Did I Mention I HATE The Stock Market?......

Buying & Selling Real Estate
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Did I Mention I HATE The Stock Market?......

Daniel F. Harb
ARRT, RT(R) / Rental Property Investor · Newport Beach, CA · Member since 2017 · 360 posts · 242 votes

Not sure if I mentioned that today. Yes, I am 100% invested in Index Funds , and yes, I am staying the course (Probably take years to recover the losses), and yes I believe in "Buy and Hold". It just stinks to see tens of thousands of dollars evaporate before your eyes, day after day after day. 

2019 cometh!!! Come 2019, I will be dumping 95% of my investments in REAL ESTATE, at least it takes time to lose money, if there is a loss. Ugh, learning, growing, licking my wounds... Thoughts on today? (The good news is, my offer got accepted and I just purchased my first parcel of vacant land, a really beautiful lot with a view! Maybe I will buy a tent and go live on the lot. Ha!)

How is your day? :)

~Daniel!

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Bryce LitwinPro Member
Danville, PA · Member since 2015 · 58 posts · 58 votes
7y

The only thing I hate about the stock market right now is that I don’t have more money to invest right now while stocks are on sale☹️  I’m hoping the (bear market) sale persists until at least February/March... I should have some extra cash by then...

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  • Adrian StamerPro Member
    Real Estate Investor & Agent · Richmond, VA · Member since 2013 · 319 posts · 167 votes
    7y

    Don’t lose till you sell

    12Reply
  • Daniel F. Harb
    OP
    ARRT, RT(R) / Rental Property Investor · Newport Beach, CA · Member since 2017 · 360 posts · 242 votes
    7y

    Hi @Adrian Stamer... So then I can't lose! It will be there for a few decades, so I think i'll be O.K. :)

    (Still thinking about buying the tent!)

    Best to you, Adrian!  $$$

    0Reply
  • Bryce LitwinPro Member
    Danville, PA · Member since 2015 · 58 posts · 58 votes
    7y

    The only thing I hate about the stock market right now is that I don’t have more money to invest right now while stocks are on sale☹️  I’m hoping the (bear market) sale persists until at least February/March... I should have some extra cash by then...

    21Reply
  • Daniel F. Harb
    OP
    ARRT, RT(R) / Rental Property Investor · Newport Beach, CA · Member since 2017 · 360 posts · 242 votes
    7y

    Ha! Well said, @Bryce Litwin!  you are exactly right. Over the last three years (except for the last three months!), my Index Funds have done extremely well. I guess I can't have my cake and eat it, too!

    Best to you!

    ~Daniel

    1Reply
  • Craig Jeppesen
    Rental Property Investor · Chubbuck, ID · Member since 2018 · 532 posts · 466 votes
    7y

    Time to buy. Stocks are on sale.

    4Reply
  • Daniel F. Harb
    OP
    ARRT, RT(R) / Rental Property Investor · Newport Beach, CA · Member since 2017 · 360 posts · 242 votes
    7y

    Fire sale prices, @Craig Jeppesen!!!

    0Reply
  • Eric Carr
    Real Estate Broker · Los Angeles, CA · Member since 2017 · 655 posts · 293 votes
    7y

    I don't mess with stocks. I know it sucks to see your balance dwindle but you haven't really lost anything - it will come back. And if I did buy, me might be around the corner from when I'd get in. 

    I chose RE and crypto

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    @Daniel F. Harb one of the rare times I hit it right in the stock market. I had founder stock in my small commercial bank that got bought by a big bank.. so I got a 5X multiplier I think I bought the stock ( pink sheet about 4 years ago.)

    I put in a sell order and the funds hit today.. I locked in at the 52 week high.. stock in the last 3 weeks fell 20% so feeling like for the first time in 50 years I timed it right.. 

    Just wish I would have bought more bank stock when I could have.. 

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
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    4Reply
  • Daniel F. Harb
    OP
    ARRT, RT(R) / Rental Property Investor · Newport Beach, CA · Member since 2017 · 360 posts · 242 votes
    7y

    I hear you, @Eric Carr. I try to be diversified between my Index Funds and RE, but it's kinda frightening how the market can tank so much, so quickly.  :(

    Hello @Jay Hinrichs! Good for you! Timing the market is a rare bird, right?! Congratulations, my friend. Awesome!

    I purchased that parcel of land in Desert Hot Springs, Ca. About a little under 9,000 square feet. Zoned R1. I'll let it sit for a while, and hopefully build a home on it later. I was just there today, and there are some gorgeous houses up there.

    Best to both of you!  $$$

    ~Daniel 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Daniel F. Harb:

    I hear you, @Eric Carr. I try to be diversified between my Index Funds and RE, but it's kinda frightening how the market can tank so much, so quickly.  :(

    Hello @Jay Hinrichs! Good for you! Timing the market is a rare bird, right?! Congratulations, my friend. Awesome!

    I purchased that parcel of land in Desert Hot Springs, Ca. About a little under 9,000 square feet. Zoned R1. I'll let it sit for a while, and hopefully build a home on it later. I was just there today, and there are some gorgeous houses up there.

    Best to both of you!  $$$

    ~Daniel 

     like to think it was my brilliant move but I wanted to cash out since it was 52 week high and I know 5 b banks stocks really don't move much..   congrats on the lot.. 

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    1Reply
  • Daniel F. Harb
    OP
    ARRT, RT(R) / Rental Property Investor · Newport Beach, CA · Member since 2017 · 360 posts · 242 votes
    7y

    Thanks, @Jay Hinrichs! Merry Christmas to you, your wife and family.  :)

    ~Daniel

    0Reply
  • Llewelyn A.
    Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes
    7y

    I started a Partnership with some friends and relatives who mainly are Stock Market Investors.

    The purpose of the Partnership, in this case an LLC, was to purchase a $1.5 Million 3 Family in Brooklyn, All Cash.

    3 months ago I told everyone to pull out their cash in the Stock Market.

    They completed their stock sales a few weeks ahead of the Market falling off the cliff.

    I then closed on the 3 Family at a very good Price, collected a $40k buyer's commission as I am also the Buyer Broker, and just finished renting the 3 Units, signing the last apt lease in a few days, getting approximately $6k per month in Cash Flow for the 1st year.

    Not only that, I am securing an Investment HELOC at a 50% LTV, so roughly $750k, which I can use to investing in the Stock Market.

    I had already anticipated the fall of the Market as the inevitable Corporate Tax breaks had to wear off eventually.

    There just isn't enough consumers that benefited, in my opinion, therefore Corporate Revenues cannot increase and profits has to either stabilize as the max Corporate Tax breaks levels off.

    Really, only one way to go.

    I am anticipating the decline to last for a while.

    As an Trader, however, I will eventually buy long term growth stocks but also hedge it with PUTs in case I get in a bit too early.

    My friends and relatives are ecstatic as they probably saved a decline in their net worth by as much as a $1 Million.

    BTW, there is an old saying, "It is easier to make the 1st Million than it is to keep the 1st Million."

    In other words, most Investors don't anticipate the down turn because they believe they can't predict the future. So they don't bother looking at the signs ahead.

    I like to tell people that you have an Investment Vehicle. If you drive your Investment Vehicle by looking in the rear view mirror (looking at past data), you will crash your Vehicle. If you only look at the side windows (looking only at the present data), you will crash your Vehicle. BUT, if you constantly look through the Windshield (what does the future hold for this Investment Vehicle) and only occasionally look in the rare and side view, you will know the obstacles that may be ahead, the warning signs, such as the bridge is out! or whether or not you should go full pedal to the metal!

    I really do suggest that people try to understand Economics and how Government Policies affect various industries. It really is very helpful!

    12Reply
  • Frank Wong
    Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
    7y

    The thing with the stock market is you have zero control.  The fundamentals may look great the PE looks great the index charts look great but when there are more sellers than buyers none of it matters.  In its simplest form, the stock market is driven by liquidity.  What you have seen in the last 3 months is not by chance.   Rising rates + QT + declining earnings. 

    I have traded the market for 17yrs and have been following it since I was 15yrs old looking up charts at my school library.  I am no expert but I have 22k hrs of screen time of experience.   The number 1 rule in stock investing is to manage your risk and to use stop losses.  If you are not using stops you are essentially gambling.  This is the one thing you have control of. 

    The main reason why I think real estate is the best investment is more control. Plain and simple. 

    7Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y

    @Daniel F. Harb. I’m glad you said you’re staying the course otherwise I would have to criticize you for bashing the stock market. It’ll go up and down. Don’t time it. Just put money there and leave it. I was speaking to an investor earlier today (who does basically zero real estate). They made 50 percent return this year on one stock (that they bought individually). Over the last 20 years they’ve averaged 10 percent return overall per year. Never lifted a hammer. Never dealt with tenants. That sounds pretty good to me. Truly passive. Don’t bash the stock market just because it’s current going down. Simply buy more :D.

    7Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y

    @Llewelyn A. Are your friends and family happy with the 4.8 percent return I’m calculating based off your numbers? That seems awfully low for an illiquid investment like real estate. I can invest in bonds and earn 5 percent all day long.

    2Reply
  • Llewelyn A.
    Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes
    7y

    @Caleb Heimsoth

    I've been doing this for 21 years.

    The Cap Rate on a Brooklyn, NYC property is not a fixed rate based on the initial purchase.

    These are moving Cap Rates. For instance, most of the Cap Rates from the initial investment to now, after decades, would be crazy to most people.

    I anticipate that the 5% Cap Rate I get initially, will easily double in 5 years and definitely in 10 years.

    This is what I am asking people to do, look through the wind shield of your Investment Vehicle, not the Side View.

    Today's Cap Rate is the side View of your Investment Vehicle. Looking through the Wind Shield is the future Cap Rate of your Investment Vehicle.

    The properties I purchase accepts a low Cap Rate for future returns.

    Bonds are not moving Cap Rates, but their Market Prices will fluctuate.

    I wouldn't buy a bond now since it is anticipated that Interest Rates will go up, at least in my opinion.

    Staying with the kinds of properties I have been buying has been beating the Stock and Bond Markets for the 21 years I have been investing.

    I know it's a very difficult concept that the future can be predictable. What all investors need is a solid grounding in Economics and the effects of policy, both locally and nationally.

    It really does help.

    Also, I wouldn't call this Investment completely not liquid.

    In fact, if you believe in future Interest Rate increases, and I certainly do, borrowing against these Investments increases your profitability as you can lock in the lowest interest rates NOW. The Bank then bares the risk of higher rate increases while you profit from it.

    It's a win-win scenario if you think about it.

    Multi-Family properties are an inflation hedge. In other words, it goes up with Inflation. But lock in your fixed rate mortgages, and the Mortgage Debt Service remains the exact same.

    Win-Win.

    4Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    7y

    I think a few of my buy limits were triggered today. Some FAANG stocks down 30% since August.

    It/they still may have room to fall, but at least with limits, you can have a make me buy (vs make me move) price you set without emotion and with some control vs blind end of day priced mutual fund investing.

    2Reply
  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    7y

    I get more joy than I should watching the FAANG stocks fall.

    There is such an amazing amount of alt left anti free speech fascism coming from big tech that something needs to pop the ego. 

    15Reply
  • Bjorik Mutize
    Real Estate Broker · Minneapolis, MN · Member since 2016 · 530 posts · 398 votes
    7y

    @Daniel F. Harb Lol no dumping the rest of the 5% in real estate?

    0Reply
  • Karen O.
    NYC, NY · Member since 2016 · 617 posts · 456 votes
    7y

    Staying the course feels like the right thing despite how hard it is.

    I hope this'll table any talk about turning the SocSec trust fund over to WS. 

    Those of us with jobs & ER sponsored plans, don't have a choice as WS is our only option until we leave said jobs. 

    Buying at a discount makes sense though not if you think things are going a lot lower.  Only problem: no ones knows where the bottom is.

    A reminder that diversification is good.

    0Reply
  • Account Closed
    Real Estate Investor · Marysville, OH · Member since 2014 · 242 posts · 196 votes
    7y

    I cashed out 100% of my NON-retirement investment accounts in late 2017 and funded my RE portfolio growth, growing to 20 units.  Market was at the time an all time high, and I had the feeling the 2016-2020 years would not be smooth sailing for reasons I'll leave implied if you know what I mean.  For a little while I was disappointed to see that the market was dealing with current events fairly robustly and wondered if I made a mistake.  But the 2nd half of 2018 has me thinking it was a good call.  I'm in better shape at this point having liquidated where I did than if I stayed the course.  And I have a nice little RE portfolio going.

    1Reply
  • Jason Merchey
    Investor · Hendersonville, NC · Member since 2013 · 754 posts · 281 votes
    7y
    2Reply
  • Jason Merchey
    Investor · Hendersonville, NC · Member since 2013 · 754 posts · 281 votes
    7y

    DIVERSIFICATION. 100% real estate held as buy and holds is too extreme. Playing the stock market with 100% of your capital on the 1-3 year time horizon is too extreme. I believe in both stocks and real estate, but I don't have more than 30% of one and 50% of the other comprising my portfolio. And obviously, there is 20% non-stock and non-RE in there, too. 

    @Daniel F. Harb not sure what you mean by <<Come 2019, I will be dumping 95% of my investments in REAL ESTATE>>

    5Reply
  • Michael H.
    Rock Hill, SC · Member since 2015 · 104 posts · 209 votes
    7y

    @Daniel F. Harb real estate can go down too where you can lose everything. A lot of people did in 2008-2010 due to leverage. If you position size properly, RE and stock market can work for you. The only people that get blown up in those investment vehicles don’t have proper risk management/position sizing.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Llewelyn A.:

    I started a Partnership with some friends and relatives who mainly are Stock Market Investors.

    The purpose of the Partnership, in this case an LLC, was to purchase a $1.5 Million 3 Family in Brooklyn, All Cash.

    3 months ago I told everyone to pull out their cash in the Stock Market.

    They completed their stock sales a few weeks ahead of the Market falling off the cliff.

    I then closed on the 3 Family at a very good Price, collected a $40k buyer's commission as I am also the Buyer Broker, and just finished renting the 3 Units, signing the last apt lease in a few days, getting approximately $6k per month in Cash Flow for the 1st year.

    Not only that, I am securing an Investment HELOC at a 50% LTV, so roughly $750k, which I can use to investing in the Stock Market.

    I had already anticipated the fall of the Market as the inevitable Corporate Tax breaks had to wear off eventually.

    There just isn't enough consumers that benefited, in my opinion, therefore Corporate Revenues cannot increase and profits has to either stabilize as the max Corporate Tax breaks levels off.

    Really, only one way to go.

    I am anticipating the decline to last for a while.

    As an Trader, however, I will eventually buy long term growth stocks but also hedge it with PUTs in case I get in a bit too early.

    My friends and relatives are ecstatic as they probably saved a decline in their net worth by as much as a $1 Million.

    BTW, there is an old saying, "It is easier to make the 1st Million than it is to keep the 1st Million."

    In other words, most Investors don't anticipate the down turn because they believe they can't predict the future. So they don't bother looking at the signs ahead.

    I like to tell people that you have an Investment Vehicle. If you drive your Investment Vehicle by looking in the rear view mirror (looking at past data), you will crash your Vehicle. If you only look at the side windows (looking only at the present data), you will crash your Vehicle. BUT, if you constantly look through the Windshield (what does the future hold for this Investment Vehicle) and only occasionally look in the rare and side view, you will know the obstacles that may be ahead, the warning signs, such as the bridge is out! or whether or not you should go full pedal to the metal!

    I really do suggest that people try to understand Economics and how Government Policies affect various industries. It really is very helpful!

    we did something similar we pooled 6 mil in cash and bought a premier housing development in Portland market. NO debt makes us super safe.. and even if prices dropped 10% we are better than 25% IRR. if they stay the same we are over 40% IRR

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    1Reply
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