All Forum Posts by: Eric James

Ones that can bite you though are higher end homes where the previous owner strips them

takes every cabinet every door every light fixture basically deconstructs the inside of the house

5% risk free return is hard to compete with, particularly when cost of debt is at or above cap rates in many classes of real estate.

 So pretty much where we are except for the technical unemployment numbers? Continued stagflation and something will undeniably break. Likely the S&P companies that are just too levered. 

And I think the Fed will push it this way and the only doubt I have is the influence of the election. That doubt is strong though. 

I also have a very different view on if rates do come down. I think real estate has a lot more seasonality than folks given attention to. If rates come down end of Q1, any Q1, you'll see prices rip for the prompt 1-12 weeks then dip and in Q4 really correct of that year. If rates go down at any other point, you'll see prices go up quickly in the 4-6 week span then come down. I really feel the rates are the reason inventory is low and once rates come down, we'll see inventory change.

Look at the same cities previously mentioned

Arlington, Savannah, and Boston

Once rates go down, inventory will increase in the long(er) term. Prices may rip in the shorter term, but I think inventory will go up. And buying power will change.

 Man if you can build for 65% that seems like a deal to me. Congrats, lets do a deal. 

 This is GOLD!  I've ruminiated on this topic a bit, we are 50 now and in good financial shape and stand to inherit in 10-20 years when we absolutely will have no need for more money.  But with 4 kids in their teens/twenties now, seems like that money would be far better used if one of them has entrepenurial ideas (and energy and time).  Could be a low-cost loan or seed money equity stake rather than a gift to be more "fair".  Otherwise I guess for me generational wealth just looks like passing it down too late to be useful until it either dilutes a bunch or ends up in the hands of a spendthrift who blows it all.  Anyone have experience with this dilemma? 

 Such esteemed company!

I like to think the best lesson we've taught the kids, and grandkids, is that hard work and a plan will get you further than any amount of money that lands in your lap. The other part of it is that no one should expect something for nothing. Case in point: daughter needed to replace her car, which she's had for 8 years. She had some money saved but nowhere near enough to buy a new car. I can afford to buy a new car and just give it to her but I'm not going to do that. Instead, I gave her a no-interest loan; she wanted to get a new car and never had one before, so I bought the car outright (a sensible Kia Forte) and essentially gave her a no-interest loan. She pays me $200 a month until it's paid off. I know she will pay it back because I've loaned her money plenty of times before which was always paid back. She can feel independent because she is independent - I didn't give her anything, she bought it herself. 

Same thing goes for the grandkids. Bought them each a car ($4k limit) when they graduated high school (getting ready to buy the last one), they have to pay for maintenance and insurance. If they wreck the car, well they'll have to figure it out. 

On principal, I am against "generational wealth". If I had my way in society, everyone would start out with the same amount of money when they hit 18 - maybe 100k, I don't know - and you make whatever you make of yourself until you're dead. Then all the money goes back into a pot and we do it again. But this of course is Utopia, which is never going to exist, so you end up taking care of your own and the issues and charities that are important to you. I expect to leave all of my money to the kids and charity when I step off into the cosmic unknown :)

Also: the question was do you worry about your kids? I don't, because if they manage to piss away the empire after I'm dead then they deserve to be poor!

 Yeah that's the tough thing wanting to invest right now, properties were lucky to cashflow a few years ago when rates were 3-4%, now that they are 7+ that has added an additional 30% or so expenses assuming your not putting 30% or more down. Deals don't make sense unless you do something crazy like put 8 students in a single family :)