Comments on: Between you and me and the fence post… http://7m7y.com/2009/03/02/between-you-and-me-and-the-fence-post/ Learn how to make $7 million in 7 years ... a NEW guided learning experience. Join now! Thu, 04 Aug 2011 07:45:42 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Retirement Accounts: 7 Case Studies « How to Make 7 Million in 7 Years™ http://7m7y.com/2009/03/02/between-you-and-me-and-the-fence-post/comment-page-1/#comment-1496 Retirement Accounts: 7 Case Studies « How to Make 7 Million in 7 Years™ Wed, 11 Mar 2009 07:45:10 +0000 http://7m7y.com/?p=1509#comment-1496 [...] Diane - Is currently assessing her options; while she does so, she is drawing down on her retirement account. Should she take the penalties and pay down debt and/or continue to draw down her living expenses? [...] [...] Diane – Is currently assessing her options; while she does so, she is drawing down on her retirement account. Should she take the penalties and pay down debt and/or continue to draw down her living expenses? [...]

]]> By: Adrian http://7m7y.com/2009/03/02/between-you-and-me-and-the-fence-post/comment-page-1/#comment-1501 Adrian Thu, 05 Mar 2009 23:47:20 +0000 http://7m7y.com/?p=1509#comment-1501 @ Diane - Loopnet.com is the best site for commercial RE (comps; etc.) ... if I am investigating a neighborhood I download a report of (say) all the offices for sale in that area and plot on a graph the per-sq-foot price on the Y axis and the total square footage on X axis. That quickly shows me what property is selling for in that area (and in what size ranges) ... that - and your realtor's advice - should help you come up with a low-ball price. If it cashflow's positive (incl. the reasonable 'rent' you will pay yourself), you intend to use/hang on to it for a long time, and you can cover the ancillary costs (outgoings, property taxes, vacancies, etc.), I wouldn't stress too much about the price, provided it sits nicely on that graph that I just mentioned ... @ Diane – Loopnet.com is the best site for commercial RE (comps; etc.) … if I am investigating a neighborhood I download a report of (say) all the offices for sale in that area and plot on a graph the per-sq-foot price on the Y axis and the total square footage on X axis. That quickly shows me what property is selling for in that area (and in what size ranges) … that – and your realtor’s advice – should help you come up with a low-ball price.

If it cashflow’s positive (incl. the reasonable ‘rent’ you will pay yourself), you intend to use/hang on to it for a long time, and you can cover the ancillary costs (outgoings, property taxes, vacancies, etc.), I wouldn’t stress too much about the price, provided it sits nicely on that graph that I just mentioned …

]]> By: Diane http://7m7y.com/2009/03/02/between-you-and-me-and-the-fence-post/comment-page-1/#comment-1500 Diane Thu, 05 Mar 2009 23:06:58 +0000 http://7m7y.com/?p=1509#comment-1500 What would be considered a decent-sized offer? Thanks for the list of "subject to"s The 2.9% debt blossoms in July as well...I can't see paying the higher rates later, so I was paying against it while I was working, then withdrawing what I needed monthly to continue paying off debts/obligations, and it finally dawned on me that the finance charge I was paying on the one debt was a waste since I was withdrawing my own money regularly and not a check. I can withdrawn my money whenever I want, whereas a check comes when they pay you. Doh! So, I just withdrew enough in this calendar year (hopefully a lower tax year, but if not, it won't be higher) to pay it off. How would you gage how much to low-ball a deal as well - base it on cash-flow (one method I heard) or de-value the RE based on on-going and local market conditions (and if so, how to go about determining that value...are there easily-found comps for commercial RE?) Thanks, Adrian! What would be considered a decent-sized offer?
Thanks for the list of “subject to”s
The 2.9% debt blossoms in July as well…I can’t see paying the higher rates later, so I was paying against it while I was working, then withdrawing what I needed monthly to continue paying off debts/obligations, and it finally dawned on me that the finance charge I was paying on the one debt was a waste since I was withdrawing my own money regularly and not a check. I can withdrawn my money whenever I want, whereas a check comes when they pay you. Doh! So, I just withdrew enough in this calendar year (hopefully a lower tax year, but if not, it won’t be higher) to pay it off.

How would you gage how much to low-ball a deal as well – base it on cash-flow (one method I heard) or de-value the RE based on on-going and local market conditions (and if so, how to go about determining that value…are there easily-found comps for commercial RE?)

Thanks, Adrian!

]]> By: Adrian http://7m7y.com/2009/03/02/between-you-and-me-and-the-fence-post/comment-page-1/#comment-1499 Adrian Wed, 04 Mar 2009 22:31:44 +0000 http://7m7y.com/?p=1509#comment-1499 @ Diane - If you want to 'dip' your toe into investing in commercial RE, owner/occupier is not a bad way to go ... I did it, and it worked out for me. But you HAVE to want to own commercial regardless in case you do end up selling/closing your business. You need to find a good agent who will act for you ... if there is plenty vacant then low-ball your offers with a decent-sized deposit check attached. Put in conditions, such as subject to Due Diligence (30 days, let's say); approval of your 'partner' (could be your dog); subject to finance; etc., which give you plenty of outs. Money at o% is not great, so make sure we are talking short-term ... if you need to finance later, then paying off 2.9% debt is also not great (you will just need to borrow back at 5%+ later). @ Diane – If you want to ‘dip’ your toe into investing in commercial RE, owner/occupier is not a bad way to go … I did it, and it worked out for me. But you HAVE to want to own commercial regardless in case you do end up selling/closing your business.

You need to find a good agent who will act for you … if there is plenty vacant then low-ball your offers with a decent-sized deposit check attached.

Put in conditions, such as subject to Due Diligence (30 days, let’s say); approval of your ‘partner’ (could be your dog); subject to finance; etc., which give you plenty of outs.

Money at o% is not great, so make sure we are talking short-term … if you need to finance later, then paying off 2.9% debt is also not great (you will just need to borrow back at 5%+ later).

]]> By: Diane http://7m7y.com/2009/03/02/between-you-and-me-and-the-fence-post/comment-page-1/#comment-1498 Diane Wed, 04 Mar 2009 14:22:17 +0000 http://7m7y.com/?p=1509#comment-1498 @ Adrian - currently the retirement money is in cash, earning 0 by itself. I used some of it more recently to eliminate a 2.9% charge on a debt. NB: Withdrawing it before the requisite age of 59.5, I will pay 10% on that money, but if I wanted a few months to do it, I'd still pay the 10% but would not have avoided the $100 I avoid by paying off the debt now rather than continuing to pay it down to zero by the later date. I have not got enough insight into the market to place it somewhere else short-term as I need some soon to pay any tax debt for 2008 and any anticipated for earnings for this 1st quarter of 2009 (now self-employed). With the bankrupting of some of our banks, I even worry that if I go to withdraw the cash, it might not be there (images of the 20s when banks stopped allowing withdrawals). I am considering several ideas on what to do with the remaining monies - estimating 30-40% for taxes and penalties: RE investing and/or a Zumba Studio. At this point, I am working on the Zumba aspect and have research still to conduct to determine whether I would be better or worse off renting a facility or buying a commercial property that has room for the studio (maybe currently unrented space). The concerns I have with renting a studio are related to improvements I make to the location, then building a clientele that likes the location picked, and losing the location for some reason. Conversely, opening the studio and not being successful, or not finding the right location, and wanting "out" of that. But I think the downside on that is better than the downside of renting, assuming the rest of the facility was earning rent. There are a lot of commercial strip properties that are new and vacant around here. Any insights into negotiating for such a piece of property would be appreciated, as well as in finding one. I have contacts who have done this and will ask what they have learned as well, and particularly how they picked their location. There is much to learn, but I think I am going to end up doing a lot of that "on the job." @ Adrian – currently the retirement money is in cash, earning 0 by itself. I used some of it more recently to eliminate a 2.9% charge on a debt. NB: Withdrawing it before the requisite age of 59.5, I will pay 10% on that money, but if I wanted a few months to do it, I’d still pay the 10% but would not have avoided the $100 I avoid by paying off the debt now rather than continuing to pay it down to zero by the later date.

I have not got enough insight into the market to place it somewhere else short-term as I need some soon to pay any tax debt for 2008 and any anticipated for earnings for this 1st quarter of 2009 (now self-employed). With the bankrupting of some of our banks, I even worry that if I go to withdraw the cash, it might not be there (images of the 20s when banks stopped allowing withdrawals).

I am considering several ideas on what to do with the remaining monies – estimating 30-40% for taxes and penalties: RE investing and/or a Zumba Studio. At this point, I am working on the Zumba aspect and have research still to conduct to determine whether I would be better or worse off renting a facility or buying a commercial property that has room for the studio (maybe currently unrented space). The concerns I have with renting a studio are related to improvements I make to the location, then building a clientele that likes the location picked, and losing the location for some reason. Conversely, opening the studio and not being successful, or not finding the right location, and wanting “out” of that. But I think the downside on that is better than the downside of renting, assuming the rest of the facility was earning rent. There are a lot of commercial strip properties that are new and vacant around here. Any insights into negotiating for such a piece of property would be appreciated, as well as in finding one. I have contacts who have done this and will ask what they have learned as well, and particularly how they picked their location. There is much to learn, but I think I am going to end up doing a lot of that “on the job.”

]]> By: Adrian http://7m7y.com/2009/03/02/between-you-and-me-and-the-fence-post/comment-page-1/#comment-1497 Adrian Tue, 03 Mar 2009 11:40:22 +0000 http://7m7y.com/?p=1509#comment-1497 @ Diane - Question: what do you think that you are earning on your 'retirement money' [ https://www.networthiq.com/people/Diane ] post-tax? What do you think you COULD 'earn' elsewhere? If more, what do you think that 'elsewhere' might be? @ Diane – Question: what do you think that you are earning on your ‘retirement money’ [ https://www.networthiq.com/people/Diane ] post-tax?

What do you think you COULD ‘earn’ elsewhere? If more, what do you think that ‘elsewhere’ might be?

]]>