All Forum Posts by: Ben Zimmerman

Over time, real estate located in high demand areas like Phoenix trend upward in value.  Because of this trend, almost everyone is always buying homes at historically high prices.  The same rules apply to stock market index funds, nearly any time you buy an index fund, chances are that it's price is pretty close to it's all time high.

Buying at the current all time high price isn't necessarily a bad thing.  The fact that the current price is an all time high is completely irrelevant, the only thing that matters is where the price will likely go from here.  Will it keep going up, or will it fall.

While nobody knows if the price will go up or down in any particular year, the biggest thing to remember is that real estate is a long term investment, not a short term play.   In the short term, who cares if the value starts to go down a little?  The home going down in value only matters if you plan on selling it.  If you hold onto it the price temporarily going down is completely irrelevant.   In the long run prices of homes in desirable locations will increase in value, if for no other reason than due to inflation.  So even if the home goes down in value in 2021, or 2022, eventually the market will recover and the price will go up.  The only key is having sufficient amounts of capital reserves so that you can survive a potential economic downfall without being forced to sell the home at inopportune times.

Furthermore, if you can't pull the trigger and buy a home while prices are going up, what makes you think you have the internal fortitude to buy when prices are going down?  It takes some serious willpower to buy a home for 250k when the month previous it was worth 260, and the month before that it was 275.

I'm relatively certain that you have it backwards.  You would want to be the primary and the seller would be the additional insured.  The way you have it written I'm fairly certain after the house is sold subject to, the previous seller could simply light the place on fire and collect the insurance check.

@Eliana F.

I'm assuming you plan on living in the property for at least a year to fulfill the FHA requirements.

Otherwise I would double check your expense numbers to make sure they are realistic, specifically your property tax calculations.  I'm not from MA but a quick google search shows they have some of the highest property taxes in the nation at 1.17% annually for the state, plus any additional property tax levied by the city/county.  At 1.17% of price, I would think at minimum your property tax would be closer to 3,160 per year, plus whatever the county/city charges.  

Also I would be skeptical about 200/month total for gas/elec/water/and sewer for a triplex.  I would assume that 3 people trying to heat their homes in the cold winters would cost a decent amount, plus 3 families showering every day for water etc.  Another quick google search shows MA pays some of the highest utility costs in the nation.

I've never had much luck with multifamily units having someone upkeep the lawn/snow removal for free.  It works fine in a single family unit, but in a multifamily it can sometimes be difficult to find a tenant that will actually do it.

 The webinar ad is acceptable, but probably still could be better off to the side instead of the middle of the page.  But beyond the webinar, there are two sponsored ads on the page.  Between the webinar and the two sponsored ads, there isn't a single post visible on the screen.  

I find it incredibly odd to go to a real estate forum, only to have sections where there isn't a single forum visible on the page, instead its nothing but ads.

So maybe it's just me, but I can't express just how much I dislike the new layout of BP.  There is so much wasted space around the edges where there is no content at all, and the ads are Costco sized and right in the middle of the page.  Scrolling down the page I found this section where there was literally nothing displayed on the entire page other than 3 adds.  Couldn't we at least move the ads to the side and have nothing but articles in the middle?  When its possible to see literally nothing but ads while scrolling through the forum, that is a HUGE turn off, for me at least.

Besides that, because you can now only see 2-3 articles on the screen at once it takes a lot of work (scrolling is hard, #FirstWorldProblems) to find a topic that you might be interested in.  I used to see a dozen or so article headlines at once and could at a glance see if I wanted to read further into the topic.  

Does anyone else feel the same way?

Quotes like these are where I would start if I were trying to develop a magical formula for how fools are separated from their money.  Enjoy the view while it lasts Sir Icarus, your hubris will be the end of you.

I too have plenty of individual stocks that have done well in the past.  That doesn't mean that I expect them to do well forever, nor does it mean that just because I picked a winner stock that I am somehow an intelligent investor that is capable of picking future winning stocks.

Enjoy your ride with Facebook stock while it lasts, sure it's price is through the roof today, but what happens when the next faddish social media site comes out and suddenly Facebook is the new Myspace?  Remember how quickly Myspace faded into oblivion?  Every hot stock was smoking hot....until it suddenly wasn't.

Apple would have been bankrupt in 1997 had Microsoft not bailed them out.  Enron, Lehman Brothers, WorldCom, General Motors, Citibank, Washington Mutual all went bankrupt, and the list goes on and on.  Nobody thought these companies would ever go bankrupt, that they were too big to fail, and yet they failed anyway.

Enjoy your profits, because the stock market is a cold hearted beast.  If you are foolish enough to believe you can average 40% year after year, then at some point the market will teach you a costly lesson in humility.

My initial thoughts is that this post has nothing to do with real estate, and everything to do with you stroking your ego and bragging about your recent stock market success. The only thing that would make this post more obnoxious is if you had a link to your guru masterclass where you teach people how to achieve similar stock market gains.  

Anyone who claims that they can on average obtain a minimum return of 40% in the stock market over a several year timeframe is either....

A. stupid

B. Selling something

C. Naive

Anything is possible, not everything is likely.

In order to cashflow $1000 with no mortgage, rent would likely need to be 1500ish to still cover taxes/insurance and random repairs.  Depending on where you buy, a home that rents for that price would likely be somewhere in the neighborhood of $150k-200k.  In some geographic regions you could do it cheaper than this, but I certainly wouldn't want to invest in those types of dying communities that are experiencing no population/wage growth, or worse yet negative growth.

At $1000/month cashflow, it would then take you between 16-23 years to save enough to buy your second property assuming 3% price appreciation and 3% rent increase per year.  (obviously having a high income job can reduce this time significantly).  

Without using loans and leveraging your money, it's going to be an uphill battle trying to achieve your goals unless you have a VERY high income job to help you buy a new property for cash every year or so.

If you assume a 150k purchase nets you 1k/month in cashflow, that is essentially an 8% return on your money.  At those ratios it would likely be better to simply put your money in a passive stock market index fund earning 10%ish over the long run.  Ya the real estate will likely come out ahead even at 8% once you factor in the homes appreciation, but if passivity is your goal and you don't want to manage or repair, then an index fund might better suit your needs.

/Salute

The VA loan is pretty amazing, but it becomes better if you can wait until you separate if you think you will have any disability rating because at that point you no longer pay the VA funding fee which can save you thousands of dollars.

Check for state programs for first time home buyers and military members.  I don't know what Texas has specifically but often times there are a variety of programs that offer a variety of free grants in the form of down payment assistance or closing cost assistance etc.  This might be a decent place to start looking.  https://www.tsahc.org/homebuye...

In addition places like Navy Federal Credit Union has RealtyPlus, an option where if you use one of their real estate agents, you receive cash back after closing.  The cash back is based on the purchase price of the home and a standard 250k home would net you roughly $1500 in savings by using their agent.  https://realestateperk.com/Rea...

*I am not affiliated with any of these companies.