All Forum Posts by: Sam B.

The ignorant and fearful speak of a "housing crash" with salivating eagerness, as if it's some magical land where people beg for persons to buy there properties at pennies on the dollar, banks pour out capital upon any willing to purchase with little to no restraint, and it's just all fluffy bunny rabbits and rainbows............. NO! As a '09' investor the reality of a collapse market looks a lot more like Mad-Max as people run in circles with their hair on fire, bankers grabbing every penny they can and locking the vaults tight. Nobody wants to sell because the sky is falling, toilet paper and Ramen is sold out everywhere, the #1 shows on tv become about prepping and how to grow gardens with your own poo....

AND, in a crash market, cost of rental housing SKYROCKETS. I find it so interesting how clueless the fearful are of actual historical facts and financial data. When I get asked what will I do if the market collapses my answer is simple truth, probably raise rents and buy on contract a lot as finance capital dry's up like the desert.

And the "oh, but what if the dollar collapses and civil war, WWIII, what then???!!!" Well, in the instance of an appocalypse, when were battling in the streets for food, I don't think any of us will be too busy in housing because we will be battling in the streets for food!!!!!

Although all this is moot because there is not 1 economic factor of fact that lays any foundational explanation for HOW will housing collapse! Ask those who warn of collapse, HOW will it happen, there answer is "oh, well prices are too high, so, it has to come down"...... Ok, so why is gas over $1 a gallon, why isn't my coke $0.50 again, why is a burger over $5.00....... That is a declaration of ignorance on their part, plain and simple. Housing prices are rocketing up due to a COMPOSITE factor of shortage, demand, and INFLATION of the core inputs to supply housing. When you can lower the cost of labor and all the materials that go into housing than, and only than, will you be able to lower housing costs. OR just eliminate 30 million people or so, overnight.

Inflation is real, go to a grocery store and not only price but WEIGH you goods, you will find 20% price increases with 20% volume decrease, do the math. To build a home requires wood, wire, cement, a whole lot of items all experiencing inflation AND demand shortages making short term inflation.

Housing will go UP! How do I know, because the math tells me so. Remove all emotion, all, and listen to the pure math. Pure math said housing was going to collapse anytime back in 2007 because of the fu#kery wallstreet was playing in the securities, and those who listened to the math, were able to project the fall with factual ease, it was emotions that said "no, never happen, just cause".

We are living through a paradigm shift.

"It's different this time."

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I posted this a while ago but I know this is a relatively new thing so there are a lot of new players popping up over the last couple years.

I need to skip trace roughly 100,000 property owners in one batch.

I'm familiar with BatchSkipTracing and YellowLetterHQ (the latter being half the cost listed online). Waiting on quotes for my volume.

Any other suggestions? Quality is important.

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Originally posted by @Account Closed:

@Sam B. Do you think 80% of people going to college look anything like the 80% of millionaires today who got college degrees back in the day? Do a little research on the changes that have happened in college prices, and culture.

Besides that, this is a hilarious thread with how much war is involved in everyone debating on here over a Kiyosaki book haha! I mean everyone on bigger pockets podcast basically says their starter book was rich dad poor dad.

I don’t want to be insulting but the coronavirus is coming out in people on this thread!!

Always open to some good debate, but it takes me forever to scroll down, so I’ll have to miss any further entertainment until I get a vacation to read this thing!

>Do you think 80% of people going to college look anything like the 80% of millionaires today who got college degrees back in the day?

That's not what I said.

I'm not a fan of the education system as it is but nobody is suggesting a better alternative.

For the vast majority of people, the education to 9-5 career track is the way to go.

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Originally posted by @Timothy W.:

Really? You think a non income producing property that costs more to buy than it is worth is a non sequitur? Ok.

This is why I sold my real estate to buy the law degree. Lot of money to be made in the second to third year of Trump's second term when the credit market dries up and suddenly properties are no longer valued based on access to lending.

I think that a primary residence that saves me $1,000 a month is worth just as much as a rental that makes me a thousand, yes. They're both assets. They both produce a return. There is absolutely no difference.

As far as your second point I don't disagree but it's not relevant to the point at hand. The only question is whether the asset has equity and produces a positive ROI which is dependent on the price paid not whether or not the owner is a homeowner or a landlord.

1 Vote

Originally posted by @Timothy W.:

I have a doctorate in law and I can tell you first hand that higher education does not tell you how to become rich. The professors sure as heck don't because most of them haven't figured it out. The reason 80% of millionaires "have college degrees" is that millionaires are motivated people seeking new challenges and a degree is one of them. They are millionaires because of who they are not because of the degree. There are plenty more people with college degrees who are not millionaires than are.

Fair point but again for the vast majority of people their best bet is to go to college and get a job. Those things are not "stupid".

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Originally posted by @Timothy W.:

I'm guessing you aren't aware of the utter bloodbath that occurred in 2006. What he proved is that the liabilities on a primary residence can exceed the value of it and it has no income generating exit strategy to weather a full market cycle. That's why it's a liability rather than an asset. That's what being upside down on a mortgage is called.

What a complete non-sequitor.

A primary residence is still an asset. The fact that you can lose money on an asset if the market crashes is completely irrelevant. It still generates the economic value of saved rent. It's an asset by any accepted definition, whether you overleverage it or not.

Robert Kiyosaki didn't prove anything except that some people are stupid and don't know how to manage their money and not buy and borrow against overpriced crap. I figured that out when I was about 12.

By the way I'm well aware of what happened in 2006 and I'm a pessimist on the market, maybe you should glance at my post history.

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Originally posted by @Account Closed:

@Ron T. This is the FUNNIEST thing ever! I hope I someday have time to read everyone’s points in here. On top of that, you look like a young version of Kiyosaki (of course better looking so you don’t get mad).

I’m just stating the obvious here, and no one will read it cause it’s too hard to scroll down to, but any book of Kiyosaki’s books are worth the read because he serves one purpose over all, Motivation. You read Kiyosaki, you get motivated to not be stupid and not waist your life in things like school or stupid jobs. If it’s not written by Robert it’s probably not worth reading . Thanks for the laugh everyone especially the vet who almost got his 203 out to take Joe out!!

>You read Kiyosaki, you get motivated to not be stupid and not waist your life in things like school or stupid jobs.

I really wonder how much financial ruin these gurus are responsible for sometimes.

Most rich people aren't real estate investors, they go to school, get a good job or start a business (which is anything but "passive investing"), and they save their money. 80% of millionaires have college degrees.

Telling people that college and working are stupid is irresponsible. The vast majority of people are not cut out for self employment.

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Originally posted by @Timothy W.:

Except Robert Kiyosaki was talking about this for over 23 years and many downturns, including the subprime crisis, have proved him right on it. You're just in an up market cycle. True investments work in both up markets and down markets.

I wasn't aware that the subprime crisis spared all of the investors who were buying houses in 2006.

What exactly was he proved right on? The fact that assets can go down in value? Truly groundbreaking. What a genius.

1 Vote

Originally posted by @Joe Villeneuve:

Originally posted by @Sam B.:

Originally posted by @Joe Villeneuve:

Originally posted by @Sam B.:

Originally posted by @Joe Villeneuve:

Originally posted by @Sam B.:

Originally posted by @Joe Villeneuve:

Originally posted by @Ben Zimmerman:

@Steven Aguirre Words have meanings, you are somehow attempting to change the meaning of the word "asset" itself, such that an asset is only an item that generates cashflow. However that is not what the word means. You can't just alter the fundamental meaning of a word and expect others to somehow magically agree with you.

An asset is an economic resource that a) can be owned, and b) is expected to provide future economic benefits.

Is a brick of gold an asset? It doesn't provide any cashflow.

Is cash an asset? It doesn't provide any cashflow.

Is a good contractor, property manager, and agent an asset? You have to pay each of these people so according to you they are all liabilities.

Is a home in rural america an asset if it cashflows 100/month, even if it is located in a dying small town and is constantly going down in value?

Is a home in California an asset if it had negative 200/month cashflow, but was resold after owning it for two years at a $250,000 profit?

Is a duplex an asset if you live in one side, and the rent from the other side pays your entire living expense? Since you're just breaking even it doesn't provide any cashflow and is not an asset according to you.

Is a trademark or patent an asset?

Is a stock an asset? -trick question since we didn't specify if it payed a dividend or not, since if it doesn't pay a dividend then it doesn't provide you any cashflow.

When you need to show proof of assets for qualifying as an accredited investor, what items do you list? Surely you don't count your cash reserves and other such items since we have already established that you don't even count those as assets in the first place.

People need to stop inventing their own words and changing the fundamental meaning of words. If you own a home then the home itself is an asset, and the mortgage on that home is a liability. The debt is the liability, not the entire house.

Have you ever once calculated your net worth? Net worth = Assets - Liabilities. If you have, then you will have agreed with me that the home is an asset, and the debt on that home is the liability.

Furthermore I doubt that very many people would argue that renting a home for 30 years is economically superior to owning a home for 30 years. So it's going to be real hard to magically argue that the economically superior option that is contributing massive amounts towards your net worth is somehow a liability. How do you own something that is nothing but a liability, and end up profiting massively from it? -Answer: You made up your own definitions of assets/liabilities that are not based on reality.

Your quote: "An asset is an economic resource that a) can be owned, and b) is expected to provide future economic benefits."

a) Yes it can be owned,

b) a big NO it has no future economic benefit...that's what my analysis proves. Just because you sell the property for more than your purchase price, doesn't mean you made a profit (future economic benefit). That's only one number in the formula. You left out all, and I mean ALL of the costs associated with ownership that the owner has to pay. When you are analyzing your own home, you pay all the costs of ownership. When you own the same property but you rent it out to someone else, the tenant pays most of the costs of ownership from the rent.

>When you are analyzing your own home, you pay all the costs of ownership.

Every penny you don't spend on rent while living in your own home can be categorized as income for the purposes of analyzing the ROI of a primary residence. So it's not as different from a rental property as you're making it sound.

What in the H^** are you talking about? This isn't an option between the same person having a choice of renting a home to live in, or buying a home to live in. How those that took that direction got down that path is beyond me.

The comparison is between the home you live in (buying), and that same home if it was "USED AS" a rental property where you were the Landlord...not where you were the tenant.

The statement was "your own home isn't an investment" because the owner of the home (homeowner living in their own home) must pay for all of the costs associated with owning and living in that home. The comparison with a rental property was to show why a rental property WAS an investment to the landlord...because most of the costs of ownership, and ALL of the costs of living in that home, are paid by the tenant...not the owner.

Joe,

You just repeated what you said before so clearly you missed my point.

"property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies."

This is the definition of an asset, as per Google.

"In financial accounting, an asset is any resource owned by a business or an economic entity. It is anything that can be owned or controlled to produce value and that is held by an economic entity and that could produce positive economic value."

And this is what Wikipedia thinks.

"An asset is anything of value or a resource of value that can be converted into cash. Individuals, companies, and governments own assets. For a company, an asset might generate revenue, or a company might benefit in some way from owning or using the asset."

And Investopedia says this.

A home is an asset.

The "economic benefit" or "positive economic value" of a home is the fact that it provides someone with shelter. This is an economic benefit. It is typically sold for actual money, and it provides said person with a service they would have otherwise purchased. And even if this wasn't the case, a home would still fit the definition of an asset. Notice the definition says "could" not "does".

It's not always the best asset (neither is rental property for that matter). But it is an asset.

The mortgage is a liability.

Financial gurus can't just redefine words as they please in order to promote themselves by clickbait. That's essentially what this whole "your home is not an asset" thing is.

If the costs of ownership and use exceeds the total returns, it isn't producing a "positive economic value"...it's negative. That's why I don't consider your own home to be an asset.

>If the costs of ownership and use exceeds the total returns

So renting is cheaper than buying then? Then I suppose it would logically follow that all of the landlords who rent houses that would otherwise be bought by homeowners are losing money every month, and therefore don't have assets either by your definition.

In any event, whether the ROI is positive or not is irrelevant to whether or not something is an asset.

What????

You said:

>If the costs of ownership and use exceeds the total returns

In any case where this is true, it means renting is cheaper than buying.

In any case where renting is cheaper than buying, buying is a bad deal whether you're a homeowner or a landlord.

In fact, the homeowner's ROI is actually higher because he doesn't have to hire a property management firm or expend any of the effort required to deal with a tenant.

Therefore, on any given property, the homeowner's ROI will always be higher than the landlords.

So not only is my primary residence an asset, it's a more of an asset for me than it would be for a landlord, by your definition.

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All Forum Posts by: Sam B.

Sam B. has started 6 posts and replied 174 times.

Post: Should I be waiting for a crash?

Post: Should I be waiting for a crash?

Post: Best Quality Skip Tracing Service?

Post: Robert Kiyosaki The Lazy way to invest in real estate.

Post: Robert Kiyosaki The Lazy way to invest in real estate.

Post: Robert Kiyosaki The Lazy way to invest in real estate.

Post: Robert Kiyosaki The Lazy way to invest in real estate.

Post: Robert Kiyosaki The Lazy way to invest in real estate.

Post: Robert Kiyosaki The Lazy way to invest in real estate.

Post: Robert Kiyosaki The Lazy way to invest in real estate.