Investing

BigR mentioned to me that he plans to invest in rental property.  I have been thinking for a long time about what to invest in.  I currently have the usual investments of stocks and bonds.  But I am losing faith in the world economy.  I investigated a number of options.  I looked a precious metals but these really bother me as being purely speculative.  Gold has no intrinsic value, its value being nothing more than what other people value it at.  I also looked at energy, like buying oil futures.  But again, this is speculative with the risk being technology.  Technological developments can radically effect the price of oil and other energy sources.  Real estate had been very speculative with people buying based on hoped for appreciation, but this has come to an end.  I look at real estate purely based on what return I can get from renting out the property.  Based on this, real estate was a bad investment during the bubble but has become quite a good investment now.  And best of all, the rent to purchase price ratio seems best near the Mexican border, which isn't surprising since Mexicans aren't big savers and investors.  I am learning everything I can about investing in rental property and hope to start soon in El Paso.  Another benefit of this is that this will get me more socially connected here in El Paso and more in tune with what is happening here.  So I want to thank BigR for this idea and share this with anyone else looking for investments.

Start with homes and plexes under 200k because after that a commercial loan is needed.
Also look for owner contracts as you can bypass the bank. We bought our home on a lease option otherwise we would have never gotten into one. Apartments are good but renters dont stay as long as they do in homes. I,ve looked at your market in El Paso fschimdt and it is very doable. And study your foreclosures if you have spendable cash.

Right now our plan is to buy owner financed properties in TX. The bank is totally circumvented.
We will also be looking at 4 plexes, single family homes and apts some of which are owner financed.
Also we will be using some bank financing also. All loans for properties over 200k are considered
commercial if they are for multiple units so we will look for multiple units under that figure.

I was reading about the near-earth asteroid 433 Eros, and there is speculation that it has more precious minerals than could ever be mined out of earth's crust. That got me thinking, what would happen to the value of gold, or palladium, or whatever, if abundant quantities were found on some asteroid and technology had progressed to the point where mining was profitable? I also remember reading about how amethyst used to be one of the most valuable gems in the world, but then enormous caves of it were found in Brazil, causing it to fall from stratospheric value to average value. You can now get a big handful of the gem for less than 100 bucks, I think.

I agree that precious metals, minerals, oil or any commodity is speculative due to technological wildcards and the chance of finding big concentrations somewhere.

Regarding real estate, I've read several books on it, and taken a class that dealt largely with it. Good, and in my opinion undervalued properties (at least here) always seem to be on the edge of cities, located a distance away from shopping malls and other amenities. I'm thinking these places would be ideal for self-sustained living, because you could grow your own food and have your own animals. These houses also tend to be the older American prarie style 50s-60s single floor brick-walled homes.

Regarding the border, what do you plan to do regarding the ever-increasing violence there? People are getting hanged, and ranchers are getting shot, and it just seems to be getting worse. To me it doesn't seem to be the safest area.

If a large asteroid hits Earth, we will have more to worry about than the price of precious metals.

Regarding real estate, I will invest in a totally numbers-driven way.  I will focus on maximizing my return and nothing else.  So all that matters is the effective cap-rate, meaning the return on my investment.

Regarding the border, you must be getting your news from TV.  El Paso is one of the safest cities in America.

Well, I meant orbital mining.

The border here is so unsafe that they've had to pull out ecological restoration projects and basically any non-enforcement activity from the area. I've heard El Paso is safe, but I read that bullets from Cuidad Juarez have hit the capitol building in El Paso, which emphasizes the surreal nature of the situation. I don't know, I wouldn't be very comfortable living near so much chaos. I suppose the area offers undervalued real estate, so if you make it look nice, people will probably buy into it.

Orbital mining?  It's funny how no one notices that the space initiatives have come to screeching halt.  History books will probably record our landing on the moon as the peak of our culture, and the abandoning of the space programming as an indication of the beginning of the end.

I don't know where you live, but yes, El Paso is somewhat surreal.  When I drive down I-10, I can see Juarez very close.  And yes, the occasional bullet does fly across, and one can sit out and watch gun battles in Juarez.  But El Paso remains safe and I see no reason for this to change.  What will change eventually is that the battle between the rival drug gangs for control of Juarez will end and Juarez will become safe to visit again.

fschmidt wrote

I don't know where you live, but yes, El Paso is somewhat surreal.  When I drive down I-10, I can see Juarez very close.  And yes, the occasional bullet does fly across, and one can sit out and watch gun battles in Juarez.  But El Paso remains safe and I see no reason for this to change.  What will change eventually is that the battle between the rival drug gangs for control of Juarez will end and Juarez will become safe to visit again.

Aside from violence, how does Juarez compare to Tijuana for visiting to see none-femisphere culture and meet none-femisphere women? I assume Tijuana is more tourist driven, American influenced and English friendly while Juarez is more rural? Lacks tourist amenities?

Drealm wrote

Aside from violence, how does Juarez compare to Tijuana for visiting to see none-femisphere culture and meet none-femisphere women? I assume Tijuana is more tourist driven, American influenced and English friendly while Juarez is more rural? Lacks tourist amenities?

I don't know much about Juarez.  I haven't been there in 20 years.  Considering how different Mexico is from America, I would say that the difference between Tijuana and Juarez shouldn't matter much.  Tijuana is only really "American influenced and English friendly" in a few tiny tourist areas.  Otherwise it is pure Mexico.

Interesting that you bring that up. It's actually one of my main issues with contemporary societial progress, our lack of human space exploration. I've been interested in it since a kid, and follow it quite closely. I see it as a springboard for humanity's next stage of advancement. I love the idea of exploring new worlds and vast, uncharted expanses. This is why the fact that we haven't been to the moon, let alone mars, in nearly 42 years irritates me as it irritated Neil Armstrong at the 40th anniversary event. People are disappointed in the direction our space program has taken. Did you know that NASA was planning to send humans to mars by the mid-1980s? That plan looked feasible, and it was feasible, but it disintegrated in the wake of changing cultural priorities.

This reminds me of a strange argument that never made sense to me, and was used to justify taking so long to get back to the moon. The gist of it was that all the Apollo engineers died with their knowledge, and creating a new launcher from scratch without this prior knowledge would be a daunting task. I always thought, certainly it was harder to implement the first time around, especially with the more primitive technologies available at the time, correct?

Well, when you put a co-alpha perspective to it, it finally makes sense: We simply don't have the armies of people who are bright and willing to work together to create a successor to the Saturn V rocket anymore. Everything is disparate and disorganized, locked in turf wars and funding battles. And so that's why program after program gets canceled, culminating with Obama's cancellation of the Constellation program, which was basically the U.S. Government saying goodbye to going to the moon again in the next 30-odd years.

Right now, NASA has these small, robotic orbiter programs, and some of them are quite innovative, but they're just not on the scale of something like the Apollo spacecraft. It's sad because we need the ability for humans to explore other worlds, and colonize them, if for no other reason than this world going to complete shit. Think about what would be possible if you could build a co-alpha space colony on a fertile, empty world.

What bugs me most about society's place is that this is a time when we need more cooperation, not less. A world that is running out of fuel resources and experiencing ecological degradation on a massive scale is not the place that an omega society can run rampant in and recover from. We need more cooperation, not less, more co-alpha minds developing solutions to today's difficult problems, not less. I see hope in countries like China and India, and have a sinking feeling that America might not carry the banner to a human Mars landing. Hopefully fossil fuels remain plentiful enough before alternatives are found and all major cultures don't become omega. It's the only hope this world has with the current rate of resource consumption.

Invest in God. Tithe. Store up your treasures in heaven and not in Earth. Be generous and give to those who need. Jesus warned it would be very hard indeed for the rich man to enter into heaven...

J. Donner, I don't think we're talking about storing up treasures on earth per se. Money and possessions are just tools to get what we really want. Or that is my view on them. Were it not for a desire to have a girlfriend, wife, and family someday, along with other things the future entails, I wouldn't care much for saving up money. Money is my biggest issue. I've been called a penny-pincher and stuff like that, but it's just that I value a relatively frugal way of doing things.

Anyway, I know nothing about how to invest or what to invest in. Everything seems so uncertain. If CoAlphas can develop a bit more and we could help each other invest and make money in general, then that will be a crucial element to CoAlpha success. Because accomplishing this CoAlpha project will mean a profound investment of resources. And speaking for myself, and I'm sure many other men, it's pretty hard to make a buck nowadays.

I'm open to ideas; I have no idea what I should do with the little money I do have, nor do I know of a decent way to make a decent living. Right now it's just work and save. I've got about $6,000 right now, hoping to have minimum $10,000 by year's end. And be able to save at least $10,000 a year every year. If anyone has any suggestions for someone of my financial status, I'm open to ideas and I'm listening.

Humanity, what kind of work do you do?

I'm a camp counselor. It was the only job offer I got after applying for hundreds of jobs and being unemployed for 8 months after college. I know it's not much, but I'm able to save the vast majority of my income at least. And future job prospects still do not look good for me.

If you contact me on skype, maybe we can figure out a way to get a better job.

Like everything else, learning to invest in real estate effectively takes time, time that I don't have.  I posted my ideal solution to my local real estate meetup.  I don't expect much of a response.  I discussed the idea of splitting real estate income with my real estate agent to have him help select good properties, but he doesn't seem interested because his current business works fine for him.  The bottom line is that people in El Paso generally lack both ambition and brains, and this is exactly why there is such an opportunity here.  Someone with an investment mindset could create a real estate investment vehicle here in El Paso and in other cities like it in middle America that would out-perform anything offered on Wall Street (at least based on my criteria).  I would love to see this happen, but I need someone to do most of the work.  If anyone is interested in moving to El Paso and becoming extremely rich, please contact me.

fschmidt wrote

If you contact me on skype, maybe we can figure out a way to get a better job.

I've looked at so many jobs it's absurd. I'm fairly limited to certain jobs. My degree is useless in this horrible economy. I can essentially teach or do low end labor that anyone can do. I've applied for hundreds of teaching or education field jobs since I graduated last year, and it took tons of effort to merely score an interview. Before I got my current job, I was so desperate that I was applying to low-end, dead-end jobs at places like Wal-mart and McDonald's and K-mart. Even those were a no-go. So if I can't get a job in my field or even a low-end job, I don't see how you could help me. (And I've utilized several connections since last year - it didn't work.) Merely finding a job, much less a decent one, is almost as difficult as finding a non-feminized woman here in the U.S. I've pretty much narrowed down the possibilities for my future career: Either teach in certain places in the U.S. which actually will hire (Very few places and it would require me to move which means I have so many more expenses that I'm not saving any more money than I am now) or teach overseas (which won't pay much more than likely but it's a job and a way of moving abroad, at least short to mid-term.) Things are a little hectic for now, but if things calm down closer to the end of the year, I may go ahead and apply to teach overseas. I'm pretty pinned-in as things are working out so far. But I'm open to ideas as always.

fschmidt wrote

Like everything else, learning to invest in real estate effectively takes time, time that I don't have.  I posted my ideal solution to my local real estate meetup.  I don't expect much of a response.  I discussed the idea of splitting real estate income with my real estate agent to have him help select good properties, but he doesn't seem interested because his current business works fine for him.  The bottom line is that people in El Paso generally lack both ambition and brains, and this is exactly why there is such an opportunity here.  Someone with an investment mindset could create a real estate investment vehicle here in El Paso and in other cities like it in middle America that would out-perform anything offered on Wall Street (at least based on my criteria).  I would love to see this happen, but I need someone to do most of the work.  If anyone is interested in moving to El Paso and becoming extremely rich, please contact me.

It sounds too good to be true. I don't have any knowledge of investing or real estate, so I'm not invested minded. Why has no one invested in El Paso to become rich then? If someone could simply move there, invest and build up real estate, then why hasn't it been done already? My thinking is that if it hasn't been done already, then there is something that makes it overly difficult, or that it being a border city may make investors nervous or disinterested for some reason. Or perhaps it has simply been over-looked by investors.

If you have a teaching degree, teaching ESL abroad would be a good approach.  But feel free to talk to me on skype anytime and I may have other ideas.

I think there is a opportunity not just in El Paso, but in middle America in general.  The problem is that there currently is no painless way for investors to invest in unleveraged real estate.  The reason for this is that real estate investors, who set up real estate funds, are all focused on maximizing returns instead of minimizing risk, so they all use leverage.  So I think there is an opportunity for a unleveraged real estate fund to meet the new need for safety.  This market for safe investments is new both because investors are now more scared than usual, and because the usual old safe investments are no longer safe.  In particular, treasury bonds aren't safe because the dollar is no longer safe, and precious metals aren't safe because they are overpriced.  Opportunities emerge as things change, and what has changed is an increased demand for safety and the end of previously safe investments.