Political Roundtable Part XXI

[FAH1223]

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[stilldropin20]

It is also interesting that some presuppose that those that are barely making a livable wage have additional resources to invest in the market or real estate. In fact, this is incorrect.

What is also interesting is the same policies that are supported by this administration exacerbate those very same issues. For example decreasing the personal income tax rate, trying to push through inflation based capital gains taxing (when we have already reduced the rate) and continuing the tax carveouts for real estate investors. Those policies increase the deficit and reduce our ability to invest in the country and increase productivity (which has meaningful wage growth implications); pushing speculative real estate investments that drive up the cost of housing and benefit landlords and disadvantage first time home buyers.

read above. In the USNavy i made 6K year 1. 12K year 2. 18K year 3. and 22K year 4. Thats it!!!

I saved 28K of all of that over 4 years and bought my first 2 flat for 146,000 in 1993. I rented on unit each unit for 600 per month and finished the basement using a 3 k credit card from home depot and lived down there....after i paid off the 3 K. Home depot then lent me 15K on credit card. using that and sweat elbow grease, i rehabbed and modernized the upper units in 1994 and rented those same units out for $1600 each.

This aint rocket science and I can teach a monkey how to invest like this or i can coach people with good job into armchair investments. You guys all think you are smarter than me and have all these fears, concerns and worries. and I'm the guy worth 8 million just in cash and real estate equity without selling my dental businesses (worth an additional 6 million).

Again, i started all of this with 28K after 4 years in the USNavy. Average salary 14K per year. I mean dog crap! They may as well paid me in pinto beans. Still, i saved those beans and immediately invested them. It works. But you cant buy for wants. You have to buy solely to make money and you have to be creative and be willing to put in long days.

When i was rehabbing that first building and others, i would go to school on Tues and Thurs all day long (straight A's). Then work evening Fri, Sat, Sun. And work on my building on Mon, Wed, friday day time. 18 hour days. 7 days per week. plus school.

yeah i did it. it wasn't that hard. I was 21. I planned. I worked my but off. I delievered a good product. It worked. I reinvested my equity into more real estate. Its quite simple.

[gtn130]

Yeah man all sweat and elbow grease

[gtn130]

SD20 bought real estate at the housing market's absolute nadir of the last 30+ years and chalks it all up to hard work and street smarts

[stilldropin20]

Yeah man all sweat and elbow grease

and the rental income has gone up even moreso that the cost to purchase. your own graph shows its an up and down market. it will always be up and down. Its all about net rental income. you have to buy the right building. The more units you can buy the better. You can buy a 4 flat with 5% down. You just have to buy the right building.

if you can "time" the market, even better. now is still a decent time to buy if you are timing the market. 2010-2014 was a great time to buy. You mad cuz you missed it? It doesn't matter.

I picked up a building last summer for 542K. Its worth 750-800K. Instant equity. I know what i'm doing. And how to buy and how to identify under valued property and work over weak sellers/agents. But even with out the equity. put the equite aside.

here are the approx numbers:

$135k down (25%).
mortgage 4.3% just under $2000 per month including taxes. ($1500 is interest and taxes aka losses)

Its a 2 unit. in north center chicago. 4Br 2Ba w 2 car garage rents for 2800 per month. the 2bd simplex rents for 1600 per month. Monthly profit: $2900 per month that with equity. and considering zero appreciation.

dems da fact. go save 135K and learn the business and you too can buy the same property and make the same monthly profit. Or I can live in the 2br upstairs for free and profit $1300 per month.

This building will be worth $1.5 Million or more in 10 years or less. North center. bell school district. So you can still buy right now in this current market and make money.

[pancakes3]

SD20 bought real estate at the housing market's absolute nadir of the last 30+ years and chalks it all up to hard work and street smarts

and took government handouts, erm, i mean military benefits, erm, i mean hard work and street smarts.

"look at those dummies BUYING food. i ate for free on the government's dime because i'm SHREWD."

[gtn130]

SD20 bought real estate at the housing market's absolute nadir of the last 30+ years and chalks it all up to hard work and street smarts

and took government handouts, erm, i mean military benefits, erm, i mean hard work and street smarts.

"look at those dummies BUYING food. i ate for free on the government's dime because i'm SHREWD."

Yeah he only made $6k his first year in the military, but it was fine because he's so scrappy and sensible - had nothing to do with the fact that every single living expense was paid for by the government.

[stilldropin20]

SD20 bought real estate at the housing market's absolute nadir of the last 30+ years and chalks it all up to hard work and street smarts

and took government handouts, erm, i mean military benefits, erm, i mean hard work and street smarts.

"look at those dummies BUYING food. i ate for free on the government's dime because i'm SHREWD."

come on guys. seriously. you messing with a vet!!?? That i ate at the galley for free as part of my "pay" when i was earning $365.00 bi weekly!!!!

I hear military pays $50K starting right now starting!! and prolly does sign on bonus. I got a whopping. $6,600.00 my first year. Food was a part of the pay. they gave me a rack to sleep in too. in a big open room next to 120 other cadets. some of them psychos. I did my time. put my life on the line. worked an amazing but short career as a CT/ET tech (now navel intelligence officer) on the USS parche and the USS william H bates. But because i knew i had bigger fish to fry...i spinched my pennies and save my coins and bought myself a pice of the american dream.

if i did it. anyone can do it.

[stilldropin20]

^^^ like seriously what are you guys? I know we joke, but are you guys seriously involved in political discussions without even owning anything? invested in anything? Do you all have nothing to lose?

i mean this isn't hard guys. it takes a little time. I can coach anyone how to build wealth. in any market.

[dckingsfan]

I love how anecdotal information should drive policy. This is how bad policy is made.

[queridiculo]

I love how anecdotal information should drive policy. This is how bad policy is made.

Bootstrapism at its finest.

"I did it all by myself, everybody else can too if they only work hard enough."

[stilldropin20]

I love how anecdotal information should drive policy. This is how bad policy is made.

Bootstrapism at its finest.

"I did it all by myself, everybody else can too if they only work hard enough."

ahhhhhhhh...ok..........yeah..........i get it now.............. I know who i am talking to now...........

so what i'm dealing with here is 1 of the following:

A. Too lazy to work hard or
B. Too foolish to save money or
C. Too scared to invest in our markets or
D. Too scared AND too lazy AND too Foolish to know the difference in any of it and no clue on where to start.

Got it. News flash: A guy like me reads the room in a split second. I knew who i was talking to 16 years ago.

here's a little hint fellas. I really am who i say I am. And it aint hard to get here. It really isn't. But when a guy like me is willing to teach a guy like you the "ropes." And about economics of small business and economics of wealth building strategies in general and how politics make these markets move and how to maneuver within the movement of these markets: you listen. You STFU and listen. You guys can NOT teach me anything. You have no real life experiences with anything. you're just guys that punch time clocks. Thats why your arguments do not move me. It has nothing to do with "Trump."

now if your goal is to repress markets? so you can buy in at lower values? then your weak informed arguements in these pages make sense. or if you are just a hater? you hate guys that learn to build wealth? And you're in a go nowhere job? And too lazy or too old to go back to school? And you want my tax dollars to supplement you??? Why should I give you my money? When you wont even take my advice on how to build your own wealth so you dont need my money?

you guys sound like whiners and complainers who either dont work hard enough, smart enough, nor willing to gamble on yourselves. You play it safe and try to hit singles with your 9-5 and all you get is first base or stuck on 2nd 95% of the time.

you dont get to change the rules of the game without it being mutually beneficial and therefore agreeable to both teams. Cry racism all you want. This has nothing to with race. I'm brown. The system worked for me. No one was there to help. No body brown black or white helped me. Not even my family. and I'm not agreeing to change the rules for (ANYONE) that is not willing to do the work just so they get their "piece" on my equity.

You do the work or you dont. You take the risks or you dont. You get out of it what you can get out of it. That game will never change.

Even if you could change the rules, "the wealth" will move oversees before you can capture it and redistribute it. And that your problem. And you guys dont know how to repatriate wealth. keep it here. and tax it in away that will be acceptable to the elites. Wake me up when you are ready to learn how to build wealth or when you are ready to learn how to capture and tax the wealth so as to redistribute it.

[dckingsfan]

I love how anecdotal information should drive policy. This is how bad policy is made.

Bootstrapism at its finest.

"I did it all by myself, everybody else can too if they only work hard enough."

And it is great that individuals excel - we want that. But government policy shouldn't be driven by that - although you can see that individuals political outlooks are driven that way.

If you are a millennial with lots of debt you are going to see things differently that an old person with different life experiences.

It takes strong political leaders to ignore anecdotal information and look at the larger picture.

[dckingsfan]

…

I love FRED

[stilldropin20]

I love how anecdotal information should drive policy. This is how bad policy is made.

"Anecdotal"

2 billion in rental income property exchanges hands each year and over 500 billion in residential real estate in chicago.

Total land value in chicago is half a trillion!!! just in chicago!! but its "anecdotal."

Do you ever listen to yourself?

Manhatten has over 1.74 trillion in real estate just on Manhattan!! "anecdotal!!"


https://www.citylab.com/life/2018/04/what-manhattans-land-is-worth/558776/

80% of the entire wealth of the bottom 98% (AKA 10% of the entire wealth in the USA) hold their wealth in the form of their real estate or single family home. Anecdotal!!!

40% of the entire wealth held by the top 2% (wealthy elite) hold that wealth in the form of real estate. Anecdotal!!!!

Seriously bro, get a clue. real estate is basically how 99% of american hold 90% of their wealth. If you believe that is "anecdotal" then i dont know what to tell you.

now go look at your FRED graph again. and it should all make a little more sense.

the combined entire house hold net worth of the USA is just under $85 trillion including gold, our entire market holdings and savings accounts and all of our real estate just in chicago and manhatten real estate land values alone is $2.25 trillion.

So yeah, real estate is where its at!! Thats how you build wealth. its the safest and most secure. and 2 ways: appreciation (3-7% depending on market) and rental income production (7-12% cap rates on cash depending on market). Considering both forms of wealth building, 12-19% rates of annual return on cash is normal. No market does that. anywhere. nor do they pay you monthly dividends (that you can reinvest into your portfolio).

Real estate is the best way to build wealth...especially once you learn to borrow against it to buy more real estate, time the ups and downs in markets, and recognize faster appreciating locations.

so imma take a hard pass on your anecdotal dismissal. You clearly dont have a clue what you are talking about.

[GhostofChenier]

http://m.rasmussenreports.com/public_content/current_events/politics/prez_track_aug02

[stilldropin20]

http://m.rasmussenreports.com/public_content/current_events/politics/prez_track_aug02

50% approval ratings. 90% amongst his base. 51% approve of the wall.

[stilldropin20]

hey guys...just checking...its you guys that really care about the sanctity of our elections, right? and we just cant have one single fraudulent vote, right? this is a big deal, right?

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well have no fear!!! Donald trump is ON THIS!! . dont worry folks. he will keep the elections safe unlike Obama , brennen, clapper and comey who completely failed. Trump to the rescue!! too much winning for the american people!

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[dckingsfan]

And now something that wouldn't be considered anecdotal. Add to that the additional school loans and well, there you have it.

Why has this happened? Because of stupid tax policies (helped along by this latest POTUS); stupid land use policies and the Freddy/Fannie mess (and other reasons cited in the article). To say that it wasn't easier to purchase a house in the past is just ludicrous.

https://www.curbed.com/2018/4/10/17219786/buying-a-house-mortgage-government-gi-bill

Code: Select all

Year      MHV        MR        HMI      IR
1950     $7,400     $42     $2,990    2.47
1960    $11,900     $71     $4,970    2.39
1970    $17,000    $108     $8,734    1.95
1980    $47,200    $243    $17,710    2.67
1990    $79,100    $447    $29,943    2.64
2000   $119,600    $602    $55,030    2.17
2010   $221,800    $901    $49,445    4.49


MHV = Median Home Value
MR = Median Rent
HMI = Household Median Income
IR = Median Home Value/Household Median Income

[stilldropin20]

And now something that wouldn't be considered anecdotal. Add to that the additional school loans and well, there you have it.

Why has this happened? Because of stupid tax policies (helped along by this latest POTUS); stupid land use policies and the Freddy/Fannie mess (and other reasons cited in the article). To say that it wasn't easier to purchase a house in the past is just ludicrous.

https://www.curbed.com/2018/4/10/17219786/buying-a-house-mortgage-government-gi-bill

Code: Select all

Year      MHV        MR        HMI      IR
1950     $7,400     $42     $2,990    2.47
1960    $11,900     $71     $4,970    2.39
1970    $17,000    $108     $8,734    1.95
1980    $47,200    $243    $17,710    2.67
1990    $79,100    $447    $29,943    2.64
2000   $119,600    $602    $55,030    2.17
2010   $221,800    $901    $49,445    4.49


MHV = Median Home Value
MR = Median Rent
HMI = Household Median Income
IR = Median Home Value/Household Median Income

ah...moving the goal post now from "anecdotal" evidence of wealth creation vs. the "cost" of investment vs income...or as your define "ease."

Interesting....hmmmm...was it "easier" in 1977-1981 with 16-19% interests rates? Was it "easier" before the creation of the FHA loans? You know 20% was the norm and only acceptable amount to put down on a house since forever. And it was difficult to qualify for FHA loans with 5%. FHA loans were also costly (hidden costs) and suppression would occur when it came time to appraise the value of the property. the and the FHA guidelines of the last couple decades made it more fair and easier to qualify and appraise. is it "easier" when minimum 680 were reduced to 620?? even 580?? credit scores were the absolute bare bones acceptable score but more times than not you used to need a 720 score? Was it easier for black and brown folks in the 60's, 70's, and 80's? Was it?

there is a give and take with everything. More at play here than just the "hard costs purchase" and the hard cost of a down payment vs. income. interest rates matter. credit scores matter. equal opportunity and availability to all real estate to all races matters. Lower "down payments" from 20% to 5% matters. accepting lower credit scores matters.

hard cost vs income is only one metric and only one obstacle to purchase.