I’ve written about real estate vs stocks ’till it’s almost like beatin’ a dead horse, at least from Wall Street’s point of view. Half the time the posts were written when stocks were ridin’ high. Everyone was lookin’ in the mirror seein’ Donald Trump starin’ back at ‘em. Every time I write about it, the stock ‘n bond guys come outa da woodwork to put in their two bits — for what it’s worth.
Look, if stocks are your thing, good on ya. But today’s post, though short and sweet will starkly draw the differences between the two.
Let’s do this the way Socrates might.
Which investment jumps with joy when the cash flow is 1% of the invested capital?
Which one delivers 3-10 times that cash flow with only 1/5 the invested capital?
Which one can ‘grow’ your capital from $55,000 to $250,000 in roughly 15 years or less without a day of appreciation?
Which one offers almost three decades of tax shelter?
Which one offers ‘leverage’ that makes ya feel like you’re in Vegas, riskin’ house payment money?
If you bought half a dozen income properties a decade ago using 20% down, what’s your equity worth now? Where would you be with stocks, having used the same amount of invested capital?
BawldGuy TakeAway: In San Diego, one of the highest priced regions in the country, residential income property included, you’d have spent just over $250,000 in down and closing 10 years ago. You’d still be ridin’ high, but on a lame nag.
Though you’d of ridden the emotional real estate roller coaster for sure, by 2004 your original capital would’ve been easily worth $1 Million. But then Murphy showed up with his Bad News Bears and spoiled the party. You hung tough. Ya weren’t gonna leave San Diego, cuz it always comes back stronger than before, right? Don’t feel like the Lone Ranger, cuz that’s how those in places like NoCal thought too. (Hello Palo Alto!)
Your cash flow has grown quite a bit, even with the market correction. Your buddies who went Wall Street’s way, aren’t doin’ so well. You? You’re not happy your two comma equity went bye-bye, but you’re making more monthly income than ever, and your money has actually grown. If you’d taken the ever growing cash flow and paid down your loan balance, you’d really be on top.
So What now?
Here’s what now — Get Outa Dodge, and get out around 4:30 yesterday afternoon! Put your local properties on the market, and move them to a region far more in keeping with your ultimate Plan. Stop fighting the tide. You’re gonna lose — you ARE losing. But you already know that, so let me show you a way to improve your status quo, big time. Some of you won’t be able to — most will though.
Stop managing tenants, increase cash flow significantly, and acquire property that isn’t older than you are. 
Take the increased cash flow and get yourself free and clear in a surprisingly short time period. Some of my clients will get that part done in 7-8 years. With the equity shown above, in a decade you should be showing cash flow of nearly $100,000 annually — assuming rents don’t go up a dime in the next 10 years. If rents do go up…
If this sounds like something you’d like to cautiously explore, gimme a call. Besides, I need the fix. 619 889-7100 will find me. Have a good one.
Related posts:
- Wall Street vs Real Estate Investments – Self-Directed IRAs
- San Diego Income Property Is Much Like Many Regions — B-List — Your Area?
- Stocks vs Real Estate — Both Down Now — Long Term? RE Still Easy Winner
- San Diego Real Estate Investors — How’s That Income Property Workin’ For Ya So Far?
- How To Build Wealth Through Real Estate In 10 Easy Steps
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