Housing crash deniers ???

[Greg R.]

Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions. 

However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.

Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct. 

[Carlos Ptriawan]

Quote from @James Hamling:

 Financial Freedom, which is not an end, it's a beginning. Once a person is financially free, that means that person can engage in pursuits of passion vs pursuits of necessity. Open a history book, tour a museum, are they filled with works of necessity or passion? All the greatest things in our lives have come from works of passion. 

The real financial freedom that I understand from Mark, Sergey, and his friend is basically so simple ..........you have to make sure the company prints the money out of nowhere for you LOL :) I see the other QP investor is also doing the same...it's not about salary.

[John Carbone]

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @Michael Wooldridge:

@John Carbone from the sounds of things you are a long term investor that is working to replacing his income with CF. My w2 also funds pretty quick purchases for properties. 

I get @Joe Villeneuve point about rolling the equity forward into more properties faster. I’ll have to play with the numbers I think perhaps cashing out a bunch of equity about 41-53 would allow me to retire almost instantly instead of 55-56 as planned but there’s  a lot of variables. Still it’s an interesting dynamic to play with. 

I’ve never been a big fan of flipping and given that I have the income to invest 25% down consistently and quickly, my major goals has always been to replace the invoice to retire early. but it’s absolutely faster the way Joe is discussing. I’m just not sure how much faster. 

As you said, "play with the numbers", do the math.  You'll be very surprised.  Einstein was once asked what he thought the greatest invention of the 20th Century was.  His answer was "compound Interest".  What he said after that was more important.  "Those that understand it, will live off those that don't".

Isn't doing a cashout refi up to 80 percent the same thing though? Why sell the performing asset? I understand the math of doing 20 percent down payments for higher COC, but you are also using more leverage. Not saying leverage isn't a good thing, but it goes both ways. Granted, historically using leverage in real estate works out great as you describe, but until interest rates moderate and prices level off, I see no reason to jack up the real estate leverage. A 20 percent reversion in prices can knock you back multiple years.

 I think the leverage aspect is misguided. I’m glad that investors in general follow this advice. When they are underwater and foreclose like has happened before in my area, I’ll purchase from their banks with leverage then. 

How are you increasing leverage?  You have the same number of loans.
Pulling out more equity with a sale than a refi.  Also, when you cash out, the mortgage payment goes up, and the cash flow goes down as a result.
Keep in mind that all appreciation is based on the PV, so increasing your total PV is exponentially increasing future gains from appreciation.
REFI is a linear return, with a step backwards.  Selling and moving forward gets you an exponential return.
It's the power of the penny...and that has nothing to do with "every penny adds up".  I don't want them adding,...I want them multiplying...like Gold(fish).
If you took a penny, and every day you doubled the previous day's total, (so day 1 would be 2c, day 2 would be 4c, etc...), how much money would you have if you did this for 30 straight days?  Simple math formula.

Your assumption though is that by selling and buying bigger and better is that the returns will be equal to the previous deal in a linear manner. As expansion goes up, risk of performance also goes up. Selling and buying bigger doesn’t mean a linear compounding increase in return. In theory, yes, multiplying the Pennies, but what happens when that 8th penny is only “worth” 4-5 pennies. I’d rather have a 20 percent return with minimal leverage than a 3-4 percent return on 5x leverage relying on overpriced underlying assets continuing to return at the same levels they did over the past decade.  

[Greg R.]

Quote from @James Hamling:

Quote from @Joe Villeneuve:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

@John Carbone from the sounds of things you are a long term investor that is working to replacing his income with CF. My w2 also funds pretty quick purchases for properties. 

I get @Joe Villeneuve point about rolling the equity forward into more properties faster. I’ll have to play with the numbers I think perhaps cashing out a bunch of equity about 41-53 would allow me to retire almost instantly instead of 55-56 as planned but there’s  a lot of variables. Still it’s an interesting dynamic to play with. 

I’ve never been a big fan of flipping and given that I have the income to invest 25% down consistently and quickly, my major goals has always been to replace the invoice to retire early. but it’s absolutely faster the way Joe is discussing. I’m just not sure how much faster.

Yeah, Joe's method is the ticket IMO. Makes too much sense. Even though I've been able able to scale at a good pace and cash flow strongly, I think that I could have had much larger gains and more scalability with his method. I've been in this game almost 15 years and @Joe Villeneuve helped me to unlock my mind with what I consider to be a game changer. 

Out of curiosity, what's the reason you're striving for retirement? I feel that I would be extremely bored and lose motivation. I can't see getting to a place to where RE investing would require all of my time, even if I scaled 5x. Especially if you have PMs, accountants, attorneys, etc. You're basically just managing a portfolio and looking for the next deal. 

I should also preface this with the fact that I enjoy my W2 job, I have a great boss, great pay, flexibility, and a really good work environment. If I weren't in this situation I might have a different perspective. 

If you don't mind, I'll tell you my answer to the why.  Actually, your last 2 sentences answer your question perfectly.  When asked, I tell people the 2 reasons why I got into REI:
1 - Financial - To pay off all my personal debt, and to have income (CF) to cover all of my monthly bills...and then some.
2 - Personal - To have fun.  If you're not having fun, you're not doing it right.  This doesn't mean you won't run into problems along the way, but for me, solving those problems is a big part of the fun.
Like I said above, I think you answered your own question already.

 Financial Freedom, which is not an end, it's a beginning. Once a person is financially free, that means that person can engage in pursuits of passion vs pursuits of necessity. Open a history book, tour a museum, are they filled with works of necessity or passion? All the greatest things in our lives have come from works of passion. 

Space-X is set to change the trajectory of the Human Species, and it came from Financial Freedom. Without cashing out from PayPal, Tesla which was a work of passion, never would have happened. Space-X never would have happened.     St. Jude Children's Research Hospital and the countless lives saved, breakthroughs made, it's all possible via those who achieved financial freedom and then were enabled to engage in such ventures and funding. 

Life begins at Financial Freedom. 

Totally respect your perspective on this one, but I personally disagree. I'm sure I'm the minority in this mindset, but I see money as one of the lesser important things in life. Financial freedom makes life a lot easier, but at what cost? Those of us with a family & kids risk wasting precious time with our family and the people that matter most to us. But at what cost, to stack chips? 
To me it's a big balance, I'm only willing to invest so much time & energy into work and RE investing. We all have a finite amount of time & energy. The more we invest into making money, the less we have to invest in our family.
People like Musk, Bezos, etc., have zero work life balance. they are obsessed with making money and have sacrificed everything to do so. 
That's not a sacrifice I'm willing to make. 

[James Hamling]

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @Michael Wooldridge:

@John Carbone from the sounds of things you are a long term investor that is working to replacing his income with CF. My w2 also funds pretty quick purchases for properties. 

I get @Joe Villeneuve point about rolling the equity forward into more properties faster. I’ll have to play with the numbers I think perhaps cashing out a bunch of equity about 41-53 would allow me to retire almost instantly instead of 55-56 as planned but there’s  a lot of variables. Still it’s an interesting dynamic to play with. 

I’ve never been a big fan of flipping and given that I have the income to invest 25% down consistently and quickly, my major goals has always been to replace the invoice to retire early. but it’s absolutely faster the way Joe is discussing. I’m just not sure how much faster. 

As you said, "play with the numbers", do the math.  You'll be very surprised.  Einstein was once asked what he thought the greatest invention of the 20th Century was.  His answer was "compound Interest".  What he said after that was more important.  "Those that understand it, will live off those that don't".

Isn't doing a cashout refi up to 80 percent the same thing though? Why sell the performing asset? I understand the math of doing 20 percent down payments for higher COC, but you are also using more leverage. Not saying leverage isn't a good thing, but it goes both ways. Granted, historically using leverage in real estate works out great as you describe, but until interest rates moderate and prices level off, I see no reason to jack up the real estate leverage. A 20 percent reversion in prices can knock you back multiple years.

 I think the leverage aspect is misguided. I’m glad that investors in general follow this advice. When they are underwater and foreclose like has happened before in my area, I’ll purchase from their banks with leverage then. 

How are you increasing leverage?  You have the same number of loans.
Pulling out more equity with a sale than a refi.  Also, when you cash out, the mortgage payment goes up, and the cash flow goes down as a result.
Keep in mind that all appreciation is based on the PV, so increasing your total PV is exponentially increasing future gains from appreciation.
REFI is a linear return, with a step backwards.  Selling and moving forward gets you an exponential return.
It's the power of the penny...and that has nothing to do with "every penny adds up".  I don't want them adding,...I want them multiplying...like Gold(fish).
If you took a penny, and every day you doubled the previous day's total, (so day 1 would be 2c, day 2 would be 4c, etc...), how much money would you have if you did this for 30 straight days?  Simple math formula.

Your assumption though is that by selling and buying bigger and better is that the returns will be equal to the previous deal in a linear manner. As expansion goes up, risk of performance also goes up. Selling and buying bigger doesn’t mean a linear compounding increase in return. In theory, yes, multiplying the Pennies, but what happens when that 8th penny is only “worth” 4-5 pennies. I’d rather have a 20 percent return with minimal leverage than a 3-4 percent return on 5x leverage relying on overpriced underlying assets continuing to return at the same levels they did over the past decade.  

 And what-if that 8th penny get's unexpectedly INCREASED to being worth 12. What if, what if, what if.......

[John Carbone]

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @Michael Wooldridge:

@John Carbone from the sounds of things you are a long term investor that is working to replacing his income with CF. My w2 also funds pretty quick purchases for properties. 

I get @Joe Villeneuve point about rolling the equity forward into more properties faster. I’ll have to play with the numbers I think perhaps cashing out a bunch of equity about 41-53 would allow me to retire almost instantly instead of 55-56 as planned but there’s  a lot of variables. Still it’s an interesting dynamic to play with. 

I’ve never been a big fan of flipping and given that I have the income to invest 25% down consistently and quickly, my major goals has always been to replace the invoice to retire early. but it’s absolutely faster the way Joe is discussing. I’m just not sure how much faster. 

As you said, "play with the numbers", do the math.  You'll be very surprised.  Einstein was once asked what he thought the greatest invention of the 20th Century was.  His answer was "compound Interest".  What he said after that was more important.  "Those that understand it, will live off those that don't".

Isn't doing a cashout refi up to 80 percent the same thing though? Why sell the performing asset? I understand the math of doing 20 percent down payments for higher COC, but you are also using more leverage. Not saying leverage isn't a good thing, but it goes both ways. Granted, historically using leverage in real estate works out great as you describe, but until interest rates moderate and prices level off, I see no reason to jack up the real estate leverage. A 20 percent reversion in prices can knock you back multiple years.

 I think the leverage aspect is misguided. I’m glad that investors in general follow this advice. When they are underwater and foreclose like has happened before in my area, I’ll purchase from their banks with leverage then. 

How are you increasing leverage?  You have the same number of loans.
Pulling out more equity with a sale than a refi.  Also, when you cash out, the mortgage payment goes up, and the cash flow goes down as a result.
Keep in mind that all appreciation is based on the PV, so increasing your total PV is exponentially increasing future gains from appreciation.
REFI is a linear return, with a step backwards.  Selling and moving forward gets you an exponential return.
It's the power of the penny...and that has nothing to do with "every penny adds up".  I don't want them adding,...I want them multiplying...like Gold(fish).
If you took a penny, and every day you doubled the previous day's total, (so day 1 would be 2c, day 2 would be 4c, etc...), how much money would you have if you did this for 30 straight days?  Simple math formula.

Your assumption though is that by selling and buying bigger and better is that the returns will be equal to the previous deal in a linear manner. As expansion goes up, risk of performance also goes up. Selling and buying bigger doesn’t mean a linear compounding increase in return. In theory, yes, multiplying the Pennies, but what happens when that 8th penny is only “worth” 4-5 pennies. I’d rather have a 20 percent return with minimal leverage than a 3-4 percent return on 5x leverage relying on overpriced underlying assets continuing to return at the same levels they did over the past decade.  

 And what-if that 8th penny get's unexpectedly INCREASED to being worth 12. What if, what if, what if.......

The fact that housing is severely over valued right now is not being “negative”, it’s just math. Math has no emotions or feelings. The fact that you accuse me of being negative and using “psychological” analogies in describing investing , just shows you are an emotional investor. I love people like you, and fortunately you are in the majority of the sheep population, I’ll be buying when your clients get hit with the leverage “brick wall” and for the aforementioned discounts. Please continue doing as you have been for the past decade. 

I think you are between the anxiety and denial spectrum right now. Give it 18 months and I’ll see you at the bottom. 

[Carlos Ptriawan]

No dude, you got me wrong haha LOL we can still have Musk/Bezos printed money for us while having 90%  life and 10% work (from Hawaii).
Almost everyone is doing that now.

That zero work life balance is BS--that's only true for working class, Mark ZUkerbegh is actually surfing in Kauai beach righ now hahaha LOL 

[Greg R.]

Quote from @Carlos Ptriawan:

No dude, you got me wrong haha LOL we can still have Musk/Bezos printed money for us while having 90%  life and 10% work (from Hawaii).
Almost everyone is doing that now.

That zero work life balance is BS--that's only true for working class, Mark ZUkerbegh is actually surfing in Kauai beach righ now hahaha LOL  

If you think these guys hang out all day while others make money for them, you're deceived. These guys work night and day, they only come up for air every once and a while. Zuck probably had to book time on his calendar a month in advance to take a few hours for surfing. These guys (and many others) will wake up one day and wonder where life went. It passed them by.

 I get your post though :)

[Joe Villeneuve]

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @Michael Wooldridge:

@John Carbone from the sounds of things you are a long term investor that is working to replacing his income with CF. My w2 also funds pretty quick purchases for properties. 

I get @Joe Villeneuve point about rolling the equity forward into more properties faster. I’ll have to play with the numbers I think perhaps cashing out a bunch of equity about 41-53 would allow me to retire almost instantly instead of 55-56 as planned but there’s  a lot of variables. Still it’s an interesting dynamic to play with. 

I’ve never been a big fan of flipping and given that I have the income to invest 25% down consistently and quickly, my major goals has always been to replace the invoice to retire early. but it’s absolutely faster the way Joe is discussing. I’m just not sure how much faster. 

As you said, "play with the numbers", do the math.  You'll be very surprised.  Einstein was once asked what he thought the greatest invention of the 20th Century was.  His answer was "compound Interest".  What he said after that was more important.  "Those that understand it, will live off those that don't".

Isn't doing a cashout refi up to 80 percent the same thing though? Why sell the performing asset? I understand the math of doing 20 percent down payments for higher COC, but you are also using more leverage. Not saying leverage isn't a good thing, but it goes both ways. Granted, historically using leverage in real estate works out great as you describe, but until interest rates moderate and prices level off, I see no reason to jack up the real estate leverage. A 20 percent reversion in prices can knock you back multiple years.

 I think the leverage aspect is misguided. I’m glad that investors in general follow this advice. When they are underwater and foreclose like has happened before in my area, I’ll purchase from their banks with leverage then. 

How are you increasing leverage?  You have the same number of loans.
Pulling out more equity with a sale than a refi.  Also, when you cash out, the mortgage payment goes up, and the cash flow goes down as a result.
Keep in mind that all appreciation is based on the PV, so increasing your total PV is exponentially increasing future gains from appreciation.
REFI is a linear return, with a step backwards.  Selling and moving forward gets you an exponential return.
It's the power of the penny...and that has nothing to do with "every penny adds up".  I don't want them adding,...I want them multiplying...like Gold(fish).
If you took a penny, and every day you doubled the previous day's total, (so day 1 would be 2c, day 2 would be 4c, etc...), how much money would you have if you did this for 30 straight days?  Simple math formula.

Your assumption though is that by selling and buying bigger and better is that the returns will be equal to the previous deal in a linear manner. As expansion goes up, risk of performance also goes up. Selling and buying bigger doesn’t mean a linear compounding increase in return. In theory, yes, multiplying the Pennies, but what happens when that 8th penny is only “worth” 4-5 pennies. I’d rather have a 20 percent return with minimal leverage than a 3-4 percent return on 5x leverage relying on overpriced underlying assets continuing to return at the same levels they did over the past decade.  

Using my system, you're not concerned how 8 years from now will impact what you are buying today because you won't have the same property 8 years from today.  The system only needs to have a handle on the next 3-5 years max.  You can always design deals to make this work.

You're not always going bigger.  Part of the steps will be splitting into more than one.

If you start with 50k in equity, and move it when it grows to $100k, then again when it reaches $200k (remember, this could be 4 properties with $50k equity), then $400k, then $800k...that's only 4 steps...and if that $800k was 20% DP's, that's $4M in PV. Now, the system I use isn't buying SFH or MF continuously...particularly as the equity/PV grows. As the numbers get bigger, I start to move into different types of RE...more suited to returns from the larger numbers.

 Also, why do you assume I'm getting only a 3-4% return on the higher leverage.  I'm actually getting much higher...and higher than the 20% you speak of.  If you're not getting higher returns with higher leverage, then you're doing it wrong.

[Carlos Ptriawan]

hahahaha I think you have the idea, meaning you don't have to work as Mark/Sergey per-se, but you could work as very very low-key guy (lets say as German translator) in the company that Mark/Sergey operates and they will print the money for you, even when you are lazy or very diligent :) From that money you could always buy any midwest property for almost free (as the money is just printed from somewhere).

The point being is ... you have to work for company that can print the money for you OR you make a business that the business is printing money for you. 

[John Carbone]

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @Michael Wooldridge:

@John Carbone from the sounds of things you are a long term investor that is working to replacing his income with CF. My w2 also funds pretty quick purchases for properties. 

I get @Joe Villeneuve point about rolling the equity forward into more properties faster. I’ll have to play with the numbers I think perhaps cashing out a bunch of equity about 41-53 would allow me to retire almost instantly instead of 55-56 as planned but there’s  a lot of variables. Still it’s an interesting dynamic to play with. 

I’ve never been a big fan of flipping and given that I have the income to invest 25% down consistently and quickly, my major goals has always been to replace the invoice to retire early. but it’s absolutely faster the way Joe is discussing. I’m just not sure how much faster. 

As you said, "play with the numbers", do the math.  You'll be very surprised.  Einstein was once asked what he thought the greatest invention of the 20th Century was.  His answer was "compound Interest".  What he said after that was more important.  "Those that understand it, will live off those that don't".

Isn't doing a cashout refi up to 80 percent the same thing though? Why sell the performing asset? I understand the math of doing 20 percent down payments for higher COC, but you are also using more leverage. Not saying leverage isn't a good thing, but it goes both ways. Granted, historically using leverage in real estate works out great as you describe, but until interest rates moderate and prices level off, I see no reason to jack up the real estate leverage. A 20 percent reversion in prices can knock you back multiple years.

 I think the leverage aspect is misguided. I’m glad that investors in general follow this advice. When they are underwater and foreclose like has happened before in my area, I’ll purchase from their banks with leverage then. 

How are you increasing leverage?  You have the same number of loans.
Pulling out more equity with a sale than a refi.  Also, when you cash out, the mortgage payment goes up, and the cash flow goes down as a result.
Keep in mind that all appreciation is based on the PV, so increasing your total PV is exponentially increasing future gains from appreciation.
REFI is a linear return, with a step backwards.  Selling and moving forward gets you an exponential return.
It's the power of the penny...and that has nothing to do with "every penny adds up".  I don't want them adding,...I want them multiplying...like Gold(fish).
If you took a penny, and every day you doubled the previous day's total, (so day 1 would be 2c, day 2 would be 4c, etc...), how much money would you have if you did this for 30 straight days?  Simple math formula.

Your assumption though is that by selling and buying bigger and better is that the returns will be equal to the previous deal in a linear manner. As expansion goes up, risk of performance also goes up. Selling and buying bigger doesn’t mean a linear compounding increase in return. In theory, yes, multiplying the Pennies, but what happens when that 8th penny is only “worth” 4-5 pennies. I’d rather have a 20 percent return with minimal leverage than a 3-4 percent return on 5x leverage relying on overpriced underlying assets continuing to return at the same levels they did over the past decade.  

Using my system, you're not concerned how 8 years from now will impact what you are buying today because you won't have the same property 8 years from today.  The system only needs to have a handle on the next 3-5 years max.  You can always design deals to make this work.

You're not always going bigger.  Part of the steps will be splitting into more than one.

If you start with 50k in equity, and move it when it grows to $100k, then again when it reaches $200k (remember, this could be 4 properties with $50k equity), then $400k, then $800k...that's only 4 steps...and if that $800k was 20% DP's, that's $4M in PV.  Now, the system I use isn't buying SFH or MF continuously...particularly as the equity/PV grows.  As the numbers get bigger, I start to move into different types of RE...more suited to returns from the larger numbers.

But your system does require 3 percent appreciation. We have had gains substantially above that last decade. A mean reversal to fair value over the next 3-5 years will make your strategy not work out for people doing what you are saying now. Variance and standard deviations can be deadly when just using baseline 3 percent in projections. 

[James Hamling]

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @Michael Wooldridge:

@John Carbone from the sounds of things you are a long term investor that is working to replacing his income with CF. My w2 also funds pretty quick purchases for properties. 

I get @Joe Villeneuve point about rolling the equity forward into more properties faster. I’ll have to play with the numbers I think perhaps cashing out a bunch of equity about 41-53 would allow me to retire almost instantly instead of 55-56 as planned but there’s  a lot of variables. Still it’s an interesting dynamic to play with. 

I’ve never been a big fan of flipping and given that I have the income to invest 25% down consistently and quickly, my major goals has always been to replace the invoice to retire early. but it’s absolutely faster the way Joe is discussing. I’m just not sure how much faster. 

As you said, "play with the numbers", do the math.  You'll be very surprised.  Einstein was once asked what he thought the greatest invention of the 20th Century was.  His answer was "compound Interest".  What he said after that was more important.  "Those that understand it, will live off those that don't".

Isn't doing a cashout refi up to 80 percent the same thing though? Why sell the performing asset? I understand the math of doing 20 percent down payments for higher COC, but you are also using more leverage. Not saying leverage isn't a good thing, but it goes both ways. Granted, historically using leverage in real estate works out great as you describe, but until interest rates moderate and prices level off, I see no reason to jack up the real estate leverage. A 20 percent reversion in prices can knock you back multiple years.

 I think the leverage aspect is misguided. I’m glad that investors in general follow this advice. When they are underwater and foreclose like has happened before in my area, I’ll purchase from their banks with leverage then. 

How are you increasing leverage?  You have the same number of loans.
Pulling out more equity with a sale than a refi.  Also, when you cash out, the mortgage payment goes up, and the cash flow goes down as a result.
Keep in mind that all appreciation is based on the PV, so increasing your total PV is exponentially increasing future gains from appreciation.
REFI is a linear return, with a step backwards.  Selling and moving forward gets you an exponential return.
It's the power of the penny...and that has nothing to do with "every penny adds up".  I don't want them adding,...I want them multiplying...like Gold(fish).
If you took a penny, and every day you doubled the previous day's total, (so day 1 would be 2c, day 2 would be 4c, etc...), how much money would you have if you did this for 30 straight days?  Simple math formula.

Your assumption though is that by selling and buying bigger and better is that the returns will be equal to the previous deal in a linear manner. As expansion goes up, risk of performance also goes up. Selling and buying bigger doesn’t mean a linear compounding increase in return. In theory, yes, multiplying the Pennies, but what happens when that 8th penny is only “worth” 4-5 pennies. I’d rather have a 20 percent return with minimal leverage than a 3-4 percent return on 5x leverage relying on overpriced underlying assets continuing to return at the same levels they did over the past decade.  

 And what-if that 8th penny get's unexpectedly INCREASED to being worth 12. What if, what if, what if.......

The fact that housing is severely over valued right now is not being “negative”, it’s just math. Math has no emotions or feelings. The fact that you accuse me of being negative and using “psychological” analogies in describing investing , just shows you are an emotional investor. I love people like you, and fortunately you are in the majority of the sheep population, I’ll be buying when your clients get hit the with leverage “brick wall” and for the aforementioned discounts. Please continue doing as you have been for the past decade. 

[John Carbone]

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @Michael Wooldridge:

@John Carbone from the sounds of things you are a long term investor that is working to replacing his income with CF. My w2 also funds pretty quick purchases for properties. 

I get @Joe Villeneuve point about rolling the equity forward into more properties faster. I’ll have to play with the numbers I think perhaps cashing out a bunch of equity about 41-53 would allow me to retire almost instantly instead of 55-56 as planned but there’s  a lot of variables. Still it’s an interesting dynamic to play with. 

I’ve never been a big fan of flipping and given that I have the income to invest 25% down consistently and quickly, my major goals has always been to replace the invoice to retire early. but it’s absolutely faster the way Joe is discussing. I’m just not sure how much faster. 

As you said, "play with the numbers", do the math.  You'll be very surprised.  Einstein was once asked what he thought the greatest invention of the 20th Century was.  His answer was "compound Interest".  What he said after that was more important.  "Those that understand it, will live off those that don't".

Isn't doing a cashout refi up to 80 percent the same thing though? Why sell the performing asset? I understand the math of doing 20 percent down payments for higher COC, but you are also using more leverage. Not saying leverage isn't a good thing, but it goes both ways. Granted, historically using leverage in real estate works out great as you describe, but until interest rates moderate and prices level off, I see no reason to jack up the real estate leverage. A 20 percent reversion in prices can knock you back multiple years.

 I think the leverage aspect is misguided. I’m glad that investors in general follow this advice. When they are underwater and foreclose like has happened before in my area, I’ll purchase from their banks with leverage then. 

How are you increasing leverage?  You have the same number of loans.
Pulling out more equity with a sale than a refi.  Also, when you cash out, the mortgage payment goes up, and the cash flow goes down as a result.
Keep in mind that all appreciation is based on the PV, so increasing your total PV is exponentially increasing future gains from appreciation.
REFI is a linear return, with a step backwards.  Selling and moving forward gets you an exponential return.
It's the power of the penny...and that has nothing to do with "every penny adds up".  I don't want them adding,...I want them multiplying...like Gold(fish).
If you took a penny, and every day you doubled the previous day's total, (so day 1 would be 2c, day 2 would be 4c, etc...), how much money would you have if you did this for 30 straight days?  Simple math formula.

Your assumption though is that by selling and buying bigger and better is that the returns will be equal to the previous deal in a linear manner. As expansion goes up, risk of performance also goes up. Selling and buying bigger doesn’t mean a linear compounding increase in return. In theory, yes, multiplying the Pennies, but what happens when that 8th penny is only “worth” 4-5 pennies. I’d rather have a 20 percent return with minimal leverage than a 3-4 percent return on 5x leverage relying on overpriced underlying assets continuing to return at the same levels they did over the past decade.  

 And what-if that 8th penny get's unexpectedly INCREASED to being worth 12. What if, what if, what if.......

The fact that housing is severely over valued right now is not being “negative”, it’s just math. Math has no emotions or feelings. The fact that you accuse me of being negative and using “psychological” analogies in describing investing , just shows you are an emotional investor. I love people like you, and fortunately you are in the majority of the sheep population, I’ll be buying when your clients get hit the with leverage “brick wall” and for the aforementioned discounts. Please continue doing as you have been for the past decade. 

I’ll time it when any monkey with a calculator can see what is happening. Even you say 5 percent adjustment is coming, so why bother buying? 

do they give these quotes to realtors when they get their license? 

[Carlos Ptriawan]

Quote from @John Carbone:But your system does require 3 percent appreciation. We have had gains substantially above that last decade. A mean reversal to fair value over the next 3-5 years will make your strategy not work out for people doing what you are saying now. Variance and standard deviations can be deadly when just using baseline 3 percent in projections. 

Joe method is very common actually and it's very applicable in the Midwest market. Here are some more data points for you. The inflation rate in the country is 3% per year so if your property appreciates only 3% actually you don't have an appreciation, it is just coming from inflation.

The country's nationwide IRR from 2010 is 9% IRR. Or appreciating roughly 6%, so 3% is from appreciation, especially in the western region.
In Bay Area/CA appreciation is plus an additional 1% so it is 7%.  

So Joe's input is primarily working in the midwest region, even today, but you can't apply here in CA.  
For low cap rate/middle cap rate market, the best strategy is to do just flipping , it has a bigger risk/reward. 

One need to understand where to apply the theory in which market and at which business climate.

[Michael Wooldridge]

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @Michael Wooldridge:

@John Carbone from the sounds of things you are a long term investor that is working to replacing his income with CF. My w2 also funds pretty quick purchases for properties. 

I get @Joe Villeneuve point about rolling the equity forward into more properties faster. I’ll have to play with the numbers I think perhaps cashing out a bunch of equity about 41-53 would allow me to retire almost instantly instead of 55-56 as planned but there’s  a lot of variables. Still it’s an interesting dynamic to play with. 

I’ve never been a big fan of flipping and given that I have the income to invest 25% down consistently and quickly, my major goals has always been to replace the invoice to retire early. but it’s absolutely faster the way Joe is discussing. I’m just not sure how much faster. 

As you said, "play with the numbers", do the math.  You'll be very surprised.  Einstein was once asked what he thought the greatest invention of the 20th Century was.  His answer was "compound Interest".  What he said after that was more important.  "Those that understand it, will live off those that don't".

Isn't doing a cashout refi up to 80 percent the same thing though? Why sell the performing asset? I understand the math of doing 20 percent down payments for higher COC, but you are also using more leverage. Not saying leverage isn't a good thing, but it goes both ways. Granted, historically using leverage in real estate works out great as you describe, but until interest rates moderate and prices level off, I see no reason to jack up the real estate leverage. A 20 percent reversion in prices can knock you back multiple years.

 I think the leverage aspect is misguided. I’m glad that investors in general follow this advice. When they are underwater and foreclose like has happened before in my area, I’ll purchase from their banks with leverage then. 

How are you increasing leverage?  You have the same number of loans.
Pulling out more equity with a sale than a refi.  Also, when you cash out, the mortgage payment goes up, and the cash flow goes down as a result.
Keep in mind that all appreciation is based on the PV, so increasing your total PV is exponentially increasing future gains from appreciation.
REFI is a linear return, with a step backwards.  Selling and moving forward gets you an exponential return.
It's the power of the penny...and that has nothing to do with "every penny adds up".  I don't want them adding,...I want them multiplying...like Gold(fish).
If you took a penny, and every day you doubled the previous day's total, (so day 1 would be 2c, day 2 would be 4c, etc...), how much money would you have if you did this for 30 straight days?  Simple math formula.

Your assumption though is that by selling and buying bigger and better is that the returns will be equal to the previous deal in a linear manner. As expansion goes up, risk of performance also goes up. Selling and buying bigger doesn’t mean a linear compounding increase in return. In theory, yes, multiplying the Pennies, but what happens when that 8th penny is only “worth” 4-5 pennies. I’d rather have a 20 percent return with minimal leverage than a 3-4 percent return on 5x leverage relying on overpriced underlying assets continuing to return at the same levels they did over the past decade.  

Using my system, you're not concerned how 8 years from now will impact what you are buying today because you won't have the same property 8 years from today.  The system only needs to have a handle on the next 3-5 years max.  You can always design deals to make this work.

You're not always going bigger.  Part of the steps will be splitting into more than one.

If you start with 50k in equity, and move it when it grows to $100k, then again when it reaches $200k (remember, this could be 4 properties with $50k equity), then $400k, then $800k...that's only 4 steps...and if that $800k was 20% DP's, that's $4M in PV. Now, the system I use isn't buying SFH or MF continuously...particularly as the equity/PV grows. As the numbers get bigger, I start to move into different types of RE...more suited to returns from the larger numbers.

 Also, why do you assume I'm getting only a 3-4% return on the higher leverage.  I'm actually getting much higher...and higher than the 20% you speak of.  If you're not getting higher returns with higher leverage, then you're doing it wrong.

 Joe your system is it designed for people with low capital? I've always understood the principal of being leveraged. I've never really intended to cash out on properties though because most my investments are in the $750k ish range these days for ideally larger performance per property. At some point you could look at stepping into what I call truly luxury rental $2 million, $3million properties etc...  but it's a completely different type of property. While I may dabble in that at some point. I don't see myself cashing out (maybe refinancing) to do it. 

Of course my current properties the cash flow after 5 years (rents go up also) is starting to return the original capital spent every 4 years (after 12 years) it's every 3. I guess I'm just wondering behind where you draw that line and why. I feel like I'm taking a similiar approach but slightly more cash flow heavy vs. you are appreciation heavy. 

I did run the numbers quickly and it does look like with nominal appreciation I could speed up my CF situation with a large bump after about 7 years in. But I'm also talking about refinancing 8 properties in a year. Faster yes but just not sure how long it makes sense to keep selling off properties or how your drawing that balance so to speak. 

[Michael Wooldridge]

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

No dude, you got me wrong haha LOL we can still have Musk/Bezos printed money for us while having 90%  life and 10% work (from Hawaii).
Almost everyone is doing that now.

That zero work life balance is BS--that's only true for working class, Mark ZUkerbegh is actually surfing in Kauai beach righ now hahaha LOL  

If you think these guys hang out all day while others make money for them, you're deceived. These guys work night and day, they only come up for air every once and a while. Zuck probably had to book time on his calendar a month in advance to take a few hours for surfing. These guys (and many others) will wake up one day and wonder where life went. It passed them by.

 I get your post though :)

 So I'm with you on the ultra billionaires and I know guys like that - there is a reason why they wake up at 4:30 am very commonly. I'm not so sure I see the long term perspective on RE for folks like us. Part of reason I'm investing in it now is to give up my job by mid 50's. I'll have a growing business on the side and my kids will still be in their teens. Which means more time. My day job allows flexibility BUT i still have to work a lot at times. So I have a nice world but the whoel point of the investing is to have that freedom one day. Besides which the RE side will let me have more and leave a lot more to my kids who will have so much more flexibility than I had (and I had more than my dad to an extent or it looks like I will). 

No need to be a billionaire. $1-3 million in cash flow a year creates a lot of independence and time for family or passions.

[Carlos Ptriawan]

 So I'm with you on the ultra billionaires and I know guys like that - there is a reason why they wake up at 4:30 am very commonly. I'm not so sure I see the long term perspective on RE for folks like us. Part of reason I'm investing in it now is to give up my job by mid 50's. I'll have a growing business on the side and my kids will still be in their teens. Which means more time. My day job allows flexibility BUT i still have to work a lot

But that's not the key. The key is your work in any level of capacity that you can do, and you have a good work-life balance WHILE the company can give you one or two houses in Midwest for free every year, so the capital is coming from the company while you do NOTHING more. Not from another real estate.

[James Hamling]

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @Michael Wooldridge:

@John Carbone from the sounds of things you are a long term investor that is working to replacing his income with CF. My w2 also funds pretty quick purchases for properties. 

I get @Joe Villeneuve point about rolling the equity forward into more properties faster. I’ll have to play with the numbers I think perhaps cashing out a bunch of equity about 41-53 would allow me to retire almost instantly instead of 55-56 as planned but there’s  a lot of variables. Still it’s an interesting dynamic to play with. 

I’ve never been a big fan of flipping and given that I have the income to invest 25% down consistently and quickly, my major goals has always been to replace the invoice to retire early. but it’s absolutely faster the way Joe is discussing. I’m just not sure how much faster. 

As you said, "play with the numbers", do the math.  You'll be very surprised.  Einstein was once asked what he thought the greatest invention of the 20th Century was.  His answer was "compound Interest".  What he said after that was more important.  "Those that understand it, will live off those that don't".

Isn't doing a cashout refi up to 80 percent the same thing though? Why sell the performing asset? I understand the math of doing 20 percent down payments for higher COC, but you are also using more leverage. Not saying leverage isn't a good thing, but it goes both ways. Granted, historically using leverage in real estate works out great as you describe, but until interest rates moderate and prices level off, I see no reason to jack up the real estate leverage. A 20 percent reversion in prices can knock you back multiple years.

 I think the leverage aspect is misguided. I’m glad that investors in general follow this advice. When they are underwater and foreclose like has happened before in my area, I’ll purchase from their banks with leverage then. 

How are you increasing leverage?  You have the same number of loans.
Pulling out more equity with a sale than a refi.  Also, when you cash out, the mortgage payment goes up, and the cash flow goes down as a result.
Keep in mind that all appreciation is based on the PV, so increasing your total PV is exponentially increasing future gains from appreciation.
REFI is a linear return, with a step backwards.  Selling and moving forward gets you an exponential return.
It's the power of the penny...and that has nothing to do with "every penny adds up".  I don't want them adding,...I want them multiplying...like Gold(fish).
If you took a penny, and every day you doubled the previous day's total, (so day 1 would be 2c, day 2 would be 4c, etc...), how much money would you have if you did this for 30 straight days?  Simple math formula.

Your assumption though is that by selling and buying bigger and better is that the returns will be equal to the previous deal in a linear manner. As expansion goes up, risk of performance also goes up. Selling and buying bigger doesn’t mean a linear compounding increase in return. In theory, yes, multiplying the Pennies, but what happens when that 8th penny is only “worth” 4-5 pennies. I’d rather have a 20 percent return with minimal leverage than a 3-4 percent return on 5x leverage relying on overpriced underlying assets continuing to return at the same levels they did over the past decade.  

 And what-if that 8th penny get's unexpectedly INCREASED to being worth 12. What if, what if, what if.......

The fact that housing is severely over valued right now is not being “negative”, it’s just math. Math has no emotions or feelings. The fact that you accuse me of being negative and using “psychological” analogies in describing investing , just shows you are an emotional investor. I love people like you, and fortunately you are in the majority of the sheep population, I’ll be buying when your clients get hit the with leverage “brick wall” and for the aforementioned discounts. Please continue doing as you have been for the past decade. 

I’ll time it when any monkey with a calculator can see what is happening. Even you say 5 percent adjustment is coming, so why bother buying? 

do they give these quotes to realtors when they get their license? 

[John Carbone]

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @Michael Wooldridge:

@John Carbone from the sounds of things you are a long term investor that is working to replacing his income with CF. My w2 also funds pretty quick purchases for properties. 

I get @Joe Villeneuve point about rolling the equity forward into more properties faster. I’ll have to play with the numbers I think perhaps cashing out a bunch of equity about 41-53 would allow me to retire almost instantly instead of 55-56 as planned but there’s  a lot of variables. Still it’s an interesting dynamic to play with. 

I’ve never been a big fan of flipping and given that I have the income to invest 25% down consistently and quickly, my major goals has always been to replace the invoice to retire early. but it’s absolutely faster the way Joe is discussing. I’m just not sure how much faster. 

As you said, "play with the numbers", do the math.  You'll be very surprised.  Einstein was once asked what he thought the greatest invention of the 20th Century was.  His answer was "compound Interest".  What he said after that was more important.  "Those that understand it, will live off those that don't".

Isn't doing a cashout refi up to 80 percent the same thing though? Why sell the performing asset? I understand the math of doing 20 percent down payments for higher COC, but you are also using more leverage. Not saying leverage isn't a good thing, but it goes both ways. Granted, historically using leverage in real estate works out great as you describe, but until interest rates moderate and prices level off, I see no reason to jack up the real estate leverage. A 20 percent reversion in prices can knock you back multiple years.

 I think the leverage aspect is misguided. I’m glad that investors in general follow this advice. When they are underwater and foreclose like has happened before in my area, I’ll purchase from their banks with leverage then. 

How are you increasing leverage?  You have the same number of loans.
Pulling out more equity with a sale than a refi.  Also, when you cash out, the mortgage payment goes up, and the cash flow goes down as a result.
Keep in mind that all appreciation is based on the PV, so increasing your total PV is exponentially increasing future gains from appreciation.
REFI is a linear return, with a step backwards.  Selling and moving forward gets you an exponential return.
It's the power of the penny...and that has nothing to do with "every penny adds up".  I don't want them adding,...I want them multiplying...like Gold(fish).
If you took a penny, and every day you doubled the previous day's total, (so day 1 would be 2c, day 2 would be 4c, etc...), how much money would you have if you did this for 30 straight days?  Simple math formula.

Your assumption though is that by selling and buying bigger and better is that the returns will be equal to the previous deal in a linear manner. As expansion goes up, risk of performance also goes up. Selling and buying bigger doesn’t mean a linear compounding increase in return. In theory, yes, multiplying the Pennies, but what happens when that 8th penny is only “worth” 4-5 pennies. I’d rather have a 20 percent return with minimal leverage than a 3-4 percent return on 5x leverage relying on overpriced underlying assets continuing to return at the same levels they did over the past decade.  

 And what-if that 8th penny get's unexpectedly INCREASED to being worth 12. What if, what if, what if.......

The fact that housing is severely over valued right now is not being “negative”, it’s just math. Math has no emotions or feelings. The fact that you accuse me of being negative and using “psychological” analogies in describing investing , just shows you are an emotional investor. I love people like you, and fortunately you are in the majority of the sheep population, I’ll be buying when your clients get hit the with leverage “brick wall” and for the aforementioned discounts. Please continue doing as you have been for the past decade. 

I’ll time it when any monkey with a calculator can see what is happening. Even you say 5 percent adjustment is coming, so why bother buying? 

do they give these quotes to realtors when they get their license? 

And if you asked Warren buffet what you were, he would say 2 and 3. 

[Nick H.]

@John Carbone 100% agree with you on this one. I am not entirely sure what Joe V's point here is other than "more leverage is good" or "try to maintain a portfolio of 80% LTV rather than a lower LTV because more leverage is good", which imo certainly does not go without saying.

There is both more nuance here that is being ignored, and, even at a basic level - just like any investment, we're balancing risk and reward here. If black swans weren't possible into the future, or if we were guaranteed rents won't go down, or if we were guaranteed historical performance - then sure "mathematically" I do agree that "more leverage is good" if you start out cash flowing. 

Other points:

1) Say you buy a $100K house with $20K down at 5% interest, that cash flows $5K per year after servicing the debt. Say in year 3, interest rates have gone up to 8%, the house is now worth $109K, you've paid off $5K of principal (so you have $34K of equity / 71% LTV / so 29% equity as % of value of the house). Say cash flow is now $6K/year because rents have gone up.

If you sell that house and buy a new one, you're going to have transaction costs. 6 to 8% transaction costs fair? You'll be back at $100K of value to 1031 into a less valuable house than the $109K house you're trading out of. When you do that, you'll be paying an extra 3% in interest with your higher interest rate, and let's assume (other things equal) that rent is slightly lower for your new $100K house vs. your old $109K house. So instead of making $6K/year with the old $109K value house, you're now making ~$5.5K/year minus $3,000 extra interest = ~$2.5K with your new $100K house. 

Let's ignore the transaction costs on your 1031 and pretend like they don't exist (even if you're a broker, or selling directly - they do - time is money). You still lose out, because instead of making $6K/year on your $109K house, you're making ~$3K on your new $109K house w/ your higher interest rate. 

2) To John C point on ReFi - with the example above, it would be a bad choice to sell, and a bad choice to ReFi. Maybe it could make sense if someone were to offer you a 2nd mortgage at X interest rate - then you could consider levering up based on risk/reward. Separate discussion.

But to John C's (correct point) - take the example above, and let's say instead of interest rates increasing, they stay the same. Selling is STILL a bad move given the transaction costs even if interest rates were to stay the same. Refinancing though could make sense if you wanted more leverage, as your refi transaction cost should be fairly low. @Joe Villeneuve I would be curious with actual real world example/numbers as to why it is always (or most often?) beneficial to sell vs. refinance. I do not understand your point. 

Let me now try to summarize into a (hopefully helpful) statement based takeaway:

The primary reason I would want to 1031 a property into another property is if the property I am trading into had a more compelling risk adjusted return (or fit my investment thesis better, etc). The comparative risk adjusted returns need to factor in transaction costs and my old interest rate vs. my new interest rate. A PART of the consideration always should be "what do I want my portfolio level LTV / risk to be".

Note on the last point above as food for thought - it's possible I'd want a higher LTV (more debt) at certain points in time based on what I'm seeing in the economy and a lower LTV (less debt) at other points in time. It's possible I'd want a higher LTV when I'm younger with fewer properties and a W2 vs. a lower LTV when I'm older with way more properties and no W2. etc. etc.

[James Hamling]

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @John Carbone:

Quote from @Joe Villeneuve:

Quote from @Michael Wooldridge:

@John Carbone from the sounds of things you are a long term investor that is working to replacing his income with CF. My w2 also funds pretty quick purchases for properties. 

I get @Joe Villeneuve point about rolling the equity forward into more properties faster. I’ll have to play with the numbers I think perhaps cashing out a bunch of equity about 41-53 would allow me to retire almost instantly instead of 55-56 as planned but there’s  a lot of variables. Still it’s an interesting dynamic to play with. 

I’ve never been a big fan of flipping and given that I have the income to invest 25% down consistently and quickly, my major goals has always been to replace the invoice to retire early. but it’s absolutely faster the way Joe is discussing. I’m just not sure how much faster. 

As you said, "play with the numbers", do the math.  You'll be very surprised.  Einstein was once asked what he thought the greatest invention of the 20th Century was.  His answer was "compound Interest".  What he said after that was more important.  "Those that understand it, will live off those that don't".

Isn't doing a cashout refi up to 80 percent the same thing though? Why sell the performing asset? I understand the math of doing 20 percent down payments for higher COC, but you are also using more leverage. Not saying leverage isn't a good thing, but it goes both ways. Granted, historically using leverage in real estate works out great as you describe, but until interest rates moderate and prices level off, I see no reason to jack up the real estate leverage. A 20 percent reversion in prices can knock you back multiple years.

 I think the leverage aspect is misguided. I’m glad that investors in general follow this advice. When they are underwater and foreclose like has happened before in my area, I’ll purchase from their banks with leverage then. 

How are you increasing leverage?  You have the same number of loans.
Pulling out more equity with a sale than a refi.  Also, when you cash out, the mortgage payment goes up, and the cash flow goes down as a result.
Keep in mind that all appreciation is based on the PV, so increasing your total PV is exponentially increasing future gains from appreciation.
REFI is a linear return, with a step backwards.  Selling and moving forward gets you an exponential return.
It's the power of the penny...and that has nothing to do with "every penny adds up".  I don't want them adding,...I want them multiplying...like Gold(fish).
If you took a penny, and every day you doubled the previous day's total, (so day 1 would be 2c, day 2 would be 4c, etc...), how much money would you have if you did this for 30 straight days?  Simple math formula.

Your assumption though is that by selling and buying bigger and better is that the returns will be equal to the previous deal in a linear manner. As expansion goes up, risk of performance also goes up. Selling and buying bigger doesn’t mean a linear compounding increase in return. In theory, yes, multiplying the Pennies, but what happens when that 8th penny is only “worth” 4-5 pennies. I’d rather have a 20 percent return with minimal leverage than a 3-4 percent return on 5x leverage relying on overpriced underlying assets continuing to return at the same levels they did over the past decade.  

 And what-if that 8th penny get's unexpectedly INCREASED to being worth 12. What if, what if, what if.......

The fact that housing is severely over valued right now is not being “negative”, it’s just math. Math has no emotions or feelings. The fact that you accuse me of being negative and using “psychological” analogies in describing investing , just shows you are an emotional investor. I love people like you, and fortunately you are in the majority of the sheep population, I’ll be buying when your clients get hit the with leverage “brick wall” and for the aforementioned discounts. Please continue doing as you have been for the past decade. 

I’ll time it when any monkey with a calculator can see what is happening. Even you say 5 percent adjustment is coming, so why bother buying? 

do they give these quotes to realtors when they get their license? 

And if you asked Warren buffet what you were, he would say 2 and 3. 

Your such a feckless Troll!     Spending the day spewing lies, distortions, rants and baseless attacks. 

yes, as the founder of a tech start-up, without doubt 0 innovation. Founder of more then a dozen companies, absolutely, imitator without doubt. Yes, one Absolutely achieves "Top Producer" via idiocy.    

What have you achieved? Of course you must be "the" innovator supreme, please, bestow upon us your accolades of achievement kind sir. With out doubt they are so numerous that it would be a grand list of so many.    Please, delight us all with accounts of your conquests.......

[Amber Arwine]

The markets are going to vary widely depending on the area of the country that you are in. Northeast and West are starting to decline but Midwest and South are holding steady. 

https://fred.stlouisfed.org/graph/?id=MSPUS,MSPNE,MSPMW,MSPS,MSPW,

Similar to how California, Florida and Arizona got hit MUCH harder in the 2008 crash than other states, the housing market will always vary by state and county.

[Michael Wooldridge]

Quote from @Carlos Ptriawan:

 So I'm with you on the ultra billionaires and I know guys like that - there is a reason why they wake up at 4:30 am very commonly. I'm not so sure I see the long term perspective on RE for folks like us. Part of reason I'm investing in it now is to give up my job by mid 50's. I'll have a growing business on the side and my kids will still be in their teens. Which means more time. My day job allows flexibility BUT i still have to work a lot

But that's not the key. The key is your work in any level of capacity that you can do, and you have a good work-life balance WHILE the company can give you one or two houses in Midwest for free every year, so the capital is coming from the company while you do NOTHING more. Not from another real estate.

 Agreed. hence my comment. Real estate takes time but if you are using property management, if you have a realtor even if you understand the valuations, your cash flow might not be as high but your time invested is minimal. Frankly, I have a folder that holds 90% of what I need for each purchase. My lender is so used to it now she saves as much as she can (can only hold so much and for so long) but she is used to me just lump sending a bunch of the paperwork for underwriting and they figure it out. It's a bit more work for them but given they have now had 3 mortgages from me in a year, and two more from friends alone. Well they are happy. 

But yes the reason why I pointed it out is greg seems to look at it like work. And it can be. I'm looking at it for hte day I can stop working. 

[John Carbone]

And if you asked Warren buffet what you were, he would say 2 and 3. 

Your such a feckless Troll!     Spending the day spewing lies, distortions, rants and baseless attacks. 

yes, as the founder of a tech start-up, without doubt 0 innovation. Founder of more then a dozen companies, absolutely, imitator without doubt. Yes, one Absolutely achieves "Top Producer" via idiocy.    

What have you achieved? Of course you must be "the" innovator supreme, please, bestow upon us your accolades of achievement kind sir. With out doubt they are so numerous that it would be a grand list of so many.    Please, delight us all with accounts of your conquests.......

 James, If you go through the back and forth discussions we have had over the past few weeks, you are the "troll" always instigating attacks. Just because I call you out on your BS doesn't make me a troll. I hate using this term because it is so overly used nowadays, but you are the classic "bully", about 1 in 100.  I have a zero tolerance policy for people like yourself. I've seen people like you over the years thinking they can shout the loudest and claim to know all. For example, years ago in High School, there was this GOON who would go around and take food off peoples plates. There was a friend of mine who he did this to daily, he finally listened to me, when one day the GOON took a Bosco stick, and what followed was "hey Jim (it actually was his name)…you forgot the sauce" and when he turned around, my friend threw the cup of sauce directly in his face. Suffice to say, the bully James was in shock, and he never took another piece of food from him again. Nowadays though, if that happened, my friend probably would be suspended from school. I'm not going to spout my accolades on here, because it doesn't matter. Nobody cares what you claim to be just like nobody cares what my accolades are. 

[Carlos Ptriawan]

Quote from @Amber Arwine:

The markets are going to vary widely depending on the area of the country that you are in. Northeast and West are starting to decline but Midwest and South are holding steady. 

Yes that's the compilation of our previous discussion also.
The price adjustment is actually more vulnerable in these cities only:

All California cities + Las Vegas, Phoenix , Portland , Austin, Seattle, Nashville. 

Take a look here :

[James Hamling]

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

 So I'm with you on the ultra billionaires and I know guys like that - there is a reason why they wake up at 4:30 am very commonly. I'm not so sure I see the long term perspective on RE for folks like us. Part of reason I'm investing in it now is to give up my job by mid 50's. I'll have a growing business on the side and my kids will still be in their teens. Which means more time. My day job allows flexibility BUT i still have to work a lot

But that's not the key. The key is your work in any level of capacity that you can do, and you have a good work-life balance WHILE the company can give you one or two houses in Midwest for free every year, so the capital is coming from the company while you do NOTHING more. Not from another real estate.

 Agreed. hence my comment. Real estate takes time but if you are using property management, if you have a realtor even if you understand the valuations, your cash flow might not be as high but your time invested is minimal. Frankly, I have a folder that holds 90% of what I need for each purchase. My lender is so used to it now she saves as much as she can (can only hold so much and for so long) but she is used to me just lump sending a bunch of the paperwork for underwriting and they figure it out. It's a bit more work for them but given they have now had 3 mortgages from me in a year, and two more from friends alone. Well they are happy. 

But yes the reason why I pointed it out is greg seems to look at it like work. And it can be. I'm looking at it for hte day I can stop working. 

 A tip on the Realtor fee side of things. 

For a person who is savy like yourself, and well organized, you can ask for Facilitator agency vs exclusive agency, and for applicable fee structure for such. Not uncommon for agency fee to drop too 1-2% in such scenario. 

On buy side, doesn't really matter if getting seller to cover right BUT, for the more sizable deals and yes, commercial this works the same, that is an option in many if not most places of facilitator vs exclusive "full" agency.