All Forum Posts by: Paul Azad

consider the opportunity cost of doing this

#1) sell house for cash or to a buyer with their own financing from a bank, etc and you get 315K at time zero, you invest that at historic SP500 8.4% return over last 220 yrs and it grows to $3,541,514.46

#2) do owner financing and you get 100k up front that invested at 8.4% grows to $1,250,000, plus you get your payments at $1400 x 360 months or $502k, invested grows to $3,265,000 total including the 1.25 mil above

so you come out 300k better not doing it and you don't have to service the loan and all the other risks

remember banks don't even carry mortgage notes after origination, they dump them onto the US taxpayer via illegal-unconstitutional havens like Fannie/Freddie/HUD, and for last 15 yrs the FED has bought every MBS in the country, which frees up the Banks capital to do it again and make the real money on churning the points and fees

plus will next 30 yrs have higher inflation than last 30 yrs? probably, so your money locked up at 6.75% yield while if we get higher inflation causes mortgage rates to rise/cap rates to rise and stocks to rise even faster than RE. 

I would hire a RE attorney to draft and send the letter to the resident to vacate in 30 days, no reason given, and if any questions they should be sent to your attorney only. I would not converse with tenant in any format, as things could end up in court, if he declines to leave and has to be evicted etc. 

also don't confront in person, you said he is MMA fighter, good rules to live by include : Never get involved in a land war in Asia , and never anger a man with Cauliflower ears.

OP, for right now, who knows?

argument for stocks, corporate earnings rose 11.39% this quarter year/year, so puts forward PE on sp500 at 19.9, not far above historical avg of 18.2 PE, and the earnings of companies are growing much faster(driving PE lower) than the historical price appreciation of real estate, which per every long term study has it pegged at about the inflation rate (Dutch economist Piet Eichholtz built a price index of houses on the Herengracht {most expensive canal, homes} in Amsterdam, with a constant quality from 1628 until 1973, which has been extended to present, 400yrs). Also SP500 up 8X since at 666 on 3/6/09 until now, in just 15 years, with no leverage. Obviously one can use leverage in Equities as well, through 2X, 3X, 4X ETFs on sp500 or QQQs, also via margin but at only 0.5X, but can get easy 100X on call options and potentially infinite leverage on cheap short dated expiry options, So investing today one could get great returns in stock market?

argument for Real Estate, with 5 to 1 or even greater leverage, can be great investment clearly. For me the tax benefits are huge as well. My syndicated CRE investments have done 23% avg annual returns since mid-90s, many rolled over and over by 1031, giving effective tax yield near 37%/year if I were to ever sell, which I hope I never shall, just pass to kids with basis step up on first 13.6 Meg. However, Real Estate is highly sensitive to borrowing costs for all that lovely leverage. With the 10yr rising from 0.31% in 3/2020 to 4.55% now, and if one believes in the data from Soviet mathematician/economist Nicholai Kondratiev, the interest rates along with GDP, follow long 50-60 year cycles of Leverage Up/De-Leverage, or expansion-contractions. We just got off a 40 year Leverage UP from 1981 until 2020, which followed a De-Leverage from 1942-1981, this cycle maps out pretty perfectly going back to late 1770s in US, meaning we may be in year 4 of 30-40 years of rates rising and Cap Rates rising, and pressure on real estate appreciation?

So OP, Who Knows? but just keep investing in something because Inflation is Certain :(

BOFA has 3.18 trillion Assets, most earning prime +, so north of 8%, but the bare minimum they would earn would be 5.33% with any cash deposits parked at the FED reverse repo facility, which equates to about $470,816,666 per day in interest, So delaying a digital payment for a week is like 3.5 Billion dollars across its portfolio

And I love that despite tbills going from near zero to 5.4% over last 2 yrs, BOFA/CHASE still paying its depositors the Princely sum of 0.01% on savings accounts. I'm gonna invest that and watch it grow. :)

yes agreed, definitely not the same thing, just using the equity REIT index as a proxy for american real estate in general. For the passive investors more comfortable with syndications/REITs/CLOs/MREITs/debt funds etc, not wanting active private real estate was thinking more about relative value, Do you think there may be value in certain indoor mall/central business office that has been beaten down so much? especially for someone with 5-10yr horizon? Or are those asset classes really permanently damaged?

 got it, thankyou, hopefully His trust/bank offers some better cash management options as we all know they are getting at least 5.33% from parking his money at FEDs reverse repo facility, or if they have any brains buying 4-8-13 week Tbills for 5.5%, then again they probably are and won't offer him any options so they can keep all that profit, which means there's a business opportunity for a trust co/bank that will 

This simple chart shows the PE multiple difference/spread between SP500 and US Equity REITs, typically REITs more expensive than stocks but now at lowest level/price since GFC-2009, so from a relative value perspective of where to invest a dollar, this is a great time to invest in real estate, thinking long term. Last time spread was this low, March '09, from then until Covid 2020, SP500 went up 455% but VNQ-REIT index went up 555%. Thoughts?

"In response to your concerns, we've thoroughly investigated the matter and have taken steps to address any discrepancies. Also, we want to let you know that your investment has been fully refunded."

this was the only refund by RADD mentioned in the 66 Google reviews/responses on their Google listing, and it was in response to an investor who had filed an SEC complaint, so everyone who has invested with them and has been denied a redemption, please file SEC complaint, but still more likely that a chronically depressed Lemming will survive the annual ocean crossing than you will see a dime of your investment anytime soon. 

They are suffering from their own stupidity, being "over-leveraged", and the investor from greed/fear inducing a good old fashioned Bank RUN on them, which they don't of course have the funds to pay out without bankrupting themselves. Their only chance is to cut all distributions and redemptions and like other syndicators pray fervently that US 10yr will drop 200bips to bail them out of their own stupidity/greed, which may happen, doubtful, Lemming like odds here too. 

What is far more interesting is not the dumb greedy investors that refuse to do an ounce of due diligence before investing and then act shocked but rather the scores of sycophantic, mindless automaton like investors in these reviews who give them 5 stars and say it's the best investment they have ever made in real estate, interspersed with RADD apologizing to 2/3rds of the reviewers for halting distributions and redemptions, which in one review they even hilariously claim that "halting redemptions is common practice in real estate." NO SIR it is not! that is definitely never common. Invariably about 75% or more of the positive reviews come from people who say they attended RADDs Wealth Retreats or conventions, suggesting a more cult like/beholden nature to their reviews perhaps. 

Still good idea to file SEC complaint, but likely won't get you anywhere. Remember SEC never took action against Bernie Madoff who stole 42 Billion in a real Ponzi scheme that he gloated about and that was uncovered 5 years earlier by Markopolos who reported it in excruciating details to the SEC. Nor took any action against 2 Trillion induced losses during GFC, by any banker or rating agency etc, but suppose it can't hurt to get some of your frustration out by filing a complaint, and the RADD managers may be dumb enough to give you back some of your money, as they purported to in 1 review (probably a lie).

If I were in RADDs shoes today, I would have 2 choices, file bankruptcy and disperse assets after paying all liabilities, probably <50 cents on the dollar for investors, or do what they are doing, which is to go to church every day and pray for lower rates and tell the investors to go pound Sand. 

There are even recent google reviews touting what a great company RADD is, despite suspending all distributions and redemptions more than a year ago. Maybe these are fake reviews made by RADD or people are just this profoundly stupid/naive? I just don't get it. The company hasn't even updated its NAV share price since 3/15/23, so why would any thinking person give them their money? They are telling you for >1 year we offer no distributions nor redemption of your investment. This is the equivalent of dumping your cash on your driveway and lighting it on fire, it offers the same return metrics :)

"A fool and his money are soon parted." Thomas Tusser 1557

This company purported to flip urban Baltimore row houses. from the article above, one investor bought 2500 Hollins street west baltimore for 20k, then spent 20.5k for rehab, a simple Google street view search shows it to be abandoned row houses in worst neighborhood of highest crime city in America. I'm pretty sure The Wire filmed here for their "Hamsterdam" sequences. 

anyway, some responsibility must be allocated to the infinite greed of the investor who believed this to be a reasonably safe investment? I should start a fund to flip multi-family in northern Gaza, can guarantee 200% annual returns? What, too soon? 

Everyone develops an intrinsic BS Meter at a young age, but I guess it just stops working on some people, perhaps this is inevitable, perhaps necessary? JP Morgan once said MArkets exist to transfer wealth from the impatient to the patient

isn't there an IRA at a brokerage which wholly owns your checkbook IRA/LLC? that you are the unpaid manager of? so can't you just wire back the cash from your IRA/LLC to the original parent IRA account at the brokerage and then invest in 8 week treasuries at 5.5% or if lazy then buy USFR at 5.4%? or if you can't send money back to parent IRA, then as manager or the IRA/LLC just open an account at Treasury.gov and buy 8 week UST at 5.5% directly held by treasury dept in the name of the IRA /LLC?