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Discuss Latest WCI Blog Post: How Real Estate Investments Go Bad

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  • Discuss Latest WCI Blog Post: How Real Estate Investments Go Bad

    If you think you can't lose money investing in real estate you're fooling yourself. Here are 9 ways these investments can go bad.

    The post How Real Estate Investments Go Bad appeared first on The White Coat Investor - Investing & Personal Finance for Doctors.



    Click here to view the article!
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

  • #2
    “My emails go unanswered. That’s called manager/platform risk. Yes, I still made money on the investment, but I didn’t make as much as I should have.”
    Crowd funding/platform risk- does this include the cost of your time invested? You educate yourself, you vet the platform, you sign up, you vet multiple deals, you invest in a few, you “monitor” the deal, it finally closes.
    There is an “overhead” cost and of course some is fixed and some variable. Doing one deal only, this $5k deal would be a loser for sure. Is there any guidance (time, capital dedicated, % OH) you can share? For $500 at 10% it’s not very appealing.

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    • #3
      I have a single family rental that has been a money pit. Spent $30,000 on unexpected repairs above the initial cosmetic reno and expected maintenance over the first few years. Its in an excellent neighborhood, remains rented and is producing positive cash flow so overall ok but sucks to have lost the $30k which I won't ever be able to recover.

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      • #4
        Originally posted by Tim View Post
        “My emails go unanswered. That’s called manager/platform risk. Yes, I still made money on the investment, but I didn’t make as much as I should have.”
        Crowd funding/platform risk- does this include the cost of your time invested? You educate yourself, you vet the platform, you sign up, you vet multiple deals, you invest in a few, you “monitor” the deal, it finally closes.
        There is an “overhead” cost and of course some is fixed and some variable. Doing one deal only, this $5k deal would be a loser for sure. Is there any guidance (time, capital dedicated, % OH) you can share? For $500 at 10% it’s not very appealing.
        Sure. But what i learned messing around with $2-20K deals I can now apply to $250K deals. So while there is some cost there, that education has some ongoing value. And not only to me, but to hundreds of thousands of doctors that I educate (and in turn get paid for educating.)

        But I agree with your general point that these deals are optional and just like picking stocks, you have to add in the value of your time to truly calculate your return.

        There's always the Vanguard Life Strategy Moderate Fund.
        Helping those who wear the white coat get a fair shake on Wall Street since 2011

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        • #5
          There are several ways to lose money owning real estate, paying too much, not doing due diligence on deferred maintenance, too aggressive leveraging, mismanaging once owned. Get those right and you can make good money. Everyone makes mistakes but as long as they aren't fatal you learn to not make the same mistake again and move on.

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