All Forum Posts by: Ken Teng

In my opinion, you should get as many good debts as you can manage. Two keywords here:

1, Good: The debt is working for you, generating money instead of consuming your money;

2, Manageable: You should have an idea of what you are doing and can keep track of things all the time. In case bad things happen, you need to have an exit strategy.

All the rich become rich through leveraging, no exception (well, except inheritance).

This partially accounts for the real estate boom in USA, especially Seattle.

I am curious why Canada can do this, while nothing similar is done in USA.

@Brent Coombs Alternative Minimum Tax.

https://turbotax.intuit.com/tax-tools/tax-tips/IRS... (search for Line 4 on Home Equity Loan)

I am not sure if this is the right place to ask this question. If not, please let me know and I will move it to a proper place.

I always have a concern over the current low interest rate. Take a 30yr fixed mortgage for example. Roughly it is about 3-5% now, and a lot of people refi-ed their properties to that rate. However, what may happen if the rates increase a lot in the future, say to 10% (given a 30 year period, this is actually pretty likely)? Now how will the lenders, mainly the large banks, view this vast number of hugely "under-performing" loans? Will those powerful players play tricks to achieve a better return to have us investors burned?

I am just curious, and any comments are welcome.

One point to factor in: Trump.

Because of Trump, this may be a good time to invest in the Rusty Belt. If only Trump can achieve a fraction of what he claims, bringing jobs back, cutting taxes or infrastructure investment, the Rusty Belt may revive faster. But this is a bet, because he has no political records, and no one knows what may come up.

Before answering this question, please notice the following facts:

1, Currently, the mortgage rate is so low that it is like banks giving you free money to make more money on. The average mortgage rate is about 3-5%. The real inflation rate, according to my observation, is about that level. So that is actually money free of interest.

(The government inflation rate is "very carefully" calculated to look good, just like the unemployment rate. Any one who is unemployed for over half a year is not considered unemployed, because the government thinks they are not looking for jobs...)

2, HELOC, as many observed, has a variable rate, and the rate is usually higher than a mortgage. BTW, if you hit AMT, interests cannot be deducted for HELOC and HEL.

3, Making good money in real estate (in fact in every trade) is about leveraging. If you do not leverage, you just turn your active income into passive income, which is OK but can barely get you out of the rat race. Of course, leveraging comes with risk, but you cannot earn money without taking risk.

Hi, I am a new member in the bay area, and I am interested in real estate investment. Though a full time engineer job in the bay area pays not bad, the pressure (work-related pressure, living cost and sky-high taxes) and huge uncertainty of the hi-tech industry continuously urge me to search for alternative incomes.

Yet, it is prohibitively expensive to invest near the Silicon Valley. At least in its current state, positive cash-flow is not possible, assuming a 60-80% loan on the property. So I am looking at areas with a better ROI, e.g., Midwest. Because of my full time job, I am more inclined to buy some turnkey properties or properties almost ready for rent. As I have not done any remote investment, any advice or deal leads are appreciated. Thanks!