All Forum Posts by: Ronald Perich

@Gino Barbaro, a telling metric I look at is the Civilian Labor Force Participation rate. It's at one of the lowest points it's been in the last 20 years. Add to that a stagnant median wage (in inflation-adjusted dollars).

So we have fewer people working as a percentage of the population than 20 years ago and those that are working make about the same amount of money. GDP Since April of 2008 (in inflation-adjusted dollars) has risen a paltry 4.36% (that's over a period of seven years).

I'm not an economist and I don't play one on TV. But I don't know if we actually ever came out of the last recession.

The only bright side to all of this is household debt to GDP. It continues to decline which should make the next downturn a little less painful.

Already have my tickets! If I order something from you, can you just bring it to the convention :)

@Ben Leybovich, Grant is not the only one who is starting to pile up the cash in anticipation of a softening of the market. Sam Zell is also staging for it (read about it in Barron's). While his fund may be working in the office arena, it speaks to the condition of the economy and what his outlook is on opportunistic plays.

The Case-Schiller National Home Price Index also shows that Home Prices have nationally all but recovered to 2007 levels. That doesn't necessarily mean another crash of 2008, but it does show that housing prices have recovered to a pretty high level. That brings affordability into play. Wells-Fargo's Housing Opportunity Index also shows how housing is becoming more expensive relative to median incomes.

Intel is laying people off (good paying jobs), Boeing is laying people off (good paying jobs), and Information Week just posted about about more than 260,000 tech workers on the chopping block in 2016.

Everyone is running into RE as an investment and the less-enlightened are over-paying for that opportunity. 

To me, this points to an opportunity in the making.

And I listen to Grant's podcasts quite a bit. I think what he's saying is get yourself ready to take advantage of this situation. He thinks we're already in a recession and nobody is publically saying it. What he wants you to do is sell high and stash your cash so you can buy low.

And that's what we'd all like to do, isn't it?

I can't say that I've seen it. But I like your approach. If it's in the area I am thinking of, then it should be a highly sought after property. Best of luck! 

Those numbers are a bit thin for a wholesale. $120K all-in for a property with an ARV of $135K doesn't makes the buyer any spread after closing costs. Not sure you'd find anyone other than a long-term buyer. And even then it's a bit on the low equity side.

Bingo! You cannot use that 401(k) money until you're ready to retire or until you leave the job and roll it over into a self-directed account that can then invest in income-producing assets. But even that income isn't giving you immediate benefit - it has to go back into your retirement account.

That means I need to wait until I've reached "retirement" age.

I want the option to retire at any time of my choosing, not when the government gives me permission to do so. I want multiple streams of income that gives me the ability to retire when I want.

Look, I understand the majority of people will never buy or start a business. They feel safe working for an employer who will provide them with benefits and the "security" of a steady paycheck. For those folks, a 401(k) is probably going to give them the best chance of eating more than Ramen noodles when they retire after 40 years.

@Jon Pacitto

My personal opinion of employer-sponsored 401(k) plans is they are a fallacy at best for most people. And this is coming from someone who contributed to their employer plan since day 1. Yep, I contributed to my plan while in high school. But they are a good way to break into investing. And they sort-of force a discipline upon you because you invest automatically and get used to not having the money. As @Dmitriy Fomichenko pointed out, the employer match is an attractive feature of many plans. 

But I won't contribute to my 401(k) any longer, even with the generous match. I wrote a post about it a while back explaining why. Bottom line for me is a 401(k) through my employer is not as good for me as investing in cash-flowing assets. But this is my personal opinion (backed up by data), not necessarily something everyone should do. Dmitriy can explain why a Solo 401(k) is a much different story.

If you ever leave your current employer, make sure to move your money out of the plan through a direct rollover to an IRA.

I started investing in real estate when my employer made changes to the pension plan (they stopped contributing to it). I was facing a shortfall in my retirement plans as a result of this change that I needed to make up. After the 401(k) losses I racked up in 2008, and how long it took me to recover from those losses, I knew I wouldn't make it through stock investing alone. I needed something else.

And so do you. 

Do not believe that promises made by others will be kept. Take control of your own destiny. If you do falter, at least you'll go down swinging. Still need convincing?

This article talks about pension cuts for truckers already in retirement. 

Another on how the 401(k) isn't living up to the hype.

And hopefully everyone realizes Social Security is spending more than it takes in according to its trustees.

My point? 

The folks with pensions really can't count on it staying in place as promised. And even if they do, the purchasing power of your defined payout reduces as you age.

Social Security has to change how much it pays, when it pays, and/or how much it taxes to stay solvent. In all three cases, you end up with less.

And 401(k) plans just don't live up to what was promised.

Take an active role in your own future. Don't rely on someone else to take care of you. 

My advice? Hire a plumber. It may cost you, but they will get it corrected and do so safely. It sounds as though this may have been a piecemeal job over time. You never know what might be going on and could be looking at a serious problem later on.

@Jeff B., glad to hear it! 

Of course, your market is quite different than mine. If you are in San Bernardino County, the SFH market has been on fire the last 12 months and average prices have risen. This puts pressure on rentals as more people move into them.

My market, not nearly as hot. MFH sit around for a while as we don't get a lot of traction from the big players. Any well-run property will go faster of course. But it still takes a while.