All Forum Posts by: Henry Clark

OP. Have been thinking about this same topic.   To expand the discussion and possibly a slightly varying view and approach.  That we are actually taking, not just talking about.  

1.  To me the best asset to be in is to have Debt.  The longer the term the better.  BUT make sure you have liquidity to cover payments thru either cashflow or other assets.  To me an investor wins on the asset side by its value going up, and they also win on the DEBT side as the dollar gets cheaper and cheaper.

2.  We invest in Silver.   It is great but we didn’t  go hard enough into.   Stopped buying at $30.  Now about to get back in at $5X.  Long discussion.  But gold and silver to me are dangerous assets.   They follow the Risk in stock markets up.  we are over 100x P/E ratio on the Mag 7.  When the stock markets fails, both gold and silver follow assets down within a few months.  I actually like this.  A crystal ball for when to get out of metals.  As soon as the stock market collapses.  
   
3.    Cash is King-  yes, playing with a falling knife.  Did a sizable reduction of our stock positions into cash equivalents.  This is a short term position of a year or less.  A.  Step over into silver., b.  Buy cargo containers for our storage locations.  At a 8 year low in price.  100% deductible year one. Buy at $3,000 wholesale, can resale at $4,500 retail.  c.  Have another storage site I want to buy which is for sale, just asking more than I want to pay.  

Lot depends on your investment life cycle.  Most of the things above don’t apply to someone just starting out.  

BP you did it again.  Time for dinner.  Over in Europe, Croatia.  I can’t pass up beef liver and grilled onions.   One of my all time favorites, especially with a beer.  All the things on the menu and I pick something I can cook at home, but great.

It’s your money, your right, even if you’re wrong.    

On the above I will be wrong, either in magnitude or timing.  Hope I’m not too far off.

The above post has to be AI.   Who would ever put calf liver and onions in a post?

Found out if you put a deposit down on construction the contractor can back out if they pay your deposit and a matching amount back to you.  So a contract might be a contract. 

Killing time after lunch on the boardwalk in Split, Croatia.   Separate post on this trip.  My overall view hasn’t changed.  

1.  Hindsight wish we had moved more into Silver.  Bought in at $30 or below.  Now pushing past $50 in the last few months.  This is actually one of our safest investments.  We have a crystal ball.  You always wonder when a market top occurs.   But you don’t know!   Actually with precious metals they go up trailing the stock market and they go down trailing the stock market.  As soon as the stock market crashes you need to sell.  Actually need to decide if we move more of our cash position into Silver.

2.  Best investment-  haven’t really thought of it this way.  But our debt is our best asset.  Inflation and the dollar going down are reducing the cost of our repaying the debt while at the same time our Self Storage asset values are going up.

3.  Crypto-  have not really researched. Watched Mark Moses YouTube.  Definitely agree it is a limited fund supply.   Thus it will both hold its value versus the U.S. currency which has to get deflated by either inflation or currency printing.  Watched Peter Schiff YouTube and he notes the same issue as I mentioned in Silver or say gold.   When the stock market goes down it will also follow.  Again haven’t researched both views much.  But it’s a new asset that I don’t want to follow since it has had a short life cycle thus far.

4.  All of our asset classes are moving as planned upward.   Our cash position as planned is moving downward.   A trade off for liquidity, plus hopefully buying into other asset classes.

5.  In Croatia in a trip.  Bread has gone from a $1 to $3 per the cab driver.  Says Ukraine use to supply most of their wheat. A.  Glad we aren’t on the lower economic end or inflation would hurt versus help.  B. Governments will always use war as a last resort under financial pressure.  Most people use tea leaves to read the future, but I’ll use a loaf of bread.  

Self storage specifically.  Decide on your risk tolerance.  Depending on that refinance to both get a lower rate possibly, increase your rate but reset and extend your balloon period to say 7 years, amortize your loan back out to 20 or 25 years.  Might cost you more but you’re locking in your loan finance risk.

LTV% make sure your in a position to cashflow. If not keep some excess cash positions to meet payments until your occupancy rate is in a sufficient position to meet cash flow if your a newer location.

Don’t know “when” but it’s getting closer. 
Like all pontifications about the future, I’m either wrong in impact or timing.  

It’s your money, your always right, even if your wrong.  

OP show the numbers.

  What is your BAH?  
What is your all in cost on this property?  P/I, property tax, ins, elec?

can you STR the extra room,

How much longer are you stationed there?

After 2 years you should be able to sell at a loss, and still make money with your BAH.

OP had to pull away for a second.   If you do a trailer use a lawyer to sale thru.  Sale yourself.

Realize not totally in your discretion.  Try to get stationed at higher cost areas.   Korea, Japan, Germany, Italy, Cal, NY. Not Louisiana or Georgia.

Normally a multi unit property is the traditional best way.  But not for you at least now.  

Inflation adjusted you should be worth $1.5 to $2mm by your early 40’s.  

Even today you will be past most BP posters wealth in 4 years.

When you retire join Civil Service.   Go overseas to get BAH.  Keep doing this tax free.

Your military time carries to civil service so you get a second retirement.

Not counting your military retirement and benefits you will be far past any guru or other training.

Plus your risk adjusted return is far past other investors.  Your initial money is tax free guaranteed from the federal government.     
If you pick military tenants on properties.  The military is your bill collector and other renter control.   One call to their commanding officer and their pay, training, promotions, etc are restricted until they settle with you.

Stick with just your personal housing for now.  
1.    What is your BAH potential?

2.   Max your payments to match your BAH.

3.  Live in for two years.  Keep selling and use the tax free 2 out of 5 years capital gain exclusion up to $250k per spouse.

4.  Check on the above for military.  Believe your 5 year time window is longer. 
5.  At each base move keep upgrading in both cost and size.  
6. As you build up a larger cash snowball, use part for downpayment and the rest on upgrades.

7.  Get your real estate license to reduce the transaction cost.  
8.  Your first investments, although you might be past would recommend a trailer with the lot.  Say $50,000.  Say your BAH payment is $20,000 per year.   In 2 years you gain $40,000.  Even if you sell for $45,000 when you leave or lose money.   You actually make $35,000.   No taxes.  If your stationed there a 3rd year buy another trailer and lot and rent the other one out.

9.   When you leave sell to the next military person and teach them.  

Croatian language.  The people I have talked with say don’t learn the language. There are to many dialects and they don’t understand each other.  Young people know English.  Old people know Italian.  So learn Italian.   You can use it in more countries.  

OP we prefer to stick with development.  We do Self storage and Country Subdivisions.  Most people are investors and not developers.  
A.   They will pay a premium for a property already developed.

B.  Location.  Location.  By developing you add another dimension to your control over location, which adds both value and sale ability.  

Key issue to development is construction to market length.   Holding costs and “Market” timing.  

 OP congrats on your success.   How did you manage Risk?   What were your main areas of risk? 

Day trip to Dubrovnik.  Game of throne game.   Wow. Have never seen tourism to the max like this.  Enclosed walled castle area.  2 tour ships parked in town .  3,000 each.   Our tour bus had 3 minutes to unload.  They get charged $800 for that 3 minutes.   Only one way traffic for them.  

About 1,000 people live in town.  Gets slammed.  

But.  But.  Found a potential next investment area.  Beaches, water and view is better than Belize.   Some palm trees but no coconut trees.  

I love Nasty.  

Several old properties just in the area.  About 2 miles shoreline drive.  New interstate and new exit ramp into community.  No development yet.  So what.

Big beautiful bay inlet off the Adriatic Sea, beach front properties, boat docks, large town 25 minutes away.  Killer views, ultra clear water.  3.5% interest, 30% down, 15 year amort.  Both down and amort period are tight.  No development as of yet.   Both rent and property values have doubled since they joined the EU and switched to Euro.  

Our guide used to be a banker.  Talked withe her about seaside land for development.   She noted an area about 10 miles from where we are staying hope to check on it this week.