All Forum Posts by: JD Martin

 I had to look at the financial spreadsheets a couple of times to understand what I was looking at. I think his saving grace is that he's got almost $600k of what could be liquid savings between the 401k and the Roths, so although there's a cost of doing business there he does have some mattress. Beyond that I don't disagree with you at all. Personally, I'm baffled at the bad rap working gets from younger people. I don't know what kids learn if their parents just stay home all day and ride bikes or kayak. I think if I was a kid, and all of my friend's parents had jobs and my parents just rode bikes all day, I'd think we were pretty rich even if my parents told me we were eating off a dumpster dive kitchen table and buying 2-day old donuts 🤣. It would also say to me that just having fun and indulging my whims was really the only thing that mattered in life, that working was for suckers. That's the lesson I'm most disturbed about the "retire at 25" mindset today. 

Beyond that, my thoughts:

1. I can't see $600/month for health insurance for 7 people. That just doesn't make sense to me, considering that I wrote & negotiated our company health insurance for over 20 years, and it can't possibly cover deductibles, medication, vision, or much else. Even if it's being bought off the interchange, it has to be subsidized, which then really makes everyone else look like suckers if someone can own $4 million of RE and ride bikes and then buy subsidized health insurance. Something about it just feels unfair. But more importantly it's not realistic. 

2. I agree that the vacancy, maintenance & cap ex are likely grossly underestimated and likely to eat into some of that cushion. That said, he has some expenses in there that he could always cut like church donations and travel and such. 

3. His occupation is listed as a mechanical engineer. That seems like such a talent to waste especially since it probably took a lot of time and money to achieve - either paid for by his parents, or perhaps subsidized by the taxpayers because we need talented people in society. 

Maybe I just don't get it because I come from a different generation, but the people I looked up to found noble purpose in meaningful work. I'm sure Einstein could have spent his later years tubing and riding mountain bikes but instead he spent a lot of his time and effort trying to prevent nuclear holocaust and still researching all the way up to the end. Work is not just a way of providing for your family, it's a way of providing support to all of society. To me, the "retire and goof around" mindset is just a big F U to the rest of society, and that doesn't seem very healthy or sustainable long-term. 

 That's for sure. I don't like it at all compared to my long term rentals, but I kind of boxed myself into it as the house needs to help pay for some of its own keep. In a couple of years I think I will probably just let friends and family use it when we're not there in the winter because I'm just not a big fan. 

 Deal of the Day has been hereby cancelled due to tariffs 🤣🤣

 Hope you never have to with Booking, as they are completely worthless in that aspect. Partly I think because of being based overseas, and partly because they (like VRBO & AirBnB) just don't give a crap about hosts - we're just there as golden cows to be milked. 

 Thoughts, probably disjointed:

1. Yes, a lot of our problems are self-inflicted, sometimes through economic malfeasance and sometimes through grandiose visions of alternate reality. Sometimes obviously so (ie Guatemala & Iran 1950s), sometimes only in the rear view mirror (support for S Vietnam, for example). 

2. *Most* of the time we are trying to do good in the world, regardless of the party in charge or individual in the OO. Screws up are going to happen and that doesn't mean it has to negate the good that was done for others. GB let ne'er-do-wells talk him into taking out Saddam, a bad guy for sure but a bulwark against radical Islam and Iranian aspirations. He also did more than every president combined to help combat HIV in Africa. LBJ pushed us deeper into Vietnam but also pushed for water & electrification for millions of poverty areas in the US.

3. We need take no lectures from any other government on the planet for our mistakes. GB incited the Mossadeq overthrow, giving us the Shah and consequently the Ayatollah. Our protection blanket enabled the high standard of living in Western Europe, Japan & Australia. Taiwan & South Korea would not be thriving democracies without our efforts.

4. Most people around the world love the US, or at least Americans. When I was in the Navy I found most foreigners when we went somewhere thought well of us - OK, so this was in the 80's and 90s but nevertheless. Why shouldn't they think well of us? We've provided a lot of resources around the world for a very long time.

5. One advantage China has over us in some developing countries is no religious or racial baggage. They don't care who they are working with in Africa as long as it benefits them. We dropped the ball supporting minority governments in these areas for too long.

6. Most government workers believe in helping other people and in their mission. Certainly there's always going to be waste and abuse and that should be curbed whenever possible but we should stop demonizing federal, state and local gov't employees as people just sitting around eating bon-bons. Without government we have anarchy, and we need good, dedicated public servants to make sure we don't devolve into anarchy. 

I think as Americans we have some right to strut around a little bit. We saved the planet from fascism when everyone else was too feckless and pathetic to do so. Without our manpower, money and weaponry, a third of the world would be the 3rd Reich and the other third would be Japanese slave colonies. Since then we've generally done our best to try to contain or limit wars, provide aid to other countries within reason, and raise the standard of living for everyone. We've worked to try to limit ecological damage, whether from a nuclear holocaust, hunting whales or wholesale poison dumping into rivers. We've welcomed people from every corner of this globe into a caste-less system, where those arriving here with nothing can carve out a great life for themselves. Have we screwed up some places, not made enough advances in others, acted greedily & maliciously at times? Of course. This is not Utopia, it's just a bunch of humans who are going to have human biases and make human mistakes. But we need to give ourselves a lot of credit, and stop acting like we - one side or the other, or collectively as Americans - are the bad guys. Liberals are good people. So are conservatives. As a country we're pretty good to the rest of the world. Right now we have this kind of violent internal convulsion that is happening, as a result of years of demonizing each other. That's unfortunate but I believe it will pass. 

Depends on what's normal in your market. In my market those are generally low C and below housing. Everyone wants CHA these days where I am. 

Retired means different things to different people, I guess. For me retired means I don't have to work anymore - I could just hang around and live reasonably well off my past efforts. I consider myself retired these days, as I retired from my career (public executive management) 4 years ago. But I still do some consulting work for my old employer, teach a little on the side, and of course watch over my rentals so from the point of view of just sitting on the beach I guess I'm not retired. But who would want to sit around and do nothing anyway?

The numbers and the situation doesn't make any sense. They bought at $300k 2 years ago in the hottest town in NC. They've been paying on the note for 2 years. They owe $298k, which according to you is essentially market value. So there's been no appreciation on this townhouse for the last 2 years? If it was just keeping up with inflation, you should have about $10-15k in equity in it right off the bat since market value ought to be $310-315 with nothing but CPI adjustments. Then you are going to lose several hundred dollars a month on rent self-managing. And there's no guarantee they can even buy another home, so you're really counting chickens with the real estate commission deal.

This sounds like a very bad idea to me. I think you are overestimating how "hot" this market is, if there's been no growth on value of an essentially brand new townhouse in 2 years. 

Honestly, this sounds like a bankruptcy waiting to happen based on your post. You are essentially looking to finance what is likely D/F properties with maximum leverage and what sounds like no capex, vacancy, professional management, maintenance or taxes built into your model. I agree with Chris, your best option is probably going to try to create either a syndicate of like-minded investors willing to pony up so you can own the properties outright or find a HML that will float you enough cash to get them running and then try to refinance into more traditional financing, probably with the entire portfolio since your individual assets will be too low to go door to door.

How many houses have you done this with so far? What does your current portfolio look like? 

You made a mistake by not having your representative - property manager or someone else - just meet them there the first time, especially knowing you are up against a close deadline, instead of relying on good faith and a lock box to facilitate the inspection. So yeah, you're going to have to live with it or walk with their deposit.