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Real Estate Investment strategy- Advice Needed
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Seles83
#1 Posted : Monday, August 27, 2012 4:08:14 AM
Rank: Member

Joined: 11/9/2007
Posts: 288
Location: OZ
Hi Fellas,

Its been a while since i was here anyways i am back!!

I am kinda in a limbo here...I am trying to get myself out of rat race of life...

I am currently contemplating between this two investing strategies:

Strategy I: (All Cash)
House A:
2bdr Loneview Apartment- 4.5m
Estimate Rental Income-22k-25K range
2bdr Sucasa@Msa Rd Apartment- 2.85m
Estimate Rental Income-13k-18K range


Strategy II: (Cash and Leverage)

2bdr Loneview Apartment- 4.5m (All Cash)
Estimate Rental Income-22k-25K range

4bdr Villa @Four ways Kiambu Rd- 15m- (3M Cash and 12m Mortgage- rate 19% Monthly repayment-195k)
Estimate Rental Income-80k-90K range

which option would you go for and why? Do you have a better strategy, construction is not an option..i am currently based out of country...

Is suraya reliable company to deal with...how well do they finish their houses??

Please share your thoughts!!



More monies, more problems...
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  | | Edit by user: Monday, August 27, 2012 4:11 AM | Reason: Not specified
Sarrouniya
#2 Posted : Monday, August 27, 2012 7:53:34 AM
Rank: Member

Joined: 7/31/2008
Posts: 163
Location: Nirvana
Seles83 wrote:
Hi Fellas,

Its been a while since i was here anyways i am back!!

I am kinda in a limbo here...I am trying to get myself out of rat race of life...

I am currently contemplating between this two investing strategies:

Strategy I: (All Cash)
House A:
2bdr Loneview Apartment- 4.5m
Estimate Rental Income-22k-25K range
2bdr Sucasa@Msa Rd Apartment- 2.85m
Estimate Rental Income-13k-18K range


Strategy II: (Cash and Leverage)

2bdr Loneview Apartment- 4.5m (All Cash)
Estimate Rental Income-22k-25K range

4bdr Villa @Four ways Kiambu Rd- 15m- (3M Cash and 12m Mortgage- rate 19% Monthly repayment-195k)
Estimate Rental Income-80k-90K range

which option would you go for and why? Do you have a better strategy, construction is not an option..i am currently based out of country...

Is suraya reliable company to deal with...how well do they finish their houses??

Please share your thoughts!!





Do people actually take up mortgages at those rates for income generating projects? Maybe if your goal is to just live in your own home and make repayments for the rest of your life. But as an investment otherwise, you do the math. You will not recover your initial investment in your lifetime. 19% is just too expensive.
|The Universe will correspond to the nature of your song ...
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Seles83
#3 Posted : Monday, August 27, 2012 8:02:02 AM
Rank: Member

Joined: 11/9/2007
Posts: 288
Location: OZ
@Sarrouniya

Is there a better strategy? rather than above that does involve buying land and constructing myself..

And Yes some fortunate people are able to access those crazy lending facilities..
More monies, more problems...
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kamundu
#4 Posted : Monday, August 27, 2012 2:25:17 PM
Rank: Member

Joined: 5/9/2011
Posts: 786
Location: Mashinani
Me agrees. Unless rental income is more or equal to mortgage=bad investment
Peace in our Homeland.
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Seles83
#5 Posted : Monday, August 27, 2012 3:00:47 PM
Rank: Member

Joined: 11/9/2007
Posts: 288
Location: OZ
kamundu wrote:
Me agrees. Unless rental income is more or equal to mortgage=bad investment


Thanks Kamundu...how would you go about it given ..7m with a target of creating >42k passive income..

Having only ccess to diaspora facilities...no cheaper rate or on ground advantage
More monies, more problems...
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  | | Edit by user: Monday, August 27, 2012 3:05 PM | Reason: Not specified
Seles83
#6 Posted : Monday, August 27, 2012 3:03:03 PM
Rank: Member

Joined: 11/9/2007
Posts: 288
Location: OZ
kamundu wrote:
Me agrees. Unless rental income is more or equal to mortgage=bad investment


Thanks Kamundu...how would you go about it given ..7m with a target of creating >42k passive income..

Having only ccess to diaspora facilities...no cheaper rate or on ground advantage...
More monies, more problems...
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  | | Edit by user: Monday, August 27, 2012 3:06 PM | Reason: Not specified
kamundu
#7 Posted : Monday, August 27, 2012 3:31:30 PM
Rank: Member

Joined: 5/9/2011
Posts: 786
Location: Mashinani
Me agrees. Unless rental income is more or equal to mortgage=bad investment
Peace in our Homeland.
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mkonomtupu
#8 Posted : Monday, August 27, 2012 3:41:59 PM
Rank: Veteran

Joined: 2/10/2010
Posts: 1,001
Location: River Road
Seles83 wrote:
kamundu wrote:
Me agrees. Unless rental income is more or equal to mortgage=bad investment


Thanks Kamundu...how would you go about it given ..7m with a target of creating >42k passive income..

Having only ccess to diaspora facilities...no cheaper rate or on ground advantage...


Reasons why I prefer stocks to property If i put 7 m into lets say KCB at 25 I get 280,000 shares with a dividend of 1.85 for this year comes to ksh 580,000/= which works to Kshs 43,166/= per month. If you were lucky like some to get KCB at 15 your initial 7m is now worth 11.6m in less than a year plus 863,000/= in dividends. No wonder i still live in a rented house.Sickquot; Sickquot;
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Seles83
#9 Posted : Monday, August 27, 2012 4:01:11 PM
Rank: Member

Joined: 11/9/2007
Posts: 288
Location: OZ
I did stocks got burnt..lost millions...then i moved to real estate...niko na shivers thinking of stocks
More monies, more problems...
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Gatheuzi
#10 Posted : Monday, August 27, 2012 5:00:56 PM
Rank: Veteran

Joined: 8/16/2009
Posts: 994
@ Seles.. If you fear stocks then you are better off first getting what you can with the 7M. Don't think about leverage due to the limitations of mortgage and so go for strategy 1.
Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.
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