Real estate investing con artistry

[The White Coat Investor]

AlexxT wrote:

Dont_know_mind wrote:

Real estate is very local but on average (averaged nationwide) is probably on average 1-2% below stock index LT return but the difference is made up by leverage. From my own limited sample size of experience, my net return on commercial CAGR has been 10%, residential 8%, vacant land 18%. 

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Great post!  Thanks for that.  It would make a good blog post for WCI.

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You made 18% on vacant land? That's a rather impressively successful bit of speculation there.

But the number make sense. If you buy a cap rate 6 property and it appreciates at a rate of 2% inflation, that gives you 8%, not counting any tax benefits. If you want to get into the double digits, you'll need to leverage it (or find a better deal.)

[Complete_newbie]

I would like to know what's speculation? Reason is I have seen many RE investors do the vacant land flip. They have access to land somehow where developing communities are and then they flip yo developers of CRE.

In my book it's not speculation. Its access and anticipation. Not for everyone but a good method for not average investors to make money. Dontknoemind is successful and many I know are as well. Requires experience and skill.

I suppose you can say the same thing of how do certain people know certain investments : @kamban don't patels know hotels in and out ? I don't call their way of doing business speculation though it would seem that way to many here.

A lot of RE returns come on the flip. I believe IRR js much higher than stocks (15%+). I'm still searching for data on this but may just compile from developers and investors I know.