All Forum Posts by: Johann Jells

@Patrick M. your partisan and provably wrong assertions about red states subsidizing cities are getting tiresome. You did not respond to my facts, but continue to state the same lies. And if cities are getting more in this crisis, they're just getting back what they actually send to DC instead of it going to support people who state the Federal govt does nothing for them and cities are evil.

This kind of hackneyed trope is called "The Big Lie". The urban states are all net exporters of Federal tax money and the rural states are net importers. Few are bigger takers of cities money than Mitch McConnell's Kentucky.

The US counties morphing to relative size by GDP http://metrocosm.com/map-us-ec...

BRRR. Buy, Renovate, Rent, Refi, Repeat.

This gives you the equity paydown, and hopefully cashflow, to build your wealth. But the important part is paydown on borrowed money. A property on a 15 year 75% LTV note with no cashflow still yields almost 10% yearly over the life of the note.

You need to look at the basics of what house hacking is. 

1st, it's living in a property while you fix it up. So no, you can't house hack and not live there. You can renovate and then move from a single family, or renovate a unit of a multi while you live in it or another in the property. Just buying and renovating etc is investing in RE not househacking.

2nd, its usually getting the benefits of owner occupied FHA loans and living there 2 years to be able move without tax penalty. I believe you can have up to 4 FHA loans, but I'm no expert on the subject.

3rd: Its BRRR. Buy, Renovate, Rent, Refi, Repeat. Each one is enabled by the previous.

 I have not experienced that situation, what would cause it? My properties appreciated because I chose well in a gentrifying area. I have seen a 60x return on my original capital in 24 years, more if you count the additional properties I bought with equity from the 1st.

The 'living on appreciation' issue I addressed, expecting to live on your investments and quit your day job is one way (among many) to not get rich. By househacking a multifamily we haven't had housing expenses in 24 years, and now have 100k in cashflow. That's not a hundred doors in a low value Great Plains city, that's 13 units including our own. My apartment would rent for at least $3500, so including income taxes that's around $60k of value.  If this is failure I'll take it. Better than the guy I bought my last property from who tried to leverage his inherited 4 family into an empire and lost it all underwater in the subprime crash.

I long ago concluded this is because most BPers would rather be able to quit their day jobs than actually get rich. 

Common utilities like water or even heat need a change of thinking. Your cost isn't the bill. It's the difference between the bill and what you build into the rent. I have a 4U with a steam boiler, the expense of ripping out that whole system and building 4 separate heating systems is many, many times what I may lose in the error between the 2 numbers, if there is one.

You miss the point that he's actually made $5,600/month including appreciation. Cashflow chasers never seem to see this. I have decent cashflow but it's nothing on my appreciation.

Bank appraisals are BS. Period. I paid for 2 when trying to refi a place in 2012, both of them deliberately misstated the sq ft to make their number come in to what "their gut" told them was right. One by 15% and the other by 20%!  This was not an 'honest mistake', I held the tape measure for one of them. It's a 3U rowhouse with a single floor extension, you need 4 number to get it right. They lied. This was literally criminal, they took my money and did not give honest service. The banks said 'tough' when I explained the obvious error. 

Someone on another site was saying "crime is off the charts!!!" I posted the actual data and pointed out no, its not, just look at the actual chart!  So much of the crime commentary is hysteria, often with a partisan political agenda, since one of our major parties makes no secret of it's contempt for cities and their inhabitants. Here's the historic murder rate:

How many murders were there last year?  They jumped by 44% from 319 in 2019 to 462.  Up? Yes. But not anything like the bad old days. People are stressed. Lets see what happens when the external stress comes off.

There's millions of people who have always wanted to live in NYC but were priced out.  The last decade of constantly rising prices and rents seemed unsustainable to me.  Maybe the new normal will be at a lower price point where those people can finally have their dream as people who've had their fill leave, as they've always done. That would not be such a bad thing. 

Here's a crank theory: Covid has acted as an accelerant for various aspects of society. It hastened the deaths of hundreds of thousands of the very elderly who would have died within a few years, and it hastened the inflection point at which maturing families decide to leave NYC, as they always have within a few years. 

Most of my friends from my 20s moved from the city in their 30's, as did both my siblings. Many of my neighbors here move when their kids hit kindergarten age. This is the old "normal", Covid simply moved up the timeline for many. The 30 somethings that moved to the burbs or further may not come back in droves, but the younger less settled people will, particularly if the cost is down.  In a lot of the suburbs where they're doomsteading with their parents there isn't even rental housing stock for singles, thanks to exclusionary low density zoning. But that's a whole nother argument.