All Forum Posts by: Justin Kurpius

@Justin Kurpius 

In the first scenario, the COC return is 940 x 12 = 11,280 / 120,000 = .094 or 9.4 %. Total profit over ten years would be 164,800 / 10 = 16,480 / 120,000 = .137 or 13.7% average return per year.

In the second scenario, the COC return is 1532 x 12 = 18,384 / 120,000 = .153 or 15.3 %. Total profit over ten years would be 589,100 / 10 = 58,910 / 120,000 = .49 or 49% average return per year.

I hate alarmists with statements "experts say". Well, here is your source. Read lower " between 200k and 1.700k" 

https://www.businessinsider.com/coronavirus-150-million-americans-may-get-infected-2020-3
Paul ignore this link. Everyone else please listen to this CDC video 

Coronavirus Epidemic Update 34: US Cases Surge, Chloroquine & Zinc Treatment Combo
https://www.youtube.com/watch?v=U7F1cnWup9M

Don't allow maggots to make you primal and reactionary. This shutdown is appropriate and resaonable. What the Trump admin and local govts are doing will reduce the impact. Desocializing will bring benefits. I am selective with my renters. 

Research for knowledge. Level of emotion and fear is the inverse of your knowledge and sense of hope. The S. Koreans used anti-malaria to reduce their numbers greatly. NL and others are redearching a solution. The capitalist system is natural and gives incentive to inventors to find solutions and they deserve the financial reward of saving people's lives.

Fear-mongers not worth responding to.

@Zac Boelkow The biblical quote you used is teaching 2 separate principles. The rich rule over the poor has always been the case in every civilization that I know of. The borrower is slave to the lender is a little different. In the US We often think of slaves in terms of our countries history of slavery in the 1800's and 1900's, where someone owned someone else and could mistreat them, humiliate them, and there was now way out of their situation. If you read the book The Richest Man in Babylon, it talks about slavery in the old world which was different.  Slaves back in the biblical era could own land and have a wonderful life. They could even own other slaves that would work for them (according to the history described in that book). If someone in that time period was not in a position to improve their situation but could sell some of their freedoms for a time period to eventually put themselves into a better situation then why not do it.  Is that not similar to what people do now-a-days with going to work for someone else to better their situations, yet it is giving away some of their time freedoms?  People who want to be free to do what ever they want seem to eventually be the ones without freedom if them don't go about it properly. 

Secondly, you say you'd rather have 1 property (duplex) at 120k paid off than 5 properties duplexes each with 20% down and you say using leverage does not "net" more financial returns or speed up the process. Lets analyze this a see how this would look after 10 years.

Example of owning 1 duplex free and clear

Current Market Value: 120k

Rents: $1600

Mortgage 0

Taxes: $100

Insurance: $100

Property management at 10%: $160

Repairs/vacancy/turnover/Cap Ex reserves $300

Monthly cash flow $940

Market Value at the end of 10 years giving 3% appreciation per year: $161,300

Total equity 10 years: $161,300

Total in cash flow over 10 years (with rent increases of 2% per year): roughly $123,500

Overall increase over 10 years: $164,800 (123,500 cash flow + 41,300 in appreciation)

Example of owning 5 duplexes with 20% down

Current Market Value: 600k

Rents: $8000

Mortgage payment $3168 (5% on 480k, 20 year)

Taxes: $500

Insurance: $500

Property management at 10%: $800

Repairs/vacancy/turnover/Cap Ex reserves $1500

Monthly cash flow $1532

Market Value at the end of 10 years giving 3% appreciation per year: $806,500

Total equity 10 years: $507,800 ($806,500 market value - $298,700 loan balance)

Total in cash flow over 10 years (with rent increases of 2% per year): roughly $201,300

Overall increase over 10 years: $589,100 ($201,300 in cash flow + $387,800 in appreciation).

According to math (unless my numbers are wrong which I don't think they are), it appears that spreading out the 120k among 5 properties creates more than 400k more in overall increase of net worth or profit than just buying 1 duplex free and clear.

But as you said, "to each their own."  My purpose with real estate is to make my money work most efficiently as possible.

I think everyone should panic and shut down. I will take it from there. 

Want to do well during this downturn? Focus on who, what and where will benefit instead of going thru all the what if "mental masturbation" 

I got a little anxious about this situation watching the news. So, I skipped a 1,000 leads. Marketing went out at 9:30 this am. 5 new leads already.  Use this energy...

It not how the markets behave but how you behave.

PS I bought 30 days' worth of normal stuff, 3 weeks ago. I will say living in Florida and dealing with Hurricanes has us with a better level of understanding of this kind of disaster. If we get quaranteed, I get two weeks of crushing tasks and "Netflix and chill" with the Mrs. That sounds amazing.