biophase
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My friends and I are currently discussing all that's going on today. The ultimate question that always comes up is, where do you put your money today? Stocks, Crypto, Gold, Real Estate, Business, Cash?
I'm definitely a real estate guy when it comes to storing and preserving wealth. The same piece of real estate can be great for me and bad for you at the same time. I am here to today to show you why.
In 2008 I bought a new construction home in Phoenix, Arizona for $335k. I paid $70k down and got a regular loan.
In 2010, the market crashed and the house was worth $200k, I found a renter at market rate at $1700/mo, but my monthly payment was $2400. So I was -$700/mo in cashflow.
I did the math, even with a renter, I was going to be -$8400/year on a place that was -$135k to breakeven.
I calculated that if it took 10 years for this home to appreciate back to where I could breakeven, it would have to be worth $446k in 2019 in order for me to just BREAKEVEN. That would be -$84k in cashflow over 10 years, 6% realtor fee @ $27k to sell. This is also assuming that the home is always rented and nothing breaks. With this 10 year projection, I decided to let the home go into foreclosure in 2010.
Today, this home is worth around $660k.
If I would have kept the home and gone through the trouble of renting it for 10 years and held past its breakeven price in 2020 and sold it today, I would have a nice profit of around $150k. Instead I lost $70k and had a foreclosure on my record for 7 years.
So was this a bad investment? Yes, for me it was. Because of my financial situation at the time, 2010 BIOPHASE couldn't afford to carry -$8400/year cashflow, nor did I want to. I also couldn't pay off the mortgage either.
But for someone else, it may have been a great investment.
Imagine ALLCASHBILL buys this property in 2008 instead of me. He pays cash because he is looking for a place to invest and park his cash. So he pays $335k, and rents it out at $1700/mo. He cashflows +$1000/mo. or $12,000/yr. He sells in 2022 for $660k. So in the 14 years he has owned this property, he makes $468,000k, $168,000 on cashflow and $300k on appreciation.
What a great investment for him!
I made this post to show why the same house can be both a good or bad investment. It all depends on you!
I tell people that I just bought a home in Vegas last month and they say, real estate is in a bubble, don't buy, you are crazy. I ask them why. They give me all the data like current inflation numbers, interest rates rising, we are going into a recession. But what they don't understand is that I am now ALLCASHBILL and they might by 2010 BIOPHASE. We are in two totally different situations. So even though it's the same house, it might be the right buy for someone else but not for you.
I'm definitely a real estate guy when it comes to storing and preserving wealth. The same piece of real estate can be great for me and bad for you at the same time. I am here to today to show you why.
In 2008 I bought a new construction home in Phoenix, Arizona for $335k. I paid $70k down and got a regular loan.
In 2010, the market crashed and the house was worth $200k, I found a renter at market rate at $1700/mo, but my monthly payment was $2400. So I was -$700/mo in cashflow.
I did the math, even with a renter, I was going to be -$8400/year on a place that was -$135k to breakeven.
I calculated that if it took 10 years for this home to appreciate back to where I could breakeven, it would have to be worth $446k in 2019 in order for me to just BREAKEVEN. That would be -$84k in cashflow over 10 years, 6% realtor fee @ $27k to sell. This is also assuming that the home is always rented and nothing breaks. With this 10 year projection, I decided to let the home go into foreclosure in 2010.
Today, this home is worth around $660k.
If I would have kept the home and gone through the trouble of renting it for 10 years and held past its breakeven price in 2020 and sold it today, I would have a nice profit of around $150k. Instead I lost $70k and had a foreclosure on my record for 7 years.
So was this a bad investment? Yes, for me it was. Because of my financial situation at the time, 2010 BIOPHASE couldn't afford to carry -$8400/year cashflow, nor did I want to. I also couldn't pay off the mortgage either.
But for someone else, it may have been a great investment.
Imagine ALLCASHBILL buys this property in 2008 instead of me. He pays cash because he is looking for a place to invest and park his cash. So he pays $335k, and rents it out at $1700/mo. He cashflows +$1000/mo. or $12,000/yr. He sells in 2022 for $660k. So in the 14 years he has owned this property, he makes $468,000k, $168,000 on cashflow and $300k on appreciation.
What a great investment for him!
I made this post to show why the same house can be both a good or bad investment. It all depends on you!
I tell people that I just bought a home in Vegas last month and they say, real estate is in a bubble, don't buy, you are crazy. I ask them why. They give me all the data like current inflation numbers, interest rates rising, we are going into a recession. But what they don't understand is that I am now ALLCASHBILL and they might by 2010 BIOPHASE. We are in two totally different situations. So even though it's the same house, it might be the right buy for someone else but not for you.
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