All Forum Posts by: Alexandre Marques dos Santos

@Anthony DiBenedetto

Excellent! Dont take my words as ones to discourage you. I just prefer to give you strong base to start your process and face headwinds.

Off course you can find shortcuts, like owners finance, but my experience tells you will pay a higher rate for the loan, and that could kill your cash flow.

Its worthy to start searching for that though, and get used to what an owner finance charges and requires to close a deal with you.

Lastly i forgot to mention, use also this period to improve your credit score. It will help when you are ready to pull the trigger.

Take care

@Anthony DiBenedetto

First thing is to start lecturing yourself in RE. Take the time and invest on that.

Secondly ( you can do it together) keep saving money for when u will start. You will need 20% plus closing, plus reserves plus any rehab needed.

Also start to study target market. SFH, multifamily, condo apartment. Location and economy in the market.

With that, you will get a sense on where to invest and what is the type of RE. What type of tenant ( class a, b , c or d). You will be solid positioned to pull the trigger and understand what will come to you. And will be ready to absorb any headwind...

Good luck

@Anthony Franco

Not sure why you cant find a 30 yrs fixed. Maybe look for other banks? Unless this deal 15/30 has a better rate than 30 years fixed, makes no sense to you.

Technically the rate should be closer to the 15 yrs fixed.

Does not matter for you the ballon as you think it will sell around 10 yrs... but again, the bank must give a better rate for you than a 30 yrs fixed...

@Greg Moore

Thank you. Having this feature, makes a bit more sense. The only thing is that you should adjust the return is for the volatility of the price.

Any asset that have more volatility, should offer a better return.

What do you prefer? An asset that gives 6% py but you know price will be similar or a bit higher, or receive 8% and have no idea where the price will be?

If my RE gives me 6% py in return, then the asset you described needs definitely to give a better return.

Unless you have conviction the price WILL go up. Than you should sell all RE and dive on it.

Good luck

@James Wise.

If i were to be a billionaire, i wouldnt mind to put 1 mio in a pure speculative bet. I could actually spend some in a casino. Unfortunately i am not. So i put my money where i can rationalize.

Can you tell me why the price is going to go up?

By the way, tell me which companies are “investing” in crypto. Those are the

ones i will stop investing as, if it is true they are investing, it shows me they have less corporate governance than i thought so.

@Jacob Menke

Thats surprising. Need to read contract, in this case, THIS one becomes a investment, like a stock ( although you cannot rationalize the corporate strategy)

@Greg Moore

Zero. Cryptocurrency is not an investment. If you hold it, how much will you receive in dividends? Or in interest?

Ok, nothing... So tell me, will you know how much can you sell it on the future for? No? So becomes a gamble...

Bitcoin is mined everyday. So supply is positive. On the other hand, demand is unknown.. does it grows continuously?

Finally, new cryptocurrencies are coming to market. So even more supply. I dont like it.

If illicit money stop buying ( due to regulations), prospect is not good...

I like the way you think... in part.  let me reply the theme in pieces... otherwise we will get nowhere.

1) The money went to banks.  banks were reducing Balance Sheet to deleverage.  If government did not put money there, they would actually damage even more the economy.  government cannot lend to you, so it trust lending to banks it will end on your pockets.  it did actually happened.. in part.  If government did not lend to banks, banks could reduce even more credit availability.  even call back some loans, and this would increase the damage in economy, with some folks being called...

2) you mentioned something very precise.  if consumers dont spend the money, inflation will not come out.  that in economy is the speed the money circulates in economy.  You are absolutely right.  you are assuming consumers, will reduce the consumption for some reason.  In 2008 it also happened.  as crisis hit the market, ppl got scared and stop consuming.  as  a consequence, the problem was just bigger than just a deleverage problem.  When consumers started to see a relief, then they would get back consuming and could off set the situation.  if government did not reduce the amount of money, it would propel inflation...

Now the situation started being similar... you are right looking as this way... but we also had a problem with supply.  theres a reduction in the supply of many goods...  you couldn't buy toilet paper, alcohol , and other stuff...  demand for these goods increased and supply reduced...  government acted to boost confidence, and consumers seems to have returned.  at this point, if the huge amount of money remains, inflation will pop up.

Off course there are other factors.  productivity, technological developments, all factors affects as well...  but if we discuss each of one, them discussion will have no end... economists always tries to discuss one topic at a time, to see how variable affects the dynamics, and keeps the rest steady state.  

Like in the big crisis, money was printed... speed of circulation dropped, but seems to be resuming... so money printing should be squeezed, or inflation will come up...

My thought is that rates will be the last resort.  i might be wrong, but there are instruments to dry up the excess of money prior to rates.  and that would be more powerful tool than just raise rates...  lets see...

take a good care

@Jorge Vazquez

Not sure if i agree with you...

For start, you imply the guy WILL have issues. Well depending on the class of tenants, i believe you can actually face a problem, but not always.

Also many people like to be hands on. It gives some joy to do that. Giving to a PM could take that out.

Lets not forget the cost vis a vis to the work. In a property where rent is 3 -5 k i would say its not too much work for 300-500 per unit. In a property with 700-1000 rent, 70-100 might not be enough.

Finally considere some folks have extra time, is it too much to use his time to get some extra money? Do we need to study so much to learn so much that we dont even have time to look for our assets?

I personally have a PM, where we split the work. She is main contact from tenants, take care of walking in/out, deal with maintenance, and i pay fixed per init. She contacts me and decision is mine. I search for appliances when dneeded, and we get in touch all the time. I just need to be hands on. In many situations i thought i should be “saving” the extra buck, but being out of town, makes a bit harder...

@Bill F.

The answer to your late question is quite simple. Although FED was printing money, due to the deleverage from financial system, we actually faced a huge monetary contraction. So the act of printing money was not enough to offset the contraction caused by deleveraging.

The situation is not the same now, as a consequence printing money is making expansion.