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All Forum Posts by: Peter W.
Peter W. has started 5 posts and replied 279 times.
Quote from @Simon Delony:
Hello, I am very new, I just started educating myself last Monday. My wife and I have been talking about doing something like this = rental properties, flipping, house hacking, etc. for some time and after we sold our house towards the end of last year (made a good profit) are finally in a position to pursue it.
I am super-focused and excited on wanting to learn as much as I can and start this journey to financial freedom. I have been soaking in (and making pages of notes) where as my wife struggled to listen to the one Podcast I sent her during the week. This has created an issue in discussing any topic as I have read not to over-whelm your partner with your knowledge, and she seems to know everything (sound familiar🤣) . How do I move forward with this venture? I do not see the point in trying to continue putting together a team when we haven't sat down and worked out our strategy, because she doesn't understand why we need it.
I'm stuck in the mud.
Thanks for any positive advice.
I don't quite understand the issue? Is the issue she doesn't want to read books or listen to podcasts on real estate investing? Or is the issue that she doesn't want to do real estate investing?
It seems to me you are over complicating everything. This isn't a complicated business; you don't need books or podcasts to take part or succeed. Buy quality real estate at a reasonable price and hold on to it for a long time while taking care of the property.
Ultimately you are going to figure out your strategy by trying. So pitch something to her at a high level. e.g. BRRR is you buy a home in a neighborhood that needs work, fix it up rent it out, then roll some of your equity gain into the purchase. Then she can tell you she is on board or no. My wife is on board with real estate investing in the sense, that she's okay if I do it, but she does not want to be an active participant (other than help with the paint colors and design)--it works for us. We've also learned that we don't want to do major renovations if we can help it--too hard with little kids so we buy properties that are essentially turnkey.
If she isn't sure if she wants to do it, then propose to start small and see how it goes. Make sure there is a clear exit strategy she decides it's not for her (e.g. BRRRR but refuse to refinance for the 6 months in case you need to sell).
Take my advice with a grain of salt...
But a couple of back of the napkin numbers (primarily residential but I suspect it applies to commercial)
Real estate (unleveraged) without value add will average rents + inflation (in appreciation). Second rule of thumb is about half of your rent money will be spent on expenses.
If you can hit the 1% rule (which is 1% rent per month compared to the value of your house) you'll return 6% plus inflation (say 3%) 9% total. Most markets, especially ones without lots of headaches don't do the 1% rule, more like the 0.75-0.8% role, so now we are looking at 4.5%-5% plus inflation (so 7.5% total). If these returns seem reasonable to you, then keep digging. You can increase returns with leverage (that is a mortgage) or with value add (renovations, additions etc).
I think cap rates (rents minus expenses divided by purchase price) on commercial and industrial is higher with less work involved, but its more expensive than I can afford--so I know next to nothing about that land.
Post: Trump Policies Will Put Downward Pressure on Real Estate Rents/Prices
- Posts 280
- Votes 274
Quote from @James Hamling:
Quote from @Peter W.:
Quote from @James Hamling:
Quote from @Bruce Woodruff:
Quote from @Nicholas L.:
thanks for the predictions! regardless of my political beliefs, i am of course still hopeful that the economy remains strong. even the cuts to foreign aid though i don't think will bring that much money back domestically... open to other perspectives on this but i don't see it.
i genuinely don't know what will happen with interest rates. i do think even if there is a slight decrease, it brings buyers back like you said.
one thing that doesn't get covered a lot is how many properties are owned free and clear - about 40% i believe. so, these owners are under a lot less pressure to sell than someone with a mortgage payment. and in my experience they'd rather leave a property vacant than sell for less than what their neighbor got.
Taking that money that was going overseas, and keeping it at home, has got to have a positive affect. I mean, we're talkin 100's of Billions....
The #1 positive effect it has, that I never hear any talk about, is it improves the US position in global economy and trade positioning.
How?
Think of it this way. The US has been providing all this "free security" to ___name_the_nations___ . So those nations don't have to spend the $ and manpower on doing it themself.
Instead, those nations can spend the $ on things improving there economies, there exports, there whatever that is COMPETING vs US exports or what-not.
FORCE the nations to pay for there own programs, to provide and fund there own security, forcing them to stand on there own 2 feet vs USING U.S. and U.S. $ to pay for and do the things they don't want to pay for or do..... Yes, those nations have less in other arenas to infill for what they USED the US to do.
It's like kicking a near 30-something adult child out of your basement.
Yup, they go kicking and screaming how there just gonna starve. But you know they are 100% capable of taking care of themself, they just don't want to because the free ride was so nice.
The US has been paying for it's own competition, just in a round about manner.
Think of it this way. If you own a Burger joint, and across the street is another burger joint, what would happen if you pay 15% of there rent for them?
What if you paid 15% of the rent for every restaurant on the block?
Yup, next thing ya know your the most expensive on the street and struggling to sell anything because you can't price it as cheap as they all do.
STOP paying there rents. When they have to cover there own bills, like magic your selling more, because they can't afford to undercut you anymore. The undercutting you paid for....
Just poking
With Europe, I always assumed (since the fall of the Soviet Union) we weren't protecting Europe from e.g. Russia or China, but rather from themselves. They have a tendency to embroil the world in their petty disputes. And protecting Europe from themselves doesn't cost very much (and requires that they have small militaries). In return, they fall in line on U.S. foreign policy decisions regardless of whether it is in their own interests. An obvious example is the support of swift and the dollar for pricing trade contracts, or support of our invasion of Iraq in 2003. A more controversial example is German support of whatever mess it is that we helped make in Ukraine. You could argue it's a better deal for them than us, but still a good deal for us.
No Peter, not even close, your way off on all your notions around it all.
At end of WWII, Allied forces and Soviet Forces meet in Germany.
It was known, well known, back then what a significant threat the Soviets posed. In there ideology but in the dictator at the helm.
Europe was in ruins. Most European nations had no anything. No form of government more or less defense anything.
It was universally known and accepted that if allied forces decommissioned that Soviet Forces would continue forward, and steam roll all of Europe.
So we stayed. Guaranteeing the safety and security of Europe, but also effecting Command & Control for the monumental task of establishing governance, law and order.
Rapidly the Soviets proved this threat, keeping significant forces at/ near this new front. Walling off. Keeping occupations of, for example Poland, in ways that were not "friendly" or anything remotely like that of allied forces.
This became the cold war, the Iron Curtain.
Decades slipped by and, still US and allied forces were required to hold the line.
Keep in mind reconstruction from WWII was only completed in the 90's. No joke, that's how much destruction there was.
There was legitimate need and necessity for this positioning until the Soviet Union collapsed. Europe did not have the capability of holding the line and defending against Soviet invasion without the USA.
So why, when Soviets passed into the history books, are we still there on mission that literally no longer exists? Soviets don't exist.
Scandinavia now has arguable the best special forces on earth. The Fin's mtn division is legendary. The Sweed special forces are no joke.
The Pol's are not push arounds either and Germany is back as the world leader in defense mechanized units and items.
The list goes on. Point is, Europe does not need US military on station as we are. They don't.
I do not advocate for completely leaving 100% from the theater but a 90% draw down YES 100%.
Our position needs to flip 180degress to one of SUPPORT of the Euro armed forces on station, vs them supporting us on station.
Same goes for Korea, that is the exact same situation. And equally makes no sense as it's just a ridiculous abuse of USA at this point. Once necessary, now just parasitic.
Germany and other EU members are rightly involved in Ukraine because it is a threat, an immediate threat for them. But still they approach it via "hey USA, you should do 90% of this for us, if you do, we will kick int he other 10%".....
WTF, RU forces are not in any threat of rolling armor into D.C. but they sure as hell could roll it into Berlin.
We are NOT the world police or world welfare and this BS of doing such with MY MONEY needs to STOP.
Support. Be an ally. Not a send-off.
The circle of abuse must end. It's time to kick the kids out of the basement and tell em to stand on there own 2 damn feet. We will support them in form of HELP, but were not gonna be there butler anymore.
It's for there own good, and our own good.
That’s right NATo was formed and existed for 55 years to counter the Soviets. So when the soviets dissolved 35 years ago, why do we still have NATO? Your answer is that it’s a legacy organization which has mostly outlived its purpose and our allies are effectively freeloading off the peace and stability we provide.
the alternative that I proposed is that by guaranteeing everyone’s security we could do it at reduced costs while giving us the cover to act unilaterally to our benefit and have nearly everyone else step in line. An example would be the way we were able to export most of our inflation after Covid.
Best
Post: Trump Policies Will Put Downward Pressure on Real Estate Rents/Prices
- Posts 280
- Votes 274
Quote from @James Hamling:
Quote from @Bruce Woodruff:
Quote from @Nicholas L.:
thanks for the predictions! regardless of my political beliefs, i am of course still hopeful that the economy remains strong. even the cuts to foreign aid though i don't think will bring that much money back domestically... open to other perspectives on this but i don't see it.
i genuinely don't know what will happen with interest rates. i do think even if there is a slight decrease, it brings buyers back like you said.
one thing that doesn't get covered a lot is how many properties are owned free and clear - about 40% i believe. so, these owners are under a lot less pressure to sell than someone with a mortgage payment. and in my experience they'd rather leave a property vacant than sell for less than what their neighbor got.
Taking that money that was going overseas, and keeping it at home, has got to have a positive affect. I mean, we're talkin 100's of Billions....
The #1 positive effect it has, that I never hear any talk about, is it improves the US position in global economy and trade positioning.
How?
Think of it this way. The US has been providing all this "free security" to ___name_the_nations___ . So those nations don't have to spend the $ and manpower on doing it themself.
Instead, those nations can spend the $ on things improving there economies, there exports, there whatever that is COMPETING vs US exports or what-not.
FORCE the nations to pay for there own programs, to provide and fund there own security, forcing them to stand on there own 2 feet vs USING U.S. and U.S. $ to pay for and do the things they don't want to pay for or do..... Yes, those nations have less in other arenas to infill for what they USED the US to do.
It's like kicking a near 30-something adult child out of your basement.
Yup, they go kicking and screaming how there just gonna starve. But you know they are 100% capable of taking care of themself, they just don't want to because the free ride was so nice.
The US has been paying for it's own competition, just in a round about manner.
Think of it this way. If you own a Burger joint, and across the street is another burger joint, what would happen if you pay 15% of there rent for them?
What if you paid 15% of the rent for every restaurant on the block?
Yup, next thing ya know your the most expensive on the street and struggling to sell anything because you can't price it as cheap as they all do.
STOP paying there rents. When they have to cover there own bills, like magic your selling more, because they can't afford to undercut you anymore. The undercutting you paid for....
Just poking
With Europe, I always assumed (since the fall of the Soviet Union) we weren't protecting Europe from e.g. Russia or China, but rather from themselves. They have a tendency to embroil the world in their petty disputes. And protecting Europe from themselves doesn't cost very much (and requires that they have small militaries). In return, they fall in line on U.S. foreign policy decisions regardless of whether it is in their own interests. An obvious example is the support of swift and the dollar for pricing trade contracts, or support of our invasion of Iraq in 2003. A more controversial example is German support of whatever mess it is that we helped make in Ukraine. You could argue it's a better deal for them than us, but still a good deal for us.
Post: Trump Policies Will Put Downward Pressure on Real Estate Rents/Prices
- Posts 280
- Votes 274
Quote from @Henry Clark:
Yall got me laughing. So back to movies. Master and Commander.
The officers are sitting eating dinner. At the end, the Captain asks the Doctor. Next to the bread buns are two weevils. He says Stephen which of the two Weevils would you pick? The doctor says they are the same. Captain says but if you had to pick. Doctor says the one on the right it is the larger of the two.
Table roars in laughter. They tell him in the Navy you always pick the lesser of two Weevils.
Folks there is a train coming down the tracks and the US is stuck on the tracks. We can either try to do something (Trump) in which case there will always be naysayers for anyone changing something. Or we can do the same thing (Harris) but only faster and move towards the train.
Are you mentally and business wise at the point above, recognizing we are on the wrong path and cannot escape the train. If so, what are you doing in terms of REI to either gain advantage or to reduce your risk?
Or do you see no issue, and want us to stay on the tracks?
My buddy John and I had the above discussion years ago before he died. I told him it was too late to save the US, we were past the 51% pendulum. To many people were feeding off of the government, whether citizens, politicians or employees. He said you still have to try and I have. But with that said, I still have been selfish and taken care of our family business first. We have made our plans no matter what happens. We make money no matter what happens, and we have reduced our risk. It doesn't matter now what happens.
Sidenote- I love billionaires and someday trillionaires. The American dream is to start with little and "Make It". Elon Musk started from an upper middle class setting and then bit into the American dream. I don't care whether I like Musk or Trump. But I do applaud anyone who has put their money on the table and pushed their idea forward.
OP- what the president does, doesn't matter. I would however bleed more now, than a lot later. And if it doesn't work, glad we tried.
Can I poke at this part just a little bit.
"Are you mentally and business wise at the point above, recognizing we are on the wrong path and cannot escape the train. If so, what are you doing in terms ofREI to either gain advantage or to reduce your risk?"
I'm trying to work through this for my family. I can think through these things in engineering projects, but not so much for business and investing. For me, I share similar concerns (but don't share the inevitability of it). For me, in my little corner of the world, I saw two things I could do, a.) buy the tech monopolies, that is the oligarchs who are taking over and b.) buy hard assets (e.g. real estate) preferably with cheapish debt as inflation is likely to be at least above average moving forward.
What actions would you recommend to a middle/upper middle class person?
Post: Trump Policies Will Put Downward Pressure on Real Estate Rents/Prices
- Posts 280
- Votes 274
Quote from @Daniel Suarez:
Quote from @James Hamling:
Quote from @Steve K.:
Quote from @James Hamling:
Quote from @Steve K.:
Elon is getting $8M per day in tax dollars, while cutting government programs that cost much less than that per year. And he was not elected. The programs he's cutting employ a lot of good people and provide a lot of good services to the country. Has anyone seen the letters that federal employees are getting? These were not written by government employees and are insulting to good people who provide civil services. They say "stop being lazy and find a real job in the private sector". It's absurd and unjust. I know for a fact that Elon is a con man from when I worked in the solar industry, his solar company was a total scam and gave the whole industry a bad name. Trump also has a history of scamming people (Trump University, his charity, all of the contractors he never paid, everyone who got the short end of the stick during his multiple bankruptcies, claiming $70k tax write off per year on his taxes to do his hair, his company was found guilty of fraud, etc.). It's a con job by two of the biggest con artists in history. People are still worried about Hunter's laptop or Hillary's emails when the conspiracy is right in front of us. Like I said earlier, these two will be the world's first Trillionaires while the rest of us suffer.
Ok, this Trump Derangement Syndrome is way outta control now. How about some FACTS and TRUTH OF CONTEXT for this:
Yeah, what an Evil Guy Elon and Space-X is charging the US $8m per day for what was $16m+ per day.......
"HOW DARE YOU SAVE US MONEY ELON!!!!!!!!"
Get out of you propaganda bubble Steve and read some facts. Stop being a tool used by those with nefarious reasons. You’re better than this Steve. You’re smarter and better than this.
You’ve obviously fallen for the con. I know for a fact Elon is a con man from insider information. Whenever his solar company was about to go bankrupt, he’d launch an “exciting new product that will revolutionize the solar industry”. My friend was the head of the new products division there and Elon would just come up with these random new product ideas the night before a meeting with investors while pulling an all-nighter (on drugs btw) then order my friend to put a big marketing presentation together quickly, literally using Hollywood movie sets and actors pretending to be satisfied customers when the products were completely fake. Stocks would go up after the presentation, all based on lies. The product would never come out or even begin being developed, 100% smoke and mirrors. He does this with Tesla all the time too. Stocks will go down based on missed earnings reports and Elon will just announce some new shiny object that is “coming soon” to pump the stocks. Like the Optimus Robot that is supposedly autonomous and coming to market next year, but was actually being controlled by humans with remote controls at its launch party. Just to pump the stock up. How much do you want to bet the robot will not be for sale anytime in the near future? The cybertruck and autonomous driving are also examples of products he promised many years before they were ready just to pump stocks. The stock prices of all of his companies have always been out of whack with their P/E ratios because he’s the world’s best conman. Nobody voted for him, and now he’s firing thousands of federal employees.
Wow, Steve, with all love brotha, seriously, your space-cadet way out there man. Come back down to earth with us.
Seriously Bro, you need a detox. No joke, you need a propaganda detox.
I suggest like one of those Canadian get-aways where it's awesome fishing, water sports, and no internet or cell reception.
Just nature, life NO media of any kind at all.
Look, it is fundamentally impossible for Elon to be any form of a "con-man". He has invented more things than this text box will probably allow for text, I mean that very literally.
For Tesla he literally invented an entirely new form of manufacturing, including all the machines and tools for that invented manufacturing form.
Space-X is a list of hundreds upon hundreds of inventions. And to boot, he literally posts it all online FREE for anyone/everyone to take and use.
Con Men do not invent things, more or less hundreds and thousands of things.
Con Men do not offer open access to the masses.
Elon said end all EV subsidies, including his. Con Men do not cut off there own e-z $.
Before Space-X the US was reliant on Russian rockets and the Russian space agency. Did you not know this or just forget that?
How is it "welfare"? That's the most bizarre spin.
The US Gov, ie NASA, has contracted to hitch rides on Space-X rockets like a space taxi. Is you paying an Uber Driver "welfare" payments?
Why do they contract for rides on Space-X vs there own rockets? I literally showed you the numbers. Because it's a TON cheaper. It's more then a 50% DISCOUNT.
This total disregard for facts, and blind hate because of someone's political affiliation is mentally unhealthy.
Seriously, get a vacation from all this stuff man, it's making your head soft. Get a detox. I know your smarter than this, I know your smart enough to think it through and think "wtf, that doesn't make sense, that's spin, wtf". But man, they've really got you punch-drunk on the kool-aid.
Con-man might not be the exact word I’d use, but you’re definitely overhyping his achievements. Yeah, he’s done some impressive things, but let’s not act like he single-handedly invented Tesla or revolutionized every aspect of manufacturing. He invested in an existing company and made it successful, which is great, but that’s not the same as inventing it.
And let’s not forget Twitter lost about 80% of its value since he took over—so, not every move he makes is some galaxy-brain genius play. He’s got a track record of ignoring experts and making technical decisions based more on ego than expertise. The whole "he's open-sourcing everything for the world" thing sounds nice, but in practice, a lot of those ideas haven’t exactly panned out the way he claimed they would.
I think calling Tesla an existing business is a bit of a stretch. It was two guys with an electric go cart before Elon came around. He was chairman of the board for a while before taking over as CEO, and probably one of the most active chairmen as well (so active that it made more sense for him to become CEO). What his companies have achieved with him in charge is unthinkably tremendous.
I'd agree that he definitely is not open sourcing everything--I'd probably say he isn't open sourcing anything. I have secondhand knowledge on how he (spaceX) stole a significant portion of the IP for the Dragon.
"He’s got a track record of ignoring experts and making technical decisions based more on ego intuition than expertise." For better sometimes and for worse sometimes, but fixed.
Like all humans he has his goods and bads but he has accomplished is nothing short of unbelievable.
Post: Trump Policies Will Put Downward Pressure on Real Estate Rents/Prices
- Posts 280
- Votes 274
Quote from @James Hamling:
Quote from @Peter W.:
Well, this has been a thread. My view is still the president has minimal impact on most of the economy. So my opinion is that what the president is doing has minimal impact on housing. Folks remember, the modus operandi of both political parties is to fill your mind with stress in order to motivate you to do something. Whether or not this stress is warranted is irrelevant to their need to fill your mind with it--in general your emotional energy is better spent elsewhere.
I expect inflation to continue to be elevated--driven in largely by the debt, which will continue to keep rates high and new supply relatively low. And it will continue to provide increases to operational expenses which may or may not be able to pass along to the tenant depending on your market.
Elon is a bit of a loose cannon, sometimes with good ideas, sometimes with bad ideas (remember the boring company or how he kept insisting tesla cars should not come with steering wheels). Some of his cuts will end up being very good and some disasterous. Hopefully the administration will quickly pivot on the bad cuts. I suspect the cuts have minimal but slightly good impact on the debt and the economy.
Not to be a "Debbie Downer" but the Boring Co. is a giant success thus far.... It's kind of doing below ground what Space-X has been doing above, completely redefining and innovating things. It's just a few time steps behind.
They just landed a big contract with Dubai to construct a hyper loop.
There is the Vegas loop, more innovations and completed testing of said innovations than can shake a stick at.
SOooo probably a bad example, unless trying to show what a horse-shoe Elon has up his rear.
Seriously, this man's win's are ridiculous. PayPal, Tesla, Space-X, Star link.... Can call him a lot of things but "loose cannon" is a bit laughable an accusation. He is not the richest man in the world by accident.
Trump administration fires and then tries to rehire nuclear weapons workers in DOGE reversal - CBS News
He's successful because he has a bias towards action rather than thinking which is at least an order of magnitude more useful. He is willing to work an insane amount of hours, suffer immensely and push others around him to do the same. He is comfortable with an insane amount of risk--nobody would have touched what Tesla and SpaceX were doing because everyone thought it would fail. And he has a great ability to only attack the problems which will be most impactful. He's still a loose cannon.
I am willing to eat crow on the boring company. Last I heard they were trying to build a tunnel in Miama (2020ish) which is dumbest thing I have ever heard of (geologically speaking). A mentor once told me only a fool bets against Elon.
Post: Trump Policies Will Put Downward Pressure on Real Estate Rents/Prices
- Posts 280
- Votes 274
Well, this has been a thread. My view is still the president has minimal impact on most of the economy. So my opinion is that what the president is doing has minimal impact on housing. Folks remember, the modus operandi of both political parties is to fill your mind with stress in order to motivate you to do something. Whether or not this stress is warranted is irrelevant to their need to fill your mind with it--in general your emotional energy is better spent elsewhere.
I expect inflation to continue to be elevated--driven in largely by the debt, which will continue to keep rates high and new supply relatively low. And it will continue to provide increases to operational expenses which may or may not be able to pass along to the tenant depending on your market.
Elon is a bit of a loose cannon, sometimes with good ideas, sometimes with bad ideas (remember the boring company or how he kept insisting tesla cars should not come with steering wheels). Some of his cuts will end up being very good and some disasterous. Hopefully the administration will quickly pivot on the bad cuts. I suspect the cuts have minimal but slightly good impact on the debt and the economy.
Quote from @Bethany S Labrinos:
Quote from @Peter W.:
Well, I'll tell you what I think. I think the idea of owning 100 doors is crazy. I would probably start in Albany and then 1031 into 2-3 multifamily buildings in the city, but you'll do you and I'll do me.
I live and invest in east side of Rochester, NY, there is a shortage of houses due to 20 years of negative population growth followed by significant growth post pandemic. This is both to rent and to buy. I think the story across a lot of the upstate is similar, net exodus from 2000-2020, followed by a surprising increase in prices and population growth following the pandemic as people (and companies) searched for affordability. I know we have been positioned as the transgender capital of the US in large part because NYC is too expensive. While I love upstate New York, I get the opinion that most people are here because of work or family and would rather live somewhere warmer. So, I think you have a risk factor in upstate New York that you don't get in most other areas (it's not where most people would choose to live).
I think upstate New York one of the few areas in the country you can cash flow in B areas with 80% downpayment, so that's nice--in terms of deals, I think the numbers still work out at market prices.
Finally, the property taxes are very high in upstate New York. On my properties about half of the mortgage payments go into escrow for taxes. I pencil in 4.5% when I underwrite my deals.
Yea not really tracking why my goal is "crazy." Many people own more than 100 doors... but to each their own. I appreciate the input nonetheless!
I'm aware--one of my neighbors is one of them. I don't enjoy being a landlord--I enjoy being an engineer (my day job), so having more than a handful seems crazy.
Well, I'll tell you what I think. I think the idea of owning 100 doors is crazy. I would probably start in Albany and then 1031 into 2-3 multifamily buildings in the city, but you'll do you and I'll do me.
I live and invest in east side of Rochester, NY, there is a shortage of houses due to 20 years of negative population growth followed by significant growth post pandemic. This is both to rent and to buy. I think the story across a lot of the upstate is similar, net exodus from 2000-2020, followed by a surprising increase in prices and population growth following the pandemic as people (and companies) searched for affordability. I know we have been positioned as the transgender capital of the US in large part because NYC is too expensive. While I love upstate New York, I get the opinion that most people are here because of work or family and would rather live somewhere warmer. So, I think you have a risk factor in upstate New York that you don't get in most other areas (it's not where most people would choose to live).
I think upstate New York one of the few areas in the country you can cash flow in B areas with 80% downpayment, so that's nice--in terms of deals, I think the numbers still work out at market prices.
Finally, the property taxes are very high in upstate New York. On my properties about half of the mortgage payments go into escrow for taxes. I pencil in 4.5% when I underwrite my deals.