I noticed an advertisement that Bonnie Spinder has in the SF Examiner. It Says "Buy, Sell, Repeat. Then Retire."
She's got it wrong. The best way to get there is "Buy, Work Hard, Repeat. Then Retire". Selling is not the necessary component. In fact it only delays the end goal. If you keep selling the properties that you buy, then you'll keep paying Bonnie lots of commissions which will allow her to keep purchasing those big full page ads in the newspaper, but it won't get you any closer to your retirement. On the other hand, if you keep the property, rent it out or use it for a business, then it will generate revenue which can initially pay down your mortgage, and ultimately pay for the miathai's that you'll be ordering on the beach during your retirement.
Don't get me wrong, I've sold a building or two in my career, and there are good reasons to do so. For one, if the building doesn't cashflow, then dump it. Or if you need the money for a bigger more profitable investment, or for your kids education. Well, we do what we gotta do. But in retrospect, I don't think I really needed to ever sell any of the properties that I sold.
I also want to mention the work hard part. Its not just like flipping pan cakes here. Real Estate investment is not a free lunch and to get to the end goal, you can't really be living off of your investments (otherwise it would be retire, then buy, sell .... it doesn't work that way). This means that while you are buying and buying you need to be working your 1st job. Even if you 1st job is a Real Estate agent like me or Bonnie, or a contractor or a street sweeper. You gotta eat while you are biulding the equity in your properties.
Further, don't think that Bonnie is just mis-informed herself, she may sell lots of properties, but can't believe that she doesn't have a pile of rental properties that she's keeping for the long haul. And I know she's working hard..... to get you to sell that property to her.
That's just one investors opinion: Think and justify your actions before you sell it.
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2 comments:
It depends on the project. What do you have against Bonnie? Of course you can easily flip, even in today's market. And of course there are properties you want to buy and hold. It's a tag line....Buy, Sell, Repeat, then Retire. It's true....I don't think you got it....or you really needed material to write about, so you made it up. (?) Get a grip.
I don't think you read my post carefully. I just don't think you have to sell. I tell my clients that the goal is to build a portfolio of properties that will generate income, not to get a big lump of cash that you may have to pay taxes on or spend.
listen, that flip game's not risky for Bonnie, she gets paid either way, but how are your projects going right now? All my properties cash-flow :]
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