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Originally Posted by venomous viper
Ok, I'll bite. Don't buy with neg cash flow, don't sell,don't do a balloon loan, just re-fi, hire good mgmt, and check areas that are good to invest in. Try any of these in the past and you win HUGE. Calif in most decades, St. George in 90's, Casa Grande AZ in 2000, Bend Ore last 5 years. All made OVER 100% increase in value in 5 years or LESS. If you put $10K down on any of them , when value doubled, you increased your 10K to 100K. That is leverage my friend, and many are doing it RIGHT now, like me. Over last 49 years, the annual avg PER year is 6.34%. If you want to not pay taxes legally and create wealth, real estate is your best choice, period.
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Thanks, I understand real estate finances. Too bad for me Utah late 90's wasn't one of those time periods. It's not as simple to catch one of those waves as you describe. You see real estate ramping up, and it might be a false ramp up and go back down. Another time, you might try to get it and it will jump 20% in a month or two while you're figuring out what to buy and what's happening in the market and you missed the ramp up. You also have to know what to get out. These things happen quickly and if you miss the high point, you could get hurt in a correction.
Also, you don't always know the cash flow's going to be negative when you have repairs and tenants stick you for rent. I believe in real estate, but it's not for everyone. When I get a larger portfolio, I'll get back in. For now I'm sticking with index funds.
Also, where do you get the 6.34% number? Sounds high.