re vs the market Posted by: cliff physical therapy
Posted on : 3/9/2010 11:44:33 PM what are the advantages of re investing over stocks/mutual funds? |
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 neither Posted by: xburbx
Posted on : 3/10/2010 8:39:57 AM there will be arguements for both sides. i do a good bit on both so i can say that if you know what you are doing on either end, they both work and both have pitfalls. you will find many people heading into re right now will tell you that stocks/mutual funds are not good and to stay away from because their ira just tanked and they want an item they can touch and feel. the reason their ira tanked is because they werent really in control of their investment. stocks/mutual funds are 10x harder to learn than re in my opinion. they do offer far better returns from residential re investing if you know what you are doing.
at the end of the day, you can go with either, but will fail if you are not intimate enough with your investment. i feel you should know every single angle to risk and reward with where you put your money. risking 5k to make 1k is dumb in general. depends on success rate of course. Ian (Philadelphia)
WeSellHomes2Fix.com
Blog - http://phillyrei.blogspot.com/ |
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Re:neither Posted by: JerryNJ
Posted on : 3/10/2010 1:20:42 PM Just to expand on what Ian said.
RE is great for generating cash if you know how to find great deals.
I love derivatives markets much more than real estate, and believe they are far better for the kind of lifestyle in my vision. Ive made some great money in the futures markets, and real estate has been nothing more than a vehicle to be capital safe since I have no trust fund. Its taken alot longer than I thought :-(
The important distiction to be made between these types of buying and selling is that with real estate, and especially with wholesaling you can make money with absolutely or very close to no money. You money is limited to costs instead of capital purchasing. With derivatives (or crappy 1:1 equities) you need 20-100K in cash, and multiple factors to be in place and solid before you can have a realistic chance of long term sustained success.
The problem 99% of people have is that they dont like to postpone success for years in the name of learning and managing their emotions. They go to a 3 day seminar instead. Trading is deceptively simple. So they get a broker and tell themselves that the broker will preserve their account. Then they lose their ass, because brokers are commission hogs, not traders. |
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It depends Posted by: ReCoachDennis REI Coach and Mentor
Posted on : 3/10/2010 3:44:54 PM it really depends on you and what you're looking for.
I've placed several blog entries on my site comparing real estate investing with REITs and the stock market and REI just blows them away because of the huge returns you can get with REI- for example a simple wholesale deal where you risked $100 and flipped the home for a $5,000 profit.
Then again, many folks just would rather invest passively and be on the side lines. In that case the market may be better for you. You can also be a money or credit partner and profit from deals that way
Dennis Personal, Real World REI Coaching and Mentoring
http://house-buy-coach-dennis.weebly.com |
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Re:It depends Posted by: xburbx
Posted on : 3/10/2010 11:10:46 PM Dennis
For ROI in that scenario, yes wholesaling wins. The issue is being able to turn money over faster in the stock markets. I know plenty of traders that make about 2500-3500/day trading exposing 400-600 dollars per trade. The difference in what they do any REI is that they make this money day in and day out. It is based off a capital base much larger than the money at risk, but thats more depth. The amount of money per wholesale deal to match those kind of number in constant ROI would require much more capital than $100 and a marketing machine. We turn on the low end 4 deals a month and on the high end 12 and there is no way we could do that at $100/deal. Between marketing, infrastructure, misc expenses it works out to quite a large monthly nut. Im not saying it cant be done, I'm just speaking from my experience. Several traders I know average on the low end 5% / month and the high end 20%+. They do lose some months, but yes I do know that adds up to 60% - 140%/ year. Most people dont believe that is possible, but it is. . Ian (Philadelphia)
WeSellHomes2Fix.com
Blog - http://phillyrei.blogspot.com/ |
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Re:It depends Posted by: cliff physical therapy
Posted on : 3/10/2010 11:54:50 PM any good resources you could recommend to help get educated in the market? thanks guys! |
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which market Posted by: xburbx
Posted on : 3/11/2010 8:32:48 PM stocks - elitetrader - investopedia to start but it's far from the end
rei - this site and biggerpockets would be my suggestion Ian (Philadelphia)
WeSellHomes2Fix.com
Blog - http://phillyrei.blogspot.com/ |
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Note true Posted by: xburbx
Posted on : 3/12/2010 9:28:40 PM If you spend the time to navigate ET there are guys that offer great advice that trade enormous size and have made huge profits. Look up GNOME on there or LESCOR. Those are some guys that trade massive amounts. There are tons of other great people on there, but the ones that arent good are brutal. There is a lot of garbage, but once you see the "trees through the forest" it is a great resource. Ian (Philadelphia)
WeSellHomes2Fix.com
Blog - http://phillyrei.blogspot.com/ |
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