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Buying real estate with lottery winning

Topic closed. 14 replies. Last post 9 years ago by MeFirstYouLast.

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Entertaiment Capital
United States
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April 19, 2006
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Posted: May 22, 2008, 1:51 am - IP Logged

 Sorry for posting a similar posting again. But no one seemed to have come up with this.

 Why do I hear so little about lottery winners investing in real estate, especially income-generating commerical properties?

 Investing in some income-generating property is the way to go for winners with medium-size winnings. Say I won 17 millions as the net. I'd put 11~13 millions for a multi-tenant property. I am a Korean. Most Koreans with a lot of money tend to invest in this way. Koreans, especially older ones, have some level of aversion to invest mostly in liquid assets. I don't know. If I won 17 millions then I would have little problem with 2~3 millions in funds. (not in hedge funds. Hedge funds are no more than glorified and overpriced mutual funds. I'd go with Fidelity AND Vanguard)

 If I buy a property with the winning and if the cap rate is 6.5%, my annual income before tax should be $780,000. Not bad at all. (if the property value is 12 millions) I can give 1 mil to my parents and invest 2 mil in stock fund and another 2 mil in bond funds that generates tax-free incomes. So let's say the rent-income after tax is $500,000. (maybe I can donate to charity every year so that I can get some credit) Plus the tax-free income from the bond-funds can be 4% of the principal. so I get 80K, tax-free. I don't need to buy a house right now so let's say I get a two-bedroom apartment in Pasadena or Arcadia, CA. The rent will be about 2000 bucks. If I really decide to get a nice flat in Santa Monica, The rent will go up to 3000 bucks. Oh, then let's forget it.

 80K tax-free income is equivalent to 120K with taxes. And I spend about 24000 bucks for rent. I can use remaining 56000 bucks for a nice life every year. What about the half a million bucks income from the rent? I don't touch it, mostly. I save the money for a couple of years and use the property I have as a collateral to get a loan from the bank so that I can buy another commercial property. You heard it right. I'd buy another property by using the first property as a collateral. You can do this if you win more than 15 million dollars as a net winning.

 Imagine what you can do if you win 300 million dollars and receive 120 millions as the net. I'd put 10 million dollars in my retirement fund and use the rest of money to generate more incomes. I can give my parents 5 million dollars. Then I put 15 millions into income-generating bond funds, resulting tax-free incomes every month. The remaining 100 millions goes to buying properties. Let's say I buy 5 commercial properties with average value of 20 millions and the average cap rate of 6%. Then my income stream from the properties will be 6 million dollars. If the net income from the properties is 4 millions, then I can practically purchase a commercial property every year, by getting loans from the bank and using my properties as collateral. Know that each new property I buy also generates incomes. I can pay back the loan with the incomes generated by each properties. Maybe I can pay back the loan fast by not toching the rent incomes in any other purposes.

 Then some of you will ask, what's the point? Yeah, instead of enjoying your newfound wealth, why are you obsessed with buying more properties?

 I don't know...that's the way I am.

    Coin Toss's avatar - shape barbed.jpg
    Zeta Reticuli Star System
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    Posted: May 22, 2008, 2:36 am - IP Logged

    For the kind of score a jackpot would provde why mess with real property (other than some nice digs to live in), and upkeep, and maintainence, etc...just invest in REITs instead (Real Estate Invesntment Trusts).

    Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

    Lep

    There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.


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      Posted: May 22, 2008, 9:45 am - IP Logged

      It could be a great tax write off. Buy a block of houses and set them up as shelters for abused wifes, or some other group.  Then you can get you name in the paper as being a great and generous person, and it costs you nothing. Alla Hollywood! Isn't America great!

        lottocalgal's avatar - Lottery-043.jpg
        CA
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        December 23, 2007
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        Posted: May 22, 2008, 10:32 am - IP Logged

        It could be a great tax write off. Buy a block of houses and set them up as shelters for abused wifes, or some other group.  Then you can get you name in the paper as being a great and generous person, and it costs you nothing. Alla Hollywood! Isn't America great!

        Hear, hear, MFYL,  I'm with you.

        Now that's the thing I like hearing about. I would do it anonymously, but  happiness for me would be winning enough to retire on and doing something for others less fortunate, someone that really needs help.  (and no, not these  organized "charities")  For me, if I won enough to really live one say 15, 20 million, I would have no problem helping others with it like shelters.  I look at someone like Brad Duke who won what, 85 millon and now wants to get to 1 billion, why?  If he lives that minimal lifestyle that he claims, he won't live long enough to spend it.  Plus he says he already set up small family trusts, so what's all the extra money for?  When it is enough?

          savagegoose's avatar - ProfilePho
          adelaide sa
          Australia
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          April 11, 2006
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          Posted: May 22, 2008, 1:22 pm - IP Logged

          nice plan, sounds like you have it all figured out. now just to win the jackpot hehe.

          2014 = -1016; 2015= -1409; 2016 JAN = -106; FEB= -81; MAR= -131; APR= - 87: MAY= -91; JUN= -39; JUL=-134; AUG= -124; SEP = -123; OCT= -84  NOV=- 73 TOT= -3498

          keno historic = -2291 ; 2015= -603; 2016= JAN=-32, FEB= +12 , MAR= -86, APR = -77. MAY= -48, JUN= -29, JUL=-71; AUG = -52; SEPT= -43; OCT = +56 NOV = -33 TOT= -3297


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            Posted: May 22, 2008, 1:49 pm - IP Logged

            Hear, hear, MFYL,  I'm with you.

            Now that's the thing I like hearing about. I would do it anonymously, but  happiness for me would be winning enough to retire on and doing something for others less fortunate, someone that really needs help.  (and no, not these  organized "charities")  For me, if I won enough to really live one say 15, 20 million, I would have no problem helping others with it like shelters.  I look at someone like Brad Duke who won what, 85 millon and now wants to get to 1 billion, why?  If he lives that minimal lifestyle that he claims, he won't live long enough to spend it.  Plus he says he already set up small family trusts, so what's all the extra money for?  When it is enough?

            You big problem is that you do not have the ultimate Liberal ego.  They cannot survive without the being adored by the masses.  How else can you tell people how to live, then do everything to contradic that imagine?  drive a small ec-car around town and be glorified. Then drive that car to a private airport and get on your private jet and fly around the world week after week.  That is exactly what George Clooney does.  I don't begrudge him a penny of his wealth, or the way he spends t. I wish I could do the same. I do think he and his fellow bleeding hearts are hypocrites.  You're lack of need to be idolized makes you unique. Congraduations!

              psykomo's avatar - animal shark.jpg

              United States
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              May 30, 2004
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              Posted: May 22, 2008, 5:40 pm - IP Logged

              It could be a great tax write off. Buy a block of houses and set them up as shelters for abused wifes, or some other group.  Then you can get you name in the paper as being a great and generous person, and it costs you nothing. Alla Hollywood! Isn't America great!

              ULAST<<<<<<<<<<<<<:

              Why do U have to B so negative ??????????/??? but, & yes there is

              alway's a BUTT out DARE somewhere >>>>>>> PSYKO respect's U!

              BUTT, ........... YouLast may not be qualified to comment on RE ??

              You seem to have ..........answer's ??.........BUT, <<<<no solution's !

              TRANSLATION:

              The Lottery Post is full of $UCCE$$FULL real estate investment deal

              $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$'s!

              DO the REARSEARCH>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>!

              LOL

              PSYKOMO

                psykomo's avatar - animal shark.jpg

                United States
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                May 30, 2004
                5121 Posts
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                Posted: May 22, 2008, 5:57 pm - IP Logged

                 Sorry for posting a similar posting again. But no one seemed to have come up with this.

                 Why do I hear so little about lottery winners investing in real estate, especially income-generating commerical properties?

                 Investing in some income-generating property is the way to go for winners with medium-size winnings. Say I won 17 millions as the net. I'd put 11~13 millions for a multi-tenant property. I am a Korean. Most Koreans with a lot of money tend to invest in this way. Koreans, especially older ones, have some level of aversion to invest mostly in liquid assets. I don't know. If I won 17 millions then I would have little problem with 2~3 millions in funds. (not in hedge funds. Hedge funds are no more than glorified and overpriced mutual funds. I'd go with Fidelity AND Vanguard)

                 If I buy a property with the winning and if the cap rate is 6.5%, my annual income before tax should be $780,000. Not bad at all. (if the property value is 12 millions) I can give 1 mil to my parents and invest 2 mil in stock fund and another 2 mil in bond funds that generates tax-free incomes. So let's say the rent-income after tax is $500,000. (maybe I can donate to charity every year so that I can get some credit) Plus the tax-free income from the bond-funds can be 4% of the principal. so I get 80K, tax-free. I don't need to buy a house right now so let's say I get a two-bedroom apartment in Pasadena or Arcadia, CA. The rent will be about 2000 bucks. If I really decide to get a nice flat in Santa Monica, The rent will go up to 3000 bucks. Oh, then let's forget it.

                 80K tax-free income is equivalent to 120K with taxes. And I spend about 24000 bucks for rent. I can use remaining 56000 bucks for a nice life every year. What about the half a million bucks income from the rent? I don't touch it, mostly. I save the money for a couple of years and use the property I have as a collateral to get a loan from the bank so that I can buy another commercial property. You heard it right. I'd buy another property by using the first property as a collateral. You can do this if you win more than 15 million dollars as a net winning.

                 Imagine what you can do if you win 300 million dollars and receive 120 millions as the net. I'd put 10 million dollars in my retirement fund and use the rest of money to generate more incomes. I can give my parents 5 million dollars. Then I put 15 millions into income-generating bond funds, resulting tax-free incomes every month. The remaining 100 millions goes to buying properties. Let's say I buy 5 commercial properties with average value of 20 millions and the average cap rate of 6%. Then my income stream from the properties will be 6 million dollars. If the net income from the properties is 4 millions, then I can practically purchase a commercial property every year, by getting loans from the bank and using my properties as collateral. Know that each new property I buy also generates incomes. I can pay back the loan with the incomes generated by each properties. Maybe I can pay back the loan fast by not toching the rent incomes in any other purposes.

                 Then some of you will ask, what's the point? Yeah, instead of enjoying your newfound wealth, why are you obsessed with buying more properties?

                 I don't know...that's the way I am.

                 ea ta U ambelamba:

                "R" U a SPAMMER too?

                LOL

                PSYKOMO

                  EZMoney's avatar - weedss04lx1

                  United States
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                  June 22, 2002
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                  Posted: May 22, 2008, 6:38 pm - IP Logged

                  For the kind of score a jackpot would provde why mess with real property (other than some nice digs to live in), and upkeep, and maintainence, etc...just invest in REITs instead (Real Estate Invesntment Trusts).

                  Find me a REIT that will guarantee me to double my money in 10 years.  Oh, hey, thats right you cant.  Real Estate has always been a good bet, especially now. 

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                    Entertaiment Capital
                    United States
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                    April 19, 2006
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                    Posted: May 22, 2008, 7:34 pm - IP Logged

                     Investing in REIT can be a good idea. I wouldn't put all the money in REIT, though. I still want to have my own real property.

                     *EDIT*

                     No, these days are certainly not the good time to invest in REITs. REITs are losing money this year.

                      psykomo's avatar - animal shark.jpg

                      United States
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                      Posted: May 22, 2008, 7:44 pm - IP Logged

                       Investing in REIT can be a good idea. I wouldn't put all the money in REIT, though. I still want to have my own real property.

                       *EDIT*

                       No, these days are certainly not the good time to invest in REITs. REITs are losing money this year.

                      congrat'ssssss.......but, it take's  about 30  YEAR's

                      on averagage to make a REAL PROFIT on RE .......BUTT if U get in A>>

                      big HURRY >>>>>>> (BY) 2038 ...................>>>> CA$H-IT-OUT $$$$

                      write a B@@K and >>>>>>>>>>>>>>>>>>>>> retire$$$$$

                      LOL

                      PSYKOMO

                        TheGameGrl's avatar - character catafly.jpg
                        A long and winding road
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                        Posted: May 22, 2008, 11:52 pm - IP Logged

                        By land , not buildings. Land will eventually go up in value whereas properties fluctuate with the economy. Its a shot in the dark philospohy on multi tenant properties. There is insurance, overhead cost, and taxes.

                        As for the idea of shelters, teach a man how to fish and he fishes for life, put him in a bungalow and he cant fish. I am all about helping folks get a fresh start, but I dont beleive that includes being their caretaker or not giving them the due respect of doing for themselves.  Have a fresh start shelter where education or job conseling can be implemented along with financial planning.  Most folks really do need to get back to the basics and a helping hand never hurts provided the efforts are there.

                        I no more tell Donald Trump how to manage his financial affairs then I do my neighbors, so what difference does it make if George Clooney flies on a private jet and donates to charities. Sorry but its really no ones business....

                        ~~Is it true, Is it kind,Is it necessary. ~~~

                         Thanks be to the giving numbers: 1621,912,119 02014


                          United States
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                          Posted: May 23, 2008, 5:08 pm - IP Logged

                          By land , not buildings. Land will eventually go up in value whereas properties fluctuate with the economy. Its a shot in the dark philospohy on multi tenant properties. There is insurance, overhead cost, and taxes.

                          As for the idea of shelters, teach a man how to fish and he fishes for life, put him in a bungalow and he cant fish. I am all about helping folks get a fresh start, but I dont beleive that includes being their caretaker or not giving them the due respect of doing for themselves.  Have a fresh start shelter where education or job conseling can be implemented along with financial planning.  Most folks really do need to get back to the basics and a helping hand never hurts provided the efforts are there.

                          I no more tell Donald Trump how to manage his financial affairs then I do my neighbors, so what difference does it make if George Clooney flies on a private jet and donates to charities. Sorry but its really no ones business....

                          George Clooney's hypociry is important.  He is using his wealth and popularity to advocate a change in the life style of the world, and is not private.  Privacy is when he keeps his mouth shut and some one invades his space.  When you put a spotlight on yourself and try to influence the goofy, privacy no longer applies. He opened his mouth, now he is air game. When you type and entry on this site, you are agreeing to receive responses.  You have no special right to say something and have the world keep quite.  George Clooney did the same thinig, only with his mouth and with his full concent.

                          It is like Helping Hands, charities, churches, and "the Children" - in the end, they A-L-W-A-Y-S require you separate yourself from your money so that will you feel better.  It down't matter how much is wasted on administrative expenses, or is used to fly the Pope around the world in a style Ceaser whould be envious of.  I see millions of huge religious houses around the country, all paid for out of donations.  A simple four wall structure could have been built, but the entitiy wouldn't have been able to look good.

                          When I hit the jackpot, I will give to something that is deserving and will actually benefit something.  When there is some one in between my money and the receiptant, there is some one making a profit off that money.  Simple logic!  That guy in the suit didn't buy his suit from his parents trust!  That church and house and autombile for the pastor didn't come from their part-time job.  They deserve nothing from me for being one of a hundred middle men! I fail to see the logic of making a holy man live a life of luxury while there are Americans making an annual salary below poverty.  That would be stupid of an American!

                            Coin Toss's avatar - shape barbed.jpg
                            Zeta Reticuli Star System
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                            Posted: May 23, 2008, 6:25 pm - IP Logged

                            Just my opinion here, but to me, anyway, part of the dream of hitting a jackpot is having enough money to always be able to do what you want to do when you want to do it.

                            Whatever the endeavor, doing anything that you would be "married" to that doesn't allow you to be away from it when you ant to be doesn't quite provide one with true independence.

                            Nothing wrong with wanting to be an altruist, but I really think any jackpot winner who doesn't do something like that completely anonymously is asking for tons of trouble.

                            Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                            Lep

                            There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.


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                              Posted: May 23, 2008, 9:14 pm - IP Logged

                              Just my opinion here, but to me, anyway, part of the dream of hitting a jackpot is having enough money to always be able to do what you want to do when you want to do it.

                              This is exactly how I feel.   I have reached the senior age status.  Putting away money for the next 100 years is no where on my goals.  I want to enjoy the luxury of life as soon as I win.  I also don't need a hundred million for myself.  Let the kiddo claim the ticket, however she wants, and gimmie the amount agreed upon.  The purpose of winning millions is to be part of those who enjoy life to the fullest, not hiding away in a cave or surrounding myself with pit-bull dogs.  Las Vegas has hundreds of rich people.  They all manage to party every night.  I want to hide amongst them!