All Forum Posts by: Jordan L.

Japanese buy less of our debt cause it has to rebuild. Rates go up. The worldâ€™s money flows to perceived safety(thatâ€™s U.S. Treasuries) during times of crisis(Japan taking a hit would be considered a time of crisis). Rates go down. Is it a wash? This is a concern obviously for those trying to lock down long term debt for investments.

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A few more inches and that kid would have been thrown onto that brick plantar. That would have been interesting.

Wonder if the school and Casey's parents would chime in as to what the appropriate response should have been?

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Originally posted by Bryan Hancock:

If you are going to worry about catastrophic events like what happened in Japan you'll never find any yield in your investments. Fortunately many of the people on BP are busy educating themselves about being financially savvy.

Well. My situation is this. I just completed purchasing my 3rd rental 1 month ago. It's rented out. I have positive cash flow(though not the amount that typically gets the green light here on this board). I want to buy a fourth. The values of these properties are around 180-200k. I have 300k in cash. My outstanding loans for the 3 other properties are 119k, 149k, 147k all at 30 year fixes 6% and below. My own primary residence is 433k. I like having cash above 300k, just a psychological comfort line. If we purchase a fourth, that will bring that cash to 250k. We could wait a year and save up for another DP, but prices are good now where we want to buy.

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Originally posted by Bryan Hancock:

Originally posted by Jordan L.:

I don't plan to miss payments so that really isn't an issue for me. Credit lines with debt service certainly carry more risk than using cash. The return on your cash should trump the cost of renting money on a line of credit though.

The opportunity cost is very real, not hypothetical. The biggest risk in life is not taking one and many people pass up years of compounded returns not taking any risk with their cash.

Of course you don't plan on missing a payment. But stuff happens in life, and not just stuff that a 6 month emergency cash stash can remedy. A week ago, I'm sure the investment returns of landlords and utility investors on the northeast coast Japan were kicking arse over those who squirreled their cash in a savings account. Today, that is no longer true.

As for opportunity cost, it depends on if you know what you're doing. Most people are not financially savvy.

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Originally posted by Bryan Hancock:

Iâ€™m talking about everythingâ€¦.securities, commodities, personal assets, derivatives, closely-held stock, access to lines of credit and private money, etc.

The more liquid you are in these areas the less cash you need to keep on hand. Note that many real estate investors keep lines of credit so that they have to hold less cash. Holding cash is â€œinvestingâ€ in dollars, which has a terrible return. It helps you sleep better at night though!

What do you mean, the more liquid? You mean, having more stocks that you can cash out?

Also, from an argumentative point of view, is there that big of a difference between having lines of credit vs cash on hand? The former is that if you access it, then you're obligated to pay it off with interest involved. And if you miss payments for whatever reason, there are penalties involved. With cash, you can use it any which way, and if you don't use it, you're just paying a theoretical opportunity cost.

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Originally posted by Bryan Hancock:

The general rule I hear about from bankers is 1 dollar of cash for every 10 dollars in long-term debt is the CEILING. Beyond that you will have a harder time borrowing money.

How much cash to keep is really a personal decision and depends largely on how the rest of your balance sheet looks.

When you say rest of your balance sheet, are you talking about other RE or your cumulative assets like stocks and mutual funds?

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Is there a general rule? Should you have enough to pay off the mortgages if you have too? Or enough to cover all properties if they remain empty for a certain period of time?

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Originally posted by Mike M:

To err is human, to really screw things up - it takes a computer, to FUBAR the entire thing, it takes government.

I about choked on my coffee this morning when I read that the president of the National Association of Realtors was against FNMA and FDMC getting out of the mortgage business or at least scaling way back. The current mess we are in is due largely to the government trying to manipulate the market place by lowering lending standards.

If the US is really a FREE ENTERPRISE and CAPITALISTIC Economic system, then let that system work. Having a government interfere with it distorts the outcome. While I do agree we need regulation, much like a cop regulating the flow of traffic, we don't need the cops telling what kind of car to drive.

What if someone is driving a tank?

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Have 3 properties in Tacoma, WA. PM is 10%. If I get a fourth they'll drop it down to 8%. I have no complaints.

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All Forum Posts by: Jordan L.

Jordan L. has started 11 posts and replied 50 times.

Post: For out of state investors, do you have to file taxes for each state?

Post: So what are the rates going to do post Japanese earthquake/tsunami/nuclear disaster?

Post: Bully Gets Owned!!

Post: What is your cash to mortage ratio?

Post: What is your cash to mortage ratio?

Post: What is your cash to mortage ratio?

Post: What is your cash to mortage ratio?

Post: What is your cash to mortage ratio?

Post: Fannie, Freddie Model Declared Dead - FINALLY!

Post: How Much Do You Pay Your Property Manager?