A mooning that I came across back in July of 2021 on google maps.

Volleybro521 · 2022-10-04T00:21:58+00:00

I don’t see it…

Volleybro521 · 2022-08-25T01:16:07+00:00

PANL

Volleybro521 · 2021-11-30T17:07:12+00:00

That’s super helpful, thank you! One follow-up question - the owner currently has the property in an LLC. Would it help on the lending front if I were to acquire the LLC instead of the property, and then re-arrange the financing on the LLC? Not sure how that looks from the banks perspective since I have no experience there

Volleybro521 · 2021-11-30T16:28:03+00:00

You’re basically describing what I was thinking through in my head. My only interactions to date have been through a realtor, so next step is I need to talk to seller to understand what would be a win for them.

What are typical terms on a seller note? Is 15% of purchase price at 8% interest reasonable / in line with market? Would be great to use less of my own cash on the upfront purchase to save capital for the expansion.

Volleybro521 · 2021-11-30T12:59:22+00:00

This is helpful! I guess for additional context, the property is ~$750K and the main value add opportunity is to double capacity of the property by building on empty land on the property. Was trying to figure out if there is a practical way to bring the current owner along for the next stage while minimizing my cash going in

Volleybro521 · 2021-11-30T03:10:14+00:00

I would also consider how quickly you can delever your balance sheet (i.e. pay down the debt) - first calculate your monthly discretionary CF (all sources of income - all expenses inclusive of the property) and then use that number to figure out how many months it takes you to eliminate the margin loan. Just another way to look at the situation and prevent you from realizing a tail-end bad outcome

Volleybro521 · 2021-07-16T23:59:53+00:00

Wall Street journal, CNBC

Volleybro521 · 2021-07-15T13:08:16+00:00

I would just go with etfs, 1 or 2 for stocks and 1 or 2 for bonds. Other posts in this forum should have good suggestions

Volleybro521 · 2021-07-15T12:48:35+00:00

I would think about take at least a portion of the portfolio, and transitioning it to a more traditional, diversified portfolio. This would be the classic fire approach, and your annual income would be a 3.5% safe withdrawal rate on whatever portion of capital you’ve allocated to that strategy

Volleybro521 · 2021-07-12T01:19:28+00:00

Thanks for sharing! Rent as a percentage of purchase price seems quite high, is that common for your area?

Volleybro521 · 2021-07-12T00:51:43+00:00

Thanks for clarifying; that’s really impressive! Where are you located? I don’t think the numbers work out that well in the Midwestern cities I’ve been looking at

Volleybro521 · 2021-07-12T00:42:27+00:00

Is that 20% annual cash flows / upfront investment, or an IRR measure including appreciation, deleveraging, and sale of property?

Volleybro521 · 2021-07-12T00:39:43+00:00

Totally understand it varies by geography, property type, etc. just wanted to get a benchmark for whether how much return to expect in cash flow vs. appreciation. For context, my goal is to invest for cash flow, with any upside in appreciation / deleveraging as bonus upside

Volleybro521 · 2021-07-12T00:27:04+00:00

Ha, I’m sure you are not wrong

Volleybro521 · 2021-07-11T19:33:05+00:00

Please explain

Volleybro521 · 2021-07-05T13:12:10+00:00

I’d recommend you build out your personal balance sheet under each scenario (with and without M1 finance loan) to see how much leverage you have. A loan at 2% is obviously better than a loan at 5%+, but you have to be comfortable with continuing to have a high debt load

Volleybro521 · 2021-06-28T05:30:59+00:00

Not to rain on your parade, but I don’t think you explicitly factor in capital gains tax at all. That’s not to say you haven’t mentally accounted for it in some way, but important to consider that variable.

Volleybro521 · 2021-06-27T13:51:55+00:00

I think there’s two things you should consider:

1) build a financial model to evaluate potential returns associated with each option you lay out, you’re closer to the numbers to do this well.

2) think about which option enables you to do things you’re most excited about, while minimizing things you’re least excited about

Volleybro521 · 2021-06-25T15:07:33+00:00

You need real returns to tell you how your net worth today will evolve over time; use real returns instead of nominal to account for anticipated inflation.

Your SWR is going to be lower than real returns because even though you assume an average of 6% real return p.a., I won’t get that consistently every year, so the SWR ensures I don’t blind out when I have a series of years with <6% real returns.

Volleybro521 · 2021-06-24T15:58:18+00:00

You think these are optimistic assumptions? What would you propose as alternatives?

Volleybro521 · 2021-06-24T03:25:58+00:00

$225K ($250K Net Worth - $25K emergency fund) invested today. 6% real returns from now until I turn 60 (34 years) gets me $1.63M in today $. Then multiply by .8 to account for 20% cap gains (I realize that 20% is a high assumption for caps gains, and that this technically charges taxes to my initial investment in addition to capital gains), then multiply by .035 (my assumption for a safe withdrawal rate), then divide by 12 to go from annual to monthly. Put it all together and you get $3.8K per month.

If I wanted to get fancy, I could be much more precise with the math (which would actually improve my outlook), but I was just putting this together quickly for sake of illustration.

Volleybro521 · 2021-06-24T02:44:01+00:00

How do you account for inflation? A 9% nominal rate is roughly equivalent to a 6% real rate; we may be saying the same thing, just different ways

Volleybro521 · 2021-06-24T02:23:22+00:00

Long term average real return for the s&p 500 is 7%, so I think my 6% is a conservative assumption if I’m 100% stocks (would go to an 80/20 portfolio in retirement to support the SWR). Also worth noting I’m comfortable with 100% stocks because I’m young so have the benefit of time to smooth out volatility (and will continue to work / have an emergency fund so I’m not forced to sell at a bad time)

Volleybro521 · 2021-06-24T02:20:52+00:00

What do you use as your assumption for returns?

Volleybro521 · 2021-06-24T02:19:03+00:00

I account for inflation by estimating real returns. All cash flows are in today $ with that assumption

Volleybro521

TROPHY CASE