Jittery Investor

Not everyone can sleep well at night when their money is invested in real estate. About 16 months ago, I referred my boss to an opportunity to reserve a new home to be built in Corona with the expectation that it would appreciate in the 12-16 month construction window. During that time, the value has increased approximately $100k. While his intent has been to immediately sell the house, I offered a solution that would have been a win/win situation for both of us. The tax rate on short term investments is one's personal federal and state income tax rate. Long term capital gains tax rate for investments held at least 12 months is 15%, significantly lower than his income tax rate of 33%. My suggestion was for him to lease the property with an option to buy in 12 months at today's price. During that time, I would sublease and manage the property as if I were the owner from tenant selection, maintenance and rent collection. I would pay him a higher rent to cover the mortgage and property taxes so that he would not have any negative cash flow. The benefit to him would be that when he sells it to me in one year, albeit at today's price, he would net a higher amount due to the lower taxes and a significantly reduced real estate commission. The benefit to me would be lower property taxes for the one year and the ability to "own" a house without it being on title or mortgage. Alas, he can't sleep at night knowing that a good chunk of their savings is tied up and his wife is pushing him to sell it as quickly as possible before a real estate meltdown. Ah...amateurs!!

Mon 10/31:
$0 leftovers for lunch
$12 Halloween candy
$0 frozen dinner
$31 stuff for rental at Marshalls
(Yes, worked until 10:30pm on Halloween completing cleanup of the rental so that new tenant could move in the 1st.)

Tues 11/01:
$0 business lunch
$18 Marshall's
$19 drycleaning
$1350 Sony LCD TV at Pacific Sales
$0 leftovers for dinner

Wed 11/02:
$0 expensed $30 lunch
$6 Starbucks
$0 skipped dinner

Thursday:
-$130 returned stuff to TJ Maxx Homestore
$7 lunch at Nick's
$41 3 seasons of TV show DV
Ds on Amazon.com (saved $20 with rebate)
$0 prepared dinner

Friday:
$450 3 day real estate seminar by John Schaub
$4 lunch Carl's Jr.
$20 dinner Pizza Hut

Saturday 11/05:
$9 lunch at George's Thai Bistro
$300 3 set audio DVD of real estate seminars
$24 shower curtain rod from Bed, Bath & Beyond (saved $6 with coupon)
$68 dinner for 2 at French 75 (disappointed in the food, wasn't bad but was expecting better, manager comped $22 entree)
$22 Barnes & Noble

Sunday 11/06:
$0 brought lunch for seminar and went to gym
$73 supermarket (saved $35 in coupons)
$130 undershirts and socks at Target
$0 prepared dinner
$6 USB cable kit (saved $25 with rebates)

Monday 11/07:
$9 lunch at Gypsy Den
$0 prepared dinner

Tuesday 11/08:
$9 lunch at Thai Specialty
$9 takeout dinner for 2 from KFC

Wednesday 11/09:
$0 expensed lunch for 3 at Rubio's ($23)
$2 Coffee Bean & Tea Leaf
$0 prepared dinner

Thursday 11/10:
$44 gas
$3 Starbucks
$7 lunch
$10 takeout dinner from Albertson's