What Do You Do When You Get There?

[Perry]

Interesting tale of two
(lotsa things)
Well done.
It it a travel blog?

[syd2chc]

Partly, I am pretentious enough to believe that everyone wants to read my thoughts on the world.
I also write about how I plan to get rich without sacrificing my life right now. Personal finance for hedonists, if you will.

[Damap]

I also write about how I plan to get rich without sacrificing my life right now.

Isn't that the beauty of real estate? We went through unbelievable hell but thanks to owning investment property we are only several million dollars poorer rather than destitute. Pie in the sky when you die is not as much fun as steak on a plate while you wait I reckon!

[speights boy]

Why was the hell you went through unbelievable ?

[Damap]

Never expected the GFC to be so horrendous and bite so fast. Almost killed myself a few times in despair but had too many things to live for. Was diagnosed with PTSD and started to get proper help. Thankfully didn't lose all our property and Auckland is now giving us back part of what we lost :-)

[speights boy]

There is no doubt some people don't give bank debt the respect it deserves.
Orion has some very sound advice with his posts in this area.

[Damap]

I'd have to write a book to explain what happened. We had a LOT of real estate and Murphy was testing his laws on us :-).
But we survived!

[speights boy]

Many people with higher leverage underestimate the importance of liquidity.
It is a bit like insurance.....you don't realise how important it is until you need it.

[eri]

those who have been through crashes

will tell you

that trying to free up some liquidity, to satisfy the bank?

by selling assets that are falling in price

often find no one buying at any price

+ why would they if the price is falling

[speights boy]

^ People who are not diversified may well tell you that.

[Glenn]

^ People who are not diversified may well tell you that.

I can tell you even when you are diversified into various cities, variety of properties and other incomes you can still get stung by D Bank.
My one and only syndicate started off well. Well above expectations then disaster struck. Lost lots of tenants and the rotten bank wanted us to reduce the mortgage by one Million $.
I could have easily paid my 1/14 share but the other syndicate members could not. So we are stuck now for three years paying off mortgages instead of the planned for cash flow. We started off at less than 50% LVR but the value went down whilst we had less tenants.
I really do not know how one could have cleverly avoided a situation like this apart from not participating. Risk is what we take. Normally we expect to win but it is not guaranteed. Obviously not having ones eggs in the proverbial has meant it has not been a painful time but annoying it certainly has been.
The really annoying thing is we are now pretty well fully let again but the money is still flowing like blood to the bank every month. We are holding off hoping they will say stop enough but one can not dictate things to banks.

[speights boy]

My main point was that property has poor liquidity.
Liquidity insurance is normally purchased through owning different classes of assets.

[Glenn]

My main point was that property has poor liquidity.
Liquidity insurance is normally purchased through owning different classes of assets.

Agreed so what sort of things should one consider.
A job . I once had one of them. They made me redundant.
A business. The family decided we needed to retire.
Share market. Doing that but it is hard on the nerves. There are some good dividend paying shares these days.
Bank and others fixed deposits. Pretty slow low and boring.

[speights boy]

The really annoying thing is we are now pretty well fully let again but the money is still flowing like blood to the bank every month. We are holding off hoping they will say stop enough but one can not dictate things to banks.

Why is paying off debt "really annoying" ?
For someone who has been around a while I would have thought it was a priority.

[Damap]

The main rules that saved me from complete failure were:
1. Never refinance and
2. Be the dumbest person on your team

The rule I added for the future is
1. Never utilise a strategy that can fail if the market drops suddenly.