patrick.net

Bitcoiner says

The huuuuuge difference between stocks vs RE is that it’s soooo much easier to fuck up with stocks. You can trade while you are drunk or make a mistake or simply by getting too emotional. Locking up funds in RE is a safe bet to make money ( a lot of it) LONG TERM.

If you dca in low cost index funds, great idea. But reality is most stock traders lose money.

This is the kind of argument as "I like to overpay on my taxes during the year so I get a uuuuuge refund in April - I wouldn't have saved otherwise". =))

Not everyone is like that.

Bitcoiner says

I am DCA’ing into stocks myself but when I hear you could have bought stock xyz here and sold it here and would have made more money compared to RE I just laugh. As if most people would pick the right stock(s) and could time the market.

Set and forget. Have a beer or cigar and enjoy life. I don't care about fees. Since the housing bust my funds have gone up at least triple. I'm having fun on the way to retirement. Not waiting. On pace for at least $20k/mo with what I have by 60 with a paid off house. I ain't mad at that. Start early. I still have 20 F'ing years before turning into a legit beach tomato.

Bitcoiner says

Correct. And I didn’t say everyone is like that. To be specific. About 10% of stock traders don’t lose money. Only about 90% do.

https://www.moneyshow.com/articles/tradingidea-60554/why-90-of-traders-lose-money/

https://www.forex.in.rs/why-traders-lose-money-in-forex/

I am DCA’ing into stocks myself but when I hear you could have bought stock xyz here and sold it here and would have made more money compared to RE I just laugh. As if most people would pick the right stock(s) and could time the market.

A friend shared this yesterday. 6.9% gain on his IRA account 2 days ago when TSLA popped. He only has one stock in his IRA. Back it out, he has $20M in his IRA account.

He also owns rental properties in the Bay Area and some out of state NNN mainly for cash flow. He’s not old enough to withdraw money from his IRA, but he’s retired and plays tennis every morning. Life is great for another immigrant friend. 🤔

Eman says

He’s not old enough to withdraw money from his IRA, but he’s retired and plays tennis every morning. Life is great for another immigrant friend.

You can withdraw, essentially. You can borrow against it. Sure it's not the original capital, but you can pay yourself and use it. We borrowed $50k off my wife's 401k. As long as the employer or brokerage allows it is the only issue.

WookieMan says

Eman says

He’s not old enough to withdraw money from his IRA, but he’s retired and plays tennis every morning. Life is great for another immigrant friend.

You can withdraw, essentially. You can borrow against it. Sure it's not the original capital, but you can pay yourself and use it. We borrowed $50k off my wife's 401k. As long as the employer or brokerage allows it is the only issue.

He’s not hurting for money. He has more than enough money each month from his cash flow. He uses the excess money to buy hitech stocks like TSLA, NVDA, AAPL and GOOG each month.

He used to ask me to let him invest in apartment buildings. I didn’t take him serious so he took $2M and invested in MeetKevin’s opportunity zone fund. 🤯

It’s funny to see the contrast between 2 groups of my friends. One is business owners/investors, and one is W2 employees. In general, the former group of friends is happier, has more free time and more well off compared to the latter. One group consists of calculated risk takers/entrepreneurs, and one is risk averse and “safe”.

https://www.nbcnews.com/business/economy/home-foreclosures-rising-in-us-where-which-states-rcna88394

Home foreclosures are rising nationwide, with Florida, California and Texas in the lead

Bitcoiner says

easy to see how many owners became RE millionaires over the past decade….

It means they get to pay taxes as if they were millionaires (outside Prop 13 areas).

Booger says

https://www.nbcnews.com/business/economy/home-foreclosures-rising-in-us-where-which-states-rcna88394

Home foreclosures are rising nationwide, with Florida, California and Texas in the lead

To be expected with the spike in “died suddenly” trend as a result of “safe and effective” vaccines?

Bitcoiner says

Booger says

https://www.nbcnews.com/business/economy/home-foreclosures-rising-in-us-where-which-states-rcna88394

Home foreclosures are rising nationwide, with Florida, California and Texas in the lead

Lol

The Delinquency Rate on Loans Secured by Real Estate is the percentage of loans, secured by real estate, that are past due on their payments.

Historic low?

The article is correct. See that little spike at the end of the graph? Negative news sells. 😂

Bitcoiner says

As if most people would pick the right stock(s) and could time the market.

Let's see, over time, both RE and stocks go up. Many people have also been burned by both.

GNL says

Bitcoiner says

As if most people would pick the right stock(s) and could time the market.

Let's see, over time, both RE and stocks go up. Many people have also been burned by both.

FACT!

Eman says

GNL says

Bitcoiner says

As if most people would pick the right stock(s) and could time the market.

Let's see, over time, both RE and stocks go up. Many people have also been burned by both.

FACT!

I would say it's easier to get a great return with stocks if you see great management, undervalued company, and a moat. Real estate is nice with leverage though. Both have their pros and cons, one is more liquid than the other. One can be more boring than the other but I will not say which one.

https://finance.yahoo.com/news/some-homebuilders-are-cutting-corners-as-demand-heats-up-124424033.html

Some homebuilders are cutting corners as demand heats up

“The problem is there are subcontractors that are spread thin between all builders and do sloppy work,” Dycus said. “Then some builders are bad with construction management.”

According to Sharon, some of the mishaps in new construction could be driven by profit margin pressure from shareholders. Most builders take a construction loan to build a home, so every day that loan stays active, it costs the builder more interest.

zzyzzx says

https://finance.yahoo.com/news/some-homebuilders-are-cutting-corners-as-demand-heats-up-124424033.html

Some homebuilders are cutting corners as demand heats up

“The problem is there are subcontractors that are spread thin between all builders and do sloppy work,” Dycus said. “Then some builders are bad with construction management.”

According to Sharon, some of the mishaps in new construction could be driven by profit margin pressure from shareholders. Most builders take a construction loan to build a home, so every day that loan stays active, it costs the builder more interest.

I guess the housing crash is on hold at the moment?

Bitcoiner says

I am DCA’ing into stocks myself but when I hear you could have bought stock xyz here and sold it here and would have made more money compared to RE I just laugh. As if most people would pick the right stock(s) and could time the market.

Are you still buying bitcoin?

https://www.reddit.com/r/RealEstate/comments/147lcgq/help_nyc_coop_not_selling_even_after_100k_price/

Help: NYC Co-Op not selling even after $100k price drop.

zzyzzx says

Silly man, you don't invest in RE for yield, you invest for prices going up...just like stocks. 🙂

Obviously, I'm playing devil's advocate here. You can get burned on RE, no doubt many people have. Bitcoiner talking about timing stocks is funny since we all have witnessed how RE can go up and down also. I am a bit surprised though, to see that rate hikes haven't hurt prices much. In RE, that say location is everything. Well, I'll counter that with...interest rates and inventory are everything also, same as location. Anyone who says they knew what was going to happen to RE over that last 3 years is a flat out liar.

Bitcoiner says

About 10% of stock traders don’t lose money. Only about 90% do.

What would happen if someone would trade RE like stocks? I bet the picture would be even more lopsided, given the MUCH higher friction for both holding and buying/selling.

Bitcoiner says

you can’t just have a brain fart and sell RE in error or while drunk. Unless you are an alcoholic and drunk for 30+ days.

No different from stocks in this regard.

Bitcoiner says

RE is good for Americans (who are - in general - lousy savers) to build equity over the long run.

Sure, in your primary residence (and even then with caveats). But once we're entering investment side one must ask himself if he's not overexposed to it.

Bitcoiner says

“ I am a bit surprised though, to see that rate hikes haven't hurt prices much”

Lol, you and all RE bears as well.

RE prices are a function of supply and demand.

This is why you're looked at as kind of a dope. You ignored my last 2 sentences.

Bitcoiner says

You may have misunderstood what I said. My point is you CANNOT time markets. Doesn’t matter if it’s RE or stocks.

Except you only pointed out stocks. LOL

Eric Holder says

Bitcoiner says

About 10% of stock traders don’t lose money. Only about 90% do.

What would happen if someone would trade RE like stocks? I bet the picture would be even more lopsided, given the MUCH higher friction for both holding and buying/selling.

They do. REIT's. Tax advantaged too. Easiest way to get into real estate and do absolutely nothing. Just have to pick the right one.

I'm in the tax advantage account phase and letting that compound for 25 years, well 40 years by the end. Crash aside, on pace for $10M in non-pension or SS retirement money and a paid off house. Once the pension kicks in and SS for the wife and I we could easily live with $150k/yr or more with minimal expenses until 100.

You can undoubtedly make great low tax income in real estate, but even with a PM it's still too active for me. I like jobs where I don't deal with people. Invest in hands off accounts, check it once a year and smile. REIT's have to pay dividends on profits back to shareholders and you get potential appreciation. I'm waiting for a downturn to find some good funds and load the fuck up.

Might buy RE again, but I'm not there yet and it won't be residential most likely. Every path is different. If I had the motivation I could slay real estate. I don't have that passion anymore. I really don't like humanity outside of a select few people. I really don't want to deal with them in business.

WookieMan says

Eric Holder says

Bitcoiner says

About 10% of stock traders don’t lose money. Only about 90% do.

What would happen if someone would trade RE like stocks? I bet the picture would be even more lopsided, given the MUCH higher friction for both holding and buying/selling.

They do. REIT's. Tax advantaged too. Easiest way to get into real estate and do absolutely nothing. Just have to pick the right one.

Right. But these are technically still stocks and prone to all the same supposed dangers of "drunken trading". =))

Bitcoiner says

Eric Holder says

WookieMan says

Eric Holder says

Bitcoiner says

About 10% of stock traders don’t lose money. Only about 90% do.

What would happen if someone would trade RE like stocks? I bet the picture would be even more lopsided, given the MUCH higher friction for both holding and buying/selling.

They do. REIT's. Tax advantaged too. Easiest way to get into real estate and do absolutely nothing. Just have to pick the right one.

Right. But these are technically still stocks and prone to all the same supposed dangers of "drunken trading". =))

Yep 👍 plus the danger of selling due to emotional issues (panic, euphoria, lack of following an investment plan or lack of a plan).

Again, this is the same kind of crowd who "needs that refund" because otherwise they'd impulse-spend every last cent. Frankly, I can't relate to either.

WookieMan says

They do. REIT's. Tax advantaged too. Easiest way to get into real estate and do absolutely nothing.

Just to be clear, REITs work well in retirement accounts (IRA, 401k, Roth).
Generally speaking, the bulk of the dividend is income passed along from the company's real estate business and is therefore treated as ordinary income to the investor. This part of the dividend is taxed according to the investor's marginal tax rate.
Note that there is currently some preferential treatment for pass through income from REITs:
The portion of the REIT dividend that is attributable to income may receive further preferential tax treatment under the Tax Cuts and Jobs Act (TCJA). The act gives a new 20% deduction for pass-through business income, which includes qualified REIT dividends. The deduction expires at the end of 2025.

EBGuy says

Just to be clear, REITs work well in retirement accounts (IRA, 401k, Roth).

Maybe. But not the Vanguard REIT.

In a retirement account only the total return matters and the total return of the REIT way lagged the equity index funds. That's why I exchanged out of it.

Bitcoiner says

Do you usually walk the property with a contractor to estimate the rehab costs?

if you have no clue on residential building construction and property management, then you better bring a licensed contractor who does ... if not, then you rolling the dice, boy ....

and that is not just doing mold testing with kits from home depot... its comprehensive from radon testing in basement, to fiber optic video inspection of septic system, to going up to attic to check hurricane clips or straps, etc....

even if you think you can jew them down on price, it may not be that worthwhile an investment as far as cap rate and roi ....

....

B.A.C.A.H. says

Maybe. But not the Vanguard REIT.

In a retirement account only the total return matters and the total return of the REIT way lagged the equity index funds. That's why I exchanged out of it.

You could get ticker VTI (vanguard total stock market index ETF) and then sell monthly calls out of the money, and roll up te calls if needed. That is extra dividend money.

ad says

You could get ticker VTI (vanguard total stock market index ETF) and then sell monthly calls out of the money, and roll up te calls if needed. That is extra dividend money.

I just swapped it for the VTI mutual fund. Income from dividends versus share price appreciation, it's all the same to the balance sheet of the retirement accounts.

I have a friend who does those options trading. He lives on the profit from it. He told me that the reason I don't use his methods is because me and others like me are stupid and lazy. OK, if you say so: stupid and lazy.

B.A.C.A.H. says

I just swapped it for the VTI mutual fund. Income from dividends versus share price appreciation, it's all the same to the balance sheet of the retirement accounts.

I have a friend who does those options trading. He lives on the profit from it. He told me that the reason I don't use his methods is because me and others like me are stupid and lazy. OK, if you say so: stupid and lazy.

its not hard, boy

just set up level 0 trading account for options since you are not trading on margin or are leverage

i first learned about options with investopedia and then with blue collar investor website, which is run by a very wall street-savvy former dentist ...the dude is uber smart and i'm thankful to him ...

.

Bitcoiner says

If you are committed to something you’ll find a way to get it done. If you not committed, you will find excuses. People don’t become millionaires by accident (usually).

Wouldn’t you always have a good inspector check those items (foundation, plumbing, sewer cam, roof, hvac, etc.)?
I am thinking about buying the ugliest dog in a good hood and upgrading bathrooms, kitchen, paint, new garage door, etc. maybe adding sqft

Well I worked as a facilities manager and engineer so a lot I can do on my own, besides being a professional engineer (PE).

But yeah, you want to be able to go in and get enough info on the condition of the house from sink holes below slab to the roof ridge not venting probably.

Yeah, I understand as you want to buy in "good hood" which mean good public school and Asian tiger moms on the PTA. I got it, boy.

Or why not buy in a hood that may get gentrified eventually by soy boys and white liberal doucebags ? or would that take too long to pay off as far as ROI and/or cap rate ?

.

https://www.reddit.com/r/DaveRamsey/comments/1469e0t/getting_majorly_impacted_by_return_to_the_office/

Getting majorly impacted by return to the office

Yuma housing market is well past peak. Checking around today, I see a number of rentals that have dropped prices in the past few weeks. In fact, one who was only trying to collect $100 more than last year has lowered his rent to $100 less than what he got in 2022. In an extreme example, a guy from Somerton was trying to sell his house since last year. After starting over $300k, he eventually settled around $284k before pulling the listing and attempting to rent instead. After not finding a renter for 45 days, he's dropped his rent as well. In another example, a pretty nice looking property that started WAY above market($2,800), has now dropped to $2,400 and still without a renter.

Market declines happen first in the most over-priced, or furthest out regions, eventually working their way through the entire market. You may want to locking your tenants in now before prices start dropping next year in your area, and they move elsewhere.

NuttBoxer says

Market declines happen first in the most over-priced, or furthest out regions, eventually working their way through the entire market. You may want to locking your tenants in now before prices start dropping next year in your area, and they move elsewhere.

Over priced is the key here. We have two gas stations, one in a neighboring town that do Uhaul rentals. They're piling up. Meaning people are moving my way. There are zero homes that I could find for rent in my town on any website. Zilch. 820 homes/units.

I'm gonna pull the former Realtor card. It's location. I never look at rentals and was honestly shocked just now that there's literally nothing I can find in my town. I drive/walk all the blocks and know damn near everyone. There's nothing. No for rent signs outside of the commercial downtown area. There's only 2 active listings for sale. Normal market here is 7-10 roughly active. They're building new homes finally.

That's why my view is probably jaded to some of you. I'm not witnessing at all what some of you guys are. Our exodus happened. My area is seeing an influx, which blows my mind for IL. I think it's city folks leaving and even suburban. I drove through areas this morning I haven't been to in 10 years. They're shit holes. I'd never raise my kids there. These are suburbs too, not Chicago. Life sucks in urban environments. Humans aren't supposed to live on top of each other.

NuttBoxer says

Yuma housing market is well past peak.

Will this be a factor there also ? See below article.

https://www.cnn.com/2023/06/01/us/arizona-phoenix-groundwater-limits-development-climate/index.html

I guess they'll not cave into the developers like Bay County, FL does to St Joe.

But if water prices go up, then that will put strain on housing prices just like increasing property insurance and HOA fees do.

.

Bitcoiner says

Interesting. What are the best areas to live in Yuma? What is the Scottsdale of Yuma. Is it somerton?
Median household incomes seem a bit low in Yuma. Are there good employers out there providing high paying jobs?

Still not familiar enough to say for sure, but Foothills is the newer area of town, although Old Yuma(as locals seem to call it) has some nice housing developments as well. Really no idea on Somerton.

Yes, large percentage of the population is migratory, and only works during the winter. Creates misleading unemployment numbers, and possibly lower than normal income numbers. But my wife has been following some groups, and I think income is fairly spot on. A lot of people in Yuma do seem to struggle, although that's becoming more common everywhere.

Biggest employers are military, farms, government. Yuma is right next to the Colorado, so I would think water isn't a huge issue, although Phoenix also has some large rivers that flow right through town. I will tell you if looking at an overhead satellite view it's VERY common to see nothing but sand. Housing seems to have outpaced satellite photos by quite a bit. But given how remote it is, lack of local jobs, and summer temps, I don't see over-crowding ever being a problem.

Also, majority of landscaping consists of desert plants, sand and rocks. People like us who want grass for our kids are a strange breed.

Pretium Partners is the 2nd largest owner of single family owners (Invitation Homes is first).

Pretium recently bought 4000 homes (some unfinished) from D R Horton.

https://www.housingwire.com/articles/pretium-partners-to-acquire-4000-d-r-horton-rental-homes-in-1-5b-deal/

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Bitcoiner says

Nuttboxer, thanks. Never been to Yuma. Planning any trips to cross the border or not really a reason to do that? Btw., are you working remote or did you find a new job in Yuma?

Meaning Mexico? Certainly we'll travel down there at some point, mainly to see if any of the stuff my wife goes to Tijuana for we can do over there.

I've been remote Since 2020. Current company is East Coast, so have to wake up a bit early sometimes, but I've been assured by my boss I will never be asked to travel to corporate.