Hello all, hope you all had a great Christmas and New Year!!
My question today is whether to swap one hard asset for another…Let me explain. I have been out of work for almost a year now. Luckily i am a pretty responsible individual and had plenty in savings to be able to get through this time period. I did not want to just go back to a normal “job” so i have been taking my time figuring out what to do. So a few weeks ago i spent a weekend at one of my best friends’ vacations homes. My friend is a succesful real estate investor. He was asking if i would be interested in getting into the real estate game, since he knew i was struggling with figuring out what i wanted to do. My friend has been doing real estate for about 9 years and has done over 60 deals in those 9 years so i don’t want you to think he is some rookie that just got “lucky” on a deal or 2. He weathered the storm in ’08 crash and still came out on top so i trust him and his judgement immensly. Bottomline, he knows his S&%T. He said he would show me the ropes, kinda hold my hand through the process and i could do a deal with as little as $20,000 upfront. I have some cash readily available but In order to have the full 20k, i would need to sell about 400 oz’s of my roughly 1200 oz stack. I am in NO WAY looking to “cash out” or anything like that, i am still GUNG HO BULL in silver and will continue to stack. Im just curious if you guys think its wise to sell 400 oz’s to get in the real estate game and perhaps start doing something that could potentially change my life forever?? Please let me know any thoughts you may have and as always, your input is greatly appreciated. Thanks in advance
Silverking, investing is not for the feint of heart, and Real Estate certainly has its ups and downs. But for some reason, selling out a third of a solid investment for one of more risk – this reminds me of that old algebra problem in which you are on a bridge and a train is coming. You need to decide whether to run towards the train, or run away from it , and if you make the wrong decision it will plow right over you.
Being in Real Estate I for one wouldn’t do it unless you got one heck off a deal. That being said, real estate IMO is still dropping, yes properties are selling but for about half off what people paid for them and there are lots of Forclosure still being held back by the banks. When those properties hit the market then watch out. Don’t let the housing figures fool you they are also cooked up.
The rental market is some what doggy also as you would have to take care of your properties yourself if you cant afford to manage them out. Then there are those troublesome tennants that don’t pay their rent and the law is on their side. It sucks.
I for one will be keeping my stack and wait for the chance to buy for a lot less than 400 oz’s in the near future as I’m holding my stack for Survival and a piece of real estate isn’t going to help me any if or when TSHTF. Just My Two Cents
SK 16 Is the $20,000 the total purchase price or a down payment. What is the price of the property and will you need financing? Leverage is a two way sword. A low priced quick flipper is another matter entirely. High leverage on a residential unit usually has such high overhead, maintenance and debt service it can have a negative cash flow. If you dont have income to shelter with a property that loses money each month, that goes to waste. I have not seen too many properties bought in a rough economic period that produced a net positive cash flow in the first year
There’s a lot to consider. Firstly your relationship with your mate, the golden rule is usually no business with family or friends, can your relationship hold up to something going wrong and it heading south ?
Obviously in every area of investment even when the sector is in trouble there are shining lights of promise but if YOU don’t know what you are doing, don’t do it. Like these “investors” who buy Silver then get on Silver Forums and whinge about the price doing nothing because they don’t know why they are in or what the true reason for holding Silver is.
Housing realestate in general takes a huge hit in a tanking economy so if it’s residential you are looking at can you survive he hit if a bank holiday occurs after you sign on the dotted line ?
Agricultural land is another thing, during times of economic upheaval rural land apreciates with PM’s in some cases performs much better.
400oz is a lot to risk I know how hard or long it has taken me to gather the approximate 1500oz we have and to risk 1/3 of that for a bet is nowhere on my radar at the moment.
Good luck bud, keep stackin : )
Sounds tricky. How long would a deal take you? As a stacker you need to be sure you can buy back more silver. Says the deal takes half a year and silver goes to $45 in that time, it must be a heck of a deal. And real estate is the least sought after asset in times of hardship, isn’t it? I’d go for something that always keeps value and output, like a farm or something.
Real estate is my current FINAL exit plan. I’m all-in silver, and the plan has changed, from swapping to gold some day and taking it to my testament, or financing future kids’ proper education.
Time horizon is 5-15 years, for silver to peak against real estate somewhere in the world. My current dream is a piece of land that preferably is already a decent vineyard. Else, good land for growing crops would be fine also, I just like my wine right now, and it seems there will always be demand for that. Also, I’d use part of the land for a factory of sorts, where manpower is turned into sellable goods and/or services.
Real estate prices move differently everywhere. Silver prices are global. So once silver has gone 5x or from now, lets say $150 as long as it’s also €120 and plenty of CHF and CHY, I’ll need to look where the properties are most agreeable. I like Eastern Europe right now (wine and snow in one place, I am a snow fanatic), but the same can be said for Italy, Austria, Romania, Greece, etc.
According to my knowledge, investing in real estate business is varies from one period to another period, It’s mainly depend upon the market value. Real estate is one of the fastest developing business in present days. Many of them are take it as a part time job and success in it.
Right now really is the best time to complete a short sale on your home, claim Santa Monica short sale agents. There are so many different incentives available to homeowners through their lenders as well as government incentives, that it would almost be silly to not take advantage of them.
Brandon would it be fair to assume that you are owner or co owner in your business? If so, the first and perhaps the only place to invest your funds is within your business. If you invest with others you are at their beck and call, relying completely on their investment designs Most situations like this, with modest investments involved, ends up with losses. Relying on yourself and your business you can see your returns in the range of 30-50% cash on cash returns. $20,000 invested with $20,000 in a small bank loan can yield at substantial returns which you concern. Taking your focus off your business and looking elsewhere often turns out badly Investing in yourself, the bank of You, is wiser.
All the things that will accelerate the value of your stack will render urban or suburban real estate a nonstarter. Chaos. Mayhem. Me? I’m holding out for 100 acres a good distance from anywhere with a McDonalds. And of course Timing is everything. I figure the trick will be to let things settle out before parting with a significant part of my stack. I never was particularly tight with my cash, but when it comes to my stack, I squeak. I’d hate to trade too much of it too early for too little.
" Black flies have been far worse than the mosquitoes... they leave oozing welts, even blood running down your legs/arms. Not many lakes down here on the prairie and they are over run with the same ski crowd. Minnesota River has decent fishing for walleye and big flathead catfish though. "Reply To: How off the mark am I? Or am I?
" @Mammoth I would not mind doing direct deals if the Doc did not sell bullion on the site, I don't think it is right to "steal" customers from someone paying to keep the site up and running :)
And I don't have any Numism... "Reply To: How off the mark am I? Or am I?
" @MaryB That is what I was afraid of...seems like you are doing the best that you can with the availability!
Man, aren't the mosquito's like hummingbirds when the weather gets hot? I do admire you for being able to live ... "Reply To: How off the mark am I? Or am I?
" Mammoth you won't find dimes under $1.75 anywhere online unless you can buy huge quantities. Small stackers like myself who are happy to grab $3 face of dimes here and there pay what you have to. And I prefer USG 90% coins over generic rounds. "Reply To: How off the mark am I? Or am I?
" @coinbuysell - actually, some of us folks here on SD have done coin deals with other members, we just keep it 'under the wire.' I myself have done three - and yes there was a 'trust-factor' involved - but all three de... "Reply To: How off the mark am I? Or am I?
" Next month is May, and we all know that saying:
"Sell in May and walk away."
In other words - from now until Labor day - the PM market may continue to be a real yawner.
Having said that, there is always the possibility of a price-shock due to world events. "Reply To: starting to get worried. Any ideas?
" Look out in SW Minnesota and see how many big cities there are, I live in a town of 280 people, 2 nearest cities are 6k and 12k population. One has a "coin store" in the pawn shop. He wants $5 for a single dime. So I buy online and get what I can find cheap. And it is very rare to find dimes anyw... "Reply To: How off the mark am I? Or am I?
The analysis and discussion provided on SilverDoctors is for your education and entertainment only, it is not recommended for trading purposes. The Doc is not an investment adviser and information obtained here should not be taken for professional investment advice. The commentary on SilverDoctors reflects the opinions of The Doc and other contributing authors. Your own due diligence is recommended before buying or selling any investments, securities, or precious metals. We do not share in your profits, and thus will not take responsibility for your losses as well.