All Forum Posts by: Mario Gonzalez

**How to leverage 850k in index funds. I would hold tight and see how this shakes out with the tariffs. The market is taking a dive, if you take a loan against your portfolio if will only make it worse as you're now paying interest on top of falling stock prices. 

I'll echo what @Nicholas L. said - VTSAX will likely outperform a first time real estate investor buying out of state. I've done it and had success, but it's hard and most people do not do as well as strangers on the internet make it seem. 

You don't get cash flow from leveraged long term rentals in the current market. It just doesn't exist...even the cheap, on paper cash flow properties like will not make any money on end of year, after all expenses, actual returns.

The only real path to cash flow to live off of right now is either a paid off property or a well executed higher effort strategy like short term, mid term, or rent by the room. Even those don't provide much in the current market. Pretty much every STR market has normalized to an 8-15% return...it's a lot of hassle, expense, and risk for the incremental increase vs. VTSAX long term average. And MTR/rent by the room isn't really enough cash flow to make a serious income if that's what you are looking for.

I think that it's a "What can you do that is really hard?" market right now. Answer that question, and you have a strategy that could work. I still think house hacking is your best bet. Leverage + appreciation + time in a high appreciation market is and probably always has been the best investment in real estate. You just have to figure out how to stop the month to month bleeding in year 1-2-3.

Lastly, be careful with leverage against your investments. I think it's a Charlie Mungor quote that I remind myself of regularly - "Leverage is how smart people go broke." You have $1M. Be opportunistic and paranoid at the same time.

Mario, I personally would start with a house hack. I know there is a lot of confusion with the market right now... but I would not sell a large chunk for something you do not know. 

I would start with self education first. (Michael Zuber with one rental at a time, Dion Mcneely, and coach Chad Carson are all great ones to help.)

I also think joining a mastermind can help you a ton at this point as well. You want to make sure you are in the right group, but it can be a powerful tool. I would be a lot further along had I joined the right mastermind. I am on my 3rd one and this one has been the most impactful. (Ryan and Cory with the Wealth Juice Podcast) 

I would consider looking into any of these guys. They are experience investors and can help you bypass a lot of the learning curves if this is something you truly want to pursue. 

There is a TON of free content from all of these guys so do not feel the need to pay for any courses unless you are wanting to actually pursue real estate and level up. If you want to know any of my experiences with real estate, I would love to chat. I can give you the breakdown of the past 5 years for my portfolio. 

With cash flow being your focus, would love to see if I can help. It is a bit farther away, but if you are open minded to talking about REI in Greater Cincinnati, would love to talk about it. Shoot me a message if so!

@Mario Gonzalez

just to chime in again and then i'll stop... selling off hundreds of thousands in stock to buy a random OOS rental that you would most likely just lose money on makes zero sense.

good luck

@Mario Gonzalez  I started with house hack in PA, and told that story in Bigger Pockets Podcast #82.  I bought a 3 br ranch house that was 17 years old at an auction from the state.  I rented out 1 or 2 bedrooms largely to people who worked at the same place as me.  Most of the time both extra bedrooms were rented and that covered my entire mortgage as well as 2/3 of the utilities.  They were rented on verbal leases with no long term commitment, but there was always a demand for rooms.  Some of the people stayed long term more than a couple of years.

Then the second property I bought was a 3 unit apartment building which also led to buying the 2 unit next door.

One other strategy you might use is to buy real estate within your Roth IRA or your Roth 401K and then all profit from rents and capital gains would be tax free.

Tough love. I'm not a fan of your strategy.   Take some money out and do it right.

BTW, please don't focus on a $50K house.  You will probably have bought in the worst part of town and your experience will be a nightmare.

What is your aversion to selling off some of the VTSAX and using it to invest in real estate? That is the easiest and simplest way to get going.  If you are willing to buy out of state, you should only need to liquidate a small portion.

I'm not afraid of debt, and have tons of mortgage debt.  Taking out a margin loan on a brokerage account is not what I would consider to be prudent debt, because in a down market, the brokerage can force you to liquidate at the worst possible time.