to let the management company deal with everything for a fixed payment, because it solves some of the agency problems, where their interest is not exactly your interest. If they pay you a fixed amount, they have no incentive to fake repair bills, lie about rents received, etc.

robertoaribas says

patrick, as you know I’m in the business. Many/most management companies are a bit selective about what properties they will even take. Many parts of Phoenix for example, the rents are too low, and the pain in the a$$ is too high, so they simply will not take the contract to manage. I can show you condos here for $20K or less, with HOA under $200 a month, and taxes of $600 a year, that rent for $550 to $600. 15% or better return with no loan, but NOBODY and I mean NOBODY will manage that for 10%, probably not even 20%. $100 a month is not worth the headache.

I’m not buying them, the hassle is too high, even if they were $10,000

Roberto - email me at paul-d-meehan@hotmail.com. I too live in PHX. Would love to discuss.

Iron Triangle: Ironically, this neighborhood has a high crime rate, and its name reflects that of the Iron Triangle of the Vietnam war era. It has become known as a 'warzone' in neighboring cities.
That said, I've biked through this area a couple of times recently on the newly opened Richmond Greenway which connects that Bay Trail to the Ohlone Greenway. Riding on the Richmond Greenway (daytime) is a surreal experience as it's quite a nice urban greenspace and is in contrast to the impoverishment of the surrounding area. All the folks I've seen (families on bikes, folks pushing strollers, a couple walking their pitbulls) have been friendly. Well, there was a 'couple' near the break at 23rd St. that may have been involved in illicit activity, but otherwise a positive experience.
As an interesting side note, to the west, Point Richmond may hold the distinction of having (and then holding) the greatest property value appreciation during the bubble. Also, the waterfront in Richmond has seen a lot of development this past decade. I recommend Rosie the Riveter WWII Homefront National Historical Park to anyone who has not visited.
Edit: And let's not forget the newly reopened Richmond Plunge.

EBGuy says

Also, the waterfront in Richmond has seen a lot of development this past decade

Agreed, the waterfront areas are nice. Shortly before I left, City Hall was moved to an empty building near the waterfront to prepare for seismic retrofit on the original City Hall (never done to my knowledge). I would walk along the waterfront, past the marina just about every day and it was always pleasant. I have a photo of my wife and her father standing in front of the Rosie memorial—I actually built the first Web site (gone now) for that memorial but that was over 10 years ago.

Patrick,

I think it is worth a try. Start small, buy properties with a few friends/investors, and see where it goes. I have lived in those "bad" areas, and for the most part people are honest and take care of rent firs.

If and when you get ready to try it, give me a holler. My guess is that in the long run, barring any major damage, it will turn a decent profit.

patrick, based on your parameter 1,400*12/.06 gives this a fair value of 280,000. Now you see how useless and misleading "rules" are.

In any case, as much as housing is financially driven, it is really more a case of social science. Without understanding what is happening socially, all these rules of thumbs are meaningless in the real world.

Would you live in the Richmond iron triangle even if the rent is free? 50% of 1,400? I wouldn't. In fact 90% of the SFBA are deal breakers (would not live in even if it is free or very cheap), leaving only very few properties left for consideration. For a lot of people, housing is very inelastic.

Yes, your vacancy rates and legal costs will vary by neighborhood, so the 15% cap rate properties in the hood vs. the 2% properties in Palo Alto (they were 0% cap rate when I lived there) is misleading at first. I expect to get in average neighborhoods 11 months of rent and 1000/year of repairs. A below average 'hood might get 10 months of rent (more evictions and repairs and turnover) and 2000/year repairs, reducing the disparity. You do get paid something for the extra hassle and lower prestige, though, and above average neighborhoods are for those who have already made it and don't want the hassle.

I bought a 5-plex in Utica NY for 60,000 in 2005 and sold it in 2009 for a small profit (I owner-financed with 20% down). It looked like 20% cap rate on paper, but because of the low rents there, it turned out to be closer to 10% due to repairs exceeding my estimates.

I recently tried to get financing for property in Florida below 50k and it is impossible to get a mortgage in that price range. There is a federal law limiting the costs of originating a mortgage as a percentage of the loan that makes lenders unwilling to do business in that price range. It is a cash business in that price range, but it could be possible to sell for a big markup and become the lender (less hassle, but still some).

However, I did buy near the peak of the national market and sell last year and made 6k/year profit plus 2000 capital gain after improvements. The numbers did save my butt, as buying something in most low cap rate areas would have lost in a big way. I think people can make good money now, but I would choose Sacramento or Merced instead of Richmond. I bought in Riverside last year at 11% cap rate.

HI Patrick, Thanks so much for your GREAT website...you have kept me informed for years about what the real estate market is really doing. I would like to see an adult-sized picture of you on this blog...aside from that...you're the bomb!

Hmmm, you're not an assassin sent by the NAR are you? OK, here's what I look like:

Glad you all like the site. Someday soon I have to figure out how to live from it without selling out. Still not clear, but I think the Property Finder service might work well enough. Already have income there.

It all comes down to what you require in your investments.

Some individuals are ok with that 0.75% CD at Citibank (just saw it today, can you belive that sh**?). Others are fine with the long-term average return of ~5% for stocks, give or take a lost decade or two. Still others aren't satisfied with anything lower than 10% cash-on-cash which is typically pretty easy and achievable for a commercial real estate asset.

California just isn't known as a strong cash-flow state. It's much more about (cross your fingers and pray) appreciation and tax benefits--secondary and tertiary considerations for someone like myself who considers cash king.

That is why I and in turn my private real estate investment company invest out of state in much more cash-flow friendly municipalities than you will typically find in California.

If you are OK with iffy tenants, painful vacancy rates, frequent and expensive capital improvement and repair costs and ultimately low CoC return, then by all means, invest in Richmond (or any other California war-zone).

Similarly, if you want nice cushy tenants, low vacancy but (again) ultimately low CoC return, then invest in a mid or upscale California neighborhood.

Me, I'm just not ok with the piss poor cash flow you get from this state. I have better, much more profitable things to do with my and my client's money.

Patrick, when you are considering rent to own ratio, do you consider that you risk not being able to rent the house/apartment out? I mean if you rents that gross over 10%, if you miss 1 month of rent there goes your profit margin. Think about how easy it is to miss one month. When you first buy you aren't going to have a renter immediately. And what if that first renter decides to move out without giving you any notice? You may spend 2 months looking. Or even if you find someone immediately, they will usually want to move in on the 1st of the month, you could lose 15 days of rent. I am a good example... My old landlord upped the rent by about 150 dollars 2 years ago. I told him I'm not paying and found another apartment literally in in the same building for what I was paying. The guy couldn't rent the apartment out for the next 8 months at that price. There goes his profit margin for the next 8 years.

@ rentalinvestor: "...banks who foreclosed an owner, AND KICKED OUT THE TENANTS, LEFT THE HOMES EMPTY INDEFINITELY UNTIL THE HOMES WERE PURCHASED BY SOMEONE ELSE."

Left the homes empty indefinitely and didn't make any repairs! Property deteriorates. Neighborhood deteriorates. City wrings its hands. People who live in the area sell at any price. County moans about decreased revenue. Other property enters the foreclosure game and the whole scenario is repeated. ITMT the bank employees sit on their hands because the bank's policy is....what? Never did get a clear answer on that one.

I have to put my two cents in on chain link fences. We had a chain link fence. Put a wood privacy fence on the inside of it. The chain link fence saved the wooden fence from the then kids next door slamming into it with their sleds. Of course it ruined the chain link fence eventually but... Bottom line: Chain link has its uses.

Hmmm, you’re not an assassin sent by the NAR are you? OK, here’s what I look like:

Glad you all like the site. Someday soon I have to figure out how to live from it without selling out. Still not clear, but I think the Property Finder service might work well enough. Already have income there.

Question: did a Realtor take this photo? I detect a serious look of distrust in your eyes.

SF ace says

as much as housing is financially driven, it is really more a case of social science. Without understanding what is happening socially, all these rules of thumbs are meaningless in the real world.

This is the wisdom that is lacking with so much number crunching.

danville woman says

We now have property in Oklahoma

Danville, I have been interested in income property in Oklahoma for a long time. It is not Cool, it is not Hip, neither are carbon-energy, agriculture, federal welfare monies, nor military installations. Oklahoma has an abundance of all those un-Cool, un-Hip things, without so much baggage as Cool and Hip California.

Can you give a referral to me, maybe not on this public forum but perhaps by a different venue.

Even if you just break even on your rental properties, you eventually own the properties free and clear, right? And someone else paid for them (minus the downpayment)? Not a bad payoff unless the hassle factor is too great. But I know nothing of landlording.

The big question is what property price would allow you to break even.

It's surprisingly hard to know for sure. The only thing you really know is that a lower price is better.

@sybrib

email me at khazleton at yahoo dot com

Patrick,

You have the right idea but haven't made all the correct assumptions. The easy assumptions are annual taxes, insurance, rental rates, management company costs, and the more difficult assumptions are annual maintenance costs, annual collected rents, amount of your time/travel involved (put a $/hr figure on your labor) , etc. Also, if you can borrow 90% of purchase price then your cash on cash returns are much higher. But, liquidity of your cash invested will be much more difficult to access.

I recommend a more conservative approach as I only do homes with a 30+ CAP potential... The real trick is to buy the houses soooooo cheap that you could easily flip for a profit or rent at below market and still make money. And as you know, the higher the return generally the higher the risk and thus you won't find many 30 CAP houses in million dollar neighborhoods, but in blue collar neighborhoods. Ignore all the naysayers... I am doing as i preach each day. The key to rental income property success is long term tenants.

Anytime you get involved in less than desirable areas, you can pretty much count on doubling up your expenses and lowering your income proformas.

CAP rates are deceptive in the Hood. It has been my experience that one out of ten renters has acceptable credit in the Hood vs. nine out of ten being acceptable in let's say, El Cerrito or Lafayette.

Higher expense ratios are needed in your proforma form Eviction costs, repair cost (when they rip out the sink and steal the refrigerator.

Trust me. you're much better off accepting a lower CAP in a better neighborhood. The property will appreciate fasted, will stay rented to a better clientele.

Be sure to check out John T Reed's stuff since he is also in the Bay Area. http://www.johntreed.com/checklistsforbuyingrentalhousesapartmentbuildings.html He even recommends buying junkers and only fixing them to the point where they are attractive to newlyweds that want to put sweat equity into their first home. (Interesting guy, though a little too gung-ho Marine for my tastes.) Also I would take a long view and ask if Richmond, et al is likely to improve in the future or become a wasteland? I think the movie 'The Road' is my prediction as 'just in time' based society collapses.

Also I would take a long view and ask if Richmond, et al is likely to improve in the future or become a wasteland?
Here's some of the better (and improved) areas of Richmond: Point Richmond, Brickyard Cove, Marina Bay, Richmond Annex, East Richmond, Wildcat Canyon Park, Hilltop Mall, Richmond Country Club. The Iron Triangle faces tremendous challenges, but it is in close proximity to BART. I'd say the trajectory is generally positive, it's just that the time frame for improvement may be decades. YMMV...

If it were that easy, there would already be too many people doing it.

Also, I suspect that the management companies do genuinely crappy repairs.

Worth considering a 4-plex in a nicer place, like Cupertino or Los Gatos. They don't cost that much more than houses but you get 4 renters. So the cap rate is better, plus you have some diversification in case one renter flakes. Or you could live in one while renting the other three.

The buy in will be much more ($1m+) but so will the rent. And you'll get better renters.

This finally piqued my interest, so I thought I'd toss in a few comments. Most people have no idea how to value rental property, including appraisers and assessors. That's a major trap.

It is very possible to buy a place that looks like it should be a 30 cap (30% return) and make nothing. Many if not most real estate investors have no idea how to actually place a proper value on a piece of property. There are spreadsheets to do this, but for the most part, you won't find them floating around on the web for free. Even if you find one, knowing what data to put in is another matter altogether.

$100,000.00 for a place with gross rents of $1,400.00 per month. It looks like a 16.8% return. Great money, right? Not quite. You have to figure out the actual expenses on it, which is where most new and/or cash investors and/or owner-operators absolutely blow it. Take property takes. In many areas with tax caps, you cannot use the historical figure. You've got to calculate it from scratch by knowing and applying the local millage rate. Failing to do this properly can absolutely destroy any chance of returns, ever. At a 2.5% tax rate, you're looking at $2,500.00 a year for taxes. But it probably won't be that low. Since we're coming off a bubble, and a "deal" on rental, odds are the assessment is 25% to 50% high. Let's take a middle figure and assume the place is still assessed at $140k. Right there, you're now down from a 16.8% return to 13.3%.

Now let's assume landlord pays water, gas, and of course, repairs and other expenses. Here in the snowy midwest, this is a hefty $5,000.00 assuming $2,000.00 for repairs, $2,500.00 for gas, and $500.00 for water. Theoretically, that includes "capital" repairs but with a rental, there really are no "capital repairs" since it all comes out of your annual budget. This "great investment" just went down to a $8,300.00 net income. But -- oops, you just had a tenant turnover for a month. Now you're down to $6,900.00 income. Have a vacancy that lasts longer than a month? You're screwed. Have a tenant that doesn't pay for a month, then you have to get a lawyer, take him to court, and then market the property for another month? You're really, really screwed -- easily down to a 4% or less return for the year. The EPA passes a new lead rule for your pre-1978 property, and you actually comply with it, and now the property needs paint? Hah, hah, hah! Welcome to a negative return. Now, you have to go out to the property and change a light bulb, cut the grass, etc? Better figure out what your time is worth, because if you're calculating that at zero, you're fooling yourself. Property management companies charge 10% because managing the property takes time and effort. Using "zero" when you're doing the work yourself is a novice mistake. Welcome to lots of work for absolutely nothing.

Of all the rental properties that come up for sale, very few are a good deal unless they are currently mismanaged, vacant, or otherwise have a high risk factor. On the other hand, it is very easy to make a property _look_ like it's a good deal on paper. If I can con you into using a gross rent multiplier, I can make it look like a FANTASTIC deal. (Since your appraiser will also probably use a GRM, you won't have a clue until it's too late.) Now, since you aren't making money, what if you want out? Well, the losses get even worse since you're going to have to discount the sales price by the value of all the future rent, unless you can find another sucker. A $500 error in calculating NOI is a $5,000.00 error when you try to sell on a 10 cap. It gets ugly really, really fast.

As for those huge gains on sale ... two words: "Depreciation recapture" ... at newly improved tax rates just for special people like you!

I had to look up depreciation recapture:

http://en.wikipedia.org/wiki/Depreciation_recapture

Basic idea is that if you reduced your ordinary income by claiming depreciation on a rental house, and then sell that house for a profit, they disallow that depreciation you took. At least they disallow it to the degree that you had a profit from the sale.

Don't worry about depreciation recapture; in California, thanks to Prop. 13 (and 58) the low tax basis of that rental home is your child's birthright (at least up to the first $1milllion transferred for rental property).

plawatty, welcome and thanks for the information but somewhat misleading.

This propertt is in CA, contra Costa County, property tax are 1.20-1.25% and adjused at 2% annual max from purchase price regardless of assessors opinion. In fact, property tax are way down in the county as they have to legally abide by assessment rules to stay out of legal toruble themselves. There may be some special assesment here and there, but prop tax is stable.

Landlord pass thru the gas, electricy, water and trash to the renters. There is the repairs and maintenance which may be quite costly for this one. The biggest safeguard to protect your property is securing a big enough rent deposit and do the normal due diligence like credit and employment check, in this case, I would ask for the max of 2,800. The renter would be deterred from doing the thing you are talking about. admittedly, with this property, you're going to get a bad tenant (or unkwown recent immigrant) because that's all there is to select from.

A landlord is not responsible for changing the lightbulb or mowing the lawn.

Craigslist works miracle for landlords and I see no reason why a property cannot be rented within 30 days.

New rules always have grandfather terms.

Depreciation recapture and capital gains can be rolled over into a new property, deffering the tax as long as you wish. Lots of normally after tax expense rolls in as pre-tax deduction and the depreciation itself is a non-cash item, enhancing after tax cash flow.

I agree that rental property is more than cap rates.

What do you think of real estate with no renter headaches? Owning storage units for the newly foreclosed? http://finance.yahoo.com/banking-budgeting/article/110584/thinking-outside-the-stocks?mod=bb-budgeting&sec=topStories&pos=8&asset=&ccode= There's even an association http://www.selfstorage.org/SSA/Home/AM/ContentManagerNet/HomePages/SSA_1504_20080508T110359HomePage.aspx?Section=Home for them. (I still think converting dead shopping malls into privatized jails has legs.)

@Plawatty
Most of your numbers are probably pretty close, taxes are generally 1.25% here, and few people pay gas/electricity here.

The one that you're super low balling is the number of times the rental is going to be vacant.

Good points, ace. Here in Michigan the property tax rate on owner-occupied is about 1.5%+, and about 2.5%+ on commercial and rental. Very ugly. The tax warning comes from a few analyses that I've done. I looked at one property with a price under $100k but with an assessment based on $200k. The tax bill was $5,000.00 a year. I walked. House was sold and rented at $1400 with tenant paying all expenses. After expenses, this thing only cash flowed maybe $7,000.00 per year, if you did all your own fussing with tenants. I figure the new owner lost at least $30,000.00 INSTANTLY upon purchase. On top of that, it wasn't exactly rentable either.

As for the depreciation recapture, it isn't a big issue until you turn around to sell. A lot of people look at this deduction as free money when it isn't. It's money that bites you as a 25% tax bill at some point, assuming that rate doesn't change. Whether that's good or bad depends on in which tax bracket you made the deduction, because taking the deduction is not optional. If you're high bracket, this does appear to be a great deal. If you're not, well, then it just stinks.

SF ace says

This propertt is in CA, contra Costa County, property tax are 1.20-1.25% and adjused at 2% annual max from purchase price regardless of assessors opinion.
Landlord pass thru the gas, electricy, water and trash to the renters.
Depreciation recapture and capital gains can be rolled over into a new property, deffering the tax as long as you wish. Lots of normally after tax expense rolls in as pre-tax deduction and the depreciation itself is a non-cash item, enhancing after tax cash flow.
I agree that rental property is more than cap rates.

Speaking of Richmond, some of the schools are on life support:
Three Richmond schools will stay open for at least another two years, thanks to funding approved unanimously by the City Council on Tuesday night.
The West Contra Costa school district will get another $1.5 million from the city of Richmond to keep Kennedy High School and Olinda and Grant elementary schools open through the 2011-12 school year. The three schools were placed on a closure list by the school board last year but remain open with funding from the city.

rentalinvestor says

Phillip - what do you mean by 30+ cap?
I don’t know too much about Richmond except that I’ve heard rumors of crime. Before deciding to invest in Antioch I checked a lot of sources of data including: city-data.com. I would read google news about the city about every day. I drove in the city and made the visits to popular destinations in town to see what type of people were hanging out.
I recently was listening to a song by the favorite rap star 2pac and he says in the classic Dear Momma:

“I love payin’ rent when the rent’s due”
So even in the ghetto I would expect to collect rents, albeit the rent may be drug money.

30+ CAP means I estimate based upon my total capital investment (buy and rehab) at least a 30% annual net profit after expenses (from the collected rental income) . This term is used more often in discussion about commercial real estate... as most residential investors are not sophisticated enough to fully think through the lifecycle of their investment.

Plawatty says

This finally piqued my interest, so I thought I’d toss in a few comments. Most people have no idea how to value rental property, including appraisers and assessors. That’s a major trap.
It is very possible to buy a place that looks like it should be a 30 cap (30% return) and make nothing. Many if not most real estate investors have no idea how to actually place a proper value on a piece of property. There are spreadsheets to do this, but for the most part, you won’t find them floating around on the web for free. Even if you find one, knowing what data to put in is another matter altogether.
$100,000.00 for a place with gross rents of $1,400.00 per month. It looks like a 16.8% return. Great money, right? Not quite. You have to figure out the actual expenses on it, which is where most new and/or cash investors and/or owner-operators absolutely blow it. Take property takes. In many areas with tax caps, you cannot use the historical figure. You’ve got to calculate it from scratch by knowing and applying the local millage rate. Failing to do this properly can absolutely destroy any chance of returns, ever. At a 2.5% tax rate, you’re looking at $2,500.00 a year for taxes. But it probably won’t be that low. Since we’re coming off a bubble, and a “deal” on rental, odds are the assessment is 25% to 50% high. Let’s take a middle figure and assume the place is still assessed at $140k. Right there, you’re now down from a 16.8% return to 13.3%.
Now let’s assume landlord pays water, gas, and of course, repairs and other expenses. Here in the snowy midwest, this is a hefty $5,000.00 assuming $2,000.00 for repairs, $2,500.00 for gas, and $500.00 for water. Theoretically, that includes “capital” repairs but with a rental, there really are no “capital repairs” since it all comes out of your annual budget. This “great investment” just went down to a $8,300.00 net income. But — oops, you just had a tenant turnover for a month. Now you’re down to $6,900.00 income. Have a vacancy that lasts longer than a month? You’re screwed. Have a tenant that doesn’t pay for a month, then you have to get a lawyer, take him to court, and then market the property for another month? You’re really, really screwed — easily down to a 4% or less return for the year. The EPA passes a new lead rule for your pre-1978 property, and you actually comply with it, and now the property needs paint? Hah, hah, hah! Welcome to a negative return. Now, you have to go out to the property and change a light bulb, cut the grass, etc? Better figure out what your time is worth, because if you’re calculating that at zero, you’re fooling yourself. Property management companies charge 10% because managing the property takes time and effort. Using “zero” when you’re doing the work yourself is a novice mistake. Welcome to lots of work for absolutely nothing.
Of all the rental properties that come up for sale, very few are a good deal unless they are currently mismanaged, vacant, or otherwise have a high risk factor. On the other hand, it is very easy to make a property _look_ like it’s a good deal on paper. If I can con you into using a gross rent multiplier, I can make it look like a FANTASTIC deal. (Since your appraiser will also probably use a GRM, you won’t have a clue until it’s too late.) Now, since you aren’t making money, what if you want out? Well, the losses get even worse since you’re going to have to discount the sales price by the value of all the future rent, unless you can find another sucker. A $500 error in calculating NOI is a $5,000.00 error when you try to sell on a 10 cap. It gets ugly really, really fast.
As for those huge gains on sale … two words: “Depreciation recapture” … at newly improved tax rates just for special people like you!

You have succeeded in convincing YOURSELF you can't make money in real estate! If you would like to bet me a million dollars the scenario's i posted about are not real, I will take your bet and money.