All Forum Posts by: Matt H.

What is the current rate/term on your primary? How old are you and how much longer to you plan on working? Questions that might help you decide if you are on the fence. No right or wrong answer just boils down to your strategy. But if your loan on your current primary is awesome and you have a few working years left then I might consider being more aggressive. I like to borrow however. I always get a real nice 80 ltv on my primary right before I plan to move and rent it out. My last house, now a rental sits at 2.15% interest only. Can't beat that.

@Natasha Keck I am ashamed to say I don't really follow much of anyone. I'll have a look at Sean's stuff. I've been head down working pretty hard last couple years. I hopped on this site fairly recently looking for some people to chat with about big buildings. I'm sure they are out there but mostly it seems people are a little earlier in their careers here and I feel like I could help a little. I had a couple of people help me with advice no fee no program just because when I was starting out. Your topic caught my eye, I am by no means an expert on the economy, maybe even the opposite. I'm a pro at buying, selling, financing and leasing apartments and houses. But I like to learn so this thread was interesting although some of these posts I had to take a snack break.

Matt

@Natasha Keck

Oh gosh, let's be clear I signed up for Econ 101 Freshman year of college Tue/Thur at 8:20am and then slept through like 17 of the 20 classes. 

No one can be sure what is going to happen, my main point was if you are going to buy a building today I am pretty certain hyperinflation is not an immediate concern.

Let's define stagflation: "Persistent high inflation combined with high unemployment and stagnant demand in a country's economy."

In this case high is not defined so in my mind it is already a more likely scenario than something going up 50% on a monthly basis. My personal view is that is it also not likely in the near term.

People can't agree on what causes stagflation but the two main theories are a supply shock (usually oil) or poorly made economic policy. I'd say the former shouldn't be an issue in the near term but of course the latter we can argue till the cows come home. Janet and company are certainly controlling things with economic policy.

So I would say in my opinion both hyperinflation are stagflation are both unlikely but not equally alarmist.

My view is that everyone's concerns, especially with respect to the US debt and monetary policy are valid. But I think everyone forgets the United States is a freight train, the most powerful in the world today, perhaps in history. So even when you make mistakes, it will take quite awhile for it to come of the rails. We may be able to fix it, we may not, but near term we have some pretty smart people and a lot of horsepower under the hood to keep it moving along.

This is now too long but I'd also add real estate prices are now getting higher and I'm a buyer every year regardless. In 2016/2017 I'm making sure I buy smart as a pull back is possible, but I'm not concerned about some near term cataclysmic economic event.

Matt

Okay people let's just pick one point of this topic and realize it really shouldn't be part of his conversation. Hyperinflation. The widely accepted definition is an inflation rate of greater than 50% on a monthly basis. Said another way: a complete and total breakdown of the currency. It has happened like 55 times in the last century but most all those cases were a result of World War I or II. Most recently Zimbabwe in 2008 had hyperinflation. That means people are trading goats for sweaters. Literally. Money is worth nothing even hours later. You know what the what the official currency of Zimbabwe is today? Oh yea, that's right it's the US Dollar. Also known as the strongest currency in the world. I am not saying you can't discuss hyperinflation, but it is pretty out of place with the the other much more likely economic scenarios. Hyperinflation of the US dollar in 2016 is pretty much like a 20 team parlay hitting.

Sonny, Everyone here is giving you good advice. Here is what my dad told me and I realize it is hard: "Never spend more than 10% of your annual income on a car." No one ever got rich by buying brand new 40k vans they can't afford. I bought my first and only new car in 2009 when I was 30 because Dodge (Ram 1500 still drive it) was offering a lifetime warranty, bumper to bumper. They are going to lose on that one. Otherwise I drove perfectly reliable $2500 cars when I was poor and then moved up to 2-4 year old cars when I had more dough.

You can get a build your own policy across state lines no problem. Allstate is cutting back on everything. They started canceling my landlord policies one by one maybe 8 years ago.

8% of monthly rent after the 3rd. I give one freebie per 12 months if you let me know in advance. I also inherit a lot of lease and they are all over the place.

Tankless saves space and gas. We have one at our house and it is awesome. They are harder to fix and more expensive to buy/install. So it depends on who is paying the gas and your budget. My rentals all have boilers unless they are high end or I really need that extra space. I am guessing with four needed your tenants are paying gas. And you already have boilers so the install will be a cinch. I would get the pro discount at Home Depot and slam 4 of them in there.

@Jason Bott can you do a 5 plex in Huntington Beach, CA that got re zoned in late 2014 to flood? Never been a claim in the area in 50 years but the FEMA policy is almost 4K/year.

Amy, Love your story and I am proud of you, really good work. And as an aside Maine seems like a magical place that I want to visit. I would suggest you include a management figure. I am all for self managing I manage all mine plus a lot of others. I just charge myself management so I know what the properties would make if I had to hire someone. Whether you actually pay it or not doesn't matter. In your case sounds like you will still be at 100k this year anyway. Then you will have you passive in come figure and the management income figure which you earn by working or can outsource if necessary. And I will also share with you what happened to me and your mileage may vary. I set a goal just like yours. Right when I achieved it I decided I deserved a second home. New goal needed. Then shortly after my wife decided we deserved a nicer primary :) Goal moved again. Plus you will find it is easier to make more once you get going. You probably found that already. You just have the knowledge and the network and it all just really starts falling into place. As they say the first million is the hardest. Congrats again, really like the story. Matt