Tell Us Your Real Estate Story

Posted by: Chris Palmeri on May 22, 2009

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Agent Debbie Blumenthal tells us how she tapped into a retirement account to pay for an investment property she’s now renting out for $1,150 a month.


“I’m a realtor who lives in Southern California and have been interested in real estate, over and above my job, for a long time. I had long thought of buying real estate in the self-directed IRA that I hold with The Entrust Group, but was reluctant to move forward because of a combination of high real estate prices and a desire to pay for the investment property all in cash. As the real estate market began to fall, I started to look at areas where I thought a rental property would do best – someplace close to a major city and also close to resort areas.


A few months ago, I hit it just right: I found a bank-owned property in Stockton that I liked a great deal and had come down enough in price — from more than $200,000 in the previous sale to just over $80,000 — that I could pay for it all in cash from her self-directed retirement account. The property is accessible to both San Francisco and the Lake Tahoe area. Although it was in relatively good condition at the time of the sale, I spent a number of weeks fixing up the property and am now renting it out with a return of at least 10 percent expected during the first full year.”


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Reader Comments

Right-less NYC tenant

May 26, 2009 3:21 PM

You would imagine that in a time of economic crisis landlords would value long term creditworthy tenants. Instead, Rose Associates that owns several properties in midtown Manhattan is punishing them, simply because tenants do not have any recourse.
First, they implemented loud construction with no reimbursement to tenants for inconvenience. This included non-working elevators for 6 months - imagine the plight of tenants on high floors that go grocery shopping.
Second, they raised rents by 18% - unheard of in this market - even for long term (5+ years) tenants.
Third, they allow several applications on the same apartment simultaneously - collecting the application fee for all - but clearly unable to rent tonly one applicant.
Fourth, replacement of non-working appliances takes 3-4 months.

Shouldn't there be some defined standards for a property that claims itself as a "luxury building" (Ellington at 260 West 52nd street)?
Mr. Mayor - why not fix tenant rights in this city??? You would be right in line with President Obama's credit card reform.

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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