pancakes3 wrote:- consistent employment's not a guideline, it's a requirement. an 18 year old isn't filing taxes.
- nobody is going to take a $1200 voucher to go live in a sh*tbox apartment. they'll go live in an apt that's worth $1200, especially if you're going to nickel and dime people for laundry or parking.
- you can't get a second FHA loan by just claiming that you've moved to the second rental property and that's your new residence.
- you're being very cavalier about "income at 125k-150k annually." yes the money is coming in, but most of that money is going straight to the bank in making those loan payments.
but bickering aside, the larger point is that yeah, maybe your plan could work but chances are it won't. for your investment plan to work, it requires a very specific confluence of circumstances to align, and the margin for failure is immense. in the context of decision trees, your blueprint is severely path dependent, and even a "successful" result still plays out in a fairly lousy scenario.
and really, my biggest beef with you is mostly that you put out bad advice/takes and treat it as if it's immutable gospel. it's just a sh*tty way to communicate. differing minds can have rational discussions. i felt like indu and i had a decent discussion upthread whereas this is pulling teeth (pun intended). not only are your ideas are poorly thought out, you take way too many words to convey your poorly thought out ideas, and you cannot see the value in the words of others.
so why are you here? what do you hope to accomplish? this can be a fun forum (pun intended) to shoot the sh*t but you make it a horrifically torturous exercise.
and to be clear, i'm responding out of a feeling of social responsibility that in the event that some kid out there actually drinks your kool aid has an opportunity to hear from the other side and make an informed decision with his life.
like, if we push your logic to the absurdist extreme, everyone would follow your advice and become uber-driving slumlords. there would be no doctors, lawyers, engineers, teachers, artists, economists, etc. because any endeavor or training towards those ends are a sucker's game. it just cannot be the answer. like, i'm sorry you're harboring some sort of resentment to people (which includes your brother) who are living their lives differently than how you live it, but the manner in which you carry it is just sad.
bro, you mad cuz indu and i have a similar investment game?
"slumlords"
but seriously, take a chill pill. the investment part really is this easy. it really is. But...kinda like an uber driver, buying the right car and driving at the right time of day and in the right neighborhood, picking the right mechanic, etc...the real estate investor must buy the right house for the right price, get second and third opinions on repairs as they arise, and not bite off more than they can chew.
this strategy works because rate are still historically low and have mitigated most of the risk. It also works right now because our credit markets are wide open and been wide open for the past 2 years. rates will rise and credit will dry up. So Now is the time to take advantage of it.
As for section 8 voucher...i was not even advocating for Sec 8 in my example above. that was a rent to hipsters example. They pay! and they dont complain. They think water stains are "cool."
In terms of "rat hole" slum lording...i dont recommend that at all. The best way to do it is to buy a building like the one I outline in last post. Good shape, everything works. (FHA guidelines BTW) or you must purchase with a 203K loan and the bank forces you to make repairs with inspections).
no but seriously, im just trying to help and understand liberal better. The thread is filled with liberals and i'm just trying to figure out why? Because if any of you ever put in decades of 80-100 hour work weeks like Indu and i to build wealth, the last thing you would want is 30-40% of that going to the jack ass down the street who cant be bothered to get off of his couch and has 4 kids. So im just trying to understand it all better. And i think I may be coming around a but as to understanding this whole "liberalism" thing more through this discussion on wealth building.
But This really really really really is sound investment advice...and any kid that listens to me and takes my advice is going to be light years ahead of his cohorts.
The best thing anyone can do is buy rental income real estate....and if you can get some mixed use stuff in cities near gentrifying areas...do it...especially if the building had/has a bar or coin laundry/dry cleaners. I bought a place 10 years ago with a failing 60 year old bar in it. Ended up buying the business too and had fun owning a bar for 5 years. I rehabbed the entire building/bar/and 5 rental units to the 9's. Revenue for the bar skyrocketed. I Sold it for a massive profit just because the new buyer wanted to own a bar and didn't want to do the work. It was the income from the bar that justified the appraisal. So sometimes you get really lucky and catch a little lightening in a bottle...sometime you make your luck...but that bar and building was little lotto ticket. Other times you just chug along at 10% cap rates (and 4% appreciation). Which is still better than 3% returns on some corny index. Which is better than a 1.5% cod. Which is better than .3% rate in a savings account.
if you dont invest in our markets you wont have anything.
and no....most of the money is not going to the bank.
A typical 400K mortgage is $2000 per month at 4.5%.
It pays down the debt by $500 and $1500 goes to the bank in year 1.
In year 15, 1200 pays down the debt and 800 goes to the bank.
In year 29 about 1850 pays down the debt and 150 goes to the bank.
and typical 400K building in chicago will yield about $4000 per month in rental income.
its just math...you dont get hurt on the math. and that "math" is solely based on the rental income...now do the math on the appreciation!! what is 4% appreciation on 400K over 30 years??????
--You get hurt on the tenant that doesn't pay rent and wont leave. And you dont know how to evict, yet.
--you get hurt on the tenant that doesn't tell you about the leak under the bathroom sink and the cabinent, floor, and joists rot and mold.
---you get hurt on the finished basement that floods and your insurance doesn't cover backed up sewers.
--you get hurt on the grease fire that causes 1500 in damage...not enough to claim on insurance.
---you get hurt on city of chicago inspecting and nickle and diming you on bull crap.
--you get hurt when the boiler goes bad.
--you get hurt when someone breaks in and break in your walls and steals your pipes.
Those are the kinds of things that derail you...that is why you must keep working 60-80 hours per week in case these things come up. Again...save your money!!!! get your building in order. get the right tenants. When everything is square...buy the 2nd building so forth and so on.
Hire a real estate attorney to do your closings...a guy practiced all things like evictions. Build relationships. Get people to like you. Your attorney. Your realtor. your tenants. your contractors. They should all be friends. Pay them well. do your diligence and they will do right by you.
Hire pros not joes. Joes will ruin your material, waste your time, and frustrate you, and steal from you. Just pay the going rate for the pros. shop around. Find a handy man...let him live in a basement unit rent free...send him out everyday to spruce things up. Spruce them up yourself.
but its funny you called me a slum lord. My units are in 100% working order with fresh paint by professionals. some are high end...some middle of the road but nothing is crappy.
look...you kill it in the real estate market because interest rates are low and you win 2 ways...rental income and appreciation. You keep glossing over the appeciation part. You must not understand it. Do some research on it and get baxck to me. So long as the cost of labor and material to build keeps skyrocketing, your real estate will keep skyrocketing...add to that the value of the land...and its just a matter of buying as close to the highest desired urban areas as possible with affordable taxes and lowest purchase points.
it really is this simple.



















