All Forum Posts by: Kyle K.

@steven Hamilton, Thanks for the info. Next time I'm up north I'll give you a heads up.

If you qualify as a RE Professional and, thus, can take unlimited losses against your income, do you HAVE to take those losses? Or can you defer those losses to take at a later time?

Ken Barrett, I definitely think the ideal situation is to buy a 2-4 unit where you live in one of the units and rent out the rest. That being said, if you can't find one that is both a good investment AND a place you would consider living in, I'd go with the next best thing-- buying an investment property first. This way, you start building your investment portfolio earlier to get the ball rolling. Plus, it would be easier for your to obtain financing without a home mortgage. I think delaying the gratifcation (and cost) of owning your own home to purchase investment real estate is prudent and will pay huge dividends down the road.

Having a huge portion of your net worth in real estate isn't a problem in and of itself. If you aren't using leverage prudently and keeping adequate cash reserves, then the real estate in your portfolio could be problematic.

Might I make one suggestion:

You noted that you have money in mutual funds, which I assume is in a regular individual account versus a tax-advantaged account like an IRA. If this is money that you would utilize to purchase real estate or other investments, I would probably advise against it. There are so many ups and downs in the market that it doesn't make sense to use them to hold cash that you might use in the short term (0-4 years). Stocks and mutual funds should really only be held long term, unless you are well-versed in speculative stock trading.
Tip

I feel like rationing would have to take place to keep costs down to prevent superfluous procedures down. Makes sense to me. Regardless, I'm not happy with health care legislation until they take meaningful steps towards lowering health care costs and encouraging individuals to take care if themselves.

Good point. I actually really like Health Savings Accounts as it provides some incentive for individuals to take ownership of their own health. Who knows how the chips will fall in 2014.

The health care law, on the surface, is pretty cool. The theory is that everybody pays in, or gets taxed for not taking part. The less fortunate get their health insurance subsidized or completely paid for. Sure, there is some redistribution of wealth going on, but it doesn't seem too bad or egregious with this bill.

That's on the surface.

The real problem is that the country is facing rapidly rising health care costs. This is attributed to a couple reasons. One, most people in this country do not take care of themselves. They don't eat right, they don't work out, they don't exercise, etc. Secondly, pharmaceutical companies, in pursuit of profit, continually pump out new drugs to replace older ones. However, since they have the FDA in their back pocket, Big Pharma is able to put out these new, more expensive drugs even though they are NOT more effective than the older ones they are replacing (in many cases). Yes, it is sickening. Finally, our health care system is focused on curing symptoms, not the underlying problem. I guess part of the reason for this is because of our country's horrible health culture.

Democrats and Republicans offer no solutions to fight the real problem of rising health care costs.

I love Chicago, but I wouldn't invest there. Texas is probably your best bet.

Ulrich Burke, the number of things you should look for are many. Some of the things I would consider:

-What are the property taxes?
-How old is the property?
-How would I grade the area and type of tenant I'm likely to attract?
-Is the local economy poised for long-term wellness?
-In the case of the condos, what percentage of the complex is occupied?

When I say new and modern, I'm not talking about "conservative" vs "modern" interior design. I'm talking about basic home layouts. If you compare a 30 year old home that hasn't been updated to a newish home, that 30 year old home will simply LOOK dated with a tiny kitchen, laminate cabinets, etc. Consequently, it will be much harder for that older home to command market rents and desirable tenants without putting a lot of money into it.

I can't speak for the man, but I bet Mr. Park is cash flowing. It certainly won't be as much as the potential cash flow he could get buying a cheapo property with cash, but it will be enough to grease the wheels and build up a reserve account. By the time retirement rolls around, he'll have that mortgage paid off with significant cash flow rolling in afterwards. Besides, the guy is probably in is twenties and has no need for cash flow. He's building up his capital. By the time retirement rolls around, he'll have more capital than somebody that has been doing everything he can to get maximum cash flow in his younger years. And what is cash flow but a yield on capital?

How often do "A" markets collapse? Seriously, I would like some examples. Nothing in life is 100% certain, but smart money says 'A' areas have a much better chance of appreciating-- even if it is just at the pace of inflation-- than lowering 60% of its value in 10 years. And, you're a smart guy so I don't have to explain how using leverage allows one to enjoy a capital gain much higher than the rate of inflation, even if his property only appreciates at the rate of inflation.