All Forum Posts by: Marcus Johnson

To answer your question specifically regarding putting 25% DP, then I expect after all expenses paid to cash flow of at least $400 a unit. That was your question right?

Imo and real life experience, $2500 on a 300k rental isn't worth it. You'd probably break even after all expenses. My rental duplex was purchased for 180k and I'm making $2100 in rent and cash flowing $800 a month. I'd sell it and look for a better deal.

@Thomas Rutkowski

Yes if you take January 1976 too January 2016 which is a 30 year period, the return was 10.11%. Remember when you invest in the stock market, it's for the long haul. Yes the market has it's ups and downs just like Real Estate, but I'm not trying to time the market, I'm just using good indicators. As for how I'd feel if the market took a 40% loss in 2008 and I was retiring? Personally, it wouldn't matter because my Roth IRA isn't my only investment. There's my pension that available, my rental income and social security. Because we've made our portfolio diversified, we'll be able to decide at retirement where to pull the money out based on the taxes at the time and the value. When a person focuses their portfolio in only one asset class they are spreading their risk 10 fold.

@Thomas Rutkowski

I hate to correct you about the S&P500, but here is a good chart for you to reference in regards to the returns historically.   http://politicalcalculations.blogspot.com/2006/12/...

If you take 1950 to the present for example with reinvested dividends, you had made 11.11%. Imagine the compound interest if you invested for 30 years, maxing out Roth IRA's from Vanguard with low expense ratios, you'd have 1.4 million that doesn't have RMD's or taxes at the time of distribution.

I'm not the type of person that is going to take the risk of loaning money from my cash value to invest in something that may or may not work out.   To much risk.  

@Thomas Rutkowski

Thanks for your explanation, but I'll stick with my Term Life Insurance that is very inexpensive and my large portfolio of low expense investment portfolio.

@Thomas Rutkowski

My wife and I invest in Vanguard admiral index funds, along with rental property, but there's no way your insurance product's fees and commissions could beat my 11% average returns since we've started investing and it's expense ratio of .05%.   Can't be beaten by an insurance product.  My advice to all is to keep your insurance and investing separate.  

Also, after reading the link to an article you wrote regarding the myth "the insurance company keeps my cash value if I die" you wrote that should the holder live to normal life expectancy. What happens if one does before a normal life expectancy? Do my beneficiaries get the cash value?

Great point Brad Taylor We can all answer that quickly. Not a chance.

How is $2000 a month rent on a 300k property? I get $2100 rent on a duplex I bought for 180k in a great neighborhood. How are you even cash flow positive?

IMO, no knows when the next bubble will hit, whether it's real estate or the stock market. So it's good to be diversified at all times, not leveraged to much and to have savings. Plus your rentals should cash flow enough to maintain cash if rents should lower due to the economy. The good thing is that most down turns ween out the weak.