Given today's real estate market

[phikappapsi]

That's awful man, truly. But seeing as now we're on the clear backside of that bubble, can much more really happen to housing? Not to go in a political direction (obviously this isn't a politics forum) but does anyone see any way for inflation not to kick in over the next 3-5 years? Interest rates have to go up at some point, seems to me that a mortgage now, at 3.5% is almost going to look like free money in 5-10 years.

[barrysloate]

Joe- if you buy a second house for rental, and the rent income pays for the mortgage, taxes, and upkeep, it's hard to imagine it won't work out. But always built into that formula was the idea that the property would increase in value. I don't think you can count on that any more. So factor everything in and see if it still makes sense for you.

[bbcard1]

There seems to be a built in assumption that baseball cards are more liquid than real estate...that is a flawed perspective because of the sickness we share here on this board. Both are only liquid at a price. Maybe real estate is down, but most baseball cards are as well to a great degree except for the thin level at the top.

[Leon]

Originally Posted by bbcard1

There seems to be a built in assumption that baseball cards are more liquid than real estate...that is a flawed perspective because of the sickness we share here on this board. Both are only liquid at a price. Maybe real estate is down, but most baseball cards are as well to a great degree except for the thin level at the top.

Politely disagree. I can sell cards in the next hour to get 200k and have it tomorrow......can't do that with a house. Hell, I have an 815 credit score and can't even refinance!!

[phikappapsi]

Leon. I think his point was, you could probably do that with a house too, if you were willing to sell a 400,000 house for 200k. Maybe the cards you're talking about have a value of 400k, but given the current market, if you wanted to sell them fast, you'd have to underprice.

[Leon]

Originally Posted by phikappapsi

Leon. I think his point was, you could probably do that with a house too, if you were willing to sell a 400,000 house for 200k. Maybe the cards you're talking about have a value of 400k, but given the current market, if you wanted to sell them fast, you'd have to underprice.

I have bought and refinanced several houses. No one can get money the next day through that method. And I think with the cards I have in mind I could get 150% of what I paid and at least 80% of market value quickly.

[barrysloate]

Originally Posted by Leon

I have bought and refinanced several houses. No one can get money the next day through that method. And I think with the cards I have in mind I could get 150% of what I paid and at least 80% of market value quickly.

Leon- agreed that rare baseball cards are a very liquid asset, and that you could get 80% of their value rather quickly. But you would be leaving 20% of their value on the table. I think any asset discounted that deeply would be pretty easy to sell. If your home is worth 500K and you put it on the market for 400K I don't think it would take too long to sell either.

[bbcard1]

Originally Posted by Leon

Politely disagree. I can sell cards in the next hour to get 200k and have it tomorrow......can't do that with a house. Hell, I have an 815 credit score and can't even refinance!!

You have to admit you are unusually qualified to sell cards for nearer retail...which is cool. You are probably well aware that the refi issue is most likely your employment status, not your credit score. I have a friend who runs a rather successful recruiting business with 15 employees. The employees can qualify for loans based on their salary and gainful employment, but he cant' because he is dependent on a company he runs. Even though he is the guy who pays all the other people.

We have had similar problems. Had I not sold baseball cards to a banker for years, I would have probably not been able to get the very small loan I needed to start my company...

But yes, anything will sell at a price. There are plenty of cash buyers for real estate if the price is good enough.

For what it's worth, I am pretty much investing in saving money and keeping it reasonably liquid. I have a son heading off to college next year and a daughter three years after that. I buy cards for enjoyment, though I hope in the long run to at least break even. I buy a little metal, but you have to be in a very specialized place for that to work an it's a pretty small part of my financial equation. I can certainly see an inflation scenario and would think that the factors would point toward that...but I could also see a deflationary cycle with the pressures.

[mrvster]

If u can, have both

If not, a house would have to come first before your cards, like Leon said " you can't live in your cards"....

But if ur half way comfy, and basically don't need an "extra" house, or your doing fine making your mortage payments, then why not collect/invest in vintage???????????....if u don't wan't to deal with investment renting, then my theory is collect/invest....


like antiques=rarity and condition...

i go with rarity, that supercedes condition unless u can afford both inmho...


collect rare, qaulity, desirable cardboard....


i have only seen my t206 rarities appreciate since 1998 at exceedingly crazy rates....

i don't know, but i think the trend is keeping up with wag pushing the investment/collection...



but if your not into t206, there are other issues ....some are too are too volitile...

i love ojs, as a second vehicle, but unless collect the rareer ojs, the commons remained stable...anything 19th century seems like a safe investment also, mayos, ect


i got my quarterly 401 K statement and almost cried the other day, and hasn't gotten that much better over the years, changed the investment mix / diversification doesnt seem to matter either the "investors know what they are doing"



(please excuse me ,old business major here)



I don't care what anyone says, the rare unique desirable cards(in any set, that would be debated in another thread) seem to , dare i say it, recession proof

cardboard is only worth what someone else is willing to pay for it, like anything else in this world.....and if it is rare and desireable enuf, the investment takes fruition....like a small entity,

as long as there are individuals with moola, the desireables will be in demand..


simple economics=


supply and demand....

you would have to take care of maslow's heirachy of needs first and foremost, if you are comfy at the level you are at , then why not collect/invest.... cardsare very liquid( also as leon stated)

collectors are going to cringe when they read what i wrote about collecting as an investment, but these are different times, and these maybe alternative investments for many, instead of the traditional ones...

i always wanted to buy gold years ago, but never did.....that to me is a good investment....education is a good investment.....1988 topps might not be

i like real estate, but i am obsessed with t206


Summation:


COLLECT TO INVEST IF YOU ARE WORRIED ABOUT It, it's not far fetched .......

sell if in trouble...


sell your freak t206 to me is so desired??

peace

johnny

[z28jd]

Someday Johnny, you will work all 11 emoticons into the same post, forcing Leon to create new ones. Keep on working towards your goal my friend!

To answer the question in this thread, I have no clue. I live in an apartment above a garage and almost 90% of my assets are cards, 8% is in 2 antique cars, 1% is silver and 1% is cash. I do have enough cards from the 80-90's to build a house out of them so pish-posh to whoever said you can't live in your cards

Originally Posted by mrvster

If u can, have both

If not, a house would have to come first before your cards, like Leon said " you can't live in your cards"....

But if ur half way comfy, and basically don't need an "extra" house, or your doing fine making your mortage payments, then why not collect/invest in vintage???????????....if u don't wan't to deal with investment renting, then my theory is collect/invest....


like antiques=rarity and condition...

i go with rarity, that supercedes condition unless u can afford both inmho...


collect rare, qaulity, desirable cardboard....


i have only seen my t206 rarities appreciate since 1998 at exceedingly crazy rates....

i don't know, but i think the trend is keeping up with wag pushing the investment/collection...



but if your not into t206, there are other issues ....some are too are too volitile...

i love ojs, as a second vehicle, but unless collect the rareer ojs, the commons remained stable...anything 19th century seems like a safe investment also, mayos, ect


i got my quarterly 401 K statement and almost cried the other day, and hasn't gotten that much better over the years, changed the investment mix / diversification doesnt seem to matter either the "investors know what they are doing"



(please excuse me ,old business major here)



I don't care what anyone says, the rare unique desirable cards(in any set, that would be debated in another thread) seem to , dare i say it, recession proof

cardboard is only worth what someone else is willing to pay for it, like anything else in this world.....and if it is rare and desireable enuf, the investment takes fruition....like a small entity,

as long as there are individuals with moola, the desireables will be in demand..


simple economics=


supply and demand....

you would have to take care of maslow's heirachy of needs first and foremost, if you are comfy at the level you are at , then why not collect/invest.... cardsare very liquid( also as leon stated)

collectors are going to cringe when they read what i wrote about collecting as an investment, but these are different times, and these maybe alternative investments for many, instead of the traditional ones...

i always wanted to buy gold years ago, but never did.....that to me is a good investment....education is a good investment.....1988 topps might not be

i like real estate, but i am obsessed with t206


Summation:


COLLECT TO INVEST IF YOU ARE WORRIED ABOUT It, it's not far fetched .......

sell if in trouble...


sell your freak t206 to me is so desired??

peace

johnny

[martingale]

Don't do it, for two reasons:

1) Real estate is not an investment, it is a place to live. (Unless of course you are very wealthy, don't have to borrow to incur in debt, and can afford to have an illiquid asset as a small percentage of your total net worth).

2) When interest rates go back up, the cost of money is going to be higher and it is very possible real estate prices will go down because buyers will not be able to afford as much real estate as today.

[phikappapsi]

Logical flaw... As interest rates go up, inflation does too... So even if rates would pressure home values down, inflation pushes home values up. So if you can leverage debt in today's dollars at 3.5% and rates go back to the 7-9% range which is a historic average, youre basically earning. 5+% untaxable dividend, even before the home itself rises in value.

I know it sounds like I'm talking myself into liquidating my collection...not the case, just playing devils advocate to the previous post.

[tiger8mush]

I've heard good and bad stories about rentals. Some of my friends have rental properties. Sometimes the tenants are perfect, the houses never needing maintence, tenants always paying on time, etc. But then there are the not-so-good parts, where friends need a place to stay and it they don't pay rent and they out-welcome their stay, tenants wreck the house, are a nuisance to neighbors, house is in constant need of repairs or appliances always breaking, roof leaks, basement carbon monoxide detector goes off at 2am so u get the phone call, house goes unoccupied for a few months in between tenants, etc.

Sure, you'll probably make some money, but is it worth it? Is the renter's market good right now, considering people can buy the house themselves for a cheaper price? Can you afford to hang on to the house a few years until the market picks up so you CAN make money on the rental?

Good luck!

[egbeachley]

Originally Posted by phikappapsi

Logical flaw... As interest rates go up, inflation does too... So even if rates would pressure home values down, inflation pushes home values up. So if you can leverage debt in today's dollars at 3.5% and rates go back to the 7-9% range which is a historic average, youre basically earning. 5+% untaxable dividend, even before the home itself rises in value.

But with inflation you also get appreciation on pretty much everything, houses and cards.

In general, interest rates and housing prices go in different directions. It sounds counterintuitive but the best time to buy a house may be when interest rates are very high, and housing prices low. Then when the rates go back down and the house prices are back up you refinance. N

[phikappapsi]

To clarify for some in the thread...the house I already own is a multifamily rental. The house I'd be buying would be a single family, and I'd be renting out the unit of the current house that I already live in.

[phikappapsi]

Originally Posted by egbeachley

But with inflation you also get appreciation on pretty much everything, houses and cards.

In general, interest rates and housing prices go in different directions. It sounds counterintuitive but the best time to buy a house may be when interest rates are very high, and housing prices low. Then when the rates go back down and the house prices are back up you refinance. N

I understand what you're saying, and logically it makes sense, but it doesn't actually hold water. Look at the time periods in this country of relatively high interest rates, and expansive inflation...housing values typically outperform the inflation adjusted metrics of those time periods.

Again, I have multiple avenues of buying the second home. I was only toying with the idea that cardboard might be the correct source of liquidity to cover the initial costs. Not sure there's one specific "correct" answer

[egbeachley]

Originally Posted by phikappapsi

I understand what you're saying, and logically it makes sense, but it doesn't actually hold water. Look at the time periods in this country of relatively high interest rates, and expansive inflation...housing values typically outperform the inflation adjusted metrics of those time periods.

Again, I have multiple avenues of buying the second home. I was only toying with the idea that cardboard might be the correct source of liquidity to cover the initial costs. Not sure there's one specific "correct" answer

Over time, housing prices always match inflation. If they were off by even a few tenths of a percent, eventually everyone would own a home or nobody would.

[JasonD08]

Coming from a builder/investment property owner/card collector.....Guys it all comes down to math. I have lost over $200K in the last 3 years sitting on empty real estate. With taking that into consideration, every deal has to be looked at uniquely. If the math works out then a person can build wealth faster now with real estate than ever before. I have lost most $$ on spec homes built to sell and made more recently on investment property. With that being said, the time is right now to purchase rental property because the supply is high and interest rates are lower than we will ever see them. Now, I would not recommend being a landlord to anyone but it can pay off. I have had many in the same business tell me dont do it, that it is a headache, but hard work can pay off. You have to rent to the right people and line up your ducks, and be willing to sit empty for a month or two rather than just stick anyone in there. Also make a plan to own atleast 10......1 or 2 will just be a headache and not worth it. Atleast with 10 you should have a nice income every month and if 1-2 go empty the others will help carry them. Do what you enjoy in life. I would not recommend investment property to just anybody. I still stand firm in real estate as the way to build wealth. All of the other stuff (cards, stocks, etc.) are just smoke and mirrors. They dont make more land folks.

Jason