All Forum Posts by: Marcus Auerbach

I have gone back and forth about what kind of rental I start with. Was thinking a single family home 2 to 3 beds. Was wondering about starting in the Mid-Term rental area rather than STR. Yes I have pondered the Full year rental and that would do mortgage and give me a little extra, but thought MTR or STR might do better. Also, can you rent out each room for MTR? thanks for whom ever may lead in the right direc

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As far as housing I don’t see much changing. Until Powell drops those rates people aren’t gonna move. The difference between 7.5% rate and a 4.5% on a 200000$ house is roughly 400/ month. That is a ton of money to John Q. Public. A ton. If someone has a 2.5% loan they ain’t gonna move get less house just to pay more in interest. If immigration is on scale that some think(I don’t think it will be) that would free up housing.Also until red tape is cut and things are deregulated a little bit housing will stay high. Try to build new in freedom hating states. A friend of mine just built in a purple state and he said it was worse thing he ever been through and he grew up in household where they built numerous houses. Tariffs aren’t gonna be a big deal. We can produce building material here. We have as much natural resources as anyone in the world, most of the time is restricted for squirrels. Get the price of oil down and everything becomes cheaper. The USA is a petroleum based economy. The gas you buy the diesel that moves the junk to Walmart, the plastic on your glasses all are based on oil. I learned a valuable lesson when I was a kid. I saw gas prices going up and I asked those fed me what we was gonna do as they drove truck. He said have no fear I just raise the price to ship it. Nothing changes for us.unleash the oil production and tariffs won’t have an impact. USA is the biggest consumer in the world. No economy survives with out us. They know they can’t afford a trade war. Look at Canada and Mexico they caved in immediately. They both know that’s why they did it. All the talk on Canada lumber we got more than we can stomach. That is a fear tactic used by people. We need to take political bias out of things and look at big picture 

You can look up the energy part of total product cost, often it's around 3%. So if fuel costs goes down a third, overall production cost for that good goes down by 1%. The math works the other way too, if fuel prices go up a third, production cost goes up 1%. So the impact either way is relatively small.

Tariffs are a tax paid by the importer. 25% tariff means the cost of imported goods go up 25%. This import tax get's paid for by the importer. 

Take it from someone who spent almost 20 years working for a global manufacturer, I have seen plenty of invoices from US Customs and Border Protection Agency issued to the US importer and then struggling to pass the cost on to the market.

Why do we collect tariffs from the importer and not the exporter? 

It's very hard to collect money overseas in Vietnam, China or Germany in a foreign legal system. That's why tariffs are always collected from the business that is inside the country. Same thing if you export something to China, the Chinese government would not try to track you down here in the US, they would not be able to make you pay, so its the importer in China who has to pay.

It's important when we talk about these wide scope items such as energy and tariff's that we keep it in full context, because any micro-vision will lead to false perceptions. 

It seems that most people think this tariff thing is just a USA/Trump thing, that the world as a whole held things at 0 and along comes Trump just blindly adding such trade tax's. 

That is a wildly incorrect perception. 

The truth is, in general most of the world is/has been taxing the hell out of USA imports, and the USA has been letting them export to us for free or near free. A VERY imbalanced trade arrangement. 

Trump has been very clear with intent of these tariff's, and in recent days even dumbed it down to grade school level. These are RECIPROCAL, as in "in-return-for-your" tariff tax's. 

And it's already reaping rewards. meaning, it's working as intended. 

India has massively slashed a whole laundry list of sky-high tariffs they held on USA imports. 

Ford is the #1 biggest EXPORTER of USA automobiles. Ford is also the #1 American international auto brand. Cut's to import tariffs have immediate HUGE impacts on Fords bottom line. This is just 1 example. That means Ford can better price compete in those international markets, reduce expenses that had no connection to any production thus freeing more $ for production related expenses such as USA auto workers. 

And India is a massive market, MASSIVE. 

As a market the size of India moves, that put's added pressure on other markets being hit with reciprocal tariff's to "play-ball". Because there trade is a whole lot less important. 

Canada and Mexico are definitively "Chikwawa" economies to the USA. Bark bark bark with an almost comical bite. They can poke the USA economy but at the cost of gutting there own. They are dependent upon USA trade and economy. Worst case all USA would have to do is hold out and hold the line as they burn there economies to ashes, to then in end agree to everything the USA is requiring. 

They know it, we know it, the gig is up. 

China is an advisory. The current setup is idiotic. There is a very necessary decoupling and as Kevin O-Leary says tariff the snot out of China. We MUST decouple. It's a completely parasitic relationship. 

We have most of S.America to choose partnerships from to forge a new, better relationship with. With a lot more benefits. Cheaper shipping routes, improve S.American economies lessons illegal immigrations, a weaker Chinese economy means a weaker Chinese military threat...... 

Energy has a "sweet spot". Oil can only get so cheap otherwise too cheap means production falls because cost of doing business is a net loss. Oil has to stand at or above about 47pbl as a bare minimum. So any idea it can halve from where it is today is a fantasy, it won't, it can't. 

58-64 pbl is a more realistic "great" place for oil, economically speaking. 

But OPEC has no interest is just giving up 20% profit margins, who would. So you not only have to increase production to get the price down there, but also increase production to out-grow OPECS reduction in production, because they will throttle production to keep there profit margin nice and fat. 

Yes, lower energy costs has a multiplier effect throughout economy as there is layers in the supply chain impacted by such. I don't know the exact # but it's a heck of a lot more than 1%. But any notion of prices tumbling 20, 30+ % is unfounded. Given energies movement potential of tens of percentage points, maybe it fleshes out as high as 5% differential in everyday persons lived experiences of pricing. 

But it's a compounding effect. 

Lower cost of USA exports from 0-production costs, afford USA workers a say 5% pay bump. Lower energy costs and cut cost of goods 5% adding to disposable incomes a bit. Add some nuk power generation FINALLY and lower household utility costs another 5%, adding a bit more to disposable incomes. 

Incremental improvements all adding up to a significant improvement. 

Yes, tariffs are paid at the importer seat but importers account for this in purchase orders from exporter. If exporter is unwilling to adjust on pricing the importer goes elsewhere to source, it's just that simple. 

In God we trust, all others bring data.

Two very good charts on US trade, but I have not found a good overview about who is taxing US exports and how much.

The chart below is just general aggregated tariffs and you can see which countries are more open to trade and which ones are more closed off. I have dealt with South America, they are a pain to do business with, in particular Brazil and Argentina!!

Yeah that map is not accurate at all. 

If check here https://zonos.com/docs/guides/import-tax-rates-by-country

It shows in general most nations charge between 15-20% tariff on imports. And there sits good ole USA at 0...... 

But it's hard to lend a singular #. For example with India, some things is a fair rate, on some they are nailing 150% on USA imports. 

Only accurate way to see, is to see the actual list. Which would be a few thousand pages long of who charging what % import tariff on what USA goods. 

This https://worldpopulationreview.com/country-rankings/list-of-t... is an interactive map of world and import tariffs. Again will see USA is the lowest, or near the lowest. The vast majority charging considerably more. 

So if media were accurate they'd broadcast the "news" of Trump tariff's more as the headline of "OMG, Trump To Match Tariff's Everyone Else Has Been Charging On USA For Years"

Doesn't really have the sizzle and fear-factor to it though does it.... 

It's important when we talk about these wide scope items such as energy and tariff's that we keep it in full context, because any micro-vision will lead to false perceptions. 

It seems that most people think this tariff thing is just a USA/Trump thing, that the world as a whole held things at 0 and along comes Trump just blindly adding such trade tax's. 

That is a wildly incorrect perception. 

The truth is, in general most of the world is/has been taxing the hell out of USA imports, and the USA has been letting them export to us for free or near free. A VERY imbalanced trade arrangement. 

Trump has been very clear with intent of these tariff's, and in recent days even dumbed it down to grade school level. These are RECIPROCAL, as in "in-return-for-your" tariff tax's. 

And it's already reaping rewards. meaning, it's working as intended. 

India has massively slashed a whole laundry list of sky-high tariffs they held on USA imports. 

Ford is the #1 biggest EXPORTER of USA automobiles. Ford is also the #1 American international auto brand. Cut's to import tariffs have immediate HUGE impacts on Fords bottom line. This is just 1 example. That means Ford can better price compete in those international markets, reduce expenses that had no connection to any production thus freeing more $ for production related expenses such as USA auto workers. 

And India is a massive market, MASSIVE. 

As a market the size of India moves, that put's added pressure on other markets being hit with reciprocal tariff's to "play-ball". Because there trade is a whole lot less important. 

Canada and Mexico are definitively "Chikwawa" economies to the USA. Bark bark bark with an almost comical bite. They can poke the USA economy but at the cost of gutting there own. They are dependent upon USA trade and economy. Worst case all USA would have to do is hold out and hold the line as they burn there economies to ashes, to then in end agree to everything the USA is requiring. 

They know it, we know it, the gig is up. 

China is an advisory. The current setup is idiotic. There is a very necessary decoupling and as Kevin O-Leary says tariff the snot out of China. We MUST decouple. It's a completely parasitic relationship. 

We have most of S.America to choose partnerships from to forge a new, better relationship with. With a lot more benefits. Cheaper shipping routes, improve S.American economies lessons illegal immigrations, a weaker Chinese economy means a weaker Chinese military threat...... 

Energy has a "sweet spot". Oil can only get so cheap otherwise too cheap means production falls because cost of doing business is a net loss. Oil has to stand at or above about 47pbl as a bare minimum. So any idea it can halve from where it is today is a fantasy, it won't, it can't. 

58-64 pbl is a more realistic "great" place for oil, economically speaking. 

But OPEC has no interest is just giving up 20% profit margins, who would. So you not only have to increase production to get the price down there, but also increase production to out-grow OPECS reduction in production, because they will throttle production to keep there profit margin nice and fat. 

Yes, lower energy costs has a multiplier effect throughout economy as there is layers in the supply chain impacted by such. I don't know the exact # but it's a heck of a lot more than 1%. But any notion of prices tumbling 20, 30+ % is unfounded. Given energies movement potential of tens of percentage points, maybe it fleshes out as high as 5% differential in everyday persons lived experiences of pricing. 

But it's a compounding effect. 

Lower cost of USA exports from 0-production costs, afford USA workers a say 5% pay bump. Lower energy costs and cut cost of goods 5% adding to disposable incomes a bit. Add some nuk power generation FINALLY and lower household utility costs another 5%, adding a bit more to disposable incomes. 

Incremental improvements all adding up to a significant improvement. 

Yes, tariffs are paid at the importer seat but importers account for this in purchase orders from exporter. If exporter is unwilling to adjust on pricing the importer goes elsewhere to source, it's just that simple. 

As far as housing I don’t see much changing. Until Powell drops those rates people aren’t gonna move. The difference between 7.5% rate and a 4.5% on a 200000$ house is roughly 400/ month. That is a ton of money to John Q. Public. A ton. If someone has a 2.5% loan they ain’t gonna move get less house just to pay more in interest. If immigration is on scale that some think(I don’t think it will be) that would free up housing.Also until red tape is cut and things are deregulated a little bit housing will stay high. Try to build new in freedom hating states. A friend of mine just built in a purple state and he said it was worse thing he ever been through and he grew up in household where they built numerous houses. Tariffs aren’t gonna be a big deal. We can produce building material here. We have as much natural resources as anyone in the world, most of the time is restricted for squirrels. Get the price of oil down and everything becomes cheaper. The USA is a petroleum based economy. The gas you buy the diesel that moves the junk to Walmart, the plastic on your glasses all are based on oil. I learned a valuable lesson when I was a kid. I saw gas prices going up and I asked those fed me what we was gonna do as they drove truck. He said have no fear I just raise the price to ship it. Nothing changes for us.unleash the oil production and tariffs won’t have an impact. USA is the biggest consumer in the world. No economy survives with out us. They know they can’t afford a trade war. Look at Canada and Mexico they caved in immediately. They both know that’s why they did it. All the talk on Canada lumber we got more than we can stomach. That is a fear tactic used by people. We need to take political bias out of things and look at big picture 

Melanie, as much as I understand where you're at with this, I would have to disagree based on personal experience. Not all things are so black and white, plus a lot has to do with the market you're in / goals. 

I bought a cash-flowing, turnkey duplex in my hometown (a market I knew and understood and saw the potential for + have family close by that can help me manage it since i'm OOS). I house-hacked this. My total OOP was under $10k. I would do it over again in under 2.56 seconds. 

Zoe, I wouldn't underestimate what you could do with $25K... just find a GOOD DEAL in a good market. House-hacking is such a great way to enter IMO! I also think there's invaluable growth in just taking action. Good luck on your journey!

PS: partnerships are in my trajectory... might be a good option as well