All Forum Posts by: Chris John

Ah, it looked like I could link a youtube video.  Bummer.  It's the old "Wave Starter at a Baseball Game" from SNL.

:(

@Greg R. has gotta be sitting back like this guy:

I'm honestly very curious to know where this thread ranks in terms of number of posts.  Is there a way to filter BP threads based on number of posts?  I'd be curious to see where this ranks along with some of the other popular threads over the years.  

@Georgy Cherkassky

Can you walk me through the expected IRR of a Tardus investment? Is that something that's part of their proprietary calculator and financial coaching? I'd have to assume so as I can't imagine financial coaching without discussing it as it's one of the first things that is discussed in a proper finance course.

I mean, I think that's all that really matters anyway, right? If the IRR is higher than my real estate expectations, awesome. I should do it. If not, well, then I probably shouldn't.

Thanks.  I'm very curious to see your response as I'm wondering if there's anything to this time based (rather than rate based) arbitrage.  I'm having trouble with it as a thought exercise and would prefer to see cold, hard numbers.

@Georgy Cherkassky

I'm sorry that I didn't ask you specifically for a response on this the first time.  You previously made the following statement:

"Not entirely, if your saving 1 grand a month for a downpayment on
property; your first property will be in three years and then you will
have to save for another 3 years to buy a second property, so on and so
forth."

I replied with this:

This assumes that your first property makes $0/mo (or that you're saving $0/mo for whatever reason.) If you were making $500/mo, for example, you'd save $36k in 2 years instead of 3, thereby accelerating the purchase of your second property by a year. From that point, assuming another $500/mo, you'd then have 36k in 1.5 years, and so on.

Also, real estate allows for much better tax benefits, debt retirement, and appreciation opportunities (as well as increasing rent over the years).

Can I get your thoughts on this?  I feel like it's a fairly large opportunity cost to using Tardus strategies.

Thanks

@Tony Kim

Yeah, I'd heard of the "Be Your Own Banker" thing.  I've never really investigated it closely and I'm new to the concept of Tardus Wealth. 

I really like the concept of borrowing on a long term and getting paid back on a short term though.  For instance, I'd buy any functional house for the price of infinity, if I could only pay $100/mo for perpetuity.  It's kind of got my mind trying to find a time arbitrage situation as opposed to an interest rate arbitrage.

Like, is there any benefit to borrowing money on a 30 year term, investing it, and getting it paid back in 3 years?  And then just do that over and over?  In theory, you'd turn that money 10x over the 30 years and that alone should provide a benefit.  I just don't think that what is being mentioned here is better than the opportunity that I have to just buy and control my own assets.  I'd be lying if I said I wasn't trying to think of other, potentially more lucrative and less risky ways of doing something similar though.

I guess I've always known that part of the benefit of real estate was time arbitrage, but this is making me see it more clearly and in an entirely new way.

@Georgy Cherkassky

"Not entirely, if your saving 1 grand a month for a downpayment on
property; your first property will be in three years and then you will
have to save for another 3 years to buy a second property, so on and so
forth."

This assumes that your first property makes $0/mo (or that you're saving $0/mo for whatever reason.)  If you were making $500/mo, for example, you'd save $36k in 2 years instead of 3, thereby accelerating the purchase of your second property by a year.  From that point, assuming another $500/mo, you'd then have 36k in 1.5 years, and so on.

Also, real estate allows for much better tax benefits, debt retirement, and appreciation opportunities (as well as increasing rent over the years).

@Sam Bhattacharya

Everyone has their own criteria, but I think the idea would be to get the house with any combination of a lower price, a lower interest rate, and higher rents.  I'll only speak for myself, but the numbers don't look like they did a couple of years ago, so I'm sitting and waiting for any (or all) of those numbers to change before I buy again.

I'm with @Bjorn Ahlblad in that I'd like to see more explanation. 

Having said that, if there's no other money to dump into the property in terms of deferred maintenance or rehab and the monthly cash flow number considers a fixed rate PITI loan, I'd probably like it. Yearly income of 19,320 divided by a down payment of 120,000 is 16.1% and I like to see this percentage be over 15% to cover all the BS and unexpected surprises that come along with owning real estate. Having said that, I like to see this number be over 15% with all of the money that I know I'm going to have to dump into it, so there's not a lot of margin for rehab.

@Enoch Li

I'm definitely anything but an expert, but I think it's a specific loan type.  Sorry, I've only heard of them, but have no experience with them.