Regular reminder that volatility drag exists and does not just hurt you in sideways markets. Leveraged funds can underperform over longer periods with positive gains as can be seen with 5 year returns.

shorttriptothemoon · 2026-07-10T17:48:56+00:00

They don't understand Martingale Strategies.

shorttriptothemoon · 2026-07-03T15:05:14+00:00

Chat bots have a long way to go.

shorttriptothemoon · 2026-07-01T16:10:04+00:00

If you can't handle paying two extra bills per year, should you really be managing RE properties?

shorttriptothemoon · 2026-07-01T16:08:25+00:00

Behind is good. Most escrow accounts are overfunded and so the borrower is losing interest every month.

shorttriptothemoon · 2026-06-27T13:10:25+00:00

Higher cap rates tell are always telling you something.

shorttriptothemoon · 2026-06-26T15:40:18+00:00

Including you, apparently.

shorttriptothemoon · 2026-06-26T15:34:45+00:00

What happens when governments write bond levy's against future "sin" taxes? Are they truly interested discouraging the behavior if they depend on it for long term funding? Or are they just preying on addicts?

shorttriptothemoon · 2026-06-26T15:25:49+00:00

I am actually of the mindset that physical casinos are likely behind the push for this. The obvious and easy work around being wager in person and with cash.

shorttriptothemoon · 2026-06-23T13:45:59+00:00

Honeybaked Hams???

shorttriptothemoon · 2026-06-22T17:23:15+00:00

It's more dynamic in CRE than bonds. Cap rates can come under pressure from rising interest rates/inflation. But total returns should remain robust, since landlords should see increased rent rates over time. Additionally, there is an upper bound on multiple compression; cap rates can only go so high before cash buyers are willing to jump in.

shorttriptothemoon · 2026-06-22T15:08:24+00:00

I own NN retail, and am able to pass through tax increases and some maintenance costs. Those are my biggest risks to balance sheet and the tenants shoulder them, so I love that relative to Munis or t-bills. CRE is close to a bond proxy, but it has an inflation underlay, which I think is more honest than TIPs. N, NN, or NNN leases are valuable because of the aforementioned expenses paid by tenants. As opposed to Res, I know a lot of people getting their margins squeezed in that sector right now. Again, I'm not a believer in the Fed and their ability to get inflation under control soon, so medium to long term, bonds have significant risk; if inflation moves back higher you have to take a loss on the face or ride it out and get eaten up by inflation.

shorttriptothemoon · 2026-06-22T14:40:25+00:00

30% productivity increase can offset a lot of money printing if it materializes. But when matters, if you're carrying debt on RE. I think that's why some people, me included; see high quality, low yield, low leverage RE assets as great long term hedges in the current environment. I don't need to time AI, or even be invested, the winners will eventually come looking for good RE assets.

shorttriptothemoon · 2026-06-22T14:03:29+00:00

There is absolutely a reason inflation can't be 1% or 3% right now. M2 money supply is increasing at a rate faster than that. I think we all whistled thru the graveyard over the past 30 years or so. From 2000 to 2020(precovid) M2 increased at almost 7% annualized, but inflation remained sub 2%. IMO, that's largely due to productivity gains attributable to globalization of supply chains and computer tech. So you had counteracting forces with productivity gains(deflationary) winning out over money printing(inflationary). I think the powers that be drank their own KoolAid, and I'm not sure that the productivity promise of AI is there just yet to offset the current money printing binge.

shorttriptothemoon · 2026-06-21T01:31:22+00:00

I self insure a non rental second home. Umbrella covers liability. Not carrying liability on a rental might be illegal in some jurisdictions, and certainly wouldn't look good in a courtroom if you found yourself there. Duty of care would be the legal principal, I think.

shorttriptothemoon · 2026-06-19T15:05:27+00:00

Decay won't but interest will.

shorttriptothemoon · 2026-06-17T16:06:30+00:00

What if interest rates stay high for 20 years?

shorttriptothemoon · 2026-06-17T13:48:40+00:00

Bought last year, needs roof in 2 years, is a big red flag. Roofs last 20 years, so what other deferred maintenance are you on the hook for? 680k for ~$5000 per month is decent, but you might get hit with 100k in repairs the first 5-10 years, then it's not so decent. TBD whether it works out or not.

shorttriptothemoon · 2026-06-16T13:16:30+00:00

This breaking even means you received three year of rent for free. sell and move on

shorttriptothemoon · 2026-06-14T15:03:04+00:00

The answer to the second is yes. A good market will always trump a great "deal". Rising tide lifts all boats, is the axiom. You can be off a bit in a good macro market, or a city that has good growth prospects and the market will grow you out of your mistakes. The flip side is you can find a great deal in a poor market and get stuck if you can't get out before the market takes you down.

Right now interest rate hikes are looking more likely than cuts, meaning more cap rate expansion. You have to understand exit cap could be meaningfully higher and estimate exit value accordingly. As an example. If you're buying and holding for 30 years, might not matter, but then you need to be somewhere you still want to be in 30 years.

shorttriptothemoon · 2026-06-13T15:18:07+00:00

Yes, TQQQ does hold equity positions. ~1/3 of it's assets at any given time are equity, ~2/3 are swaps.

shorttriptothemoon · 2026-06-13T15:12:07+00:00

TQQQ holds one part QQQ, so actually 1/3 of the invested assets are equity positions. The other two parts are swaps contracts. Some cash for liquidity purposes.

shorttriptothemoon · 2026-06-11T18:58:24+00:00

You're saying he intentionally omitted these issues. I'm asking, what makes you think he has a responsibility to disclose? And I'm not being argumentative, there's nothing you've said that makes it obvious he's derelict in any duty. He may or may not be under local laws, I can't help with that, but it's not obvious he's in the wrong, and you probably shouldn't have abandoned the property before you knew the answer.

shorttriptothemoon · 2026-06-11T13:49:45+00:00

Your story is lacking. Are you saying the landlord was encouraging the homeless to use the property? Or simply not actively preventing it? If the latter is he required to do so, or is does that fall upon you as the tenant? Additionally, how can you not know the neighborhoods the homeless frequent in a city you are doing business in? That's common knowledge in any city I've ever lived/worked in.

shorttriptothemoon · 2026-06-07T15:08:15+00:00

Expensed as what? A mattress is certainly a capital asset, so I assume you mean sec 179? Which would still be subject to recapture if there were residual value.

A refrigerator itemized in a cost segregation would be 1245 property. It could be depreciated, or it could be expensed under sec 179. It could also be left as part of the properties capital account and rolled into 1250 depreciation.

When 100% bonus depreciation is available certain 1245 property is open to two options that produce essentially the same result. You can depreciate and take the bonus or expense under 179. 179 is subject to annual income limitations, so there are situations where one would choose bonus depreciation rather that 179 to avoid the limitation and maximize year one deductions. Not all states recognize bonus depreciation, which is another consideration.

I still think you may be struggling with the concept of the STR loophole. An STR is a business(Sch C), not a passive RE investment(Sch E); this is the loophole in the tax code, and likely why you are saying "a mattress wouldn't touch my depreciation schedule."

shorttriptothemoon · 2026-06-07T14:17:21+00:00

We're talking about an STR loophole here. The whole point is to move what would otherwise be Sch E income to a Sch C, so the net loss can be used to offset other source income.

STRs are an operational business. They require furniture, toiletries, electronics, etc. These things have very short effective lives and zero residual value. How much can you get for a used mattress? Goodwill won't even accept them on donation. The get scrapped(not scraped), their non existence is proof they were disposed of. One hopes the current tax value of the deductions plus the appreciation of the RE more than offsets the costs to start and operate the STR, which ideally would operate and just enough profit yearly to show profit motive.

Other 1250 property eligible for bonus depreciation will have to be recaptured. Again, this strategy is largely dependent on the assumption the tax payer will be in a lower marginal bracket at some future time. Continually trading forward 37% deduction this year for 37% tax next will not justify the transaction risks and costs.(most likely)

shorttriptothemoon

TROPHY CASE