All Forum Posts by: Account Closed

I don't agree..I bought my first luxury car in 2010, a BMW 535i. I loved that car and enjoyed every moment of driving it. I had it until last week when it got into an accident and the insurance company decided to total it. I wish they would have fixed it (body damage only) but since it was over 10 years old they decided not to. So some purchases can give many years of satisfaction..

Take a step back and ask the most important question in investing (and life). WHY? Why did you invest? Why did you accumulate what amounts to just a set of numbers in some computer or spreadsheet? What is the purpose of wealth? To me the answer is freedom and security. Having all my time to do what I want. A lot of what I want involves spending money. If I didn't spend it the whole thing would have been utterly pointless. Im not saying an expensive car is a good or bad idea. But if its something YOU want then go ahead and get it. You know you can afford it. Its not a depreciating asset. Its not an asset of any kind. Its a lifestyle cost like food and travel or anything else.

The only truly depreciating asset you have is time! So making the most of your time is the most important thing you can do.

Despite the lies and propaganda perpetuated the republicans and the fossil fuel industry wind power has nothing to do with the Texas power failures. https://www.nytimes.com/2021/0...

Wind provides less than 10% of Texas electricity. The natural gas plants are the ones failing. On top of that the grid is isolated from the rest of the country (decision made by political cowboys) so no extra power can be delivered. Solar actually would be reliable in extreme cold unless there is heavy snow in which case the panels would get covered.

Climate change is real and should be factored into investing I think. Low lying areas in coastal towns, anywhere susceptible to hurricanes (ie anything in Houston or the Gulf coast) is risky. Extreme cold is also more likely and maybe that means better winterizing  homes. 

You invest to live not live to invest. Otherwise the whole thing is pointless. If you don't have a nice comfortable home of your own for your family, why are you doing any of this? Buy your own house. There is plenty of time to continue investing.

Pay the debt.If you don't like the philosophy listen to the math. Paying off debt is a risk free return of 4.5%. The comparable risk free return on a bank deposit is 0.01%. On a turnkey IF things go well you may be lucky to get 8%. But to do that you are taking a LOT of risk. Do you have the reserves to pay tens of thousands extra in your first year if things go really bad? Think it won't happen to you? As the line from the movie goes "You feeling lucky tonight?". Its a no brainer. Pay the debt first. 

Fire the PM. Yesterday! There is no excuse whatsoever for not being reachable and giving a response in less than 24 hours. Second, it sounds like you used those marketing companies that sell properties in every state. They are not the company that rehabbed or rented or managed the property. They are just a middle  man. If they cannot even intercede on your behalf on such issues they have ZERO value add to the deal and just an unnecessary mark up you paid for. Never deal with them again. And out the firm and the PM here on BP. You have little leverage over bad actors thousands of miles away but platforms like BP can significantly affect their future business and we should not be afraid to use it

I invested about 125K in 8 turnkey properties back in 2012/2013. Sold five and recovered about $250K back. Assume zero cash flow over the time as I paid down the mortgage aggressively with free cash flow. Still own 3 with an equity value of about $180K. So yeah its possible to make money. BUT....it's far from a smooth ride. Disaster tenants, annoying banks and insurance companies, some evictions, PM changes yada yada. Don't believe it when they say its "passive". And good timing helps. Back when I bought them you could get 1.5% to 2% rent ratios all day long. Now I see the same ones trading at 1%. I doubt that the returns going forward will be the same.

One other thing is many syndications try to do a refi in year 3 to return some of the capital back to investors and that can boost IRR.

You will most likely NOT get reliable cash flow from these properties. One vacancy, turn or big repair will eat up more than a years cash flow. There are easier ways to get a grand or two a month of passive income, depending on how much capital you have and what risk tolerance and liquidity needs you have. 

I just hate banks. And any control they have over my life. So I paid off rentals. Plus the cash flow improves (not just the interest but principal payment also). I can't justify it mathematically but the POM (peace of mind) quotient is off the charts! I like not owing anything to anyone. Id rather be the lender than the borrower.