Search found 1011 matches

by WanderingDoc
Sat Jul 21, 2018 12:07 pm
Forum: Investing - Theory, News & General
Topic: Does "Time in the Market" Heal All Portfolio Wounds?
Replies: 57
Views: 5811

Re: Does "Time in the Market" Heal All Portfolio Wounds?

That is why I recommend to invest in real assets that produce cash flow. Such as? Income-producing real estate (residential/commerical/self storage/agricultural/etc.). Fluctuations in value of the property/portfolio is a moot point and pretty irrelevant when you are generating a 10-15% cash flow. I...
by WanderingDoc
Sat Jul 21, 2018 2:16 am
Forum: Investing - Theory, News & General
Topic: Does "Time in the Market" Heal All Portfolio Wounds?
Replies: 57
Views: 5811

Re: Does "Time in the Market" Heal All Portfolio Wounds?

That is why I recommend to invest in real assets that produce cash flow. Such as? Income-producing real estate (residential/commerical/self storage/agricultural/etc.). Fluctuations in value of the property/portfolio is a moot point and pretty irrelevant when you are generating a 10-15% cash flow.
by WanderingDoc
Sat Jul 21, 2018 12:13 am
Forum: Investing - Theory, News & General
Topic: Does "Time in the Market" Heal All Portfolio Wounds?
Replies: 57
Views: 5811

Re: Does "Time in the Market" Heal All Portfolio Wounds?

Another good exercise, Todd, and especially a good reminder of past exuberance about an emerging market--in this case, the US at the turn of the 20th century. UK investors held investments in everything from railroads, canals, cattle farms in the West, to actual stock on the NYSE. British investors...
by WanderingDoc
Sat Jul 21, 2018 12:05 am
Forum: Investing - Theory, News & General
Topic: Does "Time in the Market" Heal All Portfolio Wounds?
Replies: 57
Views: 5811

Re: Does "Time in the Market" Heal All Portfolio Wounds?

Just one question. Did all these folks go to the same store and buy the same hat? Just to add a small window into financial history: Such was the scale of the global financial crisis in 1914 that many stock markets around the world, including the all-powerful London Stock Exchange, were forced to cl...
by WanderingDoc
Fri Jul 20, 2018 2:01 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

So glad I made the right choice. The implication being everyone who works and invests in the market made the wrong choice. This is a common backhanded theme amongst a few RE posters on this and other fora. I don't like it. Nope. There is no theme. You are reading too far into it. Everyone (includin...
by WanderingDoc
Fri Jul 20, 2018 1:24 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

So glad I made the right choice. The implication being everyone who works and invests in the market made the wrong choice. This is a common backhanded theme amongst a few RE posters on this and other fora. I don't like it. Nope. There is no theme. You are reading too far into it. Everyone (includin...
by WanderingDoc
Fri Jul 20, 2018 1:14 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

I'm curious for all the real estate investors in this thread to tell how you did during 2008-2009 downturn? Real estate investors who bought cash-flowing assets did just fine with their 10-15% dividend (cash flow) if they just held and didn't sell. Many of my colleagues invested in large B/C class ...
by WanderingDoc
Fri Jul 20, 2018 1:09 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

So with 20% and above returns available as easy pickings in all times and places, why is it that iShares Residential Real Estate ETF (REZ) has a 10 year return of 9.38%? I know, it's not 100% residential REITs, but then why are the managers of these Residential REITS so dumb that they get returns l...
by WanderingDoc
Fri Jul 20, 2018 10:54 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

So with 20% and above returns available as easy pickings in all times and places, why is it that iShares Residential Real Estate ETF (REZ) has a 10 year return of 9.38%? I know, it's not 100% residential REITs, but then why are the managers of these Residential REITS so dumb that they get returns l...
by WanderingDoc
Fri Jul 20, 2018 10:49 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

Well, it isn't the same amount amount of "profit" regardless of down payment and there isn't "just one profit to be made per property" if I am understanding what you mean when you say that. Financing costs play a role. A very simplified example ignoring transaction costs/taxes/maintenance/price app...
by WanderingDoc
Fri Jul 20, 2018 10:44 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

Well, it isn't the same amount amount of "profit" regardless of down payment and there isn't "just one profit to be made per property" if I am understanding what you mean when you say that. Financing costs play a role. A very simplified example ignoring transaction costs/taxes/maintenance/price app...
by WanderingDoc
Fri Jul 20, 2018 2:11 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

This thread is truly interesting. I had second thoughts on real estate investing but I should say it is really one of the greatest wealth generator. But this is an very enlightening thread. Thanks wanderingDoc for some numbers. I do not think, I can find properties like that; but I can see several ...
by WanderingDoc
Fri Jul 20, 2018 12:20 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

For those interested in sensible real estate investing as opposed to the common and in some circles claimed only way to invest by leveraging up to the max I recommend the Afford Anything podcast. Paula Pant walks thru all the calculations for real estate return, especially to deemphasize the ones l...
by WanderingDoc
Thu Jul 19, 2018 9:13 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

Classic sign of an index fund investor attempting to explain real estate. Case-Schiller. Sigh, it's silly if not ignorant to expouse that and use it in any calculation. We don't invest in every single house in the U.S. in aggregate. We go deal by deal, street by street, submarket by submarket, terms...
by WanderingDoc
Thu Jul 19, 2018 7:24 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

Yup. IMO the best metric for real estate is IRR. The best metric for indexing is CAGR. With stocks and index funda, best case scenario you will pay 15% in capital gains tax. In real estate, I have legally payed zero every year, if not a small paper loss. Just another oft overlooked point. No. Your r...
by WanderingDoc
Thu Jul 19, 2018 7:04 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

That would be return on year 1. Of course all of that return is not immediately re-investable necessarily. And some of it is speculative/estimated (the estimated for appreciaiton and inflation). For example, in his example 24% of that is equity/appreciation. It would not make sense to refinance to ...
by WanderingDoc
Thu Jul 19, 2018 5:37 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

According to the "rental property calculator", your IRR is only about 16.38% not an annualized return of 38.75%: https://www.calculator.net/rental-property-calculator.html?cprice=100000&cuseloan=yes&cdownpayment=20&cinterest=4.5&cloanterm=30&cothercost=3000&cneedrepair=no&crepaircost=10000&cafterre...
by WanderingDoc
Thu Jul 19, 2018 5:29 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

20% + 8% + 4% + 3.75% + 3% = 38.75% annualized return on your $20K down payment. The kicker here is that rental real estate returns very typically grow every year because if your expenses increase at the same level as rents, the way the math works, the difference becomes greater every year (kind of...
by WanderingDoc
Thu Jul 19, 2018 3:30 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

The very long post should have been quoted, not sure what happened. 1. Using a 1% appreciation rate is dishonest. I don't even think YOU believe that is accurate. Middle of America run of the mill markets are typically 3.5%. I like to invest in 5-6% appreciation markets but assuming 4% is not outrag...
by WanderingDoc
Thu Jul 19, 2018 3:02 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

20% + 8% + 4% + 3.75% + 3% = 38.75% annualized return on your $20K down payment. The kicker here is that rental real estate returns very typically grow every year because if your expenses increase at the same level as rents, the way the math works, the difference becomes greater every year (kind of...
by WanderingDoc
Thu Jul 19, 2018 2:56 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

20% + 8% + 4% + 3.75% + 3% = 38.75% annualized return on your $20K down payment. The kicker here is that rental real estate returns very typically grow every year because if your expenses increase at the same level as rents, the way the math works, the difference becomes greater every year (kind of...
by WanderingDoc
Thu Jul 19, 2018 12:39 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

20% + 8% + 4% + 3.75% + 3% = 38.75% annualized return on your $20K down payment. The kicker here is that rental real estate returns very typically grow every year because if your expenses increase at the same level as rents, the way the math works, the difference becomes greater every year (kind of...
by WanderingDoc
Wed Jul 18, 2018 2:25 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

... $12K is the NET, post-tax cash flow in my bank account annually (I legally pay no taxes or take a small paper loss).... ..Any other questions? Just so I can understand...I take you to mean that $12K is the amount you put in the piggy bank every year, having paid no federal income tax, which I g...
by WanderingDoc
Wed Jul 18, 2018 11:53 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

I have never done the house-hack but I did live in a place that I later turned into a rental. Bought the place with a $30K down payment (even though VA loan). The property produces $12K of rental income per year like clockwork, plus an additional $4K due to a 100% passive investment I arbitraged us...
by WanderingDoc
Wed Jul 18, 2018 10:52 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

There seems to be a lot of confusion within this thread about the math, especially with how expenses are handled, among other things. Allow me to share a real world example: My first rental property, purchased in August 2015. This is a duplex in a middle-of-the-road military town, about an hour awa...
by WanderingDoc
Tue Jul 17, 2018 11:21 pm
Forum: Investing - Help with Personal Investments
Topic: First Real Estate Investment question
Replies: 6
Views: 760

Re: First Real Estate Investment question

Hello, I'm 28, single with no kids, I've been renting and saving for a couple of years, and I have about 230k in cash. I live cheaply and keep expenses low. With interest rates rising I was thinking to buy some less expensive real estate, in a good area, with the hopes of turning it into a rental i...
by WanderingDoc
Tue Jul 17, 2018 10:52 am
Forum: Investing - Help with Personal Investments
Topic: Advice for a beginner with £100k
Replies: 5
Views: 403

Re: Advice for a beginner with £100k

Hi, I'm 26 from the UK I have £100,000 that I would like to invest but I have no previous experience. I don't have anyone I know who can recommend a financial adviser to me. So I don't fancy rolling the dice and just hoping I end up with a good one. I have been looking at Vanguards UK website with ...
by WanderingDoc
Tue Jul 17, 2018 12:14 am
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 206
Views: 15405

Re: Why is leveraging property good but leveraging stocks bad?

I feel like some doubts in my mind have been resolved. I'm not sure it is clear completely but this is my understanding from the thread so far. Leveraging into property is not any better than leveraging into stocks. First principles still apply, leverage will give you higher gains and losses. Highl...
by WanderingDoc
Sun Jul 15, 2018 7:12 pm
Forum: Personal Finance (Not Investing)
Topic: A different take on retirement income: time segmentation
Replies: 179
Views: 12506

Re: A different take on retirement income: time segmentation

Very well thought out and interesting idea. Good thoughts from Sandtrap as well. I tend to think we shouldn't be so rigid in assuming lower spending in retirement. It should be more at an individual (and year by year) basis. For example, there have been years where I spent $120K and years where I sp...
by WanderingDoc
Sun Jul 15, 2018 12:17 pm
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 206
Views: 15405

Re: Why is leveraging property good but leveraging stocks bad?

You were wise to buy real estate and hold it. Real estate is a very forgiving investment. I've found that you could make a lot of mistakes, not run the numbers that well, but if you hold on - rent growth, principal paydown, and equity happens :) Well done! In my case, I just bought a few properties...
by WanderingDoc
Sun Jul 15, 2018 3:09 am
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 206
Views: 15405

Re: Why is leveraging property good but leveraging stocks bad?

Leverage is not bad for stocks. I am unapologetically leveraged. I didn't chose a margin loan to do it, instead, I have four fixed rate loans with APRs of 0%, 0%, 1.89%, and 3.125%. I carry this debt for cheap leverage, tax deferral, and the three lowest rate loans are a profitable investment in th...
by WanderingDoc
Sun Jul 15, 2018 2:17 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

Kyle has been the only person to date on 3 different forums that has fervently pointed out that the returns are "undefined", not infinite. I also have 2 properties where I pulled out all the money I had in the deal through a cash out refinance, having $0.00 in the properties, yet still getting mont...
by WanderingDoc
Sun Jul 15, 2018 1:18 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

Kyle has been the only person to date on 3 different forums that has fervently pointed out that the returns are "undefined", not infinite. I also have 2 properties where I pulled out all the money I had in the deal through a cash out refinance, having $0.00 in the properties, yet still getting mont...
by WanderingDoc
Sat Jul 14, 2018 11:53 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

Kyle has been the only person to date on 3 different forums that has fervently pointed out that the returns are "undefined", not infinite. I also have 2 properties where I pulled out all the money I had in the deal through a cash out refinance, having $0.00 in the properties, yet still getting month...
by WanderingDoc
Sat Jul 14, 2018 11:00 pm
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 206
Views: 15405

Re: Why is leveraging property good but leveraging stocks bad?

1. Walk into a Bank of America and ask to buy a house or apartment, 20% down, 5:1 leverage. They will say "you can". Ask them to give you an 80% loan to buy actual stock in Bank of America, their own company. They may laugh you out of the bank. Makes you wonder what they think the risk of one is vs....
by WanderingDoc
Sat Jul 14, 2018 7:51 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

Yes, you can get 10 (Fannie/Freddie) loans at 20% down. +10 for the spouse if you have one. I have reached financial independence long before the 10th loan, so I am just shuttled my capital to 100% passive large apartment/self storage/etc. syndications. Will banks lend on 20% down, with no recourse?...
by WanderingDoc
Sat Jul 14, 2018 7:27 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

20% is extremely doable with leveraged rentals and perhaps even if you use property manager, if you buy well. Real estate isn't for everyone, but 20-30% is realistic. Ignore the "Real estate pays you 5 ways instead of just 1 way" people. The number of ways an investment pays is irrelevant. The key ...
by WanderingDoc
Sat Jul 14, 2018 6:25 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

There are members who boast about getting 18-20% annual ROI on their direct r/e holdings. I'm curious if that is just counting gross income against cost of purchase. I always multiply rental income by 55% to account for maintenance, vacancy, management, taxes, and insurance, and then divide against...
by WanderingDoc
Sat Jul 14, 2018 6:23 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

Also, if you buy cash-flowing real estate, you can mitigate risk greatly no matter what property values do - you still get paid. Only if you tenant writes you a check:) Anyone thinking about real estate should watch : https://www.netflix.com/title/80224279 or https://www.imdb.com/title/tt2223758/ ....
by WanderingDoc
Sat Jul 14, 2018 4:44 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

20% is extremely doable with leveraged rentals and perhaps even if you use property manager, if you buy well. Real estate isn't for everyone, but 20-30% is realistic. Ignore the "Real estate pays you 5 ways instead of just 1 way" people. The number of ways an investment pays is irrelevant. The key ...
by WanderingDoc
Sat Jul 14, 2018 3:22 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

When we bought our present home 33 years ago, we sold our rather nice 2BR/2B condo. I've often thought that we should have held onto it. I'm pretty sure we could have about broken even as far as the rent covering the all the costs/PITI. We sold it for $140K, and today it is worth about $525K ($330k...
by WanderingDoc
Sat Jul 14, 2018 1:49 pm
Forum: Personal Finance (Not Investing)
Topic: Early retirement
Replies: 145
Views: 14452

Re: Early retirement

Easy solution for your 45yo early retired friend. Move overseas. The mountains to climb, restaurants to try, classes to take, languages to learn, friends to make, lovers to take, etc. are endless and one would need 10 lifetimes to do it all! :D Yep. Many people think that if someone else is signific...
by WanderingDoc
Sat Jul 14, 2018 1:45 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

Life is largely about self talk and the stories you tell yourself. If you are convinced that all you can get / are entitled to 7% returns your whole life - that's exactly what you will get. That you should take money OUT of your paycheck for 40 years, because big banks and the government told you it...
by WanderingDoc
Sat Jul 14, 2018 1:33 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

You have a lot to learn, grasshopper. In that example, I assumed an 8% cash flow, after ALL expenses. That is very conservative in the sense that no creativity or good deal is needed to get it. Most (correction, all) of my deals cash flow significantly more than 8%. Principal paydown is totally sepa...
by WanderingDoc
Fri Jul 13, 2018 11:41 pm
Forum: Personal Finance (Not Investing)
Topic: Early retirement
Replies: 145
Views: 14452

Re: Early retirement

I am entitled to my opinion, just as you yours. 55 is up there ... means you've been working for almost 40 years. I started my first job at 16. Its not only military. State and government workers can do the same. So can those who focus on investments which produce cash flow. On this forum, 55 may be...
by WanderingDoc
Fri Jul 13, 2018 10:58 pm
Forum: Personal Finance (Not Investing)
Topic: Early retirement
Replies: 145
Views: 14452

Re: Early retirement

I retired at 55 several years ago. I don't get those kinds of questions from many people. Although it's not a secret, I am careful about who I tell I am retired. I spend much of my time now on artistic hobbies, so I usually tell people I'm an artist. For people who knew about my previous career I t...
by WanderingDoc
Fri Jul 13, 2018 10:56 pm
Forum: Personal Finance (Not Investing)
Topic: Early retirement
Replies: 145
Views: 14452

Re: Early retirement

50-55 is considered early now? Military enlisted can retire with pension at 37, officers with pension at 40. I would consider early retirement 35-40 tops, since there are a lot of entrepreneurs, real estate investors, and online business owners that do it at 25-26. I mean, they do it but of course t...
by WanderingDoc
Fri Jul 13, 2018 10:23 pm
Forum: Investing - Help with Personal Investments
Topic: Dave Ramsey made me laugh today
Replies: 63
Views: 6951

Re: Dave Ramsey made me laugh today

What about something like the TSP G-fund? A lot of talk about bonds being the riskier asset class. I believe the G-fund is a different animal.
by WanderingDoc
Fri Jul 13, 2018 4:24 pm
Forum: Investing - Help with Personal Investments
Topic: What's your *real* asset allocation?
Replies: 30
Views: 3305

Re: What's your *real* asset allocation?

82% real estate equity (active and passive investments)
8% paper
~12% cash/CDs
~0.02% crypto :D

Don't own my personal residence.
by WanderingDoc
Fri Jul 13, 2018 2:52 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 361
Views: 16996

Re: Direct Real Estate Returns

You have to assume you capitalize and reinvest 100% of those returns. Which I don't. I have a day job and invest on a side. I like my regular job, and I value my free time (a lot) more than making money, sorry. I'm at the stage in my early 30s where cash flow from real estate more than covers my liv...