• The KillerFrogs

OT: How Do You Invest Your Money?

WIN

Active Member
Maybe a different discussion, but owning a home and adjusting for property taxes, maintenance, etc. is rarely a “good investment”, especially after accounting for inflation. To your point, it’s almost entirely timing dependent.

I’ve seen a few personal examples where it actually makes sense (California the last 5 years), but don’t think that’s the case in DFW.

not debating the purpose or value of home ownership, more the people who say “I made double on my house” and ignore property taxes, renovations, etc.

You have to live somewhere, are you considering the cost of renting where you are paying property tax for the actual owner which is just rolled into your rent?
With ownership, you are paying on a mortgage but you are also using someone else's money and you can reap the benefits of the appreciation which hopefully you are in an area which is doing so. TCU area is a good example.

What investment is not "timing dependent"? That is why you diversify. Closest thing I have found are guns but I am only holding and buying have yet to sell.
 

BAM Frog

Active Member
One thing that I’ve been getting into is passively investing in apartment syndications. I invest and the operator does everything else. They acquire the property, renovate the interiors, make other upgrades and increase the rents/cash flow and sell the asset. Two to five year hold, 7-9% return during that time, 70/30 (Investor-LP/GP) split upon sale of the asset. Goal is to 2X my money in 5 years. Also get a K1 to offset any taxes thanks to bonus depreciation (don’t have to depreciate the asset over 27.5 years, can take it all up front which is ideal for this kind of investment). This is the most hands off way that I know of to get exposure to RE, with the least amount of effort and achieving maximum returns.
 

gofor2

Active Member
For years I did the max 401K thing, let the money grow. Don't freak out when the market drops or skyrockets. I made pretty good returns over 15 years doing this. However, after reading a few books I've completely changed my strategy. Its all about real estate now and equity growth by having other people build equity for me.
 
Anyway. Fire away. Would love to hear the thoughts of others, especially those that have done more life than me and have better wisdom and perspective.

Yeah, I make a lot of money. I'm in the stock market. Now I don't know if you know anything about the stock market or not, but uh, if you do, you'll appreciate this. I bought cardboard when it was 14 cents a ton. And its up to 16 cents now, so... lets see, I bought 3 tons of it, so that would be....well, you figure it out. And when I bought it I made a special deal with them where I only have to keep 2 tons of it at my house.
 
For years I did the max 401K thing, let the money grow. Don't freak out when the market drops or skyrockets. I made pretty good returns over 15 years doing this. However, after reading a few books I've completely changed my strategy. Its all about real estate now and equity growth by having other people build equity for me.

That's kind of what growth and dividends in the stock market are...
 
Spend like there is no tomorrow, the socialists will take care of us! Vote for Bern students on campus today. I do wish people would be required to work real jobs before they can vote.

Currently playing some into Fundrise, which averaging around 8% returns, don't have enough in there to worry about the fees, which I believe they claim as 1%.

Or have ever held a real job before getting elected to congress...
 
Good for you.

Look at the lifestyle of those five Founder suite owners. They don't flash the jets, the cars or the ice. They don't need to. We aren't financially capable of living a lifestyle we cannot afford as it eventually catches up to you and is nearly impossible to dig out if, despite what the Dave Ramseys of the world would say.

I know 2 of them. They might not flash them, but they have them.
 

PO Frog

Active Member
One thing that I’ve been getting into is passively investing in apartment syndications. I invest and the operator does everything else. They acquire the property, renovate the interiors, make other upgrades and increase the rents/cash flow and sell the asset. Two to five year hold, 7-9% return during that time, 70/30 (Investor-LP/GP) split upon sale of the asset. Goal is to 2X my money in 5 years. Also get a K1 to offset any taxes thanks to bonus depreciation (don’t have to depreciate the asset over 27.5 years, can take it all up front which is ideal for this kind of investment). This is the most hands off way that I know of to get exposure to RE, with the least amount of effort and achieving maximum returns.
A lot of multi family is going to get smoked in the next year or so, IMO. I know of quite a few Fannie/Freddie defaulted loans that have hit our shop and they were originated in the last two years. If you bought in that time, you probably overpaid...
 

ticketfrog123

Active Member
You have to live somewhere, are you considering the cost of renting where you are paying property tax for the actual owner which is just rolled into your rent?
With ownership, you are paying on a mortgage but you are also using someone else's money and you can reap the benefits of the appreciation which hopefully you are in an area which is doing so. TCU area is a good example.

What investment is not "timing dependent"? That is why you diversify. Closest thing I have found are guns but I am only holding and buying have yet to sell.

Assuming property tax for commercial real estate builders is the same as individual residential? Don’t know enough to say either way. Don’t think rent is priced versus all-in cost of homes as renting is significantly cheaper in most metro areas.

would argue stocks are not timing dependent as the quality, recognizable ones tend to increase consistently over time.

can’t say that about real estate...it’s getting to a point where the most questionable mortgage lenders hit a risk wall
 

Wexahu

Full Member
A lot of multi family is going to get smoked in the next year or so, IMO. I know of quite a few Fannie/Freddie defaulted loans that have hit our shop and they were originated in the last two years. If you bought in that time, you probably overpaid...

Ridiculous what little shoeboxes of terrible build quality are renting for these days. There are going to be a whole bunch of terrible looking apartments all over the place in 10-20 years. "Wood" floors, quartz countertops and some trendy looking appliances are the lipstick on the pig.
 

jake102

Active Member
Ridiculous what little shoeboxes of terrible build quality are renting for these days. There are going to be a whole bunch of terrible looking apartments all over the place in 10-20 years. "Wood" floors, quartz countertops and some trendy looking appliances are the lipstick on the pig.

My two favorite real estate gimmicks:
1) New neighborhoods where they advertise being able to build your "custom" home. Yeah - you get like six floorplans and get to choose a handful of options on finishes. Want to build a mid century house? Modern? Forget about it.
2) Renovations that all look the same. The same 3-4 combos are being used.... faucets, countertops, floors, etc.
 

Planks

Active Member
Haven't seen HSA's mentioned on here yet, but make sure you max that thing out too. You can save the receipts and reimburse them decades later after decades of growth.

Agreed, I think after meeting your employer 401K match the HSA is the best place to put your money. It’s basically a Traditional 401k/IRA that you are allowed to take money out of tax free at any time for medical expenses. Plus like you said you can wait to reimburse yourself at a later date after years of growth.

It’s hard to beat something that allows your money to go in tax free, grow tax free, and come out tax free (medical)
 

Chico Dusty

Active Member
Well for any of you big money guys - the company I founded is currently raising capital. Digitally native made in USA menswear brand. I’m happy to share our deck for any interested parties.
 
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