All Forum Posts by: Jeff S.

@Uendy Garcia certainly better than paying a guru. Learning by doing is the best way. Have and have had 100+ year old properties which can be a lot of fun and a challenge too. Best of luck.

@Uendy Garcia the last time foreclosure properties made sense was as profits were coming down because of overbidding the pros came down to accepting an 18% profit on the total purchase price and invested capital excluding personal time value. You are at around 11% projected profit a very slim profit and no room for error. Unless you love this property and if worse came to worse and you had to keep it would you be ok? Maybe a keeper and a sale another day.

@Nathan Frost  Hardest part is they are all tenant occupied.

Now they are all occupied just sit back and relax a little. You can accumulate some cash just be patient and stop spending and buying. When one becomes vacant analyze it and see if rehabbing it would make you a profit to sell or maybe selling as is to get out from under if it is a loser overall.

@K S. 
So answer the OPs question, traditional buy and hold a house off the MLS is one of the worst investments today for most people as prices and interest rates are up. The amount of capital you have to raise to leverage yourself would be better off spent in the S&P 500 or employer matching 401k. Nobody wants to trap their money in a house and break even for decades while renting their so so C neighborhood home to a stranger and everything that comes with that.

Not sure this applies to the poster's actual post as he is not investing in a C class area. Dave is a pretty smart guy and at his age levering quality RE for the long haul a good plan. We can bet on the fact he is very aware of the benefits of the stock market and is taking advantage of it too.

@Erik Heldt great idea to stay with your folks and save up money. My only suggestion might be to buy a high quality home to rent and plow some sizable cash into it to make the payment livable. That way you don't get priced out of the high quality market when you want to buy a home for yourself, and by buying non appreciating cash flowing properties. Just my 2 cents.

@Sam Booth have heard it said by some players here on BP that 70% is the correct percentage of debt. It is not a bad idea to keep debt if it allows one to have lots of back up cash. Better to have debt with a strong cash position. Also if a property can support itself when leveraged at 100% then that is a good way to go and potentially a good property. For many getting their initial investment out is the winning strategy. If you hold a property long enough and it is a good one then getting all your money out and ending up paid off is a great thing but for some an asset to leverage.

At the end of the day it is all about personal choice. There is a lot to be said about living a simple life and no debt can allow that but for many lots of debt and action is the way to go. Had mentors that went both ways and were extremely successful. Most businesses need debt to be competitive. I am in an expensive area so paying cash was never possible during my days but in times past it was a more possible thing. I think with lower cost properties it would be fun to snowball cashflow into more free and clear properties. There was a time on here where some did that with super cheap properties but the tenant base could be a real challenge.

@K S.
I don't understand the statement that the the broad market index fund returns over the last decade or 100 years was luck. You can say the same for the real estate run over the last decade as well.

Yes I admit being extremely lucky in RE the last 30 years and having been unlucky in the stock market. I think the stock market is fascinating but I am too slow on the uptake getting in on the big winners. There are no guarantees going forward. To me RE is a hands on business where stock investing is just that investing in someone else's businesses. My base is RE and cash and stocks are my speculation. I am more interested in return of capital than return on capital.

@K S. here is Nike:

Return on Assets   9.89%

Return on Equity 36.38%

@K S. here is Bank of America stats. Terrible return on assets.

@Carlos Ptriawan it is thought he may be selling some Apple because he thinks if Biden is elected capital gains tax will go up and he can take advantage of lower gains now. He is taking profits too as Apple is softening a bit. With 200 billion in cash he is not capitalizing on treasuries but not sad to get some income from them.