Sunday, September 12, 2010


I was reading on a BLOG several months back, I cant recall the name. But, they were talking about wise investments (most of us dont have money to invest- Ill get to that too) The BLOG author was thinking commercial property would have a positive return. It will not !

We need to stop thinking in those terms, rental property only worked well in an inflating and vibrant economy. We will inflate but the vibrancy isn't there to support a need for commercial property. I have had rentals before and honestly I spent most of the time chasing tenants to get paid. These were low end houses so that was a large part of the problem. A lot of times a tenant would move-in pay for the first month, and then didn't pay for the next month. It would take most of that month to kick them out. Then another month to haul off all the crap that was left behind, and to get a new renter. So each three month cycle I collected one months rent and spent a huge amount of time to go broke. Its not a direct comparison to commercial property, but the risk is huge when your returns are dependent on people as tenants that aren't very reliable. It would be more dependable if I had been more selective...It is a lesson to me, giving people a chance to prove they can be responsible in the future is a loosing deal. I got screwed every-time. Most people wont utilize opportunity, to propel forward. Its the same reason welfare doesn't work.

Here is some figures to mill over, when pondering investments. A house costing 60k will return about 500 a month in rent, this doesn't include costs of maintenance. But lets just give it the benefit and say your tenant is a good one and pays every month, and nothing breaks. So 60k in cold cash will net you 6k a year.

When I got a judgment from child support, the judgment was illegal but trying to prove I wasn't served was imposable. Among the first things they did, was to lien all my property. So the property was completely locked-up with no warning...I was cash pore my money was all in property. With a lien showing on my credit report a loan was imposable, banks cant loan to you without paying all judgments. Not only can your property assets get locked up. But the first thing an attorney will do when filing suit against you is check to see how much property you own. Remember, people have the mind-set that property holdings, equate to wealth. So the county property records are strengthening there resolve to sue you. They think you have money and there coming to get it.

Real estate is not liquid at all. And its a huge target to get sued, by opportunists. Now, here is a better Idea! Cows. 12 cows will costs around 12k sometimes they are bread for this price, the offspring will net you 500 each. that's a return of 6k per year.

So the house rental is 60k to net return 6k and not liquid and lien-able.

The cows are 12k to return 6k and very liquid, and nearly imposable to lien. Also the auction houses don't report payments to the IRS.

Sure you need land for the cows, but range land is cheaper than buildings, and with our curnt melt down any thing agriculture is a very safe bet.

We had our property up for sale a while back and the highest offer was 6 times what we payed 6 yrs before. Its funny today houses prices are still falling but agriculture land is rising. We were looking at walking away with 200K in our pocket after the sale. But the child support Nazi's would have taken half. And we couldn't find anything we liked better. We decided to stay where were at. In fact our plan now is to retain the property as a safety net for our old age.

There are still deals to be had on vacant land, they are going up in price so get yours now, or you will be left in the dust.

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