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All Forum Posts by: Sevy Bialke

Sevy Bialke has started 5 posts and replied 23 times.

Post: The math behind equity

Sevy BialkePosted
  • Rental Property Investor
  • Saint Paul, MN
  • Posts 23
  • Votes 26

@Nathanael Giovanni Opoulos

Try thinking of it in simpler terms before the details of debt. Equity is how much of the property you own. Or, equity is how much money you would get if you sold the property after paying everyone else whom also owns a part of the property (meaning interest is not a factor).

If you buy a property for all cash for 100k then you have 100% equity. If the market goes up and your property is worth 200k, then you still have 100% equity but at 200k. Vice versa if it goes down and the property is worth 50k, then you still have 100% Equity at 50k.

If you buy a property for 100k with 20% down and finance the other 80%, then the BANK owns 80% of that property at that time. You have 20k of equity and they have 80k of equity. If the property goes up in vale overnight to 200k, then the loan to the bank is still at 80k, but now 80k is only is only 40% of 200k l, implying you now have 60% equity or 120k of equity in the house.

Post: 22 year old about to start a new job with 401k match

Sevy BialkePosted
  • Rental Property Investor
  • Saint Paul, MN
  • Posts 23
  • Votes 26

@Matthew Otto

Show me any deal that GUARANTEES a 50% return on your money (the match), and that's BEFORE even being out into the market where 150% of your gross contribution has a chance to grow (or decline). I max out the 401k contribution match then if I want to invest more beyond that I contribute to a Roth IRA after taxes. It's my mental safety net of putting away for retirement but having the option to pull the principle out if I want access for emergency, a deal down payment, etc.

Post: On Debt: Doubts, Questions

Sevy BialkePosted
  • Rental Property Investor
  • Saint Paul, MN
  • Posts 23
  • Votes 26

@Ralph Noyes

I'm okay with debt but I am generally conservative. I'm okay with being highly leveraged as long as I still cash flow. I only have one rental so far, currently doing a live in flip, and will be acquiring my next primary-turned rental in March-ish. My middle ground actually follows @Scott Trench philosophy which is to have a significant amount of liquidity in the bank to cover my personal expenses (currently 3 months, next goal is 1 year), then to have 10k in the bank per rental for repairs and vacancies. It's not an exact science but makes me more comfortable.

I recommend checking out Bigger Pockets Money Podcast. It still has a flair of real estate but is focused on personal finance and as such generally has a much more conservative approach.

Post: I'm a Real Estate Investor, but my Degree is in...

Sevy BialkePosted
  • Rental Property Investor
  • Saint Paul, MN
  • Posts 23
  • Votes 26

@Yonah Weiss love the question!

I have a liberal arts degree with majors in physics and math. Graduating, most people asked me if I was going to be a teacher or professor. I've worked in restaurant management, corporate IT M&A work, and now I run an oil distribution center; and just starting my real estate career with 1.5 house-hack deals in.

The primary reason I'm not more deals in is I am working on my crippling student debt first.... aside from that major negative, yes I feel my education has helped significantly in every role and will be a big positive with real estate. Between physics and math, I like to think that I have a degree in logic and solving problems and it's hard to argue against the benefits of that.

Could I be where I am without that education? Yes I like to believe so; but I also believe that's my who hubris and am under estimating just how much that education honed my analytical skills.

Post: Tree On Property Line - Who is Responsible?

Sevy BialkePosted
  • Rental Property Investor
  • Saint Paul, MN
  • Posts 23
  • Votes 26

@Craig Fitzsimmons

I had a similar situation with my house in Minnesota a couple years ago. I did not speak with a lawyer but I did talk about it extensively with my insurance agent. To echo what others have said, if the tree is in reasonable healthy shape, then any damage that happens on either property is the responsibility of the that respective property owner and considered “act of god” by insurance. However if there are large dead branches that clearly should be pruned out of the tree before the damage happens, then you as the tree owner are responsible because it is negligence and not “act of God.”

Post: New member in Minnesota /Wisconsin are

Sevy BialkePosted
  • Rental Property Investor
  • Saint Paul, MN
  • Posts 23
  • Votes 26

@Jordan Moorhead

As a Minnesota (temporarily a Wisconsinite) I've subscribed to the cabin religion my whole life and my near-retirement parents are trying to understand how to afford their own to retire with (religion makes us do crazy things ;)

As near as I've been able to good naturedly guess, the cabin love is what you get when you mix the seemingly universal desire to travel with the home-body reserved demeanor of Midwesterners.

*not Midwest person*: "Last year I trophy fished off Cape Canaveral then backpacked for a few months. Do you enjoy travel?"

*Midwest person*: "You betcha I like to travel tuh, I got a place near Dulut' and we go fishin' year round up dere for wall-ees."

Post: Soon-to-be wife not on board

Sevy BialkePosted
  • Rental Property Investor
  • Saint Paul, MN
  • Posts 23
  • Votes 26

@D'Andre Byers

My wife was also not on board at first, she saw this as too much hassle for us, our 2 kids, and our 2 dogs. I've been slowly winning her over the past three months but it finally hit home last week when we did an exercise borrowed from the bp money podcast. We each made a list of the 10 things that brought us the most joy in life then came together and talked about them.

It was quickly apparent that not many things cost money and the size of our home was not on the list but doing home projects was. Now we are committed to buying a flip to live in as well as rentals to sustain income so we can spend more time together as a family. The proof was in the end goal.

Post: Student loans or investment property

Sevy BialkePosted
  • Rental Property Investor
  • Saint Paul, MN
  • Posts 23
  • Votes 26

@George Gammon

@Ashley Gish

Apologies, didn't get to close that out.

Basically, for me, I see the logically fallacy in spreading out between my 1 & 3, but if all financial decisions were truly logic only, id be a very rich bachelor instead of a husband and father.

George if you really wanted to get wound up on the psychology of money vs the logic of money, I could have a separate conversation explaining why I'm attacking my student loans from a snowball and avalanche philosophy simultaneously! ;)

Best of luck Ashley and thanks for the good read George.

Post: Student loans or investment property

Sevy BialkePosted
  • Rental Property Investor
  • Saint Paul, MN
  • Posts 23
  • Votes 26

@George Gammon

I completely agree with "you can't argue with math " (I have a math degree). However we are not purely logics creatures and often make emotion driven financial decisions. There's a reason why people exit the stock market at the bottom despite all historical data and logic says to leave your money as it will bounce back.

@Ashley Gish I am doing all 3 recommendations I've seen.

1) With a nod to George's philosophy I take all windfall money (primary residence flip capital gains, W2 bonus, etc.) for my next reasn estate deal as the most LOGICAL use of my money.

2) I refinanced my remaining 68k @ 7% student debt last month down to a 5 year @ 3.64% (feel free to calculate your hourly income/ savings equivalent of the 3 hours I spent refinancing - I plan to pay off in 3 years regardless of term and rate, still save a couple thousand over the 3 years).

3) Reducing our lifestyle inflation (cutting expenses by living more intentionally) and using the extra money to throw at the student debt.

My own debt risk tolerance for bad debt (I consider any debt not tied to any non income producing asset or my primary imo) is low before I increase my good debt position with real estate. But if I pay off the student debt with the windfall money, we don't get the added life (financial) experience of not only living within our means but under our means. Those habits will pay dividends for the rest of our lives.

Post: Adding Value with Excel Skills? - Newbie

Sevy BialkePosted
  • Rental Property Investor
  • Saint Paul, MN
  • Posts 23
  • Votes 26

@John Woodrich So simple it's possibly a "doh" moment for me. Thanks for the feedback!