All Forum Posts by: Derrick U.

@Daren H.

Thanks Daren

I wouldn't mind living off of just $100k per year.

@Bryan S.

Thanks Bryan

I looked up all the funds and etfs offered at vanguard and the only two that are above 4% (barely above) are vembx and vgavx. The ytd's are much higher but that's just price appreciation which goes up and down. It could drop lower by the end of the year or the end of ten years. It's hard to say. And those are bond funds so with interest rates around the world at all time lows the next direction for bonds in the long run is down as interest rates rise. I don't see that happening in the short term.

If you know of any index funds that are low to moderate risk, reputable and with a 7%-8% dividend let me know. I can't find any.

I guess I'm willing to accept a lower return because

1. I know the area

2. It's better than parking my money in the bank

3. I understand this investment the best (people give me money and I provide a place to live)

4. Eventually I will own the property free and clear with only the noi (which is my financially free vehicle).

@Caleb L.

Thank you for taking the time to respond.

@Tanner Kurilec

Ok. Wow. I've not seen an index fund give you a 7%-8% dividend.

Do you know which index fund does that? If it's publicly traded then its subject to the wide swings in the market. Also companies can decide to cut the dividend at will. It happened to me with AGNC. That was a great REIT. I think at one point I was getting a 15% dividend but it dropped in value and so did the $/share even though the % only dropped to 12%. I sold it and did ok but it was uneasy because I felt like the value of my investment was at the mercy of the stock market and the large institutional investors involved. I didn't completely understand why and how the price moved so much week to week and month to month.

7%-8% is an awesome return!! I'll need to look up some index funds.

I like real estate because it's easier to understand. I think most adults have rented at some time or another. The stock market and bond market seem to have some hidden hand controlling it all.

Thank you for your answer. Just trying to understand this market better and you've helped me.

@Derrick Umphlett

And, I can manipulate the numbers to raise the COC. For example, with a larger down payment I could move the COC up 1-2%.

Shouldn't the net cash flow (and not the percentage) be the deciding factor?

Plus with interest being lowered and expected to go lower assets such real estate will continue to inflate. I'm guessing. Hence putting more pressure on returns until the only "deals" left are on properties in class d and c- neighborhoods. Then you have a whole host of issues.

@Spencer Hilligoss

Thank you.

So I guess 10%-12% return is ok?

I don't understand why however. As long as I have cash flow positive isn't that all that matters?

@Caleb L

Thank you.

What is special about 12%? Why not 30% or 60%? My money sits in the bank getting .02%.

Where else can I invest? I'm uncomfortable investing out of state because I've never done this before.

Thanks again for taking the time to respond to my question.

I'm looking at a few properties in Phoenix. Can't seem to find anything that yields greater than 4-5 percent return. Would you be ok with that return? Assume down payment is 25%-30%.

Let me know if this sounds like a good investment:

$1000000

5800sf building

12 units (10 units=410sf, 2 units=710sf)

410sf rent for $645/mo

710sf rent for $990/mo

4 parking spots

Central Phoenix

Taxes are $3500/year

Tenants pay electric

Water sewer garbage landlord pays

Updated one year ago ($25000 per unit according to seller)

Looks modern with nice upgrades according to the pics

Gated with key card access

How would I know if this is good or not. I used the BP calculator and assuming 30% down that's about 7% cash on cash roi. Basically I'd have about $1500/mo in cash flow after all expenses are paid.

It's hard to figure out the expenses. I think I was conservative but I'm not sure.

New wanna be investor here.

I'm at the early research phase of my journey. I'm building up my team and looking at properties. What I find myself asking is " would I live there?".

Is that a good initial measure to have when I'm evaluating a property?