All Forum Posts by: Dhar Rawal

@Ian Walsh, thanks Ian. Would love to talk shop as a fellow lender. Sending an invite...

@Frank S., instead of thoughtful arguments, you have made baseless accusations - against @Tom Cooper of shilling for me, against me of peddling snake oil and making false claims. 

BTW, your calculations are also wrong, since you assumed a portfolio starting point of $250k. If I was in VFINX, I would have been down to roughly $125k in 2009. The reason I was at $250k was because I had made roughly $300K shorting the market at the peak.

You seem to have a very superficial understanding of markets and investing. Your knowledge comes mostly from reading web articles rather than personal experience or research

Here is a record of my portfolio performance since 2013 when I started maintaining Mint records. Note I beat VFINX with a lot less volatility. I generate $175K in cash-flow, about 40% of it completely tax free! And I cleaned ZERO toilets. Care you share yours?

Put up or shut up

@Frank S., I think I see the disconnect. 

Your audience is people who cannot afford to spend more than a few minutes a month on their investing portfolio. Or are seriously disinterested. For all those who belong to this category, I agree completely with your advice. Diversify and use index funds, or hold liquid funds if your need is short-term.

Going by your advice, all BP investors should invest in real estate only via REIT's or real estate index funds. At most you might own your own house. Because... God forbid, how can you ever predict that a particular property will be a good investment!

I, on the other hand, am a full-time investor. I was a full-time investor when I was trading stocks. I thought BP is for investors or people who aspire to be investors. If you want to be a serious investor, and not just someone who pretends to be one, you need to invest serious time in studying markets and assets. And... try to predict how they will behave. If you cannot do this, get out of the market as an "investor". In other words, stop picking assets. I did exactly that in 2009 with stocks!

Btw, I am not a guru and do not have any education to sell. Nor am I a property developer raising cash. RehabDaddy is a crowdfunding portal regulated by securities law. Which means I cannot even invest personally in the investment offerings on my portal. So if I am selling anything, I am selling a service that allows you to raise cash or invest. My target market is full-time active real estate developers and rehabbers raising capital. And serious "investors" who want to fund them, one investment at a time. 

I can tell that you, Mr Sanchez are neither a property developer, nor a rehabber, nor a serious "investor". Good luck with your diversified index funds. 

@Frank S., you are setting up a false competition between stocks and real estate. I am actually completely agnostic. Both are markets that offer investments. I don't think I've made any blanket statements in my posts advocating one or the other

I disagree with you on two points, however:

1. I do not advocate diversification unless you don't care about investing at all. In which case, diversification gives you some measure of protection in a normal market. Unfortunately, when there is a black swan event, even diversification will not help you. Everything, including gold, real estate, stocks, bonds, international... all assets move in unison. For better or worse, the markets are now completely interconnected. You need to watch your eggs very very carefully. Regardless of how many baskets they are in :)

2. I do not agree that "No one can predict the future". There are plenty of people who do it all the time, including in stocks. Buffet is an obvious example, but there are plenty of others. While you cannot predict exact outcomes, you can predict statistical outcomes. If I can predict a strategy will execute profitable trades 55% of the time with a 100% certainty, based on back-testing, I can predict my future profits with a reasonable certainty, at least until some external factor invalidates the model. And while I never did this, its possible to incorporate dynamic real-time feedback into trading models to continuously calculate these probabilities. I would not be surprised if sophisticated HFT models do exactly that.  

@Account Closed is right about 20/20 hindsight. But there's more to it than just that:

1. We knew we were going to make $5+ million when we bought the property - All we had to do was to stabilize it. CAP rates on turnkey apartments are pretty well-known. Did I know what the stock market was going to do back in Mar 2009? I did actually :), but would I sleep at night fully invested? Remember, I had lost $300k in multiple prior market head-fakes

2. We pulled out our basis from the apartments a long time ago. We are now playing with bank money. Can I do the same with stocks? There's a reason banks will not lend you non-recourse money to play the stock market.

That being said, I do think there is a place for stock investing. If you don't have time or interest in investing and don't need the money in the next 5+ years, you can put money in a broad based index fund and get on with your life. You are essentially betting on the US economy.

Obviously, if you see another Mar 2009 scenario IN ANY MARKET, and develop conviction, go in with everything you have got :)

@Ivan Terrero, UDFI and UBIT are tax consequences you have to worry about when investing IRA money. If these two acronyms are ignored, its possible to end up with zero tax benefits, even if you were investing from an IRA :) Its a tricky topic

@Philippe Laurin, thank you. The property was almost completely vacant when we bought it. Maintenance was deferred, and a storm + a broken boiler drove out all the residents. It used to bring in roughly $600 per month per door after we rehabbed, but rents have gone up quite a bit in Houston since then, so $900 is current rent.

@Susan Maneck, seems like you have a cast-iron stomach and also did the right thing given your specific market :) Congratulations!

@Mark Holmes, 60 SFR's is a great goal as long as it does not turn into another job. But I can tell you are going to be successful, given the way you are going about it

@Mark Holmes, thanks! Congrats on the rentals. You are well positioned to grow your assets. Company 401k is a tough nut to crack :) They might loan you up to 50%, if they have such programs in place. it's putting the cart before the horse somewhat, don't you think? Unless you have a compelling reason, there's no point in converting.

Have you considered crowdfunding as a way to participate in larger equity deals?

@Douglas Corona A Texas driver's license and primary residence address is all that's required. No minimum residence time

I learnt trading like I learn anything else. I read a lot. I talk to as many experts as I can. I conduct a lot of small experiments to test hypothesis. The top rated trading books on amazon are mostly good, so you can start there.

Keep in mind however, that trading is a zero sum game. And these days, you will mostly be going up against computer algorithms on custom-built computers with privileged access to the exchange. If you do figure out an arbitrage strategy, you will make some temporary profits but eventually the computers will detect your wins and start front-running your trades.

It helps to have an advanced degree in Math/Physics/Statistics, access to sophisticated simulation software to back-test your trading strategies, and the intestinal fortitude of a Navy Seal :)