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So since you had debt on the property and the value went up by 100% did your return on equity go up by even more?
Will you be buying a new house in California at current prices or are you looking to cash out and move somewhere else.
Are you doing a 1031 exchange to defer the taxes?
I did put a decent down payment . The return on down payment after cost of doing work ( it was a fixer)
realtor commissions etc should be about 500% or so .
Definitely would be hard to make that type of return in the stock market.
1031 exchange I'm pretty sure can only be used for investment property but this one is primary residence . There is a tax exemption on a primary residence of up to 250k in cap gains if single and 500k if married if you live in home for 2 years .
Will be staying in CA most likely for various reasons although the idea of moving out of state is tempting.
Yeah that is why real estate is my investment of choice. Even people that don't even know what they're doing can make some serious coin. Nice job
You would be able to 1031 exchange a primary residence if its been rented for a year and a day prior to the sale. But yes youre right if you are married and the gain was less than 500k there is no point.
Yes I feel the same way . I had some experience purchasing properties as investments out of state so I knew what I was doing to some degree . I looked at historical prices and just couldn't see prices going down any further long term especially considering being in a major city .
Another thing is I was buying less than similar homes in the area because the home needed work .
On more thing was that I studied rents and saw that I could rent the house out for more than all the expenses if I wanted to move at some point.
I don't see the same opportunity in this market at least in my market . At some point prices will drop as they always have in the future but of course nobody knows when .
Unfortunately the L.A market isn't a good one for cash flow and the city is not landlord friendly at all . It's more a fix and flip or development market but the city makes it difficult to develop too .
I was looking on a real estate forum (BiggerPockets ) and there were some people in L.A saying they are looking at 15 % or less returns on flips . Seems risky as that profit margin could easily be wiped out in a downturn.
Hes saying that your understanding of what an asset is, is incorrect. An asset is any item that has economic value and generally could be converted to cash. It does not need to produce income to be an asset.
Lets use STRIPS as an example. This is a zero coupon bond issued by the US treasury that does not pay out interest regularly. Instead the entire pay out is paid upon the maturity date. Would you consider this an asset? According to your definition that an asset must produce income, no. That, however, is incorrect.
It's not incorrect. Go ahead and continue to believe a car and a house is an asset, it's why most people are stuck in the rat race with no escape in sight.
Not disagreeing with you just wanted to say that society has pushed the idea of earning a college degree is the only way to get a job. Society has to change the expectations that college is actually needed- I cannot tell you how many people I know that are in fields unrelated to the degree and how many great paying jobs technically do not need a degree to be performed.
Yes there are some careers that absolutely require a higher level of education but I would not say the majority do in this country.
This is also brings up my point that student loan's should be able to be discharged in bankruptcy court since the lenders apply no underwriting to the loans. Heck- that is the business to get in- hand out loans that victims cannot get out of unless they die. Colleges are a business plain & simple, they are out for profitability & nothing more.
Yes colleges are just a business plain and simple. Society pushes a lot of things on us, people need to learn to think for themselves, that's why America is called the land of the free, we have the freedom to make our own decisions but with freedom comes responsibility for those decisions.
They blame the shortage of new construction start homes on Millennials, and their desire move away from suburbs and towards urban centers. (Well, part of the blame, anyway.)
The theory is that when people insist on moving back to urban areas, it constricts builders from creating adequate inventory. Building restrictions and land costs keep builders from creating the volume of houses in an urban area than could be built in the suburbs. So builders forego the starter homes and just focus on building expensive homes.
Another factor is a lot of the smaller resale homes being turned into rentals, since rents are high--and what is driving the rents so high? The would be buyers who want to live in the city but cannot afford the expensive homes that builders are now building.
I'm not sure I agree with this theory, but if it's true, the solution seems inevitable. Sooner or later, people who really want a house let go of the desire to move to the city and the tide turns back to people moving out to the suburbs.
People may strive to find an urban place, but sooner or later pricey rentals are bound to get old. If they can't find something they can afford in the city, they'll head back out to the burbs. Whether the burbs are considered cool or not.
I think student loan debt along with a decent jobs are the only thing driving millennials away from houses. They are just really expensive and millennials have less money.
Yes colleges are just a business plain and simple. Society pushes a lot of things on us, people need to learn to think for themselves, that's why America is called the land of the free, we have the freedom to make our own decisions but with freedom comes responsibility for those decisions.
The higher education business is a $500 Billion dollar industry in the US.
So there is definitely a lot of money and jobs at stake to keep people going to college.
I do feel there is value in college, but it's not for everyone .
There is a lot of money spent on educating people that end up dropping out of college too because they don't really want to be there .
I'd like to see more alternatives to colleges . Shorter programs or certifications that allow one to obtain in demand skills .
Or even seeing grants go towards helping entrepreneurial or business minded young people to start or grow a business instead of attending school .
But again since this would divert money from colleges and universities there would be a lot of resistance to this idea.
Sure most aren't for profit but money is still crucial to them .
Non profit doesn't mean they dont care about money .
These colleges also can't pay all their bills with tuition alone so they need to raise money .
Harvard alone has $30 billion in assets in their endowment .
And caring about money doesn't mean looking to make the most profit they can, esp. because they don't make profit at all, it goes back into operations. And tuition is a small piece of the puzzle - schools with large endowments also give out very large amounts of financial aid. Harvard financial aid packages do not include loans and the hope is that students graduate debt-free, although some people do apply for loans separately from financial aid.
It's not incorrect. Go ahead and continue to believe a car and a house is an asset, it's why most people are stuck in the rat race with no escape in sight.
They are both assets. Ask any accountant. And I did escape the rat race. I retired, and between my wife and I, we have a five figure monthly retirement income.
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