All Forum Posts by: Jason Barnett

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Very wise, and very true. I tried explaining this to my GC one time and his eyes just glazed over :lol:

The best advice I can give you is to read all of the messages on this forum. Every last one of them. When you see things that you don't understand just ask your specific question and we'll try to help.

I'd be happy to talk with you off-board about municipal bonds as I don't think it's really appropriate to this forum discussion. Also you are right that IRA's are not liquid although there are a few exceptions. Pretend that you are in loss mit for a bank and you're trying to maximize the value of non-performing loans. What are your options?

1. Get the borrower to catch up on the payments (plus penalties)
- Brother B has more cash on hand from savings so he *should* be able to do this. Brother A will have less liquid assets, period.
2. Get a new home equity loan
- This is an option for Brother A, but Brother B will be SOL here. However, even if Brother A does this he could theoretically have the same LTV as brother B (90%), but now he's paying a higher interest rate for the HELOC whereas Brother B was earning interest on money that he invested.
3. Work out new terms for the loan
- Either brother can do this, but you will be more likely to work out with Brother B because you have more at risk (i.e. Brother B's high loan balance)
4. Work a short sale with a 3rd party
- This is probably what Brother A ends up doing unless he gets a new job
5. Send the property to foreclosure
- This is what happens to either brother when they've exhausted all other options. Definitely the last resort, but if you notice that Brother A has a lot of equity then you would love to foreclose on his property as quickly as possible!

Suppose for a second that you're right and Brother A actually has more equity in 15 years. Here's the problem: Brother A's net worth is all wrapped up in his house and he cannot touch it unless he sells the house (or start over with ANOTHER loan!). Most likely he could sell for a profit, but he'll have to move into a less expensive home. So you've got to add in moving costs, closing costs, etc. and all of this reduces the equity that you have (maybe 10% of the selling value). On the other hand Brother B has liquid assets and he doesn't have to spend much at all in order to get full value for his investments ($9.99 with some online stock brokerages).

My KISS answer to this problem is: "Can you earn a higher ROI than the mortgage rate on your house? If so, then save and invest the difference."

I haven't seen the partnership agreements because I am not an investor. However, I will be happy to speak to the details if anyone wants me to do so. Just email or fax a copy of the contract to me and I will post with my thoughts and opinions in this thread.

Well another way that you can do it is to be a "buyer broker". Maybe you can't keep sending deals to the buyers, but you have friends on this board (or other places) that can send more deals through you. If one of your buyers makes the purchase then you would get part of the bird dog fee from the referral.

Those are good books for beginners like you. Rich Dad doesn't give much practical advice as much as it changes the way you look at investments, income, assets, liabilities, "glitter", and most important of all building your team.

mgoddo really liked it so I am happy to let everyone here share with the resource that he's found. It appears to have at least gotten your brain thinking about the possibilities! 8)

A very good point. As I stated earlier you need to be able to earn ROI from other investments that is greater than the rate of interest on your mortgage. This is certainly not guaranteed, but 8% is quite reasonable. This is somewhat true. There are a lot of things that go into each person's tax return so it is hard to say whether you would itemize or take the standard. You might already have large medical expenses to itemize so this argument would then be moot. But yes, if you take the standard deduction then you gain no tax benefit from higher interest on a personal residence. I agree 100%. You can't invest what you don't have. :D This isn't necessarily true. I can invest in tax-exempt bonds or I could put my savings into a Roth IRA. In fact this is what I do personally and it is a good choice for some people. So your argument of taking away 25% for capital gains tax is 1) too high for our current rate system and 2) not even relevant if you can get tax-free returns. It is quite possible for Brother B to invest the difference @ 8% and actually have more net assets than Brother A after 15 years. Plus let's not forget... Brother B has LIQUID assets, but Brother A's assets are not liquid. If he has to sell that house quickly... then he finds me and I buy it at a discount of, say, 30% :mrgreen: I don't have facts to prove this right or wrong, but I would love to see some.
That's not exactly what the article says... read it again. It says that Brother B has more cash in his pocket and can make his mortgage payments from his savings while Brother A can't get a loan and needs to sell his house (to me for a discount of... oh, never mind :wink: ). No one ever went bankrupt with a ton of cash sitting in the bank!

Not only that, but Brother A's house is worth more to the bank in the case of foreclosure. They already have received a lot of Brother A's money and now they're going to sell the house and make a nice profit. If they try to sell Brother B's house they're going to realize a loss so, but if Brother B can work out his loan then the bank can continue to profit from his interest payments.

Sometimes this is the right choice! Sometimes not. I will say it again: compare the rate of return you can make on investments with the interest rate of your mortgage.
A very good point, but not 100% clear cut for everyone.
Another good point, but there are ways around this. As an example municipal bonds are very liquid and they are tax-free.

This ad isn't as crazy as it looks on first glance, but it is quite different from the conventional way of thinking.

Actually the biggest problem that I have with the article is this: most Americans don't save. When they have extra cash on hand they decide to spend it rather than save or invest. A person with a "frugal" mindset is better off acting like Brother B, but if he's a free spender then he should follow Brother A's example and hope for the best! :idea:

skelly, why not buy it without the girlfriend's income? Would you want her name on the deed anyways? Could you qualify to buy a duplex in your area with just your income + the income from the other half of the duplex?

Originally posted by "jdavila":

IM AN INVESTER W/PINN. AND I HAVE NO COMPLAINTS. I HAVE HAD AT LEAST 5 PARTNERS, WHICH HAVE RECEIVED THERE RETURN. 2 OF THEM JUST RECEIVED THERE FUNDS YESTERDAY. 1 INVESTED 10K & THE OTHER 5k. NOT ALL INVESTMENTS ARE FOR EVERYONE. OR ELSE THE HOLE WORLD WILL BE DOING IT. I ASK ALL U PEOPLE THAT HAVE DOUBTS. IF THIS WAS YOUR BUS. HOW WOULD U DO THINGS DIFFERENTLY? AS AN OWNER NOT AN INVESTER.

If you have evidence to back up your claims then email them to me. If you have hard FACTS to back up these claims then show me.

Quite frankly I don't believe you are credible at all. You have just joined the site, your grammar is very poor, you do not refute that Pinnacle has done anything illegal, and (so far) you provide no evidence to support your claims. Until you can show PROOF of what you are saying then I will not believe a word you write and I would advise all of our forum members to do the same.

Originally posted by "jdavila":

I BELIEVE PINNACLE HAS, PROFESSIONAL ETHICS TO CARRY OUT THERE BUS.

You are certainly entitled to your opinion even if I disagree with it.

Originally posted by "jdavila":

THE MINUTE U TAKE YOUR $$ AND PUT IT IN ANYONE ELSES HAND, U ARE ALREADY AT RISK.

Very true. Even if Pinnacle is cleared of all wrong-doing I think this will open up the eyes of a lot of investors. I wonder how many investors know anything about the risk from the securities laws that Pinnacle might have broken.