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Coffee Shop
Forsaking income for contentment
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<blockquote data-quote="Redhides" data-source="post: 1037649" data-attributes="member: 20308"><p>You got that right CB. It was one of the chief culprit's in the housing boom...along with a whole litany of bad government subsidies. I remember a few years ago the single greatest metaphor for this phenomenon was the condo craze on the Gulf Coast. Developer would start up with a high rise condo, and these units would trade hands 5 times before the final fool decided to live in the thing, or throw the bank the keys, or filed bankruptcy. I asked my buddy, who was engaged in this, "Is your business model really that a greater fool will come along behind you?" "No.....Real Estate always goes up, some just faster than others". "Oh...OK". If you are a fiend for that kind of action the Bellagio will give you a top floor room, limo ride, a date, cigars, brandy, and a steak if you're willing to plop down a half million bucks for a single hand of blackjack.</p><p></p><p>For emphasis these things would start at 150K and trade on up to 5 or 600K. The monthly rent you could expect in a year straight out of the Saturday Evening Post...averaged out to about $700 per week over the 52 week year or (31K/Year). That's assuming it stayed leased most of the year. Condo dues were $800 per month, primarily because institutional heavies wouldn't write it so it required some private fund. And that's just your contribution to the umbrella policy....you still haven't insured your unit. And you still haven't paid your taxes or put a stick of furniture in the place. And that's if you sleep in the parking lot so that you can collect your rent. MGMT companies at the time were anywhere form 3-10% of the gross rent. $5000 grand in revenue, maybe, on a half million dollar investment.....that you can't use because it's rented 52 weeks out of the year.....you hope. :bang: </p><p></p><p>Meanwhile, back here in the land of pine trees and bass boats, you can rent land from $20-$50 per acre on $2000-$7000 an acre land. Why the hades would you ever buy? There is a little value in appreciation and there is certainly value in the assurance that your improvements to property remain your enjoyment. But not that much........</p></blockquote><p></p>
[QUOTE="Redhides, post: 1037649, member: 20308"] You got that right CB. It was one of the chief culprit's in the housing boom...along with a whole litany of bad government subsidies. I remember a few years ago the single greatest metaphor for this phenomenon was the condo craze on the Gulf Coast. Developer would start up with a high rise condo, and these units would trade hands 5 times before the final fool decided to live in the thing, or throw the bank the keys, or filed bankruptcy. I asked my buddy, who was engaged in this, "Is your business model really that a greater fool will come along behind you?" "No.....Real Estate always goes up, some just faster than others". "Oh...OK". If you are a fiend for that kind of action the Bellagio will give you a top floor room, limo ride, a date, cigars, brandy, and a steak if you're willing to plop down a half million bucks for a single hand of blackjack. For emphasis these things would start at 150K and trade on up to 5 or 600K. The monthly rent you could expect in a year straight out of the Saturday Evening Post...averaged out to about $700 per week over the 52 week year or (31K/Year). That's assuming it stayed leased most of the year. Condo dues were $800 per month, primarily because institutional heavies wouldn't write it so it required some private fund. And that's just your contribution to the umbrella policy....you still haven't insured your unit. And you still haven't paid your taxes or put a stick of furniture in the place. And that's if you sleep in the parking lot so that you can collect your rent. MGMT companies at the time were anywhere form 3-10% of the gross rent. $5000 grand in revenue, maybe, on a half million dollar investment.....that you can't use because it's rented 52 weeks out of the year.....you hope. :bang: Meanwhile, back here in the land of pine trees and bass boats, you can rent land from $20-$50 per acre on $2000-$7000 an acre land. Why the hades would you ever buy? There is a little value in appreciation and there is certainly value in the assurance that your improvements to property remain your enjoyment. But not that much........ [/QUOTE]
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