Do you golf? Somebody always asks that question. My response is that I have clubs. Still do not have enough time to actually use them, but I have a set. We have been members of two other golf clubs, prior to the one we belong to now. My husband is the only person in this family who actually has the time to golf. Why we needed to belong to more than one club at a time is a point of debate. If you are completely honest with yourself, you may have to admit that you too do not have enough time to play golf regularly & join a club because golf takes too much time. I would have to say that’s my guess about why participation in the sport has dropped off. Golf takes about twice as much time as tennis. Maybe a difference of 3-4 hours per week. Multiplied over a year that amounts to 150-200 hours. You need to be retired or POTUS to be able to do that unless you devote every weekend to it, which won’t make your spouse happy if they are not playing with you. Younger people in their prime working hours look at that time commitment and think of what else they could be doing – working their way up at their company or building a business. And when will you find time for your family commitments? Real estate can be an ideal business and investment!
Short Sales & Investors
Year to date 2014 has produced about 200,000 short sales, which is a drastic reduction year over year. The tax code provision allowing for non-taxation of cancellation of debt has not been renewed. There may still be something enacted, but in my estimation it wouldn’t be before mid-term elections. In any event it would have to be made retroactive to cover the 2014 tax year. If you live in a judicial foreclosure state like Florida, which has deficiency judgments, you can negotiate any cancellation of debt amount, whereas in a foreclosure you cannot. Additional expenses get added on to your cancellation of debt amount that gets reported to the IRS, including attorney’s fees, repairs, etc. If you are eligible for a short sale (just because you have a property you owe more against than its market value does not make you eligible for a short sale) you definitely want to talk to professionals for the legal and tax consequences of a foreclosure. If you are not eligible for a short sale, please consult an attorney to help you understand your options. One might be bankruptcy, but if you have other assets, your lender will most likely have a requirement that you use them to settle your debt. If you have a short sale situation many investors will probably approach you and if you do not have a real estate professional who understands short sales, you could end up in trouble by signing on to a sales contract. Just make sure you take any documents to an attorney for review. Lots of homeowners trying to do short sales now are running into roadblocks with their lenders. There is a bit of lender chaos now. Work with someone who can actually be helpful to you.
3 Month Gaps
May, June and July were spent recovering from a health problem (or at least getting all screening tests that doctors like to order) and being in a doctor’s office roughly 3 times a week on average. That’s more than I had been to a doctor in 10 years’ time!
My history is one of not being overly concerned about my health, other than being fairly obsessive about eating well, sleeping enough, being active and taking a “wait and see” attitude if something seems a bit not to my liking. Generally, my attitude has been that I will go to a doctor when I have broken something or I’m unconscious 😉
This does not make doctors happy. Screened and tested for a solid three months, during which time nothing major or immediately life threatening has been found, it seems a lot of my time and money was wasted. Why is it that if doctors cannot find anything major wrong with you they think they just need to do more tests?
Please don’t get me started on drug side effects. They mostly match any complaints I might have had, but then how are you to know if it’s the drug itself that’s actually maintaining a symptom that probably would have gone away with a little time? My method is to tell the doctors to take me off whatever has the same side effects as an original symptom. Let’s see if it goes away.
Do doctors realize how stupid they sound sometimes? (No offense to those doctors in the family.) It’s like an attorney asking you “Were you alone or by yourself?”
All kidding aside, there are a couple of doctors I like, but even they are meddlesome. I guess they don’t see many people my age without major problems. No, that’s not it, is it? Doc: “Wouldn’t you want to know . . . if you were going to die?” Me: “We’re all going to die someday.”
We can’t choose when we’re going to die or the how. But we can choose how we’re going to live.
I’m having a rant about our medical systems. They seem so oriented to disease. I prefer those practitioners who believe in integrative health so you can live your best version of yourself.
GRM (Gross Rent Multiplier) and Cash on Cash Return
Investors like to use the GRM as a fast method for identifying a potential cash-flowing investment property.
To figure your GRM, use your purchase price divided by the potential gross rents on an annual basis.
Many investors like to see a net of 8-20% cash on cash return on their investment. If you consider your initial investment (downpayment) then divide by your net cash flow (not gross – you want to use your cash flow after all your expenses.) This allows you to decide if your investment will meet your cash on cash return requirement. It’s also where you decide if the risk is worthwhile for the return based on other factors.
Right now investors are not being compensated for the risks they are taking by keeping funds in banks or in the stock market. Historically, the real rate of return has been a lot higher on real terms. Don’t hold your breath waiting for the rates they pay you to rise. This is why you need to consider real estate that offers cash flow to build your portfolio and wealth.
