Money & Investing | Asian American Poll

MONEY & INVESTING
(Updated Tuesday, Apr 1, 2008, 05:11:58 PM to reflect the 100 most recent valid responses.)

Who handles the household checkbook in your family?
The Wife | 74%
The Husband | 26%

Which of the following ethnic groups attaches the most importance to making money?
Chinese Americans | 51%
Vietnamese Americans | 14%
Japanese Americans | 1%
Corean Americans | 30%
Filipino Americans | 4%

Which of the following do you consider to be your most important investment method currently?
Buy/Upgrade Own Home | 39%
Other real estate | 4%
Stocks/Options/Futures | 31%
Mutual Funds | 10%
Bank Deposits | 16%

This poll is closed to new input.
Comments posted during the past year remain available for browsing.

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WHAT YOU SAY

[This page is closed to new input. --Ed.]

Put your money into gold.
Wilson Tuesday, July 09, 2002 at 11:30:41 (PDT)

Repost,

Thanks for the reply. I have questions, but I'll contact you by email to explain the detials.

I live along the East Coast, mid-atlantic region. I was about to buy a rental property a few years ago, but decided not to. Perhaps you can clear some stuff.
B. Lee Tuesday, July 09, 2002 at 04:56:41 (PDT)

To: Real Estate Novice

Oh, man, I forgot the one question you asked. See what happens when you let me blabber? I must have gotten the MLK disease. ;)

MLS – I don’t know what it is like today. It used to be that, in California, you needed to be an agent in a broker’s office or a broker to be able to subscribe to that. I got my broker’s license in the early 90’s for that reason, and was fully disappointed. You can get access through your broker.

Repost Monday, July 08, 2002 at 21:58:04 (PDT)

To: AC Dropout

What if you want to reclaim the premises for your own use?

Also, with the 4-month waiting period, does the property owner have to accept the rent?

Hey, you said you’re a business owner, didn’t you? What do you do?

Repost Monday, July 08, 2002 at 16:00:49 (PDT)

To: Real Estate Novice

Thanks for the kind words. In reality, I really have to write the disclaimer that I can only tell you what I know from my experience, so you have to do your own due diligence. I’ve made some good moves and I’ve made some costly mistakes. Also, it seems like you’ve made some money for yourself and you’re going at it alone – good for you! At the end of the day, you’ll feel that much more proud that you did it alone without Dad’s help.

So you have a good chunk of money. I’m not sure what you meant buy “pay off the whole thing” – is that buy it cash with no loans? It depends where you are in your career and what you plan on doing with real estate. You sound like a young person with some years ahead of you in terms of earning power. If you don’t need the cash income right now, by all means leverage with loans. You can buy more properties that way.

I’d like to tell everyone not to go negative, but this is really a personal choice. I went negative when I bought my first rental. I’m glad I did it, but it was tough. I ended up making ends meet by going down on my hands and knees scrubbing carpets, cleaning refrigerators, stoves, bathrooms, window sills, walls, getting my skin burned up by Easy Off and Jasco, etc. when tenants moved out. However, in my situation, I really didn’t have a choice. I was only 24, didn’t know any better, and I didn’t have the down to go positive. So that went on for about a couple of years before the market picked up and I was able to outsource. So if I told myself not to get into the property because it was negative, I’d have given up my chance to make the return I did. Going negative is tough, and you must have a good idea how long it will be until you reach the light at the end of the tunnel. It’s basically holding power – you either have holding power in cash or in elbow-grease. You have cash – save your elbow-grease.

In your case, if real estate is your passive income, make it passive. Put enough down so you can comfortably break even. You don’t want too much cash flow if you don’t need it. You want to be able to max out on the $25,000 passive losses limitation on your Schedule E. You can do that with cash out of your pocket. IRS allows a 27.5 year straight-line depreciation schedule on the depreciable portion of your residential income properties. The depreciable portion is the “sticks and stones” not the land. A generally accepted value is around 75%. If you claim more than that, IRS may give you a call. You don’t want them to call you.

So, if you have an $800k property, $600k is depreciable over 27.5 years, or about $22k per year. That means even if your property breaks even, you can claim that you have a loss of $22k, and this reduces your Adjusted Gross Income (on the bottom of page 1 of your 1040). If you pay for your properties all cash, you’ll most likely come out highly positive (because your Schedule E will have no debt service), so your Schedule E will likely hurt your AGI (make it too big). But remember, this also reduces your capital gains basis when you sell, unless you exercise the 1031 Tax Deferred Exchange. If you want more information on 1031, let me know. I just did one two years ago.

I guess before I keep up my blabbering, can you share with us what your goals are with real estate? How do you see real estate in your life (buy/sell, speculate, cash flow, capital appreciation, etc.)? Where are you located? What’s the typical 2, 4, 8, 12, 20-unit buildings going for in a solid but not too extravagant area? How much do the units fetch in rent? What’s the vacancy factor in your area? Do you have rent control?

Repost Monday, July 08, 2002 at 16:00:37 (PDT)

AC Dropout,
I believe my friend had an issue with a tenant, the lady stay about for about 1 year. The lost of rent was minor compared to the damage she caused. Mail disappears, noise all time of night. And credit card bills start appearing everywhere. I know, totally illegal but it still happens.
Also, i believe when you are referring to 4 months, it is from the date of the eviction process.
1/2LostSoul Monday, July 08, 2002 at 14:28:01 (PDT)

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