All Forum Posts by: Daniel McNulty

@John Fish

I have seen some excellent opportunity zones investments as well, but you will be hard pressed to find one that doesn't require a 10+ year lockup to maximize the tax benefits. It doesn't sound like that;s a great fit for what you need.

Maybe you should look in other markets before you run out of time to 1031. 

Good Luck!

@Erich Stolz

The financial foundation advice above is decent and I will assume that is already covered...

If owning a real estate portfolio is of interest, there is no time like the present to get started. You are young with limited obligations, so you're unlikely to find a better time than now. Finance a property purchase. You will not need the entire 500k or anything close to that to start a house hack. You should even be able to finance a small mutli family without issue.

I am however partial to passive investments such as syndicates and private partnerships such as what it sounds like you already own through your friends. 

Good Luck!

@Mateusz Piasta

I use Cozy for all my screening and rent collection. Free to me and cost the tenant around 40 bucks last I checked. Make sure you also ask for proof of employment, use the general rule of thumb that income should be 3X rent and reference check their prior landlord.

@Cole Holloway

There is some solid advice here. Collecting free money from matches and maxing out retirement accounts is often the cheapest and easiest thing to do, especially if you are in a high tax bracket.

As @Paul Shannon alluded to, his bucketing approach is the perfect analogy for re-balancing and allocating your resources where opportunities arise in the short term. 

Stealing Paul's analogy, in the long term,there is no hard and fast rule on how to properly size the various buckets. General rules of thumb are younger folks should have much larger risky buckets like public equities / real estate / etc. (say 60 - 80%). Older folks may have smaller buckets of risky assets. The only consistent thing you may find is to have 6-12 months living expenses set aside for the average person (potentially more if you are older).

To make a long story short, pull out the ol' excel spreadsheet and see where you land. Set a target by asset class and head that direction with your monthly excess income or by re-balancing. 

@Anthony Jasmine

You are on the right track, but seem to have the cause / effect a little backwards. The fed doesn't actually cause inflation or deflation, rather the economy naturally experiences it for far to many reasons to list here. In the near future, inflation will likely be caused by the monumental increase in money supply. The fed raises and lowers rates in normal times to keep the economy heading towards its inflation target of about 2% annually. 

On the horizon, if you believe inflation is likely, you would expect the fed to raise interest rates (at some point, probably after employment numbers rebound substantially). With that in mind your long term bonds would lose value as rates rise. That is not to say your long term treasury idea is bad in the short to medium term, but your rates to value relationship is off if you are thinking over the long term. 

@Pixel Rogue

It depends if what exactly you are looking for. Income vs just appreciation. ETFs eliminate the annual tax problem common in mutual funds, so its certainly an option. Private real estate partnerships and syndicates offer the same exposure you are accustom to in real estate with much less work. REITs are offer decent current income if you can stomach the volatility, but are less attractive these days in the midst of covid related uncertainty.

It all just depends on how much risk you are willing to accept. Frankly, a little bit of diversification and steady income may be all you need, but its tough to say exactly from the question above. Good Luck!

@Aaron K. @Mark S.

Full disclosure, I generally favor ETFs myself. There was and still is to a degree a conflict of interest as Aaron alluded to  Fortunately, no load funds and ETF's  have helped to correct that. 

It's worth noting that plenty of ETF's have high turnover as well. Its actually their structure that prevents the flow through of annual taxes, not the underlying trading strategy. These days you can find most things you need in a passive ETF for the US. However inefficient, non developed markets often require more active management. Top decile is often only available in a mutual fund or SMA structure for such markets. That is to say, ETFs are exceptional, but not necessarily a one size fits all model if you have a global perspective. 

@Lawrence Pearson

Dave is an excellent resource for many people that lack a basic financial education. His budgeting and general planning philosophy are sound, but he does over reach when he swears off all debt, especially for younger folks. There is an opportunity cost of shoveling all your money to pay down debt, especially if it is a low rate or can be refinanced to a low rate, such as today. 

Cash is king, but only in a pinch. You'll find general agreement to have a plan for 6-12 months of liquidity, but after that you'll find differing opinions. It just depends on what fits your life style and needs. 

@Taylor Holden

Unless there's enough equity in the property purchase another property outright, you may find it difficult to finance additional properties. Maybe you could do a cash out refinance on the whole portfolio to purchase another. 

Good Luck!

@Alberto Foglietta

Have you considered just asking your parents to directly co-sign / co-own. It may be substantially more simple.