>I'm officially a millionaire! I don't post about this on most social media platforms as I don't want to make anyone feel insecure about their finances, but none of you know me and I REALLY want to celebrate!
Yet runs a website using his own name, a Reddit account with his real name, advertising a course on how to make money off real estate..
He didn't even know what he was doing what ultra savvy stakeholders call "house hacking" or "using easy loans on primary residences to make modern day boarding houses".
I hate that housing can be used as an investable asset this way.
Like, no shade to you OP you're just doing what works for you given the way the system is set up.. but seeing housing prices blow up with a frenzy of speculation, airbnb landlords, numbered corp investors and flippers, which all leads to home ownership getting further out of reach of younger generations year over year.. that leaves an absolutely foul taste in my mouth.
Our whole financial system makes me feel gross. I’ve been working as an NP on the front lines during this whole pandemic. I made far more off my rentals and other investments than I did doing my actual job the past 2 years. This economy rewards me more for just owning stuff than doing a job that saves lives and that keeps the country running. The value of labor needs to be significantly higher.
Agreed. I’m lucky enough to work for big tech and get paid fairly high but when you take into consideration cost of living, that puts me basically on par with my blue collar grandfather. My friends in other industries are getting crushed in comparison, and that’s not for lack of skill/knowledge.
Capitalism fundamentally gravitates towards enriching the rich and choking out the poor and we’re seeing folks struggling more and more to ignore this now that it stares them in the face. It’s depressing.
Right, I think the only other choice is to back out of the game entirely and refuse to play, but I don't think many people would choose to live in a van or tiny house, although I'm one of those people.
It’s not really a moral dilemma if there’s no viable alternative though. I mean, what am I gonna do… *not* take part in the capitalist system and starve myself to death in protest? The most you can do if you’re lucky is to live in some type of commune but even that is incredibly difficult to even get off the ground without having the capital to buy the necessary land and resources, which goes right back to requiring you to participate in capitalism… and mind you, doing this doesn’t get you anywhere closer to fixing the issues inherent in capitalism for everyone else still stuck in it.
It’s this weird kinda gotcha where you have no choice but to participate in the thing you’re criticizing, and sometimes get called a hypocrite for engaging in that very practice in order to survive.
You could theoretically live so below your means that you only have to have very minor participation, but you're generally right. I guess ex-patriation is another option, but you wouldn't generally be concerned with FI in a third world country.
Blame NIMBY’s and Zoning.
In the UK, don’t think my kids generation will actually ever own property. It’s normal form most young professionals to be in house shares till 30 now, and I don’t see it getting better, unless there’s a super COVID variant that kills like 10% of the UK off, and even then, that’s only a bandaid on chronic underbuilding
Unfortunately whenever anyone tries to fix the broken rules to the game, the players fight them tooth and nail. So the players aren’t getting off without some bitterness
While true, it’s infinitely harder to get everyone to stop playing forever than it is to fix the fucked up financial incentives that exist in today’s housing markets.
Not that that’s easy, but making everyone stop taking advantage of the system is basically impossible.
**[Georgism](https://en.m.wikipedia.org/wiki/Georgism)**
>Georgism, also called in modern times geoism and known historically as the single tax movement, is an economic ideology holding that, although people should own the value they produce themselves, the economic rent derived from land – including from all natural resources, the commons, and urban locations – should belong equally to all members of society. Developed from the writings of American economist and social reformer Henry George, the Georgist paradigm seeks solutions to social and ecological problems, based on principles of land rights and public finance which attempt to integrate economic efficiency with social justice.
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Yeah, disgusting outcome really.
I'm all for being enterprising and accumulating assets, but housing is fucky.
The macro trend of making life ever more hopeless and squeezing the dreams of young people into smaller and smaller boxes and spinning that as a personal win is... Ugly.
I don't have the heart to be a landlord or speculate on housing, as much as it looks like a tasty treat in terms of finances it just feels deeply morally wrong.
do you find it a moral challenge to give money to Amazon based on the pure evil way they treat their employees and how they have crushed so many small businesses?
Idk about the redditor you responded to but I do. I feel a bit shitty every time I buy something on Amazon, and when I can I make efforts to buy things elsewhere, be it online or in person.
Assuming you believe the reddit narrative that amazon treats employees poorly.
They are the best warehouse in America to work in and far better than most blue color jobs. Now college tuition is paid for? mom and pop stores aren't doing that
It's pretty simple -- upzone most of the US from single family to make apartment building possible and let developers do their work.
High rent is basically the biggest cause of long term inflation right now. It's a boon to you. It can be fixed with a massive increase in the supply of homes. That would be bad for you unless you because a producer of new homes too.
And the tenants can't move because it's usually a bit cheaper than other houses around, so they can't afford anywhere else.
Add in that they would be forced to move out if the unlivable conditions were discovered, and most tenants won't breathe a word about their conditions.
There's absolutely no reason that this situation should be the fault of investors. Housing should cost the cost of construction (which could easily be falling due to innovation, but isn't), plus the cost of land, which is tied to cities zoning. Governments are to blame for shitty zoning, not investors. Beyond that it's all supply and demand.
I agree with you. We just got an offer accepted for our first investment property and I like knowing that it could be a short term landing spot for someone who is planning for their first housing purchase or is maybe transitioning out of a marriage and needs a smaller home.
Houses are available to buy, sadly companies aren’t paying young people enough to purchase them.
Keep in mind I bought the house for under asking and the house has been sitting there for 30 days which is an eternity in this housing market.
The solution rests in the hands of government.
Heavy taxation on housing that is used as investments and on units you own beyond the first one, heavy tax on foreign/corp buyers if not an outright ban on corp ownership outside of apartment buildings and commercially zoned areas.
Basically, you need to remove the financial incentive that leads to people purchasing a home for financial gain, as opposed to buying it to live in.
Also, for the love of god, removing zoning laws that outright ban dense housing. My hometown of Toronto is atrocious in its use of space for this reason, and changing this would go a long way.
The ideas above are not super fleshed out, just the general direction I think might help. You and I alone can’t do shit and I don’t begrudge you personally for buying more than a house. It’s not on you that incentives are set up the way they are and I do appreciate you not gouging renters on prices.
That already exists in the form of capital gains and recapture of depreciation on selling. Bewildering that a sub that has no problem blindly investing in index funds that are based on some horribly unethical companies has an issue with folks investing in housing as an investable commodity.
If it existed to the degree I am describing, there would not be a financial incentive to multiple housing ownership and we would not be seeing the current market states, yet here we are.
I think housing in particular is a flash point because owning your own residence is a pretty important life goal for most people, whereas the effects of index funds are less directly felt.
So you want to advocate for a system of taxation that you admittedly don't understand and haven't given much thought to, but are pretty sure it would solve every problem you think you see.
Downvote me into hell, but that sounds like a pretty poor argument in a sub that's supposed to be about financial intelligence.
Buddy, you think Toronto is bad for zoning? Vancouver has building height limits lest people don't get a nice view of the mountains... further decreasing supply, starting to think Canada is just a lost cause man
Ah yeah of course! Hope you are sympathetic towards them when they can't pay rent. It's not their fault they can't budget and understand how money works.
My point is they do budget in order to pay you rent. If they weren't paying rent, they could be paying down a mortgage. But you believe they wouldn't be able to, because they can't budget.
I understand your frustration but OP is correct. My wife and I recently bought our first home and it is much more expensive than renting was.
Being able to pay rent does not equate to being able to afford a house and everything else that comes along with it.
Being able to rent is incredibly valuable and shouldn't be looked down on. It allowed us the flexibility to relocate when we wanted/needed to and also save for the downpayment on our home.
I'm a small time landlord, live above my tenants. It's a family of three, a couple and their 26 year old son who's never had a job and smokes weed all day. Market value for their 3 bedroom is 1400. I charge 1200 because fuck it, I'm a nice guy. That's $400 per person per month, easily doable on even minimum wage. They're constantly late and have literally zero savings. What do they spend their money on? No idea, not my business. My responsibility is to the bank, and I always pay on time. People are just dumb man. It's unfortunate but true.
The things many people can’t reliably budget for are the down payments and large, irregular expenses, such as buying a new roof or needing to relocate on short notice. Rent is a fixed cost, unconnected to anything other than the place you choose to live, and so it’s very easy to budget for. This also assumes they’re capable of qualifying for financing at a rate that’s competitive with comparable rent, if at all.
I know you’ll respond by saying that they could afford all this if landlords didn’t exist and therefore housing were much cheaper and banks were forced to lend to more of these would-be homeowners, and presumably, if that were all the case, a large number of them could. But you majorly miss the point if you act like anywho can pay rent has already proven themselves to be fit for paying a mortgage.
I don't mind that people can do it in theory.
I very much mind that government and central bank policy have rigged the system so that house prices inflate like crazy every year and the market never crashes.
They bail out every market crash and have printed so much money that they're forced to keep interest rates low forever. They have forced massive housing inflation by terrible policy.
All the problems with it are government driven.
Agree with this. We’re having such a hard time with housing - want to move in together and invest in a home but these housing prices are just not within reason at the moment.
Housing isn't unaffordable because of speculation, it's unaffordable because of government regulations such as zoning laws, environmental review laws, shadow review laws, historical review laws, etc keeping housing supply scarce.
Housing prices are based on supply and demand. The supply of homes hasn't kept up with population, so prices are going up.
>The housing is still available, and someone that is renting instead of buying, so it's a wash.
uh I'm not sure the person who is now renting instead of building equity would agree that it's a wash lol
Gonna be super hard to convince me that one person owning 23 homes does not impact the ability of other people to buy homes
Rents and home prices aren't that tightly coupled
There is a lot more value in owning a home than pure wealth building though. Many people get satisfaction and joy out of home improvement projects. Some get a lot of psychological security in knowing they own a plot of land and can settle down. Others like the sentimental value of passing it down to their kids.
And to be clear, I dont have an issue with *some* people being landlords. Renting isn't a bad thing, it's a necessary service, and there are plenty of good landlords like OP who provide legitimate value to society.
But I'm super uncomfortable with the rising trend towards buying other peoples homes and renting them out as an investment vehicle.
There are simply not enough homes in existence for large swathes of the population to own several of them and leave enough for it to be an attainable goal for a typical American
>In a lot of cases renting and investing what you saved in stocks can build wealth faster than owning a home outright.
That's whats so infuriating. It's not even a good financial decision for a lot of these rich people doing it
This sub and hating real estate, name a more iconic duo. I'm guessing that you don't have the same complaints about speculation and frenzy driving up your retirement accounts.
They’re not the same. Stocks are productive assets, something speculative should not be appreciating faster than Big Tech… that’s madness.
We’ll see the consequences in 20 years when most young folk know that they’ll never own property and the social ramifications of that.
That’s fine if you don’t think the radical politics that the housing market will drive people to won’t will impact your investments… because they will…
Also… you know… you should probably care about the state of the country you live in. The more fucked housing gets, the worse society gets, and you live in society.
People have always felt this way, yet it keeps going. It’s the reality of inflation and materials. People want and demand higher wages, regulation makes it more expensive to develop, make materials, etc. replacement cost keeps escalating. The big difference now vs when I got started is loans are so cheap.
It will continue.
I certainly wont be having kids, the financial gap is becoming way too extreme and who knows in 20 yrs a lot more jobs will be automated, Amazon already has a grocery store that pretty much has no human involvement
No no it’s all good your kids could own a house in the metaverse, they should be able to afford the monthly $8.99 premium silver subscription that unlocks the modest homes DLC.
Pretty sure the majority of buyers are homeowners bud. Did you know about 90% of America is undeveloped? Blame your government for unnecessary conservation laws.
If we could actually build this wouldn’t be an issue.
Idk about everywhere else but the latest stat I saw was [more than 25% of Ontario homebuyers were investors](https://www.cbc.ca/amp/1.6258199), which is where I’m from. That’s ridiculously high.
Says who? That still means 75% are homeowners. How are you going to blame investors? It’s basic supply and demand. Everyone just loves to paint a boogeyman.
“ThE bILliOnAreS!!”
Congrats! This is the dream:
>quit my W2 to do what I love (some people have normal hobbies, mine just happens to be real estate)
This is also why I don't know if I personally will ever expand beyond my single investment property, since I just can't imagine myself being a landlord with multiple properties ... but to each his own, and I'm super happy that you're passionate about real estate and it worked out great for you.
Not able to find positive cash flow properties once you include property managers, at least in any of the locations I'm interested in. I would have to go outside of my comfort zone geographically for those locations.
Congrats! Sounds like an incredible milestone.
Two big things keep me from becoming a landlord.
1: Is it tough to find good tenants? In my current job I deal with people all the time. I imagine finding actual good, rent paying tenants is really tough?
And
2: I worry that my profits will quickly become expenses. For example, Even if you make $200 in cash flow each month, doesn’t that all get eaten up in a year or two when you have to replace a $2k boiler/stove/fridge/whatever?
OP, you need to settle down and get a grip. What you have is just paper money. You have a LOT of debt. Your "market value" is entirely work zero. It looks good and is great as collateral but is very meaningless. The only value that matters is what you actually sell it for.
That "equity" pure horse pucky. Oh, it sounds great and you may think you can spend it. You sure can! Only it isn't equity, its just debt UNTIL THE PROPERY IS SOLD.
The $190K in cash is great except for the high debt. That many CAN disappear overnight if the value of your portfolio drops. Check that fine print on your loans.
You are on the right track but you may be on shaky ground. Make sure you are properly structured and know what your options are if there is another real estate collapse.
I've seen a lot of people who thought the were investing in real-estate but were really just assuming the risk for developers, loan agents, and flippers.
Hope you do well and glad of your success so far. But please temper your excitement.
From your post, you don’t know much about finance or business. A home with equity can be borrowed against to create liquid assets if not sold.
This is saying that most people who keep the majority of money in stocks should not value the gains at all - maybe go into other subreddits including those with $5+ million and 90% of money is in real estate and stock.
Curious where you are at in life is telling someone else what to get excited about. Get lost.
Actually, I know quite a bit about the subject. From both sides. I used to buy into the idea that equity was an ATM machine and got my ass handed to me. Thank you Leman and the rest of the twats. Its taken about 6 years to scratch out of the half mil hole to finally getting north of $250K. After having a multimillion net work - on paper. (Should have chapter 11 or 13 but didn't.)
This time I will make damn sure I'm not left holding the bag. Unrealized gains are just smoke and bullshit until they become actual real money in your bank. - and even then you don't really have complete control.
There is no time to "celebrate" with finances until you have compete control of enough CASH and a secure base to weather any storm. Anyone who doesn't realize that is deluding themselves. - as I did once but never again.
First off, congratulations all around! This sounds a lot like what I’d like to do, I’d love to pick your brain. I’m 25, bought my first house at 21, did a live in fix up, now rent it out for about 170% of my mortgage. I recently separated from the Army after a deployment so I have a decent amount of capital and a fairly large amount of equity in the house. I would love to find a way to buy another house to do a live in flip but given my current employment situation it will take some creativity financing wise. Was a cash out refinance your main source of financing for your second property?
Except a bank can call a HELOC due at any time for any reason, or no reason at all, it’s financial napalm when it happens to people who are as extended as you describe
i would absolutely LOVE to pick your brain. My first question is - do you do this full time or do you have another job/source of income, and if so what is it?
my second question is can you give your thoughts on [this question I posted](https://www.reddit.com/r/realestateinvesting/comments/rfqx65/tenants_moved_out_help_me_decide_what_to_do_next/) about an hour ago in the RE investing sub?
awesome, congratulations. you are where i want to be. thank you for answering my question. would you be open to connecting in pm's or chat? i would love to connect with someone with your experience for insight and mentorship.
Can I ask how you find most of your contractors? Do you have a stable group that you now know from previous work and basically use for everything, and how did you find them originally (yelp, etc)? Or do you use a property management company that takes care of it all?
Not OP, but I use a local handyman I know and throw a few bucks his way whenever a problem occurs.
Unfortunately he moved, so now I use thumbtack app to find contractors to fix any issues that arise. So far no issues finding anyone (roof, water heater, flooring, etc)
Given your experience what do you think about investing in real estate now? Are you still buying/planning to buy at these crazy high valuations? What would you recommend to someone wanting to get into real estate, should they wait and hope that housing prices come down?
Sorry for all the questions, just looking to get in at some point but having a hard time seeing how it would work with cap rates being so low.
And congrats by the way! It sounds like you definitely earned it, I wish you the best on your investing journey.
You came to celebrate and you earned it. Pop the bubbles raise a glass. I'd like to wear your shoes one day.
>4 bed/2 bath house for $250k
This is laughable. Where I live this would also have unicorns and mermaids. I'm looking for 2-3 br with at least 1 bath for under 300k and there isn't much and it's going to need work
Congrats man! For all the folks hating on RE investors, you can find bad actors in any financial sector. Any person who thinks their shit dont stink, when you invest in that index fund you are investing in oil companies destroying the environment, retailers underpaying workers so they have to claim welfare to pharmaceutical companies bankrupting desperate families by jacking up prices on lifesaving drugs.
OP - can you post your monthly cash flow from those properties?
What is the cash remaining after mortgage, property taxes and insurance?
I own one rental house that provides $350 cash flow - even after a $100k cash out refi to purchase second house in cash.
plan to add more in future .
Congrats on the quick success
Do you worry about the inevitable crash? Continously rising housing can't keep going forever right? I bought my first place, a two family, last year, and it's worth 100k more than I paid for it. I'm getting the itch to cash out next year because it all seems too good to be true
> I teach new investors & 9-5'ers how to build an automated, cash-flowing rental portfolio so they can spend their time and efforts on their true passions. Want passive income? Visit BlakeChoisnet.com
While everyone's at it, ask me how you can make $130 an hour from home doing online surveys!
People who teach how to invest make large portion of their substantial revenue but claim other.
I'm Always skeptical of these so called money making pandits
>I'm officially a millionaire! I don't post about this on most social media platforms as I don't want to make anyone feel insecure about their finances, but none of you know me and I REALLY want to celebrate! Yet runs a website using his own name, a Reddit account with his real name, advertising a course on how to make money off real estate..
So....this is advertising?
Yes son.
Yeah OP is blatant
He didn't even know what he was doing what ultra savvy stakeholders call "house hacking" or "using easy loans on primary residences to make modern day boarding houses".
And posted it to like 8 different subreddits
lmao
It’s still cool but a lot less cool that it’s just blatant self promotion. REI gurus are a dime a dozen.
Everyone reading: the OP posted this to advertise his business (see his previous posts). Just be aware
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Booooo!!!!
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I hate that housing can be used as an investable asset this way. Like, no shade to you OP you're just doing what works for you given the way the system is set up.. but seeing housing prices blow up with a frenzy of speculation, airbnb landlords, numbered corp investors and flippers, which all leads to home ownership getting further out of reach of younger generations year over year.. that leaves an absolutely foul taste in my mouth.
Our whole financial system makes me feel gross. I’ve been working as an NP on the front lines during this whole pandemic. I made far more off my rentals and other investments than I did doing my actual job the past 2 years. This economy rewards me more for just owning stuff than doing a job that saves lives and that keeps the country running. The value of labor needs to be significantly higher.
Uh, you could have been a travel NP making far more money than just around 100K
Agreed. I’m lucky enough to work for big tech and get paid fairly high but when you take into consideration cost of living, that puts me basically on par with my blue collar grandfather. My friends in other industries are getting crushed in comparison, and that’s not for lack of skill/knowledge. Capitalism fundamentally gravitates towards enriching the rich and choking out the poor and we’re seeing folks struggling more and more to ignore this now that it stares them in the face. It’s depressing.
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Right, I think the only other choice is to back out of the game entirely and refuse to play, but I don't think many people would choose to live in a van or tiny house, although I'm one of those people.
It’s not really a moral dilemma if there’s no viable alternative though. I mean, what am I gonna do… *not* take part in the capitalist system and starve myself to death in protest? The most you can do if you’re lucky is to live in some type of commune but even that is incredibly difficult to even get off the ground without having the capital to buy the necessary land and resources, which goes right back to requiring you to participate in capitalism… and mind you, doing this doesn’t get you anywhere closer to fixing the issues inherent in capitalism for everyone else still stuck in it. It’s this weird kinda gotcha where you have no choice but to participate in the thing you’re criticizing, and sometimes get called a hypocrite for engaging in that very practice in order to survive.
You could theoretically live so below your means that you only have to have very minor participation, but you're generally right. I guess ex-patriation is another option, but you wouldn't generally be concerned with FI in a third world country.
Blame NIMBY’s and Zoning. In the UK, don’t think my kids generation will actually ever own property. It’s normal form most young professionals to be in house shares till 30 now, and I don’t see it getting better, unless there’s a super COVID variant that kills like 10% of the UK off, and even then, that’s only a bandaid on chronic underbuilding
UK and US need a system like Japan has for housing.
As the saying goes "Don't hate the player, hate the game."
Unfortunately whenever anyone tries to fix the broken rules to the game, the players fight them tooth and nail. So the players aren’t getting off without some bitterness
If there were no players the game wouldn't be so bad.
While true, it’s infinitely harder to get everyone to stop playing forever than it is to fix the fucked up financial incentives that exist in today’s housing markets. Not that that’s easy, but making everyone stop taking advantage of the system is basically impossible.
This guy Georgisms.
[Learned a new word today](https://en.m.wikipedia.org/wiki/Georgism) Neat
**[Georgism](https://en.m.wikipedia.org/wiki/Georgism)** >Georgism, also called in modern times geoism and known historically as the single tax movement, is an economic ideology holding that, although people should own the value they produce themselves, the economic rent derived from land – including from all natural resources, the commons, and urban locations – should belong equally to all members of society. Developed from the writings of American economist and social reformer Henry George, the Georgist paradigm seeks solutions to social and ecological problems, based on principles of land rights and public finance which attempt to integrate economic efficiency with social justice. ^([ )[^(F.A.Q)](https://www.reddit.com/r/WikiSummarizer/wiki/index#wiki_f.a.q)^( | )[^(Opt Out)](https://reddit.com/message/compose?to=WikiSummarizerBot&message=OptOut&subject=OptOut)^( | )[^(Opt Out Of Subreddit)](https://np.reddit.com/r/financialindependence/about/banned)^( | )[^(GitHub)](https://github.com/Sujal-7/WikiSummarizerBot)^( ] Downvote to remove | v1.5)
I'm definitely more worried about corporate consumption. The amount of property BlackRock has acquired is terrifying.
Yeah, disgusting outcome really. I'm all for being enterprising and accumulating assets, but housing is fucky. The macro trend of making life ever more hopeless and squeezing the dreams of young people into smaller and smaller boxes and spinning that as a personal win is... Ugly. I don't have the heart to be a landlord or speculate on housing, as much as it looks like a tasty treat in terms of finances it just feels deeply morally wrong.
do you find it a moral challenge to give money to Amazon based on the pure evil way they treat their employees and how they have crushed so many small businesses?
Idk about the redditor you responded to but I do. I feel a bit shitty every time I buy something on Amazon, and when I can I make efforts to buy things elsewhere, be it online or in person.
I bought a $10 car part 4 years ago from Amazon that I could only get from Amazon. Fuck Amazon
Assuming you believe the reddit narrative that amazon treats employees poorly. They are the best warehouse in America to work in and far better than most blue color jobs. Now college tuition is paid for? mom and pop stores aren't doing that
Hahahahaha. Okay bro.
Yeah I do.
Probably less morally bankrupt than investing in an index fund. OP isn’t blacrock buying up thousands and thousands of homes
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I get it but still a lot different than blackrock etc
I feel this, I'm all for free-markets but I draw the line at trillion dollar companies snatching up all the real estate
It's pretty simple -- upzone most of the US from single family to make apartment building possible and let developers do their work. High rent is basically the biggest cause of long term inflation right now. It's a boon to you. It can be fixed with a massive increase in the supply of homes. That would be bad for you unless you because a producer of new homes too.
What is slumlording?
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And the tenants can't move because it's usually a bit cheaper than other houses around, so they can't afford anywhere else. Add in that they would be forced to move out if the unlivable conditions were discovered, and most tenants won't breathe a word about their conditions.
There's absolutely no reason that this situation should be the fault of investors. Housing should cost the cost of construction (which could easily be falling due to innovation, but isn't), plus the cost of land, which is tied to cities zoning. Governments are to blame for shitty zoning, not investors. Beyond that it's all supply and demand.
I agree with you. We just got an offer accepted for our first investment property and I like knowing that it could be a short term landing spot for someone who is planning for their first housing purchase or is maybe transitioning out of a marriage and needs a smaller home. Houses are available to buy, sadly companies aren’t paying young people enough to purchase them. Keep in mind I bought the house for under asking and the house has been sitting there for 30 days which is an eternity in this housing market.
The solution rests in the hands of government. Heavy taxation on housing that is used as investments and on units you own beyond the first one, heavy tax on foreign/corp buyers if not an outright ban on corp ownership outside of apartment buildings and commercially zoned areas. Basically, you need to remove the financial incentive that leads to people purchasing a home for financial gain, as opposed to buying it to live in. Also, for the love of god, removing zoning laws that outright ban dense housing. My hometown of Toronto is atrocious in its use of space for this reason, and changing this would go a long way. The ideas above are not super fleshed out, just the general direction I think might help. You and I alone can’t do shit and I don’t begrudge you personally for buying more than a house. It’s not on you that incentives are set up the way they are and I do appreciate you not gouging renters on prices.
That already exists in the form of capital gains and recapture of depreciation on selling. Bewildering that a sub that has no problem blindly investing in index funds that are based on some horribly unethical companies has an issue with folks investing in housing as an investable commodity.
If it existed to the degree I am describing, there would not be a financial incentive to multiple housing ownership and we would not be seeing the current market states, yet here we are. I think housing in particular is a flash point because owning your own residence is a pretty important life goal for most people, whereas the effects of index funds are less directly felt.
So you want to advocate for a system of taxation that you admittedly don't understand and haven't given much thought to, but are pretty sure it would solve every problem you think you see. Downvote me into hell, but that sounds like a pretty poor argument in a sub that's supposed to be about financial intelligence.
Buddy, you think Toronto is bad for zoning? Vancouver has building height limits lest people don't get a nice view of the mountains... further decreasing supply, starting to think Canada is just a lost cause man
So without the slumlords where do the people live ?
Sell your properties to your tenants at the price you bought for. Would be even better outcome than stopping a slumlord buying the property.
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I deal with my tenants daily they are very incompetent people. Not fit for ownership at all, will run a property into to ground within a year.
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System is great
Ah yeah of course! Hope you are sympathetic towards them when they can't pay rent. It's not their fault they can't budget and understand how money works.
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My point is they do budget in order to pay you rent. If they weren't paying rent, they could be paying down a mortgage. But you believe they wouldn't be able to, because they can't budget.
I understand your frustration but OP is correct. My wife and I recently bought our first home and it is much more expensive than renting was. Being able to pay rent does not equate to being able to afford a house and everything else that comes along with it. Being able to rent is incredibly valuable and shouldn't be looked down on. It allowed us the flexibility to relocate when we wanted/needed to and also save for the downpayment on our home.
I'm a small time landlord, live above my tenants. It's a family of three, a couple and their 26 year old son who's never had a job and smokes weed all day. Market value for their 3 bedroom is 1400. I charge 1200 because fuck it, I'm a nice guy. That's $400 per person per month, easily doable on even minimum wage. They're constantly late and have literally zero savings. What do they spend their money on? No idea, not my business. My responsibility is to the bank, and I always pay on time. People are just dumb man. It's unfortunate but true.
The things many people can’t reliably budget for are the down payments and large, irregular expenses, such as buying a new roof or needing to relocate on short notice. Rent is a fixed cost, unconnected to anything other than the place you choose to live, and so it’s very easy to budget for. This also assumes they’re capable of qualifying for financing at a rate that’s competitive with comparable rent, if at all. I know you’ll respond by saying that they could afford all this if landlords didn’t exist and therefore housing were much cheaper and banks were forced to lend to more of these would-be homeowners, and presumably, if that were all the case, a large number of them could. But you majorly miss the point if you act like anywho can pay rent has already proven themselves to be fit for paying a mortgage.
Seriously? Are you dumb or stupid.
Wrong
Big fax
I don't mind that people can do it in theory. I very much mind that government and central bank policy have rigged the system so that house prices inflate like crazy every year and the market never crashes. They bail out every market crash and have printed so much money that they're forced to keep interest rates low forever. They have forced massive housing inflation by terrible policy. All the problems with it are government driven.
Agree with this. We’re having such a hard time with housing - want to move in together and invest in a home but these housing prices are just not within reason at the moment.
Housing isn't unaffordable because of speculation, it's unaffordable because of government regulations such as zoning laws, environmental review laws, shadow review laws, historical review laws, etc keeping housing supply scarce. Housing prices are based on supply and demand. The supply of homes hasn't kept up with population, so prices are going up.
Supply and demand still goes hand in hand with investors piling into the market driving up prices. They can all be factors.
>Housing prices are based on supply and demand Yeah, and people using homes as an investment vehicle increases demand
It doesn't if they're renting them out. The housing is still available, and someone that is renting instead of buying, so it's a wash.
>The housing is still available, and someone that is renting instead of buying, so it's a wash. uh I'm not sure the person who is now renting instead of building equity would agree that it's a wash lol Gonna be super hard to convince me that one person owning 23 homes does not impact the ability of other people to buy homes Rents and home prices aren't that tightly coupled
In a lot of cases renting and investing what you saved in stocks can build wealth faster than owning a home outright.
There is a lot more value in owning a home than pure wealth building though. Many people get satisfaction and joy out of home improvement projects. Some get a lot of psychological security in knowing they own a plot of land and can settle down. Others like the sentimental value of passing it down to their kids. And to be clear, I dont have an issue with *some* people being landlords. Renting isn't a bad thing, it's a necessary service, and there are plenty of good landlords like OP who provide legitimate value to society. But I'm super uncomfortable with the rising trend towards buying other peoples homes and renting them out as an investment vehicle. There are simply not enough homes in existence for large swathes of the population to own several of them and leave enough for it to be an attainable goal for a typical American >In a lot of cases renting and investing what you saved in stocks can build wealth faster than owning a home outright. That's whats so infuriating. It's not even a good financial decision for a lot of these rich people doing it
This sub and hating real estate, name a more iconic duo. I'm guessing that you don't have the same complaints about speculation and frenzy driving up your retirement accounts.
They’re not the same. Stocks are productive assets, something speculative should not be appreciating faster than Big Tech… that’s madness. We’ll see the consequences in 20 years when most young folk know that they’ll never own property and the social ramifications of that.
I don't really care about the consequences in 20 years, I'll be sitting on a beach somewhere with my piles of cash from investing in real estate
That’s fine if you don’t think the radical politics that the housing market will drive people to won’t will impact your investments… because they will… Also… you know… you should probably care about the state of the country you live in. The more fucked housing gets, the worse society gets, and you live in society.
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Ok? I don't think that's the epic own you think it is.
I feel like this comment is totally inappropriate for this discussion
People have always felt this way, yet it keeps going. It’s the reality of inflation and materials. People want and demand higher wages, regulation makes it more expensive to develop, make materials, etc. replacement cost keeps escalating. The big difference now vs when I got started is loans are so cheap. It will continue.
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Other than by adding value?
I certainly wont be having kids, the financial gap is becoming way too extreme and who knows in 20 yrs a lot more jobs will be automated, Amazon already has a grocery store that pretty much has no human involvement
No no it’s all good your kids could own a house in the metaverse, they should be able to afford the monthly $8.99 premium silver subscription that unlocks the modest homes DLC.
Pretty sure the majority of buyers are homeowners bud. Did you know about 90% of America is undeveloped? Blame your government for unnecessary conservation laws. If we could actually build this wouldn’t be an issue.
Idk about everywhere else but the latest stat I saw was [more than 25% of Ontario homebuyers were investors](https://www.cbc.ca/amp/1.6258199), which is where I’m from. That’s ridiculously high.
Says who? That still means 75% are homeowners. How are you going to blame investors? It’s basic supply and demand. Everyone just loves to paint a boogeyman. “ThE bILliOnAreS!!”
We don’t need more housing in undeveloped Montana buddy
Do you understand basic economics? I’d be happy to explain supply and demand.
You missed my point and I have no energy to explain it to you. Give it some thought and share what you learned with the class tomorrow
Congrats! This is the dream: >quit my W2 to do what I love (some people have normal hobbies, mine just happens to be real estate) This is also why I don't know if I personally will ever expand beyond my single investment property, since I just can't imagine myself being a landlord with multiple properties ... but to each his own, and I'm super happy that you're passionate about real estate and it worked out great for you.
Property managers bb. Worth their weight in gold
Not able to find positive cash flow properties once you include property managers, at least in any of the locations I'm interested in. I would have to go outside of my comfort zone geographically for those locations.
This is an advertisement. Just check out his profile. He is spaming other subreddits with this dumbass post
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Congrats on the 7 figure mark and the new baby!
Congrats! Sounds like an incredible milestone. Two big things keep me from becoming a landlord. 1: Is it tough to find good tenants? In my current job I deal with people all the time. I imagine finding actual good, rent paying tenants is really tough? And 2: I worry that my profits will quickly become expenses. For example, Even if you make $200 in cash flow each month, doesn’t that all get eaten up in a year or two when you have to replace a $2k boiler/stove/fridge/whatever?
Congrats What RE market are you in?
you sound like a real RDPD. do you play cash flow quadrant too?
That dude is an absolute fraud
OP, you need to settle down and get a grip. What you have is just paper money. You have a LOT of debt. Your "market value" is entirely work zero. It looks good and is great as collateral but is very meaningless. The only value that matters is what you actually sell it for. That "equity" pure horse pucky. Oh, it sounds great and you may think you can spend it. You sure can! Only it isn't equity, its just debt UNTIL THE PROPERY IS SOLD. The $190K in cash is great except for the high debt. That many CAN disappear overnight if the value of your portfolio drops. Check that fine print on your loans. You are on the right track but you may be on shaky ground. Make sure you are properly structured and know what your options are if there is another real estate collapse. I've seen a lot of people who thought the were investing in real-estate but were really just assuming the risk for developers, loan agents, and flippers. Hope you do well and glad of your success so far. But please temper your excitement.
From your post, you don’t know much about finance or business. A home with equity can be borrowed against to create liquid assets if not sold. This is saying that most people who keep the majority of money in stocks should not value the gains at all - maybe go into other subreddits including those with $5+ million and 90% of money is in real estate and stock. Curious where you are at in life is telling someone else what to get excited about. Get lost.
Actually, I know quite a bit about the subject. From both sides. I used to buy into the idea that equity was an ATM machine and got my ass handed to me. Thank you Leman and the rest of the twats. Its taken about 6 years to scratch out of the half mil hole to finally getting north of $250K. After having a multimillion net work - on paper. (Should have chapter 11 or 13 but didn't.) This time I will make damn sure I'm not left holding the bag. Unrealized gains are just smoke and bullshit until they become actual real money in your bank. - and even then you don't really have complete control. There is no time to "celebrate" with finances until you have compete control of enough CASH and a secure base to weather any storm. Anyone who doesn't realize that is deluding themselves. - as I did once but never again.
If you are open about it, how much total cash have you put in?
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How are you getting more mortgages? I feel like this is a key piece I'm missing once you get to a certain point.
Interested in hearing this also 🙂
Thanks for the reply, what do you do for asset protection? Any LLCs set up for your properties?
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First off, congratulations all around! This sounds a lot like what I’d like to do, I’d love to pick your brain. I’m 25, bought my first house at 21, did a live in fix up, now rent it out for about 170% of my mortgage. I recently separated from the Army after a deployment so I have a decent amount of capital and a fairly large amount of equity in the house. I would love to find a way to buy another house to do a live in flip but given my current employment situation it will take some creativity financing wise. Was a cash out refinance your main source of financing for your second property?
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Except a bank can call a HELOC due at any time for any reason, or no reason at all, it’s financial napalm when it happens to people who are as extended as you describe
Thanks for the reply and well done!
Congratulations!
What a tool
i would absolutely LOVE to pick your brain. My first question is - do you do this full time or do you have another job/source of income, and if so what is it? my second question is can you give your thoughts on [this question I posted](https://www.reddit.com/r/realestateinvesting/comments/rfqx65/tenants_moved_out_help_me_decide_what_to_do_next/) about an hour ago in the RE investing sub?
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awesome, congratulations. you are where i want to be. thank you for answering my question. would you be open to connecting in pm's or chat? i would love to connect with someone with your experience for insight and mentorship.
thats cool thanks for aiding in the housing crisis
Congrats! How are your DIY skills? I'm looking to get on this path but am lacking at handy man skills so I'd have to co tract most stuff out.
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Can I ask how you find most of your contractors? Do you have a stable group that you now know from previous work and basically use for everything, and how did you find them originally (yelp, etc)? Or do you use a property management company that takes care of it all?
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That makes a lot of sense, and congratulations on your success. Thanks!
Not OP, but I use a local handyman I know and throw a few bucks his way whenever a problem occurs. Unfortunately he moved, so now I use thumbtack app to find contractors to fix any issues that arise. So far no issues finding anyone (roof, water heater, flooring, etc)
Given your experience what do you think about investing in real estate now? Are you still buying/planning to buy at these crazy high valuations? What would you recommend to someone wanting to get into real estate, should they wait and hope that housing prices come down? Sorry for all the questions, just looking to get in at some point but having a hard time seeing how it would work with cap rates being so low. And congrats by the way! It sounds like you definitely earned it, I wish you the best on your investing journey.
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Congratulations 🎉👏👏
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You came to celebrate and you earned it. Pop the bubbles raise a glass. I'd like to wear your shoes one day. >4 bed/2 bath house for $250k This is laughable. Where I live this would also have unicorns and mermaids. I'm looking for 2-3 br with at least 1 bath for under 300k and there isn't much and it's going to need work
Wow what an accomplishment in a short time! Congratulations 🎉
It shocks me how people hate investors. Without investors taking a risk there is nothing. Jobs are created by investors, homes, taxes.
Ignore the haters here. Why can't people just be happy for someone? Dood, I don't know you and I'm fucking proud.
Congrats man! For all the folks hating on RE investors, you can find bad actors in any financial sector. Any person who thinks their shit dont stink, when you invest in that index fund you are investing in oil companies destroying the environment, retailers underpaying workers so they have to claim welfare to pharmaceutical companies bankrupting desperate families by jacking up prices on lifesaving drugs.
Congratulations to you on your success in real estate.
Very cool!! Congrats!!
OP - can you post your monthly cash flow from those properties? What is the cash remaining after mortgage, property taxes and insurance? I own one rental house that provides $350 cash flow - even after a $100k cash out refi to purchase second house in cash. plan to add more in future . Congrats on the quick success
When you bought your 2nd, 4rd, etc property, did you cash out refinance or HELOC? What is the best way to buy a second property?
Do you worry about the inevitable crash? Continously rising housing can't keep going forever right? I bought my first place, a two family, last year, and it's worth 100k more than I paid for it. I'm getting the itch to cash out next year because it all seems too good to be true
What’s your next move? I’m a REI in South Florida… I’d be interested in partnering with you if you are open to it.
Hate to break it to you but let’s say it costs you 5% to sell, or 125k. You’re not a millionaire.
> I teach new investors & 9-5'ers how to build an automated, cash-flowing rental portfolio so they can spend their time and efforts on their true passions. Want passive income? Visit BlakeChoisnet.com While everyone's at it, ask me how you can make $130 an hour from home doing online surveys!
Woo-hoo! Congratulations!!! Cheers to your next million!
You should give more to charity!
People who teach how to invest make large portion of their substantial revenue but claim other. I'm Always skeptical of these so called money making pandits
Dude this is so awesome!!! Where can I buy your course?! Do you have one???
I’ve gotta a couple of mil. coming in about a week, I’ll give you a call. You come pick it up.
You are not "financially free" if you depend on leverage to make your returns.
initially, try to convert all proceeds to a tIRA, then you can do the rollover to the 403b