Second Life – Picking Up the Pieces and Starting Over (Again)

by FI Fighter on July 20, 2018

in Real Estate Updates, Updates

I’ve had a lot on my mind lately, as I try and process everything that’s happened this year and attempt to put the past firmly behind me. As mentioned in many posts of late, I recently (finally) eradicated myself free from an absolutely horrible situation in South Chicago, selling off two rental properties and losing $200,000 in the process.

Life happens… and now we learn from our mistakes and move on.

Lately, I’ve been having lots of conversations with different people and they’ve really helped me come to grips with reality and put things in the proper perspective…

First off, money isn’t everything. No, that’s not just “loser talk” coming from someone who blew themselves up and is trying to justify their losses… It really is the truth as far as I’m concerned b/c throughout these last few months, I really saw first-hand just how important peace of mind is to me. For instance, I probably could have dragged out my Chicago situation for longer (let’s say another 18 months or so), put in remedial actions, and later made a better attempt at trying to make sure I got “top dollar” for my buildings, but that would have meant I stayed trapped in mental purgatory for a good while longer…

Just totally out of the question and not worth it in my eyes…

I mean, right now, just being able to wake up every morning and not have to call someone in Chicago to help me put out another fire is already a wonderful blessing… a truly amazing bliss that is indescribably beautiful…

And priceless!

So yeah, although I’ve had to experience much negativity over the last few months, I’m really looking forward to moving on with my life now and cherishing the good times to come.

I’m starting over life, again…

And this is where things currently stand today:

  • Paid off rental property in Indianapolis, Rental Property #4. Generates decent cash flow every month.
  • 2 rental properties in the Bay Area, Rental Property #1 and Rental Property #2. Generates amazing cash flow every month (rental appreciation has been insane in the Bay Area these last few years, market rate is ~$1,000/month higher for each unit compared to where things were when I first bought in)… As I’m learning first-hand, if you want MASSIVE cash flow over time, you want to own Class A/Tier 1 properties. I had to learn the hard way that price appreciation and cash flow go hand-in-hand. Makes sense, when you really stop and think about it…
  • 1 rental property in the Bay Area, a partnership deal (50/50 split), Rental Property SH #3. Mediocre cash flow, but the price appreciation alone these last 3 years from my ownership stake in this side hustle already makes up for all my Chicago losses… and a lot more! Another case of Class A/Tier 1 properties kicking major ass! I am so thankful I was able to sneak in this deal at the 11th hour, in early 2015.

And quite frankly, that’s all I really need in my life to pay the bills and support my easy-going standard of living. Yeah, I’ve still got my cash, some mining stocks, cryptos, physical bullion, etc. but all that other stuff is just icing on the cake, and does not comprise my “Core Holdings”…

Life can be really simple, if we filter out all the noise and just get back to basics…

After my Shitcago experience, believe me, I am all about getting back to basics now…

 

I just want to be happy and care-free.

I don’t need to overcomplicate my life.

And I will do my best not to…

 

Later down the line, I may look to sell my Indy property as well, just to simplify my life even more… Indy has actually been a great market for me (night and day compared to Shitcago), and I have awesome tenants in place… But it’s still far away and the price appreciation/rent appreciation are pretty lackluster, to be perfectly honest… I think I can probably do better, elsewhere.

 

For some context (which only applies to my own unique situation), here are my own personal thoughts — I would rather own 1 Bay Area property than 10 properties in Indianapolis.

 

With all that said, I feel like I have been given a major blessing and am reborn again. I am starting my second life now and couldn’t be more excited to see where the wind takes me.

 

For starters, I have plans to travel again. Although I don’t have an exact date just yet, my early hunch is that I will make my way towards SFO airport around September/October. Most likely, I will begin my travels again in Manila (BGC). Yes, everything is preliminary right now, but I might as well put it out there — I am very seriously contemplating purchasing a 2 bedroom/2 bathroom condo out there in Manila (BGC). If I elect to go this route, I would pay all cash. But yeah, it’s early days, and I really need to do my homework to make sure there are no major “surprises”…

 

Last thing I need is another Shitcago incident…

 

Worth stating though is:

In life, a lot of times we elect to use negative experiences to prevent us from moving forward and taking chances again… For myself, I am most cognizant of this… Even though I got severely burned by real estate, I am not going to paint a sweeping generalization on things and let such a terrible experience alienate me entirely from real estate…

Real estate is NOT all evil, and I am not scared off or intimidated at all from further future investment… Granted, this time around I’m more interested in buying real estate for use as a personal residence, as opposed to purchasing as an investor… but nevertheless, we are dealing with property again…

I just have to make sure I learn from my past mistakes… and it’s all good…

 

Importantly:

  • Buy only Class A/Tier 1 properties.
  • Pick out an AMAZING location where wealthy/affluent people want to live.
  • Best school districts.
  • Best employment centers.
  • Safest, lowest crime city/district.
  • Awesome amenities, restaurants, shopping, entertainment, etc. nearby.
  • Easy to re-sell.

Yup… If I’m not willing to live in it, I won’t buy it.

Ideally, one of these apartment units…

Over on this side works just as well, too…

It’s as simple as that.

 

But we’ll see… Nothing is set in stone at the moment… I’m just trying to plan for the next chapter in my life.

 

Oh, and in regards to blogging/writing and all that stuff… Stay tuned! I’ve got some exciting projects that I’m working on as well.

 

The past is over and done with.

 

Now it’s on to bigger and better days!

 

Fight On!

{ 9 comments… read them below or add one }

1 TawcanNo Gravatar July 20, 2018 at 3:27 pm

Take the Chicago incident as a learning experience and move on. It’s nice your SF property’s appreciation already exceeded the $200k loss. 🙂

I’m excited on what’s ahead for you.

Reply

2 FI FighterNo Gravatar July 20, 2018 at 3:34 pm

Thanks for stopping by Bob!

Yup a definite learning experience, for sure! And yes, definitely a blessing that my side hustle from 2015 is already up over $200k, which more or less wipes out the Chicago losses…

You win some and you lose some… I just hope whoever is reading this can learn from and avoid having to make the same mistakes that I made.

Helping other people achieve early FI will be what it’s all about for me, moving forward.

I’m truly blessed, and I now have a newfound appreciation for life.

All the best!

Reply

3 JSNo Gravatar July 20, 2018 at 9:29 pm

I am learning much from your blog, your philosophy on investing and life. With that said, what are your thoughts on mining and precious metals market? I had built a portfolio of gold, silver, lithium, cobalt, and uranium over the past two years. Its deep in red and I am just sitting tight.

Reply

4 FI FighterNo Gravatar July 20, 2018 at 9:49 pm

JS,

In regards to precious metals and mining, this asset class/sector looks very attractive to me from a valuation point of view, especially relative to say general equities and Class A/Tier 1 real estate.

I’m sorry to hear about you being “deep in the red”, and I know it isn’t much consolation, but I’ve found myself in that situation many times before in the past with mining:

http://fifighter.com/precious-metals/precious-metals-updates/2016/01/portfolio-update-its-beet-red-these-days-january-12-2016/

Mining is volatile… Typically when there is nothing but fear, despair, and hatred towards the sector… it quickly turns around… It’s actually quite astonishing how quickly you can go from “beet red” to “bright green” again…

http://fifighter.com/precious-metals/2016/09/mining-stocks-portfolio-performance-non-gaap-accounting/

Opposite ends of the spectrum in less than 1 year…

I’m a big believer in all those metals: gold, silver, lithium, cobalt, and uranium.

It’s a Game of Patience, unfortunately, most of the time with mining… “Buy low and sell high”, don’t get too greedy at interim peaks and de-risk as much as possible. Those are some of the key things that I’ve learned playing this space.

To better and GREENER days! 🙂

Cheers!

Reply

5 joe kimNo Gravatar July 21, 2018 at 11:08 am

I’m selling my chicago property as well in a few months. not a 200K disaster but I’ve ran into multiple evictions in multiple properties in Chicago, Atlanta, Houston, Memphis in the last 2 years and almost done with traditional rentals. I’m selling 4 out of 9 properties in the next 12 months.

I still made a ton of money on real estate but like Fi Fighter I wish I bought 2 properties in SF bay area instead of 12 out of state. it would have been much easier and at least 2X in appreciation or more.

joe

Reply

6 FI FighterNo Gravatar July 21, 2018 at 2:36 pm

Joe,

Sorry to hear about the multiple evictions, but thankfully your situation is not as bad as mine! 🙂

Also, I totally understand your take on traditional rentals, I’m done too, especially in this current market. I won’t buy in again unless prices take a nose dive, and even then I will stick to the Bay Area, or other Class A locations only.

I’m not looking for a second job, or any job, and that’s what real estate can become easily if your properties require too much attention.

Yeah, if I could do it all over again, I would have only bought in the Bay Area and happily settled for owning less units.

Quality > Quantity

Quantity is so overrated, as I’ve learned first-hand! lol

Cheers!

Reply

7 alNo Gravatar July 24, 2018 at 3:35 am

Chicago was the home of Al Capone, a famous maffia boss. See that road there ? No? I pocketed the govmint money without building it. That’s the reputation Chicago has in Europe …

As far as losing $200k, shit happens. I would have paid the $60k, and lived there for a time in one of the rentals, while getting them up to spec. Another adventure to go through and write about in your blog. You missed the opportunity to make us laugh out loud with govmint stupidity.

You are young, smart, healthy and still loaded up to your eyeballs in strong currency money, so what the fuck being sleepless over it all. I understand it though, been there done that too, especially with fuck projects loaded up to the eyeball with morons to deal with.

Simply stick to your solid rules that proved to work, and enjoy the rest of your life. Try to travel to Europe, South America, instead of going back once again to the Phillippinnes to settle down. Nice things to see there too, you know.

Would be nice to see a current trimmed mining portfolio update, been a long time since you posted one.

Reply

8 NINo Gravatar July 24, 2018 at 5:40 am

I appreciate your honesty and candor on this blog; it helps to understand the highs and lows of RE investing.

Do you think your SF experience is something you can replicate over longer periods of time, or is there a large component of right time/right place?

For instance, if you had picked a Class A property in an excellent location in another large city outside of NorCal, I’m sure you would have done well, but the returns might be magnitudes lower than SF. I’m asking because I’d like to learn to spot the “next” SF type opportunity, whether it’s next year or 5 years from now.

Thanks!

Reply

9 ChiNo Gravatar July 24, 2018 at 6:31 am

I have a 2 bedroom/2 bath condo in BGC (Serendra condo) and I’m renting it out until my husband and I retire in about 10 years. You can’t go wrong with the BGC area as it’s the best place to live in the Metro Manila area. I bought my condo 3 years ago and I’ve never had it empty. It’s a highly-sought condo by executives/expats who work in Manila. I paid cash for my unit and my cash-on-cash return is decent – about 5%. The amenities in Serendra are absolutely wonderful – multiple pools, great security and walking distance to everywhere. Best of luck in your future purchase! You won’t regret it!

Reply

Leave a Comment

 

Previous post:

Next post:

Copyright © 2012 FI Fighter