Discussion Point, similar to "Do we pay it off or not?"

We are discussing buying more places. I think prices are too high and he thinks we should be buying regardless, considering that over time, all the expenses and income kind of melds together and what you paid per house ends up not really mattering. We DID buy some during the peak of the bubble back in the day and are glad we have those properties - they never went down during the crashes and today are worth well more than price paid.

If we were young and had TIME on our side for recouping and regrowing the excess money spent, maybe - that's what dollar-cost averaging is all about, really, isn't it? TIME.

But nearing our 70's, having comfortable income from the rentals that we do have, and not *needing* any more except to leave to the kids...I think over-spending on a property now doesn't make sense.

I agree. Paying more than you should for a property never makes sense. I don't believe in growth for growth's sake alone unless the deal makes sense. In my mind risk and time figure prominently at my age.

Why don't you try something different. Get a mountain house and airbnb it. you can use it some of the time and get a little brain growth with figuring out how you are going to do it.

Perhaps buy BETTER houses that are suited to what you want to leave the kids?

Each time you find a good deal, sell the worst one you have and "move up".

Which would make you happier in life?

How much do you need?

When is enough, enough?

Where is that line in the sand?

W,

Me? It's about PROFIT, not number of props.

So I like debt free. Paying off a mortgage yields the same cashflow increase as buying another.

Me? Still buying deals.

Me? Years ago my barber was also a LL. He complained prices were too high so he was not buying any more. I bought 150 more since then. He's still cutting hair at age 80. I'm not.

Me? Life is short. Throw in an illness or accident and it's over.

Moving to bigger, less involved properties.

Me? "Dad, are we rich?" "Son, *I* am rich and you live in my house."

I raised my kids, straighten their teeth, and paid for college. I did MY part as a parent to give them a solid foundation. They are doing very well on their own.

I told them I am not in business to make THEM wealthy so don't count on a big inheritance. Their job is to build wealth for THEIR families, to pay for THEIR children.

For the same reason Wifey and I are NOT contributing to the grandkids' college funds. They will all be fine without our money.

I am a firm believer in NOT giving too much to the next generation. When they THINK it's coming some day their subconscious mind will reduce their motivation. The subconscious mind CONTROLS our lives.

I've watched several LLs from our local assoc give theri props to their kids at death. The kids don't want them, let them run down, etc. They did not EARN the wealthy so they don't take care of it.

BRAD

Words of Wisdom, You make your profit at the Purchase of a rental property, not at the end during the sale!

Examples: I purchased a 4 unit property with 2 singles and 1 one bedroom and 1 two bedroom for cheap -- there was extra land with garages for parking.

Since it had limited income, the sales price reflected on the poor unit mix.

It was all rented out with old long term tenants pay under market rents.

When an upstairs tenant moved out from a single no bedroom unit only paying $472 per month, I put my contractor designer mind to work. I extended the unit, by building on top of the garage a bedroom with a walk in closet, an outside upstairs patio with french doors from the bedroom. Now this unit was transformed from a single 350 square foot unit bringing in $472 a month to a One Bedroom unit with a secure Patio, with a walk in close, a new size of 800 square feet with a rent of $1500 per month.

I did the same for a lower unit by using a garage to add a second bedroom, giving the unit two carport spaces.

For a song I did an all unit upgrade tripling the income.

If you are asking for my input on a national level - I would tell you to buy if it makes you money.

"Houses are too expensive..."

By what metric?

Dollar cost average works with stocks because every share of Stock ABC costs precisely the same amount at x-time.... or close enough to where the difference is immaterial. You have an almost perfect market in the stocks exchanges. The price is the price, and everyone knows what the price is.

Houses are not stocks. Obivous I know, but consider what that means.

House A today has a rough fair market estimated value of $100,000. Fixed up, it has a rough fair market estimated value of $200,000.

You estimate that you can fix it for $70,000.

I estimate I can fix it for $35,000.

Professional Fixer Guy can do it for $25,000.

Is that house overpriced? To whom is it overpriced? All, just you... you and me? All three of us?

Maybe if you rerun your numbers, the deal becomes more obvious...

I buy when the numbers make sense: period. I don't listen to analysts or "news" people. They don't know jack-squat about real estate investing. If they did, they'd own 50+ units like I do.

So step 1 is determine your metrics. What are you looking for? Can you find it? If not, then don't buy until you do.

Meanwhile, keep you reserves flush. Opportunity is just a lucky break that comes to a person who is fully prepared to take advantage of it.

Btw, I really like what Brad said about helping out the next generation: both what he did and what he did not do. I don't intend to set any of my kids up on easy street either. We're raising them for 18 years and instilling wisdom in them during that time. We're setting them up so they can go earn their own successes and have their own triumphs and failures to tell stories about to their kids. The silver spoon syndrome is well-documented. Sure, we'll give them some kind of nice, "get started in the world" gift, but beyond that we intend to leave the majority of our wealth to causes we care about.

I couldn't agree more with Brad and Sid about leaving the empire to the kids.

I have tried for a few years to get my kids interested in more than the bottom line. I have failed at that.

Oldest has her own place. Youngest is maybe thinking about starting to look at buying.

I figure we help them out enough by buying dinners and doo dads.

Was able to gift all the equity in her house to her when I sold it at a loss. Congrats kiddo, you just got your inheritance. We kept them around longer than our parents kept us. We have bettered them and now it is past time to see if they can fly on their own.

Back to the OT. Still wanting to grow here. Even with the lack of help. Just sold a place so I didn't have to work on it.

Need to run some numbers and see if paying off a place makes more sense than buying another. Still need to get the cashflow back up where it was (or higher) even with the reserves sitting in the bank.

There is a fine line somewhere between needing more and wanting more. I am at a place where if I were out of commission forever the spouse could still make it work. She could also start selling places off and make a nice nest egg for herself.

Thanks for all the input!

Any "empire" split 3 ways weakens it - that's why kingdoms went to the oldest son, not all the king's progeny. But ours *will* get split so the kids won't be getting rich off of us.

Both of our parents left us something - but it was split 2 ways in his family and 4 in mine, so the net effect on our lives was well lessened. I guess my mom bought one of our properties, thanks Mom.

The same thing will happen with our kids: our kingdom supports us nicely. But we are older, get Medicare (huge) and SS (not so huge but pays for Medicare) have far fewer needs or even wants than when we were younger. They will need their own resources as well as our leavings.

Travel is not a thing. We traveled a lot in our working years and were fortunate enough to see lots of Europe, if not the world. With the state of travel (and the world) as it is today, I'm glad we went back then! No interest in flying about these days (and no interest in cruising either UNB :)

More houses means more work. There comes a time when the work load should be reduced a bit and more leisure time enjoyed. If there is already plenty of income to meet all of your needs and some of your favorite wants, then do you really need more income that comes with more work?

There's an interesting statistic about how many lottery winners wind up broke again after winning millions. It's not unlike the situation with a lot of pro athletes. The same applies often to inheritances. It's impossible to put your kids on easy street unless they're thinking correctly. That often only comes from the discipline imposed by struggling and striving. I don't believe in robbing them of that opportunity by making things easy. What we've accumulated is for my wife and I. They need to put in work to get their own stuff.

I'm seriously considering setting up a trust of some sort once we're gone that distributes income but no corpus until they attain a certain age. Although we didn't give them a bunch of stuff, they grew up in an entitled age and simply don't have the get up and go I had when I was their age.

GKarl I get that - except my youngest child is 35 and has been working since he was 14. Middle son 47 and ditto. Oldest son in his 50's and is already running his own AirBnB biz down in Mexico. So my kids are well-prepared to take their inheritances and do with them as they want, they've all worked in the biz at one time or another for 20 years. Besides, we'll be dead. Who cares?

I have pics of a DIL (she was new to the family then) helping to dig up a septic tank full of poop and roots...most amazing mess you've ever seen. She knew what she was getting into LOL!

My middle son is not exactly good with money - he and his SO are both too attracted to bright and shiny things LOL! But hard working? Yes, and always has been.

My youngest starts to sweat under the collar to spend money even on necessities like shoes! And the oldest has learned in the trenches about running a business, with employees and everything (I don't even know how to do that, especially not dealing with two countries' tax codes!)

I need another house like I need a hole in my head. But guess what I did this year? Yeah, I was at the closing table 12 times this year. Now Some were sales and others were purchases. But why do we do this?

Well I might be the only person in Pennsylvania who doesn't go deer hunting. That doesn't mean, I am not a hunter. I love to hunt for a deal. They do exist even in todays market place. They are a great deal harder to find. So I picked up seven places this year. The spreads are not exactly what I want, but each of them has a value add play to them.

I see this has morphed into a discussion on whether or not to pass wealth on to future generations!

I have three kids. Two are making it on their own and doing great--working hard, taking initiative, being wise stewards of their resources. They don't need our wealth. The third has special needs and will always need some support.

After son #3 is taken care of, we'll leave something for our grandchildren. A small amount of money given as they are stepping into independence can make a huge difference. My grandfather gave each of his grandchildren $5000 in a mutual fund when I was about 10. Those quarterly statements taught us how money grows when it's invested. When we left home, it helped with college costs so that with summer jobs and scholarships we graduated debt free. For my younger siblings (who had more time for it to grow) it also helped with the purchase of that first car or first house.

We're doing the same with a foster son. He graduated from college close to debt free and with a great job offer, but didn't have money for that first apartment. We helped him out until the paychecks started coming.

There’s a saying money can be made but TIME can’t be bought.

Enjoy your retirement, connect with others you enjoy with, and being active / exercise. Make money if you need it. No need to make it if it’s optional.

There’s a saying money can be made but TIME can’t be bought.

Enjoy your retirement, connect with others you enjoy with, and being active / exercise. Make money if you need it. No need to make it if it’s optional.