All Forum Posts by: Kurt K.

I'm assuming that was directed at me. I haven't read Michael Lewis's book, but nice quip.

My example wasn't intended to be all encompassing. I just chose one, of the numerous examples of why one with a degree in math would go into finance, that I felt David C. has maybe heard of since it's recent news from said book, as this is what he asked for in his original post "What's the connection?"

Certainly it is relative.

Usually when one pitches a new product/idea and it has the potential to be a billion dollar industry, people listen as well.

Hence, the phrasing "if you consider", some will, some won't. Some consider employment, some revenues, some profit margins.

According to wikipedia:

"In the United States, high-frequency trading firms represent 2% of the approximately 20,000 firms operating today, but account for 73% of all equity orders volume."

If you call a billion dollar plus industry minimal...

There absolutely is a reason for this.

Mathematicians develop computer algorithms/mathematical formulas that are used in high frequency trading (HFT).

http://en.wikipedia.org/wiki/High-frequency_trading

For buying and holding:

Buying at a price below market and at a price where the property cash flows given market rents in your area and approximating cost of ownership.

Also, good tenant screening: doing sufficient due diligence of looking into your renters .

I would second Bill's seller financing option.

I started investing about a year ago in real estate. Own 2 properties now, neither has bank financing.

Also you need to ask yourself why you're investing. It doesn't come without work (you should be the person that enjoys this, since real estate is somewhat illiquid).

I only mention that since (to me) $60,000/yr for the rest of your life, already sounds like pretty good passive income. I personally think I would just call it a day with that.

For starter's I'd argue that an inefficient market is an advantage, not a disadvantage. In "theory" there are no good deals in an efficient market.

(Although it is worth noting that the efficient market hypothesis is completely false, and was simply made so that math models would work.)

I'd say the biggest disadvantage of direct ownership is the liquidity issue and the "stress" of ownership.

However, the returns for these should (if you buy right and manage well) yield much higher returns than through a REIT. So one must balance these factors.

Obviously there is no guarenteed right/wrong way to invest one's money.

I have never managed long distance. But I've heard of some people "managing it themselves" from a distance. Meaning the tenants still call you if there is a problem, even though you are far away, then you can call the local handyman/tradesmen etc... to fix the problem, if you have an existing relationship with any in the area it helps. As far as rent collection you could set up a direct deposit as an example.

Others simply hire a PM and let them take a cut of the profits. Although I've heard its difficult to find a good PM.

Like I said no personal experience, but this is what I've heard has been done.

I can't speak to your area. But I always look at the numbers on a buy and hold basis. I generally apply the 50% rule and look for 10 caps.

That being said a price of $264,000 (in my area) would make that building interesting, to me.

I'm not an appreciation investor per se, I'm looking to build a portfolio of 10 caps or better at purchase. If they appreciate that is nice, but isn't something I could/would count on, it's too speculative.

As an investor I don't put too much stock into it being "new and shiny". Income, expenses, and proper cap rate is what matters to me as an investor.

A lot of Excel...

Then Quicken/Quickbooks as well. (streamlined accounting/bookkeeping)

Some TurboTax during this time of year

That's about it for me.