All Forum Posts by: Drew Y.

Sean Walton interested please add me to the the next meet up list.

Michael Kelly that’s a good illustration of the many ways to fund your first flip.

@Tony Ortiz what type of CPA are looking for? What would you like them to specialize in? 

@Bill F. I totally agree with you Bill , and yes I have read the Intelligent investor, Security Analysis and a number of other financial and tools and resources. I am a value investor at heart, hence the perceived thought of keeping these properties and continuing to re-investing the "rents"/dividends into other properties. Hence the time horizon of forever. Not sure if  I should sell my "Coca Colas" for some "Tesla and Nivida"  

To answer your question:  

The business is performing, the units are self managed (hopefully awesome ) , and the alternatives are risker and frankly less appealing. I basically make take check the properties once annually to make sure the tenants and house is in good standing. 

My concern is that my opportunity cost of deploying the equity in the buildings might not out weighing the low returns on equity I am receiving. But if I deploy to assets to a large complex or out of state and more units my "head ache" cost would increase. 

@Alexander Felice Thanks Alexander for the advice. Will definitely add it into the consideration as I figure out how to re align the portfolio. 

Warren Buffett when asked about his time horizon for investments. He answered with "Our favorite stock holding period is forever.” 

That got me wondering about real estate as I know folks in the boomer generation that have never sold a building and have done amazingly well just maintaining and renting out their assets over 50+ years. Their rents to equity in the buildings are not the best, but they have low to zero debt, and don't have to worry about the rental payments to cover their debt loads and have equity lines available when opportunities become available. Their investments have become truly passive. 

I am a lot younger in my investment career and empire building, but have properties purchased in 2009  that are in that scope. Purchase for 60Kish and now valued at 225-250K with rents around 1,250 monthly. They are paid off in full with equity lines available if needed. Wondering if the adage of buy and hold forever works the same for real estate as it does for equity investments. As it seems like once the depreciation schedules have run their course it would make sense to 1031 out to re start that depreciation clock, or would it be better to take the advice of Warren and keep the asset forever. 

Also might be a good idea not to use your own personal address , as then your home address is known. Hence the reason I personally spend a little more on registered agents and have a business PO box for mailings.

@Amit M. Thanks Amit, I was am a little torn as techies might not fit the profile of the building and would have more "foot traffic" than if we were to rent to a family. 

@Alexander Felice

 2009-2014 -  Fed Quan easing and interest rates at .5 % - I was buying but too young to know about partnerships and using OPM.  2014 stop of fed buying bonds, altering interest rates and etc. 

2016 First interest rate hike rates moved from .5-.75 % but come on that's really not going to change behavior. 

2016-2018  Fed rates move to 1.75 % , so for the hypothetical 1M dollar invest its cost 5K vs 17.5K  annualized interest. This at the end of the day is still with in operable investment margins. 

Make your money sir, :) 

@Russell Brazil totally agree with you, I see some of the next housing move more akin to the moves in 1980' or 1970 (interest rate driven) rather hen deman driven ( 1929, 2008) .

Also given that construction hasn't kept pace with demand- ( population growth ) we are seeing prices rise as the more dollars are chasing fewer products. This market will seeing the classic signs of under building in certain areas, (SFH and low/mid rise apartments ) and over building in other asset classes (Luxury apartments) . This is what I see as an interesting play the next 5 years.