All Forum Posts by: Alan F.

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 Agree with all of your points short term, next 6-12 months, but not longer term. Trump will do what he did his first term, which is to pressure Jerome Powell to increase quantitative Easing and to lower the Overnight lending rate, and he will massively increase the money printing and treasury issuance as he did before. (Hopefully, he won't send people 3.4 Trillion again directly with his name on the treasury checks :) With the deficit running at >7% to GDP, a height usually only seen during wartime, further money printing and tax cuts, as he did before, will worsen this deficit, then total debt, and this more massive US treasury issuance (more supply) will cause long term Rates to continue the climb they started 5 years ago when 10 yr yield at 0.31% intraday in 3/2020.  This is basically the same set-up we had in 1945, coming out of WWII with massive debt/deficit. This caused a 36 year "Inflationary Deleveraging" , and yields gradually rose to US 10yr @15%, mortgage rates @19%. The current situation is similar with no out, except radical cost cutting, however if you back out the 2 trillion a year deficit then over last 2 years our GDP has actually been negative 1.6% or we would have been in recession. So that's politically not an option ie to cause a necessary recession and unemployment.

So, I suspect Trump will Trump and we will see gradual rise in all long yields from current levels to 14-16% over next 30-40 years. Real Estate Cap Rates will of course follow. Prolonged "Stagflation" will cause rise in rents, but with much higher vacancies and rising interest rates and falling property values, like the 1960s1970s into early 1980s.  A very bad portent of this is the 40% rise in GOLD the last 12 months on top of strong run in 2023, this is how things started in past cycle as well, with stocks flat for 20 years and volatile commodities. 

Tariffs won't have much initial impact as 83% of US economy is Services and unimpacted, and of the goods part of economy, we Import far more than we Export so tariffs on either side will hurt foreigners far more than USA, but trade war will degrade GDP, so 10yr yield will fall more from that lower expected GDP than from mild inflation causing it to rise, but this is all irrelevant short term "re-arranging deck chairs on the Titanic", so to speak

Highly selective Real Estate picking/management or very selective Value based stock picking or precious metals will be the probable course to Navigate the next 30+ years. 

@Caleb Melton said:
One of my first real jobs was construction cleanup for a contractor building an entire new subdivision. The Mexican crews were indeed very fast. We also had to tear out a d redo half of thier work and they all got fired.

Yeah.....been there done that. I've lost money tearing out shower tile that was just not quite right. So you apy the first guy, fire him, pay a demo crew to remove all his work, then pay for a real craftsman to do it right. That's smart business, right?

There are still good craftsmen out there, both Hispanic and Anglo. But guess what? They charge what they are worth......and they are busy.

Per the Silicon Valley Business journal; Approximately 2m lay off in tech

Accord to investopedia; Approximately 1.8m small businesses went under, Approximately 8.5m jobs lost.

According to crunchbase, 95,000 tech layoffs in 2024

Where's the gnasing of teeth and pearl clothing for these people?

Where does the $ for government come from; The private sector & govt "printing press"

There's something very wrong when a 1 man company pays 37% in "effective" taxes, while a government employee is protected by a labor union (protected from whom?l

A (smart) pariah shouldn't kill its host.

A wise man once told me "you'll never motivate the unmotivated, you can however demotivate the motivated"

An economy based on consumerism and its government that describes its people in term of class, along with deciding through collectivism who is "educated" or "essential" has already run off the rails.

Hello all,

Just writing to ask if anyone can recommend a book or books that outline the Live-in flip strategy.

Thanks,

Sidney

As a general rule of thumb, the more sophisticated and professional of a sub base, the greater chances a net 30 will be accepted. As for material suppliers, many supply houses offer credit accounts. 

You are definitely on the right track recognizing the value of more favorable payment terms. Working with subs who are waiting for a check the moment their work is completed can add strain to your operations. One of the biggest mistakes many investors make is focusing solely on the cash required to acquire and fund the property without considering the funds required to advance the construction. Making matters worse, the types of subs they work with are reliant on immediate payment which makes it more difficult on the investor. 

Payment terms are also a good way of qualifying the subcontractors you work with. Subs who have the ability to work off net 30's and small or no initial deposits points to them having a well capitalized business operation which reduces the risk of them walking off the job because they are chasing initial payments from other project starts.