All Forum Posts by: Frank Jiang

I don't know the details, unfortunately.  I just heard about this from a podcast on the Economist.  I'm sure they don't actually have to pay fees twice because as long as the buyer can get the loan, they can reduce fees by doing a double closing.  The purpose of this is literally just to create the illusion of a cash offer.

Many startups and realtors actually provide this as a service now.

https://www.bloomberg.com/news/articles/2018-06-28...

Essentially, the startup buys the house with a cash offer and then sells the house back to the homebuyer.

The point of the post is that important life decisions should be made using data and facts, not well wishes and feelings.  The comparisons were based on information that the OP presented.  If he has additional information that would allow him to make 45k while not pursuing college (for example, in real estate), he should thoroughly vet that option and give himself a well defined and clear case that can feasibly create that income flow.  Then that can be added as a potential option to compare against the others.  

Just saying "invest in real estate" is simply not good enough. I'm not saying that he shouldn't pursue real estate, just that if he wants to (especially if he plans to do it at the expense of a college diploma), he needs to have a much more well thought plan.  This would be a much different conversation if he had posted "I'm currently house hacking and looking at purchasing another but I just don't have time with college."  Assuming he can achieve a higher salary with no basis and no plan is what is actually arbitrary and delusional.

Respectfully, I profoundly disagree with the central thesis of your post.  Your 20s are not a time to search for happiness and fulfillment.  Pretty much every 20 year old I know does that and it gives no real guarantee to a path to long term happiness.  Most of them end up directionless and chasing every shiny thing they think will make them happy.  Your 20s are a time to instill discipline, good habits, and the understanding that sometimes you have to do something you dislike to get a better long term outcome.

This is a math decision, same as a real estate investment.  TN min wage is 7.25 so your current dropout option I'll assume 15.25 hourly based on the information given or 31,720 annual.

You didn't really state how many hours you currently work but let's assume 0 for sake of simplicity.  Staying in college and not working creates an opportunity cost of 31,720 per year for two years.  You should also count the cost of tuition which I'm assuming is relatively minimal for community college (I assumed 5K).

If you manage to come out of college with a 45K annual salary (21.63 per hour), the IRR on your investment into getting a college degree is 15%. This is a pretty good return. Probably as good or better than any real estate you could currently pursue. 35K to 45K after two years isn't even an inconceivable jump.

Your return skyrockets over time if you can get even a slightly better salary, which I think a CS student should be able to easily achieve.  Stick it out, small advantages add up to a lot and are a big deal at your age.

A lot of stuff going on, but in general, you are turning something simple into something complicated.

- "Loaning" money to your LLC isn't really what you're doing. What you're trying to do is called a contribution of capital. It's the same as moving money between checking accounts. Forget about the interest, it's not relevant.

- Profits from flips are not eligible for 1031 exchange

- With the profit you can turn back around, make an owner draw from the LLC， and pay off the HELOC. Profit on the flip will be subject to taxation as normal.

@Gary Crawford

Love this story!  Quick question: do you have a sense of how much of the appreciation from 185 to 300 was due to your remodel and how much was simply due to natural appreciation in the housing market?

You should major in accounting and spend your side time focusing on Microsoft excel, logic, modeling, and general finance.  This will give you a more than a solid foothold.  Real Estate finance is really not that complicated. Honestly, I am an employer in the corporate finance space and I look at even a real estate master's degrees as a junk degree (I view MS Finance, MBA, and BS Mathematics as superior degrees if you are pursuing a corporate role).  Everything you need to learn about real estate finance you can learn in your spare time.

You have a misconception that I'd like to destroy immediately.  There's nothing lazy about turnkeys.  These properties are marketed as hassle-free and passive.  Let me assure you that they are not.  You still need to research providers, local conditions, etc and at the end of the day, no one cares more about your investment than you do.  If something goes seriously wrong, you will have to be the one to handle it.  There are also a ton of bad actors in this realm who do shoddy rehab work and market weak properties to out of state investors as turnkey.

Those caveats being said, it can work very well. I had an excellent experience with mine (completely exited SFH as of 2018), but like any other investment, you get out what you put in.

So instead of being extraordinarily grateful that the old owner was basically subsidizing your rent for YEARS, you're going to instead kick and scream about how someone is asking you to pay FAIR VALUE?  Wow ok.  The only sociopath (a person who doesn't understand another person's feelings) here is the one who thinks it's ok for other people to pay for their life.

You are very obviously middle class.  This is not a sentiment that is shared by people living in poverty or people who live at a subsistence level.  Your statement is true past a certain dollar threshold, but hilariously out of touch when ya person is scraping to make ends meet.