All Forum Posts by: James Park

Every morning, the first thing i check is the US Dollar index, not the VIX as the dollar index is an  indicator for me where things are headed. We are at a critical junction right now as once the dollar index breaches above 85 index it is going to head towards 90 putting further pressure for the precious metals, S&P, and the euro. 

As I had mentioned before that the Commodity cycle peaks every 30 years. The last time the commodity cycle peaked was in the year 1980. The dollar bear market rally started right where the commodities cycle ended in 2011 which I believe will last into 2016 - 2018 right where the 18 year bear market cycle will come to an end for the S&P.   

The Central Fund of Canada is the representation for the Gold/Silver Chart.

The U.S. Dollar Index - Currently at 84.774

The Euro / USD exchange - 1.2832

The S&P 500 CHART from 1950 - 2014

Thanks for the responses. I believe in owning your primary residence and your rental properties, but I am sort of torn if it is better to rent or to own the office where you house your business. I am currently renting office space 5 minute away from home but the rent is so cheap right now in my area. At the same time commercial seems to have hit rock bottom in the Atlanta market.

It makes a lot of sense to stay away from office condos and own the office itself for example already stated by John Klaus. I have heard the same advice from Joel Owens as well.

Here are couple questions I've been thinking about:

1) If you later decide to retire, sell off your business, or your business doesn't make it, which type of commercial space will be easily rentable or easy to sell off when the time comes: industrial, office, or retail strip malls.

2) For those of you real estate brokers who operate their own brokerage, do you work primarily from your home office, rent office space, or own? What is your preferred setup and why?

3) I've heard before that there is a great tax benefit of leasing the office space LLC that you own back to your S Corporation. Can someone please elaborate on tax advantages of doing this.

4) If you operate a services business (tax services, brokerage, IT services, financial advisory services) and want to scale your business over time... is it better to rent or to own? Why?

@Jon Klaus
Jon, thanks for replying to my post. Do you think it is a good investment to buy an office condo vs office building in a good location? The commercial market here in Atlanta is absolutely dirt cheap right now and haven't really rebounded like residential. 

Jon, how did you go about financing your office building for 2.99% fixed for 5 years. What type of supporting documents do you need to provide to get owner occupied commercial lending? I assume the lending process is very different from residential. 

Thank you.

For those of you are self employed or small business owners / self-employed. Do you

1) Primarily work out of your home office without having to pay rent.

2) Rent an office space near your primary residence

3) Own the office building / condo where you house your business.

4) Own a residential condominium where you operate my business

5) Other, I operate my small business at "XXXXX"

For those who have selected #3, Are you happy with your decision of owning your commercial property and would you recommend it to others? Do you also rent out part of your office building to other business tenants?

I was wondering how many of you who are self-employed / small business owners:

1) Primary work out of your home office

2) Rent office space

3) Own your own office building / condo to occupy your business and perhaps rent out office space from your own building.

For those of you who are in the #3 category, are you happy with your decision of owning commercial vs renting? How did you go about financing your commercial property?

@Wendell De Guzman

This post is more for fun imagination. My favorite classic movie of the 80s is "Back to the Future". For some reason, I have always loved time travel movies like the "The Time Traveler's Wife" and "About Time" with Rachel McAdams. There is one scene in the movie "About Time" where Rachel's husband goes back in time to reconnect with his father for the last time as he knows that his father has already passed away from cancer in the future. This scene put tears in my eyes. I know that this is a really quirky side of me that my wife does not even understand.

Sorry back to real estate.

Anyways, If i had a way to time travel with a car. I would first sell my primary residence in Johns Creek and all my rental properties, I would then set the flux capacitor to 1996 and take my wife , my 4 year old twins, and suit cases of $100 bills in the trunk, travel back to Newport Beach, California 1996. Of course I would take these "New Home" ads back in time with me.

New Homes in Newport Coast, California

1. Newport Ridge Vistas - Single Family Homes starting from the low $400k
2. Campobello - Single Family Homes starting from the mid $500k
3. Civita (Ocean View) - Single Family Homes (up to 3859 sq/ft) starting from mid $500k

There is nothing wrong with day dreaming right?

I think for me, I don't regret any mistakes I have made in the past as these mistakes have become my golden nuggets of wisdom as a future investor. This applies to both my professional career and my personal investments in both equities and real estate. I believe that It is much better to lose $50,000 when that is all you have in your 20s than to lose seven figures in a bad investment in your 40s or 50s.

In 2005 I picked up a book from John Schaub when it just came out. He shared in his book that after 32 years of investing in duplexes, apartments, commercial shopping centers, he came to a conclusion that single family homes were the easiest and most profitable assets to manage. This book is probably why I never experimented with other types of real estate investments and have been such a huge fan of single family homes to build my SFR 401k plan.

One day, I just called John out of the blue from the phone number he left in his book (didn't expect him to answer my call). All in the sudden he answered... "Ahhh, hello Mr. Schaub. My name is James Park and I have read every one of your books and I am such a huge fan of yours. He was very nice to spend 45 minutes with me over the phone and shared with me his mistakes as an investor which became valuable investing wisdom for me.

The two pages below set the direction for me on what assets I will buy and hold to build my 401k retirement portfolio.  

I would go back to 2006 and tell the 30 year old version of James Park the following...

1) DO NOT put $200k down to buy a $546k new construction property in North Atlanta as a rental property. Have you done your homework and noticed that the median home prices in the Peachtree Ridge High School cluster is in the $180k range? James, Are you Freakin Out of your Mind??

2) Put that $200k into a money market fund that yields 5.5% and wait until there is blood in wall street and let the stock market crash into March 2009, then put that entire $200k into the a low expense S&P 500 index fund like the Vanguard Index 500 and forget about it for 30 years.