All Forum Posts by: Sebastien Hitier

@Cody DeLong this is a great deal on paper, 28% gross income, 18% cap rate... I PM you.

 Thanks for posting this, it is interesting to see the stat that is implied from this: if you insure many properties with them and you get less than 1 in 9 tenants to leave a mess in your property, you break even.

Great to see a book on this, I feel there is not enough on this topic. 

 I do know a property manager who operates LMNP in Paris and has many expat as client, but no accountant, PM me for more details if you would like to be put in contact with him.

I would recommend getting a high income first, and controlling one’s spending next. Saving rate of 70% seems remarkable to me considering the level of income tax, social contributions and health insurance in the US. 

There is a recurring cost to maintaining a LLC: you must at least maintain its registration status and maintain bank accounts for it to ensure you do not commingle funds. (There are also other requirements for LLC with non US beneficiaries).

You need to decide how much assets you put in each LLC and balance the income with the cost. It is a good idea that a 10k SFH in Detroit and a 2 Million high end house should be in different LLC. How many cheap houses you put per LLC is up to you.

Kudo to @Mark S. for pointing out that loading debt liens onto your LLC can reduces the amount of assets that can be sued. But you need a cost efficient lender who will lend to a LLC.

Hi @TJ Walker, 

Real estate prices follow secular trends. Just looking at how population varies every 10 years over the last 50 years gives a good idea of what will happen to a city in the next 20 years.

• large population decline will cause an increase in vacant housing stock. This put downward pressure on market prices and cause neighborhoods to decline.
• a rapid population increase will cause a shortage of housing, and this will tend to increase rents and prices.

We are not talking about identifying specific up and coming neighborhoods on their way to gentrification, this is very hard to do without being very familiar with a given neighborhood, but about painting the states with a very wide brush and see what cities are going to grow at a macro level.

## Statistical Areas defined for US Census

Analyzing commute routes to identify economic ties is not new. The USOMB (U.S. Office of Management and Budget) which gathers census statistics is using this technique for its definition of MSA ([Metropolitan Statistical Area](https://en.wikipedia.org/wiki/Metropolitan_statistical_area)) along similar lines. There are also Micropolitan Statistical Area, that define economically connected rural communities that do not have a large city as a nexus point

The MSA are then combined into CSA ([combined statistical areas](https://en.wikipedia.org/wiki/Combined_statistical_area#List_of_combined_statistical_areas)) as some criteria of economic interconnection are verified.

### Fastest Growing Combined Statistical Areas

There is much to say about a beautiful visualisation, and the CSA map does not look as attractive to the human eye as the above Mega-region map:

!(https://upload.wikimedia.org/wikipedia/commons/thumb/4/40/Combined_statistical_areas_of_the_United_States_and_Puerto_Rico_2013.gif/800px-Combined_statistical_areas_of_the_United_States_and_Puerto_Rico_2013.gif)

CSA population changes at a slower pace than their constituent MSA due to averaging, we show here the most dynamic CSA with a population above 500,000. The data was obtained from wikipedia in Dec 2016.

<!-- html table generated in R 3.2.0 by xtable 1.7-4 package -->

<!-- Fri Dec 16 14:48:51 2016 -->

<table>

<tr> <th> Rank </th> <th> Combined.Statistical.Area </th> <th> 2015 Estimate </th> <th>Cumulative Change </th> </tr>

<tr> <td> 1 </td> <td> Cape Coral-Fort Myers-Naples, FL </td> <td> 1,059,287 </td> <td> 12.66% </td> </tr>

<tr> <td> 2 </td> <td> Houston-The Woodlands, TX </td> <td> 6,855,069 </td> <td> 12.11% </td> </tr>

<tr> <td> 3 </td> <td> Orlando-Deltona-Daytona Beach, FL </td> <td> 3,129,308 </td> <td> 11.04% </td> </tr>

<tr> <td> 4 </td> <td> Raleigh-Durham-Chapel Hill, NC </td> <td> 2,117,103 </td> <td> 10.68% </td> </tr>

<tr> <td> 5 </td> <td> Denver-Aurora, CO </td> <td> 3,418,876 </td> <td> 10.61% </td> </tr>

<tr> <td> 6 </td> <td> Dallas-Fort Worth, TX-OK </td> <td> 7,504,362 </td> <td> 10.08% </td> </tr>

<tr> <td> 7 </td> <td> Nashville-Davidson?Murfreesboro, TN </td> <td> 1,951,644 </td> <td> 9.13% </td> </tr>

<tr> <td> 8 </td> <td> North Port-Sarasota-Bradenton, FL </td> <td> 977,491 </td> <td> 8.96% </td> </tr>

<tr> <td> 9 </td> <td> Charlotte-Concord, NC-SC </td> <td> 2,583,956 </td> <td> 8.77% </td> </tr>

<tr> <td> 10 </td> <td> Salt Lake City-Provo-Orem, UT </td> <td> 2,467,709 </td> <td> 8.63% </td> </tr>

<tr> <td> 11 </td> <td> McAllen-Edinburg, TX </td> <td> 906,099 </td> <td> 8.42% </td> </tr>

<tr> <td> 12 </td> <td> Boise City-Mountain Home-Ontario, ID-OR </td> <td> 756,061 </td> <td> 8.39% </td> </tr>

<tr> <td> 13 </td> <td> Des Moines-Ames-West Des Moines, IA </td> <td> 782,390 </td> <td> 8.32% </td> </tr>

<tr> <td> 14 </td> <td> Oklahoma City-Shawnee, OK </td> <td> 1,430,327 </td> <td> 8.16% </td> </tr>

<tr> <td> 15 </td> <td> Miami-Fort Lauderdale-Port St. Lucie, FL </td> <td> 6,654,565 </td> <td> 7.91% </td> </tr>

<tr> <td> 16 </td> <td> Atlanta-Athens-Clarke-Sandy Springs </td> <td> 6,365,108 </td> <td> 7.70% </td> </tr>

<tr> <td> 17 </td> <td> Seattle-Tacoma, WA </td> <td> 4,602,591 </td> <td> 7.67% </td> </tr>

<tr> <td> 18 </td> <td> Las Vegas-Henderson, NV-AZ </td> <td> 2,362,015 </td> <td> 7.59% </td> </tr>

<tr> <td> 19 </td> <td> Columbus-Auburn-Opelika, GA-AL </td> <td> 504,865 </td> <td> 7.57% </td> </tr>

<tr> <td> 20 </td> <td> Savannah-Hinesville-Statesboro, GA </td> <td> 532,048 </td> <td> 7.32% </td> </tr>

<tr> <td> 21 </td> <td> Jacksonville-St. Marys-Palatka, FL-GA </td> <td> 1,573,606 </td> <td> 7.01% </td> </tr>

<tr> <td> 22 </td> <td> San Jose-San Francisco-Oakland, CA </td> <td> 8,713,914 </td> <td> 6.87% </td> </tr>

<tr> <td> 23 </td> <td> Portland-Vancouver-Salem, OR-WA </td> <td> 3,110,906 </td> <td> 6.49% </td> </tr>

24 Washington-Baltimore-Arlington, DC-MD-VA-WV-PA 9,625,360 6.33%

<tr> <td> 25 </td> <td> New Orleans-Metairie-Hammond, LA-MS </td> <td> 1,493,205 </td> <td> 5.60% </td> </tr>

<tr> <td> 26 </td> <td> Omaha-Council Bluffs-Fremont, NE-IA </td> <td> 952,018 </td> <td> 5.54% </td> </tr>

<tr> <td> 27 </td> <td> Sacramento-Roseville, CA </td> <td> 2,544,026 </td> <td> 5.35% </td> </tr>

<tr> <td> 28 </td> <td> Lexington-Fayette Richmond Frankfort, KY </td> <td> 723,849 </td> <td> 5.34% </td> </tr>

<tr> <td> 29 </td> <td> Columbus-Marion-Zanesville, OH </td> <td> 2,424,831 </td> <td> 5.04% </td> </tr>

</table>

It should be noted that a 5 year evolution is enough to show a trend. For instance, New Orleans population rebounded following the 2005 [Katrina](https://en.wikipedia.org/wiki/Effects_of_Hurricane_Katrina_in_New_Orleans) disaster, so that the 2010-2015 evolution paints a much rosier picture than 2000-2010 would.

### Fastest Growing Metropolitan Statistical Areas

The MSA map looks as follow, these areas, though still very large show even more disparity in population evolution that CSA.

!(https://upload.wikimedia.org/wikipedia/commons/thumb/1/16/Metropolitan_and_Micropolitan_Statistical_Areas_%28CBSAs%29_of_the_United_States_and_Puerto_Rico%2C_Feb_2013.gif/800px-Metropolitan_and_Micropolitan_Statistical_Areas_%28CBSAs%29_of_the_United_States_and_Puerto_Rico%2C_Feb_2013.gif)

- iweblists gives [here](http://www.iweblists.com/us/population/MetropolitanStatisticalAreaPop.html) a list of the 100 largest ones with a convenient possibility to sort by population evolution from 2000 to 2010 census.

- wikipedia features a more complete [list](https://en.wikipedia.org/wiki/List_of_Metropolitan_Statistical_Areas#United_States) with all 382 areas.

Putting the data together allows to check that the long term trend is persistent, and get the top areas in the US:

<!-- html table generated in R 3.2.0 by xtable 1.7-4 package -->

<!-- Fri Dec 16 14:15:53 2016 -->

<table>

<tr> <th> Rank </th> <th> Metropolitan Statistical Area </th> <th> 2015 Estimate </th> <th> 2010-2015 yoy</th> <th> 2000-2010 yoy</th> <th> Cumul Change </th> </tr>

<tr> <td> 1 </td> <td> Austin-Round Rock-San Marcos, TX </td> <td> 2,000,860 </td> <td> 3.90% </td> <td> 2.83% </td> <td> 60.10% </td> </tr>

<tr> <td> 2 </td> <td> Raleigh-Cary, NC </td> <td> 1,273,568 </td> <td> 3.19% </td> <td> 3.17% </td> <td> 59.78% </td> </tr>

<tr> <td> 3 </td> <td> Cape Coral-Fort Myers, FL </td> <td> 701,982 </td> <td> 3.43% </td> <td> 3.01% </td> <td> 59.22% </td> </tr>

<tr> <td> 4 </td> <td> Greenville-Mauldin-Easley, SC </td> <td> 874,869 </td> <td> 6.97% </td> <td> 1.10% </td> <td> 56.24% </td> </tr>

<tr> <td> 5 </td> <td> Provo-Orem, UT </td> <td> 585,799 </td> <td> 1.61% </td> <td> 3.68% </td> <td> 55.48% </td> </tr>

<tr> <td> 6 </td> <td> Las Vegas-Paradise, NV </td> <td> 2,114,801 </td> <td> 2.54% </td> <td> 3.09% </td> <td> 53.72% </td> </tr>

<tr> <td> 7 </td> <td> McAllen-Edinburg-Mission, TX </td> <td> 842,304 </td> <td> 3.00% </td> <td> 2.47% </td> <td> 47.91% </td> </tr>

<tr> <td> 8 </td> <td> Boise City-Nampa, ID </td> <td> 676,909 </td> <td> 2.45% </td> <td> 2.58% </td> <td> 45.62% </td> </tr>

<tr> <td> 9 </td> <td> Ogden-Clearfield, UT </td> <td> 642,850 </td> <td> 3.88% </td> <td> 1.85% </td> <td> 45.23% </td> </tr>

<tr> <td> 10 </td> <td> Orlando-Kissimmee-Sanford, FL </td> <td> 2,387,138 </td> <td> 3.05% </td> <td> 2.25% </td> <td> 45.15% </td> </tr>

<tr> <td> 11 </td> <td> Houston-Sugar Land-Baytown, TX </td> <td> 6,656,947 </td> <td> 3.05% </td> <td> 1.96% </td> <td> 41.17% </td> </tr>

<tr> <td> 12 </td> <td> Phoenix-Mesa-Glendale, AZ </td> <td> 4,574,531 </td> <td> 1.33% </td> <td> 2.79% </td> <td> 40.67% </td> </tr>

<tr> <td> 13 </td> <td> Charlotte-Gastonia-Rock Hill, NC-SC </td> <td> 2,426,363 </td> <td> 1.82% </td> <td> 2.49% </td> <td> 39.99% </td> </tr>

<tr> <td> 14 </td> <td> Nashville-Davidson--Murfreesboro--Franklin, TN </td> <td> 1,830,345 </td> <td> 3.37% </td> <td> 1.69% </td> <td> 39.53% </td> </tr>

<tr> <td> 15 </td> <td> San Antonio-New Braunfels, TX </td> <td> 2,384,075 </td> <td> 3.25% </td> <td> 1.73% </td> <td> 39.28% </td> </tr>

<tr> <td> 16 </td> <td> Riverside-San Bernardino-Ontario, CA </td> <td> 4,489,159 </td> <td> 1.75% </td> <td> 2.37% </td> <td> 37.92% </td> </tr>

<tr> <td> 17 </td> <td> Dallas-Fort Worth-Arlington, TX </td> <td> 7,102,796 </td> <td> 2.43% </td> <td> 2.01% </td> <td> 37.61% </td> </tr>

<tr> <td> 18 </td> <td> Charleston-North Charleston-Summerville, SC </td> <td> 744,526 </td> <td> 2.93% </td> <td> 1.62% </td> <td> 35.61% </td> </tr>

<tr> <td> 19 </td> <td> Atlanta-Sandy Springs-Marietta, GA </td> <td> 5,710,795 </td> <td> 1.21% </td> <td> 2.38% </td> <td> 34.44% </td> </tr>

<tr> <td> 20 </td> <td> Lakeland-Winter Haven, FL </td> <td> 650,092 </td> <td> 2.29% </td> <td> 1.84% </td> <td> 34.34% </td> </tr>

<tr> <td> 21 </td> <td> Bakersfield-Delano, CA </td> <td> 882,176 </td> <td> 1.96% </td> <td> 1.92% </td> <td> 33.33% </td> </tr>

<tr> <td> 22 </td> <td> Indianapolis-Carmel, IN </td> <td> 1,988,817 </td> <td> 3.00% </td> <td> 1.18% </td> <td> 30.41% </td> </tr>

<tr> <td> 23 </td> <td> North Port-Bradenton-Sarasota, FL </td> <td> 768,918 </td> <td> 2.25% </td> <td> 1.55% </td> <td> 30.33% </td> </tr>

<tr> <td> 24 </td> <td> Colorado Springs, CO </td> <td> 697,856 </td> <td> 2.47% </td> <td> 1.40% </td> <td> 29.84% </td> </tr>

<tr> <td> 25 </td> <td> Des Moines-West Des Moines, IA </td> <td> 622,899 </td> <td> 2.29% </td> <td> 1.46% </td> <td> 29.39% </td> </tr>

<tr> <td> 26 </td> <td> Denver-Aurora-Broomfield, CO </td> <td> 2,814,330 </td> <td> 2.34% </td> <td> 1.41% </td> <td> 29.14% </td> </tr>

<tr> <td> 27 </td> <td> Jacksonville, FL </td> <td> 1,449,481 </td> <td> 1.99% </td> <td> 1.58% </td> <td> 29.10% </td> </tr>

<tr> <td> 28 </td> <td> Stockton, CA </td> <td> 726,106 </td> <td> 1.55% </td> <td> 1.78% </td> <td> 28.83% </td> </tr>

<tr> <td> 29 </td> <td> Madison, WI </td> <td> 641,385 </td> <td> 2.70% </td> <td> 1.13% </td> <td> 27.82% </td> </tr>

30 Washington-Arlington-Alexandria, DC-VA-MD-WV 6,097,684 2.62% 1.11% 27.14%

<tr> <td> 31 </td> <td> Sacramento--Arden-Arcade--Roseville, CA </td> <td> 2,274,194 </td> <td> 1.51% </td> <td> 1.62% </td> <td> 26.57% </td> </tr>

<tr> <td> 32 </td> <td> Columbia, SC </td> <td> 810,068 </td> <td> 2.16% </td> <td> 1.18% </td> <td> 25.17% </td> </tr>

<tr> <td> 33 </td> <td> Tampa-St. Petersburg-Clearwater, FL </td> <td> 2,975,225 </td> <td> 1.71% </td> <td> 1.33% </td> <td> 24.17% </td> </tr>

<tr> <td> 34 </td> <td> Oklahoma City, OK </td> <td> 1,358,452 </td> <td> 2.41% </td> <td> 0.97% </td> <td> 24.01% </td> </tr>

<tr> <td> 35 </td> <td> Portland-Vancouver-Hillsboro, OR-WA </td> <td> 2,389,228 </td> <td> 1.60% </td> <td> 1.36% </td> <td> 23.93% </td> </tr>

<tr> <td> 36 </td> <td> Seattle-Tacoma-Bellevue, WA </td> <td> 3,733,580 </td> <td> 2.22% </td> <td> 0.95% </td> <td> 22.66% </td> </tr>

<tr> <td> 37 </td> <td> Salt Lake City, UT </td> <td> 1,170,266 </td> <td> 0.96% </td> <td> 1.42% </td> <td> 20.79% </td> </tr>

</table>

Hi,

Am i mistaken or the only reason to chose a shorter loan term when longer term can be paid off early anyway is if the rate you can get is significantly lower on short term. 

Unless you talk about 2% addon for 15y additional term, the shorter loan deprives you of a cheap option to finance at historically low rates.

You take loan either to afford more property ot to enhance returns.

If investment has higher irr than the mortgage rate, take the longer loan. It will enhance your return. So if you have infinite money, you take the longer loan ifthe terms are fair.

The 10y or 15y option makes sense when rates are high, like 7% and 30y interest is really high.

If you were 70 years older, I would also advise that you talk to a CPA and an attorney immediately. At 14, you will hit people's prejudice when you make any offer, and there is so much you can to learn to be better socially calibrated, understand what makes people tick.

If you have that energy at 14, I strongly encourage you to start investing in yourself first. At this age there are huge dividends in perfecting the development of your brain and body over the next 7 years. I don't mean pay $40k to a guru or run a $90k college debt without any job prospect, there great references on the web for anything you want to learn, you also need to calibrate your social interaction as it will help you to find the right partner for life and business.

You can learn all there is to know about real estate investing, but starting now has low benefit to you compared to learning and developing in a diversified manner. 

Opportunities will come to people who see them and adapt.