ALTUCHER’S I HATE BUYING HOUSES – REAL ESTATE

Real Estate – In his article “Five Things You NEED to Know before Buying a House”, James Altucher declares, “I hate buying houses. I don’t “hate” many things. But I’ve lost millions of dollars buying houses. The stress is unbearable when you need to sell. And you have no money when you need it. It’s a prison. The white picket fence is the prison bars. The bank is the guards looking in. And the need to protect your family keeps you in a solitary confinement of guilt and anxiety and stress.”

Who can lose millions of dollars in real estate?  The truth is James is really telling the truth.  He really had a string of bad luck that most people will never experience.  No one can lose millions of dollars in real estate without really trying.  Especially not if the subject real estate is your principal residence.  James Altucher indeed lost at least $2 million in real estate. He was unlucky enough to buy at the wrong place at the wrong time.  He was a victim of a “perfect storm” of circumstances.  Real Estate burnt him that is why he hates real estate and won’t go near it anymore. As the story goes, Mr. Altucher bought a $1.8 million condo in the Tribeca section of Manhattan which is in the downtown area not far from Chinatown.  Then he put in at least $1 million in renovations. Shortly thereafter, the 9/11 attacks happened. He ended up selling his condo for $1 million.  So I guess he was not exaggerating after all.  Contrast his luck with that of a distant relative of mine who is in the advertising industry and claims NOT to know anything about real estate.  Let’s call her Jane.  She bought a pre-construction 2-bedroom condo at the Orion building near the Port Authority bus terminal in NYC.  Jane went into contract in 2006 for a pre-construction sale price of $900,000.  When the unit was ready for occupancy in late 2007, its value had already increased to $1.2 million. Moreover, the building had a long waiting list of buyers. For some reason not disclosed to me, 3 years later, Jane went into contract to buy another 2 bedroom unit at the just completed Rushmore building on Riverside Blvd in the upper West Side.  The pre-construction price of her unit was $1 million.  To make a long story short, she sold her Orion unit for $1.7 million and bought the Rushmore unit for $1 million. How is that for buying low and selling high to make a hefty profit?  And here’s the kicker. She got a 3% 15-year fixed mortgage loan and her 2 bedroom condo which is now worth at least $2 million. Call it fortuitous timing or the luck of the Irish, but certainly, NYC real estate treated Jane much better than it did James.

I admit I’ve lost thousands (not millions) of dollars in rental properties which is why I will NOT recommend them, but rarely can you go wrong in buying your own house.  Do the math and make sure to consider all the different factors and you will see that typically, owning your home is cheaper than renting a similar dwelling.  With regard to Altucher’s calling a house a prison, an apartment is also a prison only smaller. The landlord is the warden looking in.  You can be thrown out of jail within months if you do something the warden does not like.  On the other hand, maybe you can stay for 3 years in your house even if you stop paying the mortgage. It takes a long time for banks to go through the foreclosure and eviction process.  There are many delaying tactics you can employ to delay foreclosure and eviction.  Even after foreclosure the bank may have a hard time throwing you out on the street. Learn more, click on the link below:

https://www.amazon.com/Six-Million-Dollar-Retiree-retirement-ebook/dp/B073XTL47J/ref=asap_bc?ie=UTF8