All Forum Posts by: Keith Ferzola

@Aarron Light That is the route I am currently on. I always hear about people taking much more risks in real estate and sometimes feel like I’m not aggressive enough. Thanks for the input

Back story-

I’ve been trading derivatives for about a decade now and I’ve always been interested in RE since Rich Dad Poor Dad. I purchased a “fixer upper” town house a little while back that I’m rehabbing with my wife. We are about 80% done with this townhome currently. It should appraise around $100k-$130k more then I paid, so I’ll have some equity when I’m done.

I hold a margin account which averages a rate of return around 2% per month (realized, before taxes). The account would have much more in it but I used $60k on my townhouse. The margin account currently has about $50k in it. The derivatives I trade fall under a tax code (#1256) which is 60% long term capital gains and 40% short term so it doesn’t have the advantages of RE. The return is consistent enough for me to believe it will continuously be scalable.

I have cash reserves and other retirement accounts I will not use elsewhere.

My conundrum is do I...

1) pull out of the market to buy another property?

2) pull equity when my rehab is complete to buy another?

3) stick to what works (trading) until it doesn’t?

Or any other suggestions?

Thanks in advance!

@Blake Edwards I’m a firm believer in what Jim Cramer preaches... contribute the bare minimum into a 401k to achieve the maximum match provided by the employer (it’s free money!!).

My savings strategy is simple. I keep around a $5,000 cash savings and the surplus gets invested into a brokerage account. Money in the brokerage account is only at around 50% invested at this point.

When I find property to pull the trigger on, I will purchase directly from the brokerage account. (Liquid in about 2 days)