All Forum Posts by: Robert Steele

I throw all my receipts in a draw. :p

When the draw gets too full I sort them into folders in a filing cabinet.

At tax time they all come out and I cross reference them with my bank and credit card statements in Microsoft Money.

Then they all go into a tax year folder and back in the filing cabinet.

Old school and easy.

Retail buyers are often payment buyers. My Realtor told me a story a few years back where she suggested to a buyer that they could lower their monthly payment by getting an interest only loan and put the difference in a savings account. (Wish I had done more LIBOR indexed interest only loans myself - the only one that I kept is now at 3.25%). So what did the buyer do. They realized that they could take an interest only loan and make the same payment to get a more
expensive place. Sheesh.

Hold on. Are we talking MF per door or SFH here?

Either way I've got this system down pat!

I buy 100% LTV so my return is infinite and then I do this 100 times. That's 100 x infinity - a really big number. I then spend every waking moment managing those 100 SFHs. Well what do you expect when I cannot afford property management? The debt service takes all that ...

/take tongue out of cheek

Those central bankers must surely be preparing for hyperinflation. Look at the metric tonnes of shiny metal they are sitting on! ;)

http://www.amazon.com/Landlording-Handymanual-Scrupulous-Landladies-Themselves/dp/0932956335/ref=sr_1_fkmr1_1?ie=UTF8&qid=1329374599&sr=8-1-fkmr1

You may want to select an increment which is psychologically more acceptable to your tenants. The more acceptable numbers are those which are not multiples of 5. $22, for example, is better than $20, and $28 is better than $25. Such figures lead tenants to believe that their increases have been carefully calculated to match actual increases in operation expenses rather than to include still more arbitrary profit for the owner, rounded up, of course, to the nearest $5.

Hmm. I read on Fannie Mae that to qualify you either need to be a big shot company with $5M in assets or a qualified investor ($200K/yr income for past two years or $1M net worth not including your primary residence).

I may have read this wrong but it seems to me you cannot even find out the details of the program (such as the discount) until you are qualified and you cannot qualify unless you a rich.

Most banks selling REOs don't allow the broker/agent to double end the deal anymore. Apparently there have been some problems. Let's just say that they wish to avoid any legal entanglements.

Leverage. But not to excess. There is no magic loan to value number. Base it on what cash flow you feel comfortable with. For instance I would not take $100K and buy 10 rentals that each flowed $100 as that is not enough of a buffer. I would be more comfortable taking that $100K and buying 4 rentals that each flowed $300.

Two other benefits of leverage.

Appreciation. If I invest $10K in $100K property and prices go up 3% in 1 year then I make 30% ROI not 3%. Granted this is a double edged sword.

Inflation. By the time I am 15 years into a 30 year mortgage the dollars I am paying the mortgage back with are probably going to be worth half of what they were when I borrowed the money.

I hear ya Steve. I have asked myself the same question many times. I think inflation is in the cards and before Bryan gets all bent out of shape ;) we don't need no stinking hyperinflation to ruin our day. Just 4% a year for 10 years is enough to steal half of your wealth.

I recommend getting out of government sponsored retirement accounts (401k, Roth, IRA). When the SHTF the government can and will change the rules mid game. I wouldn't be surprised to see a patriotic new law that states one half of all assets in these plans must be in treasury bonds and no you cannot take your money out anymore as we've change that rule too. I like my wealth parked where I have control over it.

I like hard assets such a real estate and gold (5% to 10% of net worth). Particularly income producing assets. They should keep pace with inflation although may under perform if interest rates go higher (depress house prices). The stock market may go up in nominal terms but in real terms will probably continue going sideways. Having leveraged incoming producing assets is a good play as inflation effectively pays your mortgage for you. You are paying it down with dollars that are worth less and less.

Good luck!