Going back home with $1.5M. How should I start?
- Thread starter cammeray
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You will hear many different opinions on what you should do depending on the perspective of the individual providing the opinion.
If I were in your shoes at your age I would go with option 3, invest the money and find a interest not related to working and earning money.
Real estate investing, or for that fact any form of risk investment is stressful. You, in my opinion, have all the money and income to support you for the rest of your life so lay back and enjoy only those things that bring you pleasure outside of earning more money.
It appears you want to accumulate wealth for the purpose of accumulating unnecessary wealth. There are too many more meaningful purposes to life to waste your time investing in real estate.
If I were in your shoes at your age I would go with option 3, invest the money and find a interest not related to working and earning money.
Real estate investing, or for that fact any form of risk investment is stressful. You, in my opinion, have all the money and income to support you for the rest of your life so lay back and enjoy only those things that bring you pleasure outside of earning more money.
It appears you want to accumulate wealth for the purpose of accumulating unnecessary wealth. There are too many more meaningful purposes to life to waste your time investing in real estate.
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It's difficult to say since I don't know which forms of investing that you are proficient in. Speaking for myself I would choose 3, but having said that I recognize my own strengths and weaknesses in the various kinds/types of investing from long experience.
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Much has changed in Vancouver in 5 years. I would not buy right away. Rent for a year in a location that you like (say Yaletown or Kits or UBC or W-Van or N-Van or White Rock or West Side) .. then decide what and where to buy. (i.e. option 3, for now). With prices very high in Vancouver buying may not be the best financial investment for a home.
Consider buying an old apartment building in Kits, close to the beach, where you live upstairs in teh renovated penthouse with a view, and have 10-12 tenants downstairs paying rent.
Then I would do more of what interest you in life (skiing ? windsurfing ? cooking ? being a realtor ? building houses ? writing SW ? teaching ?) That may require a skill upgrade and networking to get into that space.
I would also educate myself in new skills.
I would also join a club or church or social gathering place where you meet people of like interest.
Related post on $1M investment options: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-26733-133015-What_is_better_cash-flow__or_higher_ROI_.html
Let's do lunch when you're back, if you want.
Consider buying an old apartment building in Kits, close to the beach, where you live upstairs in teh renovated penthouse with a view, and have 10-12 tenants downstairs paying rent.
Then I would do more of what interest you in life (skiing ? windsurfing ? cooking ? being a realtor ? building houses ? writing SW ? teaching ?) That may require a skill upgrade and networking to get into that space.
I would also educate myself in new skills.
I would also join a club or church or social gathering place where you meet people of like interest.
Related post on $1M investment options: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-26733-133015-What_is_better_cash-flow__or_higher_ROI_.html
Let's do lunch when you're back, if you want.
consider buying an old apartment building in Kits, close to the beach, where you live upstairs in teh renovated penthouse with a view, and have 10-12 tenants downstairs paying rent.
Q. Is this doable with the money I have? Kits and close to the beach just sound really expensive. I searched through MLS, and I have hard time locating the price range for apartment building you described above.
Q. Is this doable with the money I have? Kits and close to the beach just sound really expensive. I searched through MLS, and I have hard time locating the price range for apartment building you described above.
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[quote user=cammeray]
Q. Is this doable with the money I have? Kits and close to the beach just sound really expensive.
For around $4M you can find one. $1.5M cash plus $2.5M mortgage or so. Here is one, there are others: http://www.goodmanreport.com/print.php?id=1046
Another discussion to have (with yourself or others) is how
a) how much time to invest for each investment, i.e. how active do you wish to be, and
b) how to allocate the money
re a: You can usually make more money combining your own knowledge, your own time and your own money with access to credit. See more here on these "Five Ways to Make Money". [I say usually as you need to know what you are doing in a chosen space, and that is not always the case. But if you not only invest cash, i.e. green $s, but also time/knowledge/expertise/credit i..e blue $s you need to get additional return for that second category] Obviously you were able to do that in Asia - so why not here or from here ? [btw: what did you do in Asia]. So a decision how to allocate your time and knowledge across these 4 (or perhaps 5) ways is critical, too, and may shift in time as you gather more local knowledge and contacts.
re b: Our firm offers investments, many REIN members offer JVs or RTO deals, there are private equity investment offerings (also referred to as the "exempt market" in Canada), there are stocks or ETFs or mutual funds you can buy, or MICs, or all sorts of esoteric, excellent and dubious investments. So, if you wish to allocate say $1M, I'd create at least 10, perhaps up to 20 buckets of $50,000 to $100,000 each, and then invest each bucket in various asset classes. This is referred to as "asset allocation".
This is not investment, tax or financial advice. This is only an (informed) opinion of how I organize my own life & investments.
Q. Is this doable with the money I have? Kits and close to the beach just sound really expensive.
For around $4M you can find one. $1.5M cash plus $2.5M mortgage or so. Here is one, there are others: http://www.goodmanreport.com/print.php?id=1046
Another discussion to have (with yourself or others) is how
a) how much time to invest for each investment, i.e. how active do you wish to be, and
b) how to allocate the money
re a: You can usually make more money combining your own knowledge, your own time and your own money with access to credit. See more here on these "Five Ways to Make Money". [I say usually as you need to know what you are doing in a chosen space, and that is not always the case. But if you not only invest cash, i.e. green $s, but also time/knowledge/expertise/credit i..e blue $s you need to get additional return for that second category] Obviously you were able to do that in Asia - so why not here or from here ? [btw: what did you do in Asia]. So a decision how to allocate your time and knowledge across these 4 (or perhaps 5) ways is critical, too, and may shift in time as you gather more local knowledge and contacts.
re b: Our firm offers investments, many REIN members offer JVs or RTO deals, there are private equity investment offerings (also referred to as the "exempt market" in Canada), there are stocks or ETFs or mutual funds you can buy, or MICs, or all sorts of esoteric, excellent and dubious investments. So, if you wish to allocate say $1M, I'd create at least 10, perhaps up to 20 buckets of $50,000 to $100,000 each, and then invest each bucket in various asset classes. This is referred to as "asset allocation".
This is not investment, tax or financial advice. This is only an (informed) opinion of how I organize my own life & investments.
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Only speaking for myself, "asset allocation" doesn't make financial sense. Conventional "diversification" and "rebalancing" also don't make financial sense (to me). I don't do any of it since I believe that these 3 things do the opposite. That is they destroy wealth.
Hmm.. What about geographical diversification ? If I have ton of physical gold, I would not want to hold them all in one specific location. What if you have for example $10m cash? Holding in one institution in one country don't make sense to me...from my own experience asset allocation and diversification is essential to sleep well in night, at least for me. Of course, asset allocation in mutual fund is a stupid idea.
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[quote user=Rickson9] That is they destroy wealth.
Wealth creation needs asset concentration indeed. However, it assumes a strong knowledge in that space (e.g. gold, high tech, real estate, restaurants, ..) .
Wealth preservation on the other hand assumes you focus less of your assets into one sector (coupled with your time/expertise) and more into multiple asset classes.
Wealth creation needs asset concentration indeed. However, it assumes a strong knowledge in that space (e.g. gold, high tech, real estate, restaurants, ..) .
Wealth preservation on the other hand assumes you focus less of your assets into one sector (coupled with your time/expertise) and more into multiple asset classes.
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Eddie are you interested in thinking outside the conventional income investment type property that is the norm for REIN. If so then BC offers a opportunity for you that through a single property investment could potentially achieve your goal from day one.
The catch is you will not learn about it through REIN and it will require a unique educational curve on your part.
There is a reasonably large field of opportunity in BC that is virtually ignored by most due to unfamiliarity and undeserved negative stigma. My understanding is that in BC it is popular with retirees and has positive benefits such as extremely low vacancy rates and lower that conventional expenses.
Interested in learning more or are you locked into a conventional investment future.
PS- there is nothing in this for me so if your are interested I will post a link for you to research the topic.
The catch is you will not learn about it through REIN and it will require a unique educational curve on your part.
There is a reasonably large field of opportunity in BC that is virtually ignored by most due to unfamiliarity and undeserved negative stigma. My understanding is that in BC it is popular with retirees and has positive benefits such as extremely low vacancy rates and lower that conventional expenses.
Interested in learning more or are you locked into a conventional investment future.
PS- there is nothing in this for me so if your are interested I will post a link for you to research the topic.
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This is very intriguing. Would love to know what it is.
[quote user=invst4profit]There is a reasonably large field of opportunity in BC that is virtually ignored by most due to unfamiliarity and undeserved negative stigma. My understanding is that in BC it is popular with retirees and has positive benefits such as extremely low vacancy rates and lower that conventional expenses.
[quote user=invst4profit]There is a reasonably large field of opportunity in BC that is virtually ignored by most due to unfamiliarity and undeserved negative stigma. My understanding is that in BC it is popular with retirees and has positive benefits such as extremely low vacancy rates and lower that conventional expenses.
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[quote user=invst4profit]There is a reasonably large field of opportunity in BC that is virtually ignored by most due to unfamiliarity and undeserved negative stigma.
trailerparks ?
trailerparks ?
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[quote user=ThomasBeyer] trailerparks ?
http://www.mobilehomeuniversity.com/index.php
http://www.mobilehomeuniversity.com/forum/list.php?1list.php
Not trailer parks.
Mobile (Manufactured) Home Communities. They range from the lowest form of housing ("trailer parks") up to luxury gated retirement communities. Cash cows with next to no brick and mortar expenses. Vacancies are almost non existent as tenants own the homes and must continue to pay rent till the new owner takes over payments. In addition there are opportunities to buy and flip homes within your own community, provide mortgages ( 10% +) and private loans to residents if desired. Generally communities have on site management. Expenses generally run at 30% or less where brick and mortar properties are typically in the 50% range for expenses.
You only own and rent the dirt, maintain the roads, sewer and water.
It's an unknown product for must investors. If interested study the posted forum. They even provide training (like REIN) specializing in the unique investment. From what I have seen they are extremely popular in BC and well worth specializing in from my perspective. If I were younger I would buy up every one that I could afford at 100% leverage if possible.
They generally sell with a cap of between 10 to the high teens depending on the class of property.
But (big BUT) education is the key to success as with any property. The risk of paying too much is always present and financing is extremely difficult to obtain (banks simply do not understand and negative stereotyping is a major hurdle). Seller financing is a major component but corporations are buying them all up (at least in Ontario) so prices tend to be climbing drastic.
http://www.mobilehomeuniversity.com/index.php
http://www.mobilehomeuniversity.com/forum/list.php?1list.php
Not trailer parks.
Mobile (Manufactured) Home Communities. They range from the lowest form of housing ("trailer parks") up to luxury gated retirement communities. Cash cows with next to no brick and mortar expenses. Vacancies are almost non existent as tenants own the homes and must continue to pay rent till the new owner takes over payments. In addition there are opportunities to buy and flip homes within your own community, provide mortgages ( 10% +) and private loans to residents if desired. Generally communities have on site management. Expenses generally run at 30% or less where brick and mortar properties are typically in the 50% range for expenses.
You only own and rent the dirt, maintain the roads, sewer and water.
It's an unknown product for must investors. If interested study the posted forum. They even provide training (like REIN) specializing in the unique investment. From what I have seen they are extremely popular in BC and well worth specializing in from my perspective. If I were younger I would buy up every one that I could afford at 100% leverage if possible.
They generally sell with a cap of between 10 to the high teens depending on the class of property.
But (big BUT) education is the key to success as with any property. The risk of paying too much is always present and financing is extremely difficult to obtain (banks simply do not understand and negative stereotyping is a major hurdle). Seller financing is a major component but corporations are buying them all up (at least in Ontario) so prices tend to be climbing drastic.
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I would rent until you have been in the area for some time.
I would stay away from putting a material portion of your funds into any investment until you have time to thoroughly research and understand what you are investing in.
Dedicate your time to structuring your life in a way that will provide joy. Thomas had some good suggestions on the first page.
I would also have a large smile on my face all day, every day if I was 32, had 1.5 million in cash and $3500 in monthly passive income. Look up and say thanks.
I would stay away from putting a material portion of your funds into any investment until you have time to thoroughly research and understand what you are investing in.
Dedicate your time to structuring your life in a way that will provide joy. Thomas had some good suggestions on the first page.
I would also have a large smile on my face all day, every day if I was 32, had 1.5 million in cash and $3500 in monthly passive income. Look up and say thanks.
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[quote user=housingrental]I would also have a large smile on my face all day, every day if I was 32, had 1.5 million in cash and $3500 in monthly passive income. Look up and say thanks.
Amen, brother !
Amen, brother !