Real estate investing strategies for 55+ years old - Posted by Al

Posted by Ronald * Starr(in No CA) on June 29, 2003 at 12:12:53:

GL–(ON)--------------

Thanks for the information.

Hmmmm. I wonder what they’d take for that Fairmount Hotel in downtown San Francisco?

Good Investing************Ron Starr************

Real estate investing strategies for 55+ years old - Posted by Al

Posted by Al on June 29, 2003 at 01:48:33:

Hi,

Would it still be wise or appropriate for people who are aged 55+ yrs old to be using buy and hold investing strategy?

I’m trying to help my parents get into investing at an age close to retirement. I personally have used buy and hold strategy and have got a few investment properties in my portfolio. I am not sure if I should suggest to my parents whether or not to use the same strategy since buy and hold is more of a long term strategy? Should they just focus on short term strategies such as flips, wraps and lease options instead?

Any advice please?

Thanks in advance.

Kind regards,
Al

My strategy - I’m 60+ - Posted by gerald(tx)

Posted by gerald(tx) on June 29, 2003 at 16:23:49:

I’m an ex RE broker, left that gig several years back, had several rental properties. Sick and tired of the landlord thing, I sold them, put almost everything into mutual funds, 401k, etc. Retired in my late 50s with enough to never have to do anything again.

Or so I thought. The market went south, meanwhile I was withdrawing every month, putting a double whammy on my funds.

Decided to get back in the RE game and try some Sub2s this time. I quickly developed an income where I no longer make monthly withdrawals from my stocks. I just let those funds sit, wait for a rebound without putting additional pressure on them.

Meanwhile, a few hours a month in RE gives me something to do, keeps me off the street, and at the pace I’m going this year, looks like I might break six figures in additional income. Not bad for a retiree playing part time, I feel.

Have they got any dough? - Posted by GL - ON

Posted by GL - ON on June 29, 2003 at 13:04:34:

If your parents have no experience with real estate investing the best thing would be to invest through you.

Either by loaning you money to buy a property and holding a mortgage or through a partnership agreement in which you are the managing partner and they are the silent partner.

In either case they would have a steady safe monthly income backed by real estate with no management or skill or knowlege required.

I have done this for my mother and I know she gets a much better return, with greater safety, than she gets in any other investment she has.

Old crocks - Posted by GL - ON

Posted by GL - ON on June 29, 2003 at 12:51:01:

It just occurred to me, that the majority of the membership of my local real estate owner’s club is old crocks from 50 to 80 years old.

All buy and hold investors actively managing their holdings which they have owned for between 10 and 50 years.

here’s some thoughts - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on June 29, 2003 at 12:23:36:

Al-------------

It seems to me that you are already thinking too far down the path. First, stop and ask what is the goal here? What do you want your parents to get out of this other than the fun of owning properties which are the target of wood-destroying organisms?

Remember to think about the three money engines of real estate: C A T–Cash flow, appreciation, tax benefits. What do they want or need most?

Then think about their resources to accomplish this. What are their skills, finances, and other interests. Then think about the location where they would be investing what will work well there? Here in Coastal California, it is virtually impossible to buy a property for little down and have positive cash flow. But we get good appreciation. What’s it like where they live.

Remember that finding bargain buys–the essense of the quick turn way of making money with real estate–is a lot of work. Holding onto rental properties is typically a lot less of effort.

Good Investing**********Ron Starr********************

Another good strategy. - Posted by GL - ON

Posted by GL - ON on June 29, 2003 at 09:48:30:

Another good strategy for the investor looking forward to retirement is equity sharing.

In this strategy, you help someone buy a house (to live in) by putting up the down payment.

In exchange you get half the equity, in other words a half interest in the house.

The tenant/owner pays all the bills, mortgage payments, taxes etc. and does all the repairs. And gets the other half of the equity.

The investor gets a safe trouble free investment with no vacancies, no tenant hassles, and no negative cash flow ever.

The 55 year old who is looking to retire at 65 could put a condition in the deal that after 10 years, if they have not previously sold the house, that the house must be appraised, and either sold or refinanced so the investor gets his investment back plus his half of the equity.

If you time this for after you retire, the tax consequences will be small as it is a capital gain, and after retirement your income is normally smaller than when you are working.

A real smart person would look to buy a house at a bargain and resell at full market value, thereby getting his share of the equity cheap or possibly for nothing.

Best strategy for 55 + - Posted by GL - ON

Posted by GL - ON on June 29, 2003 at 08:45:27:

Here is an idea for real estate investing for the retirement age group that I have never seen mentioned before, except by me.

I got it from an English author who wrote about it 50 years ago.

It seems he was on a week’s holiday by the sea in the south of England. It was a resort town popular with older retired people.

He noticed that one of the other guests at his hotel seemed to be some kind of celebrity. The manager treated him with great deferrence and so did the staff. When he and his wife came into the dining room, a waitress hurried over immediately, and he noticed that they enjoyed special dishes not on the menu.

For several days he amused himself trying to figure out who this couple could be, but finally gave it up.

He asked a waiter if he knew who the couple was. The waiter replied:

"Yes, it is a well known local businessman and his wife. A few years ago he retired, sold his business, sold his house, and bought this hotel.

Then he leased it to a smart young manager.

He has the best suite in the house, room service, all his meals in the dining room, and he never gets a bill.

Plus he makes 10% a year on his investment".

Now that’s a retirement plan! I wonder how much it costs to buy a hotel in Hawaii?

Real estate for 55+ years old - Posted by GL - ON

Posted by GL - ON on June 29, 2003 at 08:33:16:

When my father was 55 years old he absolutely refused to have anything to do with real estate investing in any form, because it would take too long to pay off and he didn’t have time to wait.

That was 25 years ago and he is still going, though life would be a lot easier for him financially if he had gotten into some good real estate investments.

I appreciate the idea that you shouldn’t bother planning for the future in case you croak but what if you survive?

If you die leaving a million dollars worth of real estate you won’t care. You won’t care about anything. And I promise, no one will go Ha Ha, look who didn’t live to cash in his real estate.

On the other hand if you live another 10 years you will be sitting pretty.

I’m 52 and a long way from giving up on real estate.

Not bad at all Gerald - congrats (nt) - Posted by matt in mi

Posted by matt in mi on June 30, 2003 at 13:46:54:

nt

Re: Another good strategy. - Posted by Houserookie

Posted by Houserookie on June 29, 2003 at 13:23:22:

GL (ON),

What a great idea!!!

I might look into doing this myself.

Cheerz,