All Forum Posts by: John Clark

"5G will cause, IMHO, massive innovation, just as 3G and 4G did before it."

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Three G was a bust. Only the even-numbered G generations made lasting impressions.

China is already working on 6G.

I stumbled on this thread and have not looked at other responses. Your assumptions, however, are totally false to the point where I say "Crack pipe thinking."

Nobody gets 100% occupancy --start there and your house of cards fall. Also, compare the rate of increase in property taxes, inflation, CapEx a-c-t-u-a-l-s, maintenance, etc. and you AFTER you take into account your own time-value of money to manage the projects (buying Apple is fire and forget and don't pretend that management companies don't need review/discussion)) and the two in theory come out the same.

Risk/Reward. Make sure you FULLY account for the risk, including rent control.

Zeeshan, as other have probably said, and I just haven't gone through the thread long enough, nor do I care to, so apologies aforehand to others if needs be; there is a difference between cash flow and equity. I suspect your real concern comes in two questions as-a-practical-matter;

First is - when does a market correction (which effects equity) overwhelm equity, and;

Second is -- when does a market correction affect cash flow?

Let me answer the second question first, as it is a market timer's question, and one should be wary of trying to time a market for an exit (maybe not so much for an entry, but I can hear the doubters and they have valid point). A market correction will affect cash flow only when it is strong enough to bring down rents. Rents are sticky (section 8, market inertia, transaction costs of moving, etc.), so the market has to move a lot before rents go down. That is you marketing decision. That is your R-I-S-K decision.

Just remember, nobody likes a coward.

As to the first question (which as you can see is related to the second question (as a philosypher (sp?) I knew once said:  "It is all one.')) -- How far down do you think  property values are going to go down in your area?

Finally, and here we cut to the chase -- why and how to you think that you can time the market to the point that you can cut out the capital acquisition costs without cutting the rents?

Answer those questions for yourself and you will answer your original question.

Here endesth the lesson.

Stay away from Illinois in general. The future taxes are going to kill you. There is an article in The Economist of November 16, 2019, about the state of government pensions in general and Illinois' pensions (the worst off by far) in particular ("State of denial"). It is a truly frightening read. When you add to that the fact that the City of Chicago LOST 13,000 "innovation" jobs while other large cities gained thousands, if not tens of thousands of such jobs, then you realize just how much Illinois is circling the drain.

"The cost of engaging a Selling Broker (a Realtor in your corner) is not a cost borne by you and their compensation is typically set by and paid for from the Seller's funds."
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Wrong. The buyer pays everything because the seller factors all costs -- commissions -- into his price. There's no such thing as a free lunch.

You need to talk to a lawyer and an accountant. PERIOD. That said: A much cleaner (and troll-free) solution would be for mom and dad to put properties into a corporate entity (accountant and lawyer will decide form). Your company then enters into a management agreement with their company. Your company then enters into an investment agreement of some sort (joint venture? dunno. That's why God invented lawyers and accountants) with their company. More buildings are bought, with equity divided as seen fit, with an eye towards siblings and the IRS) and you go from there.

You will have problems, however, helping yourself to 30 percent equity up front. Maybe as a one-time payment for free management services for life? Dunno. I don't think so, though.

Before you do anything,look at your closing statement. If the closing statement gave you a credit towards your purchase price of the amount of the tenant deposits, then you did, in fact, receive the deposits, just not in the form you were expecting. Don't go off half cocked.

I have zero sympathy for people who say they cannot make a down payment. They can do what I did: Join the military. serve your country (cuz you should, period) and treat you new-found VA loan eligibility as an additional, unnecessary gift from Uncle Sam.

Then use it.

Why aren't your utilities listed?

"Inspections are typically $500-800. There are cheaper inspectors but it's often worth it to pay more for reputable ones."
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Amen. My inspector costs me more than $800, but he spends 5 or 6 hours checking out a small single-family house. As I am wont to say, "I can afford a house, I can't afford a surprise."