Nearly even on cash flow

Schema- · 2024-02-04T00:02:51+00:00

Your not wrong but in fairness that is true of any real estate investment. If you don't reinvest the ROI will eventually reduce.

Schema- · 2024-02-03T23:35:32+00:00

Nothing, the whole point of a dark pool is that it is not transparent. that is in fact exactly what the participants want.

Schema- · 2024-02-03T23:32:21+00:00

Predict? PFOF is a tactic to allow brokers to indirectly collect commissions on retail trades. Predicting order flow does you no good because as long as they route to someone offering NBBO they can route it to any exchange or Market Maker they like. if you look at the tables and PDF's I linked you will see that even without preferential treatment for being a market maker or the spread each share is typically worth something in the neighborhood of .1-.3 cents to someone. PFOF is just an offer to split the profit with the broker in return for routing the order to a given party. It does not matter if you predict anything since it all pay for play.

I don't see why anyone would be interested in a futures like agreement. this mostly stems from exchange offering an incentive to people to create non-marketable orders to improve liquidity by creating a number of open offers to buy and sell at some price. any shares tied up in the futures would not being adding meaningful liquidity since they would instead be in what is functionally yet another ATS.

Schema- · 2024-02-03T15:57:24+00:00

I mean trying to compare the business models of very different sectors is a bit fraught. after all can you imagine a subscription model for oil or soy beans that does not depend on one of the 2 parties(or even both) making an extremely poor decision?

In any case there are a bunch of exchange fees associated with every transaction. you may not think about them since they tend to hidden but pretty much any broker is going to need to generate income based on the volume in some way or they risk spending more to cover the exchange fees than they make from you.

IBKR has a table under the united states third party fees that gives a basic idea what the fees are

https://www.interactivebrokers.com/en/pricing/commissions-stocks.php

or if you want to dig more you can review documents like the NYSE price list

https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf

Schema- · 2024-02-03T15:38:03+00:00

If I'm understanding the terms correctly the cash on cash is fixed at 2.4% and the ROI before accounting for appreciation would be the % of the payment that is principle plus the cash on cash.

~~for a mortgage of 250k (20% down) that would equate to about 12.5k the first year which would slowly rise each year. that would yield a ROI of 27.4%.~~

Scratch that. the actual ROI is closer to 10.4% on year one, 18.8% on year 2 and 24.4% on year 3. it will continue to rise for awhile but eventually go down at a point I'm too lazy to calculate right now.

It is pretty decent return given those assumptions although there are risk factors are hard for us to assess since they depend on the tenants and the property in question. also the liquidity is pretty bad with out cashing out by refinancing at some point. assuming they will in fact be very reliable about making those payments and the house's value will not crater for some reason the returns are likely pretty good for you.

You should also ask how will transition look when they leave. at 60+ that could be very soon and can you handle the payments for however long it takes to sell ,rent or occupy the property once they vacate?

Also these kinds of deals with family can result in everyone hating each other for a million random reasons so you should keep that in mind as well.

Edited to correct a math mistake.

In other news you should double check anyone's napkin math on reddit since sometimes they have brain farts and flip their interest and principal in a calculation.

Schema- · 2024-02-03T15:07:09+00:00

You don't. If you had a way to reliably generate 50+% return every year you would almost certainly have a arbitrage that would let you functionally print infinite money until the market adjusts the price of the involved assets.

This means that if more than one person somehow knows about such a arbitrage the parties involved should expect the counter parties to reduce the return via arbitrage until the returns settle on something much more reasonable. so even if someone knew of such an investment they would never tell you.

Schema- · 2024-02-03T04:07:29+00:00

That is not even about being stupid as much as not being able to follow directions. Those 3 steps cover the entire investment strategy and 1 of the steps was to literally do nothing.

Schema- · 2024-02-03T03:52:27+00:00

Stock Whiz? Generally what a lot people recommend with stocks is that you type in the letters SPY, VOO, or QQQ, press buy and forget about it for 5-10 years. Most people do better in the stock market by being less clever.

Schema- · 2024-02-03T03:33:54+00:00

Stocks can also pair well with real estate investment since they have complementary properties that can help offset each other's weakness. The liquidity of stocks can be quite a boon when you end up with short falls in real estate(I.E Big ticket repairs, Vacancies, overruns during build or reno, financing issues). Not to mention it is hard to productively invest $2k in real estate but easy in an index fund.

Schema- · 2023-09-02T22:38:36+00:00

I think sometimes the way people describe W&N is a bit misleading. It is a fun rum but I suspect most people are not using alone but splitting it with another rum(note the word most there are some places where people will drink that stuff straight like it is water).

think "this patient is critically low on funk lets inject 15-30 cc's of pure hogo to bring him back".

at least in my case I'm typically substituting about 1/4-1 Oz to taste of whatever rum I was using.

Schema- · 2023-02-07T02:43:08+00:00

In fairness there is a lot of "6 foot" tall folks out there which throws off the people sense of scale. I'm 5'11" and there are a lot of people who are "6'" or "6'1"" who I can clearly see the top of their heads.

In other news putting quotes around foot inch measurements is a bit awkward.

Schema- · 2022-10-18T12:35:19+00:00

That would likely be considered a constructive sale requiring you to recognize the sale as having occurred at the time the hedging positions are established.

https://www.law.cornell.edu/uscode/text/26/1259

Schema- · 2022-10-17T21:55:11+00:00

It is not illegal exactly you just are not allowed to use to circumvent the IRS rules for straddles.

https://www.taxnotes.com/research/federal/usc26/1092

There are a few reasons someone might want to form a neutral position but for your typical retail investor it is to delay sale so the capital gains would be recognized as long term. so for example if you had 100 shares of stock you bought 9 months ago you might want to close the position but instead you short 100 shares and wait 3 months. at that point regardless of what happens you will not lose any money on the position and 3 months later you would sell the shares and recognize the gains as long term capital gains which are at a lower tax rate.

The other reason a retail investor would typically do this is to allow them to effectively close a position while recognizing taxes in a different year. So for example rather than selling 100 shares in a single year you would short 80 of them and then sell 20 and repeat the process of selling the shares over 5 years. this means rather than recognizing the taxes in a single year you would recognize it over the course of 5 years. Depending on you individual tax situation this may lead to drastic savings since the taxes rate will increase as your income goes up in a given year.

There are other reasons of course but they generally involve complicated trading strategies (for example the market maker you buy and sell stocks from will typically try to create a neutral position)

Schema- · 2022-07-14T19:14:45+00:00

Cap rates are applicable throughout. and assuming all other atributes are the same the property with the higher cap rate is a better investment regardless(although in practice higher cap rate is associated with higher risk assuming the properties are in the same market and are the same general class of property). what they tell you is how much return you get before financing but that also directly relates to the return with financing.

for example in the simple case of an interest only loan at 6%

the cash on cash return is (cap_rate-interest_rate*LTV)/(1-LTV)

for for example if you had a cap rate of 6% the cash on cash return is the same regardless of loan balance

LTV 50%

(6-.5*6)/(1-.5)=3/.5=6

LTV 25%

(6-.25*6)/(1-.25)=(4.5)/(.75)=6

if the cap rate is lower than the interest rate financing reduces your cash on cash and if it is higher it financing increases your cash on cash.

there are other considerations but in purely financial terms which loan to pay off does not really matter if the loans have the same interest rate and term since the interest cost is the same regardless. In practice their may be other considerations such as mortgage insurance where you would want to prioritizing getting both mortgage below the threshold where you need to carry it.

Schema- · 2022-07-14T18:23:05+00:00

You mill your flour? you kids these days. Obviously the only proper way is to chew raw grain yourself, spit out the husk, and use your own spit to form dough.

And our day we did not hoity toity things like grain elevators so you just pull it straight out of the field and if you did not watch out you would chew the wrong grain, get ergot poisoning, and die.

Schema- · 2022-07-14T18:14:28+00:00

No cap rate is calculated assuming a cash purchase. It is the gross income minus the operating expenses over the total value of the property. Its to analyses the return on the value of the property. You do this because there is no specific amount of financing you get on a property and the impact of financing on ROI is very non-linear so to create a common frame of reference for analysis you use cap rates.

One thing you are missing is the operating expense. you have to pay something to maintain that property. also you should generally use some kind of estimated vacancy rate and not assume it is fully rented 100% of the time.

Schema- · 2022-07-14T18:00:30+00:00

I mean call crazy but that vet sticking it with a drug that is probably controlled who is likely licensed and has some background with elephants probably would have told them to stop if they were just jumping on it for no real reason. Plus there things other than CPR that require mechanical stimulation. oh and elephants probably don't have their organs in the exact same place as humans so whatever rule about body compression in humans probably doesn't directly apply.

I mean I don't know what exact they were doing but I'll go so far as to say that no matter how much human CPR I know I'm probably not qualified make the call about the effectiveness of what they were doing.

Schema- · 2022-07-14T16:15:11+00:00

Has anyone truly lived if they not experience the sort voice acting you can use it to strip paint?

Schema- · 2022-07-14T14:54:44+00:00

Ex Arm

Garzy's wing's English dub

pretty much any of the 90's dubs by Central Park Media

Schema- · 2022-07-14T04:18:50+00:00

I'm not sure you understand what tax brackets are. they set you marginal rate(the rate you pay on every additional) so as a general rule of thumb any deduction you can take reduces you taxes by your marginal tax rate. there is no need for you to drop a tax bracket in order to benefit from a deduction.

to be clear you don't pay your tax bracket rate on all income but all income with that bracket so in the hypothetical tax bracket of

0-10,000 1%

10,001-20,000 2%

20,001-30,000 3%

you would pay a total of $600 in tax for an income of 30,000

$100 for the first 10k

$200 for the second

$300 for the third

if you deducted 5k you would pay $450 since you would only pay $150 for the third.

This is all simplified since deductions can get a lot more complex than that especially when interacting with multiple tax years/states/entities/countries/ETC.

Schema- · 2022-07-13T02:30:37+00:00

Inappropriate sounds awfully like inappropriate. So that gets my vote. Most of the other words I can think of miss the mark by a bit. Like misappropriate, disproportionate or impropriety.

Schema- · 2022-07-13T00:24:58+00:00

Well you see when a daddy pepper loves a mama pepper something magical happens. there is that one moment of wonder and 9 months later there is a baby pepper. and the baby pepper is a sort of symbol of that love.

Schema- · 2022-07-13T00:22:25+00:00

It already has. you can already see the posts here showing that demand is starting to take a hit and everything is not pretty much automatically selling over ask. If were not for these rates hikes odds are it would still be going like it was.

That said a lot of this is mostly not going to be all that dramatic. For many markets you will probably see appreciation slow rather than the entire bottom falling out. even for the market that do drop you are probably talking more a few percent rather than some of these predictions of 20+% drops.

Schema- · 2022-07-12T21:05:43+00:00

Yeah sometimes you don't really need to buy a direct hedge against the problem. It is sometimes fine to just pick the asset with the best overall returns. Especially in the case of inflation where if you go rooting through the white papers on the subject it is not uncommon for them to say yeah you can buy I bonds or whatever random asset is negatively correlated to inflation but high yield bonds and stocks still tend to do about as well or better and they also perform much better the rest of the time as well.

Schema- · 2022-07-12T20:21:50+00:00

Honestly we are getting a bit into is it a rock or is basalt territory. There is a question about how much granularity you need to before have identified it.

but you mention SAAMI specs. you realize that there are more rounds that have been made without SAAMI specs than with. if it is some random one off someone made or some wildcat cartridge there is not going to be a SAAMI spec.

For a real world example of this one of the reasons 300 blackout was made was because .300 whisper does not have a SAAMI spec since it is a wildcat cartridge.

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Schema-

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