patrick.net

Eman says

Most people are nice. Some are shady. It’s just human nature. I get to pick who I want to work with and who I don’t. No reason to hate anyone. It’s just another occupation.

You know more than I do on the owner end and you can spot issues with properties having flipped and done a bunch I assume. Listing brokers are the ones that scare me the most if you're the buyer. They 100% will lie unless you spot it. I doubt you use inspectors anymore, I won't anymore as a non-licensed person and having done enough rehab. Only time would be structural concern on an older home, pre-1950's. It's easy to spot hack jobs.

Dual agency is the biggie. Ethics and CE are fluffy bull shit. They will lie to both parties to get the deal done. I wanted to keep my job so I kept my mouth shut. Lots and lots of people and "big time" brokers could have lost their license if I blew the whistle. As you mention there are liars in all industries, but real estate given the amount of money on the line for a broker they do and will lie to you. White lies you'll most likely not find out about but it gets the deal done.

Basically on a dual agent deal they tell the seller what you'll pay and lie to the buyer about what the seller actually said. It's why dual agency should be outlawed OR they only get 2.5 or 3% total and not the 5-6% total commission. And it's okay to be friends, but if you've worked with dual agency deals and the agent is considered a friend, they have 100% lied to you if you're the buyer.

The smart cheaters never email this shit either. It's all phone calls. So even if you confront them it's a he said she said thing and you can't perjure yourself because a judge won't know who's lying. "Hey the seller came back and said he wants $100k, I know you said you'd pay that, but we're at $80k now, what do ya think?" He already told the seller you'd pay the $100k for sure in a DA situation. Now throw this situation on a $1M listing and on one deal you make the median family income in one fell swoop. No lying going on there at all.... said no one.

You're doing well and I congratulate you on your success, being honest. If brokers haven't hampered that, then your perspective will be different than mine. I witnessed 1,000's of lies and that's not being hyperbolic. Includes attorneys, lenders, banks on short sales, REO's. Primary occupant real estate (homes condos) is probably the most fraudulent profession in the country beside government itself. It's emotions. It's like the fog of war. The person just wants that damn house and can be lied into buying it.

Investing is different. You have the ability to say fuck you I'll find something else. It's not like a car where you can search and get the same one somewhere else. THAT is the house you want. I know you're on the investment side, but just pointing out from previously being in the trenches why people hate Realtors. It's not wrong to hate them. And it's not wrong to like or have a "good" one. They've lied to you though, almost certainly. It's like playing football and never having an injury for 25 years. That's impossible for 99.99999% of players.

Bitcoiner says

And realtors are to not to blame for this imbalanced market.

They have no control outside of individual deals really. You can over price a house and no one buys it. As in my most recent comment, the only time they have control is in dual agency deal and I left out inter brokerage deals. Agents within the same office. They're IC's but they're still peers in the business. They will tell what the seller will take and what the buyer will pay. That just screws the client and doesn't raise prices though. Just pointing out the main reason people hate realtors. They can't control the market.

Eman says

Just came back from a sushi buffet in Concord. $30.99/person plus drinks. Great food and service for a reasonable price.

I like Asian food, I like seafood, I like Asian seafood but I stay the hell away from Asian seafood buffets.

Bitcoiner says

Eman says

Look at this flip last spring. I missed the market by a couple months. I could have gotten $100-$150k more had it hit the market sooner thanks to low mortgage rates.

https://redf.in/H28A6Z

1.7M for a 1.2 sqft shoebox. That was quite the bidding war since your list price was
1.195M ?! Did you add sqft to this house too?

No square feet was added on this one. We got it for $1.075M. I thought the ARV would be $1.8M and expected it to sell for $1.85-$1.9M, but the market shifted by the time we had it listed. Took what the market gave us and moved on.

$1.2M listing price was a number my realtor threw out. It wasn’t going to sell for that price.

Bitcoiner says

You may also call it survival of the fittest. A lot of aspiring buyers are cut out of the RE market. There is a chance they will be life-long renters. I couldn’t afford to buy all the properties I own in todays market - even though my salary has gone up substantially (same for my wife). On the other hand you have people buying $1M - $2M homes in all cash. And realtors are to not to blame for this imbalanced market. Low inventory, no forced selling, low interest rates with duration and a concentration of wealth are the reason.

Shouldn’t blame the realtors. They can’t twist the buyers into overpaying for houses. The buyers buy due to their own life circumstances. The bond market is betting the Fed will cut rates in within the next 3 years. The new sales pitch is “buy the house, date the rate”.

WookieMan says

You know more than I do on the owner end and you can spot issues with properties having flipped and done a bunch I assume. Listing brokers are the ones that scare me the most if you're the buyer. They 100% will lie unless you spot it. I doubt you use inspectors anymore, I won't anymore as a non-licensed person and having done enough rehab. Only time would be structural concern on an older home, pre-1950's. It's easy to spot hack jobs.

Dual agency is the biggie. Ethic (some text omitted to shorten quote...) find something else. It's not like a car where you can search and get the same one somewhere else. THAT is the house you want. I know you're on the investment side, but just pointing out from previously being in the trenches why people hate Realtors. It's not wrong to hate them. And it's not wrong to like or have a "good" one. They've lied to you though, almost certainly. It's like playing football and never having an injury for 25 years. That's impossible for 99.99999% of players.

LOL, I wouldn’t be surprised if they lied a little although I “trust” it’s nothing outrageous. It’s a balancing act being dual agency. It’s give a little and take a little from both sides to get the deal done. Otherwise, they wouldn’t get paid. I get to decide how much I’m willing to pay, or I walk. The agents are not twisting my arm into buying anything so why blame them? What happened to personal responsibility? However, if I buy, s/he will get the listing when I sell/flip.

The listing agent on both of the above flips got the deals from other agents. He was NOT the listing agent when I bought them, but he got the listing when I sold them.

On the upcoming flip, the agent who got us the deal will be the listing agent. He double-ended the deal on the front end. It wasn’t “cheap” when we bought, but the numbers penciled out after adding another bed and bath so we moved forward.

@Bitcoiner,

Once you have the formula down, you can buy real estate regardless where we are in the cycle of the housing market. When deals are abundant and your cash isn’t, keep yourself open to partnerships as you can almost always exit the deal for a profit if the partnership doesn’t work out. You can also buy out the partner through refinance, or have the partner buy you out.

Syndication is where you raise money from accredited investors. Once the deal (apartment in my case) is stabilized, you can sell for a profit, or get an appraisal, refinance and buy out all or most investors. As long as your ROI is 15% or greater annually, investors will give you money. Trust is paramount is this or any biz. Once you have a good reputation, raising money wouldn’t be an issue. It’s just a matter of rinse and repeat.

Trust takes a lifetime to build and an instant to lose. Protect it at all costs.

Good luck with your real estate endeavors. It pays well if you can scale and succeed.

Eman says

As long as your ROI is 15% or greater annually, investors will give you money.

Damn that's good! Over 6 years I'm only making 4.75% annually on my ocean front VRBO condo in Maui. Primarily because I was shut down over covid for several months and one year for 6 months during an expensive seawall repair.

My 3 houses return about 9% on average but if I add them all together I'm making more $/year with the condo alone.

Those numbers exclude appreciation which wasn't a lot until the past 2 years so I guess I could try to work that out as well. I sort of brush off appreciation though and figure it's eaten away by what I save in depreciation...

Eman says

Once you have the formula down

@Eman, What's your formula?

My avg. yearly ROI in the stock market has been 20%-30%, obviously with less leverage. You need to do research though on individual stocks like you would do on any other asset, such as houses etc.

just_passing_through says

sushi buffet

Usually a step up from gas station sushi.

mell says

My avg. yearly ROI in the stock market has been 20%-30%, obviously with less leverage. You need to do research though on individual stocks like you would do on any other asset, such as houses etc.

Come on, are you pulling our leg? You'd be retired in 10 years.

GNL says

mell says

My avg. yearly ROI in the stock market has been 20%-30%, obviously with less leverage. You need to do research though on individual stocks like you would do on any other asset, such as houses etc.

Come on, are you pulling our leg? You'd be retired in 10 years.

Depends on the amount invested.

RWSGFY says

GNL says

mell says

My avg. yearly ROI in the stock market has been 20%-30%, obviously with less leverage. You need to do research though on individual stocks like you would do on any other asset, such as houses etc.

Come on, are you pulling our leg? You'd be retired in 10 years.

Depends on the amount invested.

True but, 30%? He'd be the next Buffet.

GNL says

Eman says

Once you have the formula down

Eman, What's your formula?

Why bother with real estate. Give your money to @mell. 😂

Onvacation says

just_passing_through says

sushi buffet

Usually a step up from gas station sushi.

Never had sushi from a gas station so I don’t know what to make of it. I find $30/person is great value for a sushi buffet.

GNL says

mell says

My avg. yearly ROI in the stock market has been 20%-30%, obviously with less leverage. You need to do research though on individual stocks like you would do on any other asset, such as houses etc.

Come on, are you pulling our leg? You'd be retired in 10 years.

He did say with less leverage. Real Estate is a lot of leverage with a higher upside and massive downside to personal finances. If he's gambling with margin loans on stocks it's the same thing as RE depending on how much you have in the market, they just sell your stocks to cover the loss. Not saying this is mell but you're not retiring early with 30% returns on $1k or a lucky bet. It takes balls to invest in stock with margin in any manner.

If you have $500k in stock and got a $200k margin loan on something you know was going to boom or believe so, that $200k can turn into a couple million in 6-12 months on a relative nothing burger stock. Above my risk profile as I frankly don't understand it if I'm being honest or haven't cared to learn enough.

Margin is no different than a cash out refi and getting another property. Take a cut along the way as tax free income. Expense everything. The average person does not understand this game. It is complicated, but not difficult to figure out. As with anything in business it's who you know and what you know. Real estate if you have protected assets as I've mention is the safest. You can have $6M in an IRA and no one can touch it (for now) when you're 60. Or $200k when you're 30. You can BK (still protected) or just short sell property and collect cash on rentals and hoard it. No one should ever file for BK. There are ways out of debt issues. BK is for attorneys and RE brokers. When you're the poorest you'll be they'll still come for anything.

My point was 30% good enough to gain customers and take a cut. Isn't that how Buffet made it big?

mell says

My avg. yearly ROI in the stock market has been 20%-30%, obviously with less leverage. You need to do research though on individual stocks like you would do on any other asset, such as houses etc.

I've made that (or more) in the past but definitely not yearly and figured my luck would run out so I'd better diversify. Right now I'm only accumulating company stock. The rest is treasuries.

Bitcoiner says

Nice, was the condo all cash or did you finance? Any advice you can give someone for buying their first vacation rental?

Yeah, all cash. It's hard to get financing in Hawaii, you pretty much need an on-island lender. Same with insurance.

I'd advise ensuring you're buying something that is zoned for what you want to do and a high demand area for the nearly dead or newly wed.

just_passing_through says

Right now I'm only accumulating company stock.

No need to tell if you don't want to, I presume it's the company you work for? That can be the easiest way to gain massive wealth since you know the inner workings to some degree depending on the size of the company

Or were you just talking companies in general?

Not relevant to this but my typing and thought process has been shit lately. Just read my comment above. I'm going 5am to 9-10pm with everything (work, kids, adulting) and have insomnia. I just start typing and don't care. So some comments might go into a retard on acid world. I'm done editing and fixing unless it's really awful.

WookieMan says

Or were you just talking companies in general?

Biotech company with a disruptive tech I work for. I don't expect to cash in for about a decade though. It's a small fraction of what I have.

"In 1950 the median American home price was 7,354 and median household income was 2,970 which is 40%. Today the median household income is 70,000 and median home price is 440,000. That's 16%. What makes this even more alarming is most households that are $70,000 are with two earners. 34% of US households are single earning. In 1950 only 12% where two income."
(edited for typos)

-redditor

And on that credit scam people always fall for. I've never taken out a car or home loan. Have co-signed a car, and done some zero interest appliance loans. I owned a credit card for a few years, but that's the extent of my credit history. My score is well over 700, possibly 800. My sister is the same. Her only debt has been small loans from banks.

You don't need debt for a good credit score, you need debt for slavery.

Started with 10k excess money roughly 17 years ago, which has now grown to over 1MM excess money, with the caveat that not all of it were gains, whenever there was a prolonged rout in the market and I maxed out margins I would add a few k here and there from my checkings and savings, so after adjusting for those infusions the yearly ROI roughly falls between 20%-30%. It is not that hard to make a multi-bagger if you hit a really good biotech (my main sector) pick where you have enough shares to sell off some gains and keep the rest of the shares as freeloaders and let em run. I probably need another 1MM in excess to fully retire (esp. with wife and 3 kids), house is roughly 35% paid off, but I'm aiming for semi-retirement, aka freedom from the man, at least within the next 1-3 years, and keep continuing tech by contract only while focusing on investing. As some mentioned, with a leverage of 1:2 max. and starting with a humble amount you don't become financially independent that quickly. We also have some family properties and I am not interested in doing any landlording or taking over any mortgages ;)

mell says

Started with 10k excess money roughly 17 years ago, which has now grown to over 1MM excess money, with the caveat that not all of it were gains, whenever there was a prolonged rout in the market and I maxed out margins I would add a few k here and there from my checkings and savings, so after adjusting for those infusions the yearly ROI roughly falls between 20%-30%. It is not that hard to make a multi-bagger if you hit a really good biotech (my main sector) pick where you have (some text omitted to shorten quote...) etire (esp. with wife and 3 kids), house is roughly 35% paid off, but I'm aiming for semi-retirement, aka freedom from the man, at least within the next 1-3 years, and keep continuing tech by contract only while focusing on investing. As some mentioned, with a leverage of 1:2 max. and starting with a humble amount you don't become financially independent that quickly. We also have some family properties and I am not interested in doing any landlording or taking over any mortgages ;)

property manager…cough…cough

1337irr says

property manager…cough…cough

Definitely the way to go, would need on the combined patnet expertise to pick a good one though, being overseas complicates the matter

Bitcoiner says

mell says

1337irr says

property manager…cough…cough

Definitely the way to go, would need on the combined patnet expertise to pick a good one though, being overseas complicates the matter

Mell, are you back in DE?

currently in CA (back in Europe soon, incl. DE, for the summer), no need to manage them yet. Will probably find some local mgmt company when the time comes unless siblings want to step up ;)

NuttBoxer says

You don't need debt for a good credit score, you need debt for slavery.

Or a landlord. The 2nd syllable isn't just for fun. It's reality. I own the property, I control you. Can sell anytime and can boot almost anytime I want for the dumbest reasons. I can put cameras on the exterior of MY property and track any tenant movements or guest. I have your SS# as a landlord. I'll have your drivers license. I can ask for references. Talk to previous landlords. You don't give that, you ain't renting from me. So you end up with shit landlords that probably have shit properties.

Debt is how you use it and have the ability to get out of it. Credit scores don't matter. I can get $1M cash in 48 hours and not through a bank after not paying for cars and house for 2 years (not my situation). You're hating the players and not the game. You don't understand the game. The United States is never paying back any debt. No one will collect. We won't collapse.

I've been around here long enough and MANY users have been so off their rocker it's not funny and been absolutely soooo wrong. The US "is" the world economy. We fail so does everyone else, but the others failures will be substantially worse with minimal chance of recovery for decades.

Fact is most renters are pissed they missed out in 2010(ish). They were scared of debt. Which debt literally doesn't matter at all. Until you realize that you'll just be paying other people's debt and making them money.

There are advantages of owning vs. renting. There are advantages for renting too.
The biggest advantage of owning is you don't get evicted and control your destiny somewhat.
The disadvantage is someone new moves in nearby and fucks up your neighborhood.

This has happened to my neighbor in Santa Cruz; a complete lunatic bought the funky run down house next to her and lives in a crummier house just behind it; he's running a miniature slum next to her. He put in a hot tub just a few feet from her bedroom on his side of the fence and they have drunken pot infused hot tub parties at all hours.
He got a funky Winnebago and parks it in front of the house a few feet from her front yard, and illegally rents it out.
He moves it around when they put a ticket on it; but he ran an extension cord out to it and people live in it.
Her house is a gorgeous little place with a plaque on it as registered Historic.
Her life is diminished by the presence of the kook neighbor and his kook friends/tenants and their behavior.

So, owning a place with a lot of land around it to keep out the assholes is probably the best scenario; unfortunately they're not building many of those and many people cannot afford them.

WookieMan says

Which debt literally doesn't matter at all.

How does debt doesn't matter at all?

gabbar says

WookieMan says

Which debt literally doesn't matter at all.

How does debt doesn't matter at all?

The idea is that a default hurts the lenders more than the borrowers, so the lenders accept devalued currency or a debt swap / mutual debt forgiveness. Most nations run large deficits, and not being able to redeem the loans they are owed would make their situations far worse. I don't think this will hold true forever, but until now it mostly has.

mell says

gabbar says

WookieMan says

Which debt literally doesn't matter at all.

How does debt doesn't matter at all?

The idea is that a default hurts the lenders more than the borrowers, so the lenders accept devalued currency or a debt swap / mutual debt forgiveness. Most nations run large deficits, and not being able to redeem the loans they are owed would make their situations far worse. I don't think this will hold true forever, but until now it mostly has.

Would this apply to individual american citizens? No, right?

gabbar says

mell says

gabbar says

WookieMan says

Which debt literally doesn't matter at all.

How does debt doesn't matter at all?

The idea is that a default hurts the lenders more than the borrowers, so the lenders accept devalued currency or a debt swap / mutual debt forgiveness. Most nations run large deficits, and not being able to redeem the loans they are owed would make their situations far worse. I don't think this will hold true forever, but until now it mostly has.

Would this apply to individual american citizens? No, right?

Correct

clambo says

So, owning a place with a lot of land around it to keep out the assholes is probably the best scenario

This!!!

NuttBoxer says

"In 1950 the median American home price was 7,354 and median household income was 2,970 which is 40%. Today the median household income is 70,000 and median home price is 440,000. That's 16%. What makes this even more alarming is most households that are $70,000 are with two earners. 34% of US households are single earning. In 1950 only 12% where two income."
(edited for typos)

-redditor

What was the average square footage of a house in 1950? How many bathrooms did it have? What was the r-value of the insulation?

Let me answer those for you. 1000, 1, 0

You could build a 1950 level home today for 100K. Problem is your wife will look at it and tell you to keep renting the condo. So nobody builds houses like that anymore.

gabbar says

WookieMan says

Which debt literally doesn't matter at all.

How does debt doesn't matter at all?

It's a business transaction. I will be building (eventually......). If I can't pay my construction loan the builder gets whatever is built so far. Can finish it and sell for a profit potentially. My credit takes a ding. I still have a house currently that he can't lien and I default on the construction loan. This is hypothetical.

I've known people that have committed suicide over debt. FOR NO FUCKING REASON! Debt is a contract. You can break the contract. Either party. If my builder doesn't do what I want I'm not paying them and they have little recourse besides going to court and paying attorneys because they fucked up.

People need to take the emotion out of debt. Pay your obligations, I'm NOT promoting defaulting on debt. What I'm say is it's not a big deal. Don't stress over it. Unless you have a million dollars in unprotected assets there's nothing they can do. You don't even need to file BK.

People can say we could invest differently, but we have over $1M in 401k's and Roths. Guess what? No one can touch a dime. We could stop paying everything tomorrow and say fuck off to the creditors. Would still pay for the house of course.... which they also can't touch. We have been brainwash into believing that we HAVE to pay back debt or our lives are over. The biggest companies you know or knew that are now gone all used leverage/debt. That old school mall. Sears. It's okay for big companies to fail financially but you can't as a person? You are a business and it's the same thing.

There’s two problems with debt.

1. You get overextended. Sure it’s all great on paper when you’re using 5% down loans to build your real estate empire. But then the market takes a dip and the bank calls your loan and then you’re forced to sell into a down market. It would be tough to take the emotion out of losing your entire life’s work and having to go back and manage a Burger King to feed your family and your wife divorcing you to marry a doctor.

But sure, normal construction loans or mortgages you shouldn’t get to worked up over.

2. Student debt. Lots of kids out there live off their student loans in college. There’s lots of people out there with worthless degrees and 100+K of debt that cannot ever be discharged. I guess if I was a 30 year old waiting tables for 35K / year with 100K of student loan debt and no way to save for my future because all my money is going to servicing the debt, that might be hard to take the emotion out of as well.

pudil says

2. Student debt. Lots of kids out there live off their student loans in college. There’s lots of people out there with worthless degrees and 100+K of debt that cannot ever be discharged.

Agreed. Hard to dispute that. Even STEM fields where you just end up working for a sales person that get you business and you never get to be the big dog.
pudil says

But then the market takes a dip and the bank calls your loan and then you’re forced to sell into a down market

Yeah, that's commercial/investment loans. They ain't calling residential loans. And if they call the loan, you knew it was coming. And you don't pay if you can't. It's business credit under a separate FEIN number. Generally it doesn't hit personal credit, it just becomes impossible to borrow as a business under that EIN.

I can promise 80% of people don't know what EIN even means. They hire an accountant and attorney. If you don't know how to run a business, you're not gonna pay your loans. Restaurants generally fail because people think it's all fun and games. Hang out with customers at the bar and drink on the job. You have to know what you're doing.

Most real estate brokers take their income as 1099 personal income. Guess what happens when someone comes to sue you. They can come after what they want. You to set up some corporate structure. S-Corp, LLC, etc. You tell a seller to lie about flooding issues and you get sued, your own home can get taken.

Asset protection is key. Businesses and banks have got it so IRA, 401k, Roths and HSA are shielded if you fuck something up because they want your money. BK nobody can touch it. HSA is the one area I've fucked up in. It's complicated but as long as you track everything you can draw from an HSA anytime and have it invested with pre-tax money. Health care costs WILL be higher than what you put it. Employer has to set it up or you do self employed. You won't be a millionaire from it, but it's the best way to invest emergency funds. Keep the invoices though for urgent care or major medical costs.

WookieMan says

Sears. It's okay for big companies to fail financially but you can't as a person? You are a business and it's the same thing.

I used to shop at Sears before they went bankrupt. Used to read articles about how Eddie Lampert engineered the bankruptcy so that he could profit from it.