All Forum Posts by: Jonathan Cope

@Jeff S. 

For certain. 

I have arms held back often. 

But having been wired as I am, I now take pleasure in others efforts to object. 

Their objection is often the best evidence that I am on the right path. 

Thank you for sharing this. 

Jonathan

@Grant Bublitz 

First pay checks are nice but often a bummer. 

I had the same feeling with mine. 

'Really? Where did all the money go? It's going to take forever to become rich.'

I bought my first place 24 months after pay check number one. 

If I had learned more sooner it would have not taken so long. 

Good luck. 

@Tavonte Battles 

Congratulations on your plan. 

When I got started I had the same questions. 

The link below would seem to confirm that there will be houses available in you area at your price point. 

If you rent out some of the rooms while you live there I bet you be able to live for free. 

Good luck. 

https://www.homepath.com/listing?listingid=4535590...

A giant Frocket reminds me a bit of @Leon Yang's story of his high school baggy pants earning him the nickname Penguin. I have to side with Joshua Dorkin regarding the Bigger Frocket. After a wash or two, the BFrock may be a bit sad to look at over time. Do consider going Ralph Lauren big on the logo, however. A couple of Brandon Turner plaid options would seem required for any shirt type. And, I will laugh out loud if you all end up marketing yoga pants in your collection. A landlord starter tool kit or case, however, for the DIY set could be handy and lead to good co-branding opportunities with the likes of Home Depot/Lowes, etc: flashlight, bit set, hammer, adjustable wrench, Home Depot 123 book, etc., 1 percent of profits donated to Habitat for Humanity or Colorado's Bridge House. Same could apply for pre-printed standard forms via Staples/Office Depot. Good luck.

@Gayla Kemp 

A good question, and one that many people encounter only after they have purchased a home. 

Buying a personal residence is a dream for many. For investors, however, it is often seen as a liability. A home purchase represents 30 years of bondage to a lender. You pay for and care for the bank's asset throughout the majority of your lifetime and the useful life of the home. For investors that appears to be the inverse of the preferred model. Investors want to be paid for the use of their assets and avoid liabilities.

As a young man and investor, Warren Buffett rented a residence for his family whether they were living in Nebraska or New York. He kept his capital available for investment and did not burden himself with the costs and commitments of home ownership. Upon becoming wealthy via his investment partnership, Mr. Buffett later paid cash for his first and only residence in Nebraska. He submitted a single payment of $36,500 in lieu of 30 years of bank bondage.

It is this model that many investors hope to emulate. By owning rental property while remaining a renter one may amass wealth via regular cash flow and, potentially, eventual appreciation. At some point in the future one may buy a personal residence for cash. No worries and no payments come with that ownership model.

Ironically, Mr. Buffett has recently noted that the purchase of a primary residence using a 30 year mortgage is likely a solid investment at this time in many markets if the buyer is careful to acquire value for their purchase price. He has noted that historically low interest rates, falling long-term dollar value and future American economic growth make home ownership an attractive investment option for many at this time.

My sense is that his words were meant for a broad audience and encouraging of real estate  purchases (primary residence or investment) in general. Real estate investors in many cases will benefit from the factors Mr. Buffett highlighted. In addition they will preserve their flexibility, limit their liabilities and enjoy cash flow and potential appreciation.

You will find many investors in BP nation supportive of buying rental property while remaining a renter. @Brandon Turner often notes to @Joshua Dorkin during podcasts that such a strategy or the purchase of a duplex as a primary residence, where a tenant's rent allows one to live for free, is a good start for a new investor. 

Good luck to you,

Jonathan

@Alexander Merritt

Consider focusing on value when selecting your properties.

Warren Buffett teaches that price is what you pay and value is what you get.

In the case of property, the value you get is measured more broadly than in dollars of bricks and mortar.

Value property provides certain and escalating cash flow, the prospect of appreciation, worry free income, the basis for permanent friendships with the tenants you serve, pride of ownership, safety of equity and person, protection against inflation, riches in coin and experience.

If the market or a single buyer is offering you the above at a price that under values the property in whole then buy.

One should not buy property that enslaves them with its faults.

You will spend your ownership of its faults paying with your money, peace of mind and energy.

Take a patient approach and buy value.

Buffett also teaches that wealth in life can be built with as few as twenty wise financial decisions.

He does so to remind audiences that a patient search for value is the best way to spend one's time investing.

@Dawn Anastasi, @Nat Chan and others above are offering wise counsel.

Good luck,

Jonathan

Andrey Yusupov What a terrific question. Yes, I found that once we committed to real estate investment our frugality lifted to a new level. When we became responsible for housing others we came to value a dollar in more ways than we had previously. Dollars saved mitigated risk for us and offered opportunity. We were, and are, grateful for what real estate investment offered us. Wasting what it offers or what other sources of income offer would seem ungrateful. We take joy from our frugality. It has afforded us so much in the past 15 years. Passive income, peace of mind, comfort during the Crisis, freedom to travel, strength to start a small business at the expense of a big income, the spirit to choose our own path rather than follow the herd, and more. Life on our terms more of the time. Frugality offers power. For that we take from it joy. Listening to Brie Schmidt's podcast is a great reminder of what frugality can reap. Many other podcast guests offer the same perspective which is a great tribute to the community Joshua Dorkin and @Brandon Turner are cultivating. Thank you for the great question, Jonathan

@Dawn Anastasi 

Congratulations.

The pictures look nice.

Seems to be a high quality purchase.

Thank you for sharing your success.

Are you working on other, similar leads?

@Scott Trench 

I am pro 401k.

Long term, dollar cost averaged, deferred tax, S&P 500 index fund investment seems a fine way to build a stream of wealth on the effort of American industry that one can not touch day to day and should worry little about.

Set it and forget it, as I learned from late night TV.

I see it as insurance and likely as a way to estate plan.

I hope not to use more than its required minimum distributions when I am in my 70s.

By then I'll have rolled it in to a Roth IRA, paid the necessary taxes, and set it up as my grandchildren's inheritance.

If the rules are the same then as they are now, they will have a small, annual, tax free, required minimum distribution to take over their lifetime, after my passing, with which to enjoy life and remember their grandparents.

I also agree with @Dawn Anastasi 

We are also pro real estate. 

We'll invest more time in building our real estate business for sure.

Real estate should be the larger portion of our estate.

But I see no reason to avoid a 401k.

We'll just enjoy both streams of wealth generation.

Thanks for asking the question,

Jonathan

Question: 

How does your Virtual Assistant provide you leverage?

Have you been impressed with the tactical and/or strategic output your VA has provided?

Or is a VA more bling for your business?

Background:

I enjoy being busy. Not with nonsense but with work that results in results. 

As such, I enjoy not doing nonsense work and automating anything that can be.

Bills, rent collection, basic maintenance, etc., all gets automated in our business.

As I begin to consider expanding our business away from A market SFR to B/C market MFH, I am curious what types of work others have found useful to shift to a VA?

I have read through related posts this afternoon and am still curious:

Are VAs the Real Deal or Bling?

Thank you in advance,

Jonathan