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    How Real Estate Investing Protects Against Inflation

    Its income streams rise with inflation while the underlying mortgage doesn't
    by Adam Taggart

    Friday, January 22, 2021, 9:24 AM

Inflation concerns are mounting from the nearly $20 trillion in monetary and fiscal stimulus released across the world just in 2020 alone.

This is changing the rules of investing – and most folks with traditional portfolios are going be caught completely unaware by this, warns real estate expert, Victor Menasce.

 [ Watch & Download This Video on Vimeo ]

Which is why now is an extremely good time to consider adding or increasing income-producing real estate to your portfolio, Menasce advises — because inflation works to the real estate equity holder’s advantage.

How?

Good properties generate rents that will adjust higher as inflation rises, while the mortgage rate securing the property won’t. This dynamic simultaneously preserves the purchasing power of your property’s income stream while diminishing the true cost of paying off its underlying debt.

On top of that, good properties will also return attractive equity gains while yielding tax breaks unavailable to most other asset classes.

And for those interested in becoming a real estate investor but uninterested in becoming a landlord, Menasce explains the process of syndication, which allows individuals to passively invest in much larger, higher quality properties run by a seasoned real estate expert.

This is why now is the time to talk with a real estate-friendly financial advisor (not many are!) who understands the nature of the risks and opportunities in play, can craft an appropriate portfolio strategy for you given your needs, and apply sound risk management protection where appropriate.

Anyone interested in scheduling a free consultation and portfolio review with Mike Preston and John Llodra and their team at New Harbor Financial can do so by clicking here.

And if you’re one of the many readers brand new to Peak Prosperity over the past few months, we strongly urge you get your financial situation in order in parallel with your ongoing physical coronavirus preparations.

We recommend you do so in partnership with a professional financial advisor who understands the macro risks to the market that we discuss on this website. If you’ve already got one, great.

But if not, consider talking to the team at New Harbor. We’ve set up this ‘free consultation’ relationship with them to help folks exactly like you.

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63 Comments

  • Fri, Jan 22, 2021 - 3:24pm

    #1
    brushhog

    brushhog

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    Political concerns about rental property ownership going forward

    I know you guys are trying to remain politically neutral, but, when you have an ideology whose entire premise is centered around opposition to the very concept of private property ownership...how does that play out in your estimation of the viability of owning rental property?

    The left has taken control of the entire government [whether legitimately or not ] they have control. We have already seen how states and locales immediately called for a moratorium on rents during the covid crisis. So, in effect, as the landlord you are still responsible for your mortgage, property taxes, maintenance, and etc.. But your tenants were told by the state that they didnt have to pay you.

    Moreover, the eviction courts were suspended in many places. I can easily see how the left can shut down a landlord's revenue stream.

    Is this really a viable strategy considering the radical changes that have just taken place in our country? Seems almost like investing in a gun dealership.

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  • Fri, Jan 22, 2021 - 3:48pm

    wotthecurtains

    wotthecurtains

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    wotthecurtains said:

    I guess no one knows the future...  If it was me thinking about getting in the game I'd want a discount on the property reflecting the go-forward risks related to govt-backed-non-payment-of-rent.

    In a zero percent interest environment nothing ever seems to be discounted to account for risk though.  Its all priced for perfection all the time.

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  • Fri, Jan 22, 2021 - 4:17pm

    #3
    Netlej

    Netlej

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    Rural vs Urban

    Sorry I didn't watch the vid but I have to say in the past you wouldn't want to set up a rental that was very rural. You wanted a busy town or city with strong economy, industry, anchor corporate HQ, a University maybe.

    While that might still be true to a certain degree it might just be that rural properties will rent out very successfully. I believe that the liquidity of rural property will almost always be much better too especially if it has a bit of fertile land, some infrastructure like barn and fence, etc.

    Right now the #1 hot ticket on Air B&B is farm stay. Just saying.

    Cheers!

    jef

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  • Fri, Jan 22, 2021 - 4:23pm

    #4
    agitating prop

    agitating prop

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    Prepare accordingly

    I make my living in commercial real estate in Seattle, so I kind of know of which I speak here. You must, must, must have enough income, as a landlord, to go at least six months without any rent at all.

    If you can't do that, you shouldn't be involved with this kind of income generation. Kicking great tenants to the curb because they are experiencing a temporary contraction in their incomes,  is cruel. It also ends up being counter productive.

    It is doubly cruel to expect a government not to intervene and cut tenants slack, by legislation, during a pandemic. That goes for commercial and particularly for residential.

    Fortunately, we had no vacancies and were able to expand this year.

    Brushhog, you have what is commonly referred to as a slumlord mentality. Don't mean to be insulting as you obviously have no experience in this arena, so just sayin'

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  • Fri, Jan 22, 2021 - 4:32pm

    Susan7

    Susan7

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    Susan7 said:

    Why do you feel the need to slander him? His questions and concerns are legitimate.

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  • Fri, Jan 22, 2021 - 10:30pm

    agitating prop

    agitating prop

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    Dearest Susan7

    If you are addressing me, I don't see slander, Susan 7 as I qualified my comment to reflect that I understood his comments come mainly from ignorance.  I read comments all the time from landlords who don't maintain their buildings -- and tenants who won't complain because they don't want to be kicked out. Lots of complaints from the same landlords about 'leftists' as problematic. Invariably, it turns out the landlord is a slumlord who is unprepared for hard times.

    In other words, he doesn't have a viable business. The poster has no experience in this area so doesn't know what he is talking about. And that's fair.

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  • Sat, Jan 23, 2021 - 4:28am

    smah

    smah

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    Really ?

    Whoa Brushhog! What a lot of misinformation from the far extremist-right blaming Democratic Party being communists.  I haven't notice that the present administration plans to demolish private ownership of anything.

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  • Sat, Jan 23, 2021 - 7:27am

    brushhog

    brushhog

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    And you have a Bernie bro mentality

    To propose that a landlord should be able to go 6 months without income, and to suggest that the government should "intervene" to "cut tenants some slack" [ at the landlords expense ] is preposterous. I can just as easily say a tenant should be prepared to pay rent for 6 months without his/her income. Its idiotic. The landlord/tenant relationship is one of equal trade. Rent for use of property. The landlord is not responsible for the tenant's personal well being, any more than the tenant is responsible for the landlord.

    The assumption is that its OK to bankrupt a landlord but evicting a tenant is "cruel". This, of course, extends form the juvenile idea that all landlords are rich and can afford not to be paid while all tenants are poor. In reality most landlords are middle class, they have taken on alot of debt in their properties, the costs of maintenance, taxes, and mortgage rates are high and they have to be covered every month. The idea that the government has a humanitarian obligation to allow a tenant to not pay his landlord, while still requiring and enforcing the landlords obligation to the bank, the tax collector, and the maintenance of the physical structure of the property just goes to show how for warped this thinking is becoming. Its not "humanitarian" to bankrupt one in order to benefit another. That's a feature of socialism and, worse, communism. Its wrong, and its doesnt work.

    Moreover the question is whether or not real estate rental remains a viable business in consideration of the growing number of people who think like you. The answer, sadly, is probably not.

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  • Sat, Jan 23, 2021 - 9:03am

    brushhog

    brushhog

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    Why he slanders

    Susan, thank you for call him out on that. He slanders because he feels threatened by what I have to say, he has no intelligent response, and he thinks he can shut me up or shout me down with insults. This is a characteristic of a certain type of growing pervasive ideology and mind set that we are seeing everywhere.

    It wont work.

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  • Sat, Jan 23, 2021 - 9:46am

    #10
    ao

    ao

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    AP, i have to fully agree with brushhog

    I am have a small but still significant investment in commercial real estate.  We maintain the building and the grounds well, have good relationships with our tenants, and, by and large, have been blessed with good tenants (i.e. someone who takes care of the building like we do and someone who pays their rent on time).  In the not too recent past, however, we have had two different tenants who have failed in their obligation to pay rent.  One absconded with the money his company had given him to pay rent.  The other simply defaulted on his obligation because he thought he could get away with it (and, unfortunately, he did ... mostly ... and has done the same to others).  Both tenants were perfectly capable of paying but chose not to (which I consider a criminal act, not a necessity imposed by unexpected economic hardship).  Both situations had a considerable impact on our cash flow at a time when cash flow was more critical than it is now (i.e. we were still carrying a mortgage and had recently put considerable money into repairs and upgrades).  It was not enjoyable struggling with those situations.  

    One does not become a landlord to become a charitable institution.  One becomes a landlord to make a profit and one has to take a risk to do so and invest time, effort, and capital.  That capital does not just fall into one's hands.  One usually has to work hard and long and smart to accumulate it.  I know I was always the first one in our building in the morning and the last one to leave at night so I was likely working longer each day than my tenants, to say nothing of the hours that were put in every weekend that they did not. 

    There is a legal contract (i.e. a lease) between the landlord and tenant and both have an obligation to fulfill the terms of that contract.  Otherwise, you have an abrogation of the rule of law.  And without rule of law, watch how fast a society comes apart.

    If, in hard financial times, a government decides to suspend rent payments AND allow the landlord to suspend their payments as well (such as for property tax, mortgage payments, utility payments, etc.), I would not have as much of a problem with the situation (although this situation is obviously unsustainable in the long term).  But if that government, unilaterally "rewards" the tenant but "punishes" the landlord, where is the fairness and justice in that?

    I know a number of other people in my community who are landlords and none of them are slum lords.  Not a single one.  And the vast majority of them are middle class.

    I agree with Brushhog about the 6 month rule you postulated.  If a landlord should be able to carry their investment for 6 months without receiving rent, then, to be fair, a commercial tenant should not consider starting a business unless they can cover their rent and other expenses for 6 months.  Fair is fair.  Yet how feasible is that in that real world, especially with residential real estate?  In most instances, not very.

    In so far as commercial real estate being a viable and productive investment looking forward, we have our building up for sale, if that is any indication of my feelings on the subject.  As is well known, any kind of real estate is relatively illiquid compared to other asset classes, so it's not like one can easily sell off the asset, without taking a considerable loss, if one needs to cover one's financial obligations or simply wishes to exit their position for whatever reason.

    Furthermore, landlords are humans too.  Besides investments of sweat, blood, time, effort, and capital, they have their own expenses as well.  They pay for food, utilities, loans, mortgages, insurance, child care, college educations, medical expenses, and funeral expenses like everyone else.  What happens when, because they are deprived of rental income, they can't meet THEIR personal financial obligations?  Plus, please show me historical examples of how this type of unilateral reward/punishment scenario worked out well for the involved society or nation.  I can think of none. 

    I hope I don't wind up like the man who fell out of a 20 story building window and, as he was passing the 10th floor on the way down, was asked by someone looking out a 10th floor window, "How are you doing?" replied "So far so good!"  While we have weathered all the storms so far, of all my various investments, this building remains my biggest concern and I am eager to get out from under it as soon as we find a viable buyer.  One recent promising deal has fallen through already.  

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  • Sat, Jan 23, 2021 - 10:46am

    #11
    Netlej

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    Another side to it

    There is of course another side to the rental debate. The vast majority of the population can not afford to buy a house and this reality is only getting worse. 10s of millions are being foreclosed on and or evicted which makes it even harder to buy. Banks are seriously tightening lending standards as they understand all of this. This all seriously favors those who can afford real estate as more properties become available at fire sale prices. I think I read that Sean Hannity or the other guy bought several thousand houses after Katrina for pennies on thee dollar and now rents them out.

    The net effect of this is to widen the inequality gap at an exponential rate.

    I know what those of you who have "investments" will say because I have heard it over and over, "well why don't they all just get a job, work hard, save money until they can buy a house or 3?". This kind of thinking is beyond ignorant and truly illustrates the degree that that individual has not been paying attention to what is happening.

    The argument for landlord vs tenant is directly proportional to real estate ownership.

    Everyone deserves to have a home to live in. I don't have all the answers but some do. What is clear is that what is happening now will not stand.

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  • Sat, Jan 23, 2021 - 11:57am

    Lisa

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    Well said ao...

    • I could not agree more.

    A successful society has 2 parts, safety nets when they are truly needed,  balanced by a work ethic and personal responsibility. Indeed, there are no successful historical examples I can think of without both ...

    My lineage is working class, my grandfather was the 1st to go to college on the GI bill, became a teacher, followed by his son/my dad who used his GI bill to get a Masters in criminal justice, and I who used her GI bill to obtain a Masters in Nursing. I have worked since I was 16. But I am sympathetic to the fact that times were easier then, both in finding employment and saving money. It is much harder to do both the last decade. I did not save as much as I should of in my 20’s and 30’s, was living the Southern CA lifestyle instead and being risk averse did not buy real estate there when I should have. I am now living rent free with my parents in OR, working a full time RN job and saving money/diversifying.
    I consider myself blessed although most of my co workers and friends think me insane for staying with my parents so long. My great grandfather who immigrated from Montreal, who owned a small gas ⛽️ station convenience store during the Great Depression and lost it due to all the IOU’s he extended, that were never repaid, instilled in us “Always Live Below Your Means and Save”. I wish I had listened sooner, but I guess better late than never.

    Wishing you a quick sale of your property.

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  • Sat, Jan 23, 2021 - 12:01pm

    Queen Bee

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    Queen Bee said:

    Actually there are very few homeowners being foreclosed right now due to the government's moratorium.  The same applies to tenants being evicted.  For now.  We don't really know what the government will do next to try to 'remedy' this situation. Banks have tightened lending standards at the direction of the government.

    An interesting explanation of what's happening is available in this podcast/youtube video from Ken McElroy (MC Companies, owns many apartments) and guest George Gammon (great videos explaining current economic policy).  It's short and easy to understand:  How Inflation Can Fool Most Investors

    One key quote from George Gammon about WHY the inequality and unrest is happening (paraphrased): "Volatility (in stock market, real estate market, etc.) never disappears, it simply moves somewhere else." The volatility that should be happening in the markets has 'moved' reducing the standard of living for many people.

    Also, I have never heard any investor say "why don't they all just get a job" when speaking about the economic and civil suffering being experienced today. When it's your business to invest, you care about what, whom, how, and why you invest where you do. You must to be successful.  I have heard non-investors say that though.

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  • Sat, Jan 23, 2021 - 12:18pm

    #14
    Jeff

    Jeff

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    Farmland Syndication

    Anyone have any info on buying farmland with syndication?

    Anyone interested in being part of a Farmland syndication group?

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  • Sat, Jan 23, 2021 - 2:06pm

    brushhog

    brushhog

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    Not really

    Queen bee, homeowners and landlords who miss their payments may not be getting foreclosed on right away, but those payments arent going anywhere. If a renter misses April and May rent, the government says thats OK, the landlord has to suck it up and take the hit. If the landlord misses his April and May mortgage payments, the bank isnt expected to take the loss. You'll have to make those payments up, probably with interest and penalties.

    Now the government, [with all its generosity in waving that landlord's rent payment ], hasnt yet waved any property tax levies anywhere. So, dont pay your landlord, no problem. Dont pay your property tax, we'll kick your door in and drag you out of your home. Covid 19 shut downs are no excuse for not paying THEM. Isnt that interesting how their humanitarian generosity stops the moment it actually costs them something?

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  • Sat, Jan 23, 2021 - 3:05pm

    #16
    agitating prop

    agitating prop

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    AO

    AO,

    Thanks for your comments! I appreciate them and don't completely disagree with you at all.

    Renters are in a one down position in residential real estate. Generally speaking, they cannot afford to save 6 months rent to get them through the hard times.

    If they are exceptional tenants, don't cause any problems, it is well worth the landlord's time, effort and money to at least defer payment of rent, if it looks like the situation will improve.

    Beyond that, I don't have the answers. I think that everyone should have a roof over their head. I also agree that landlords should not be in a position to go broke themselves in a situation where rents are not paid and there is no end in sight.

    In that case, the landlord's savings would run out. Each case of non payment of rent has to be viewed through several different lenses.

    Currently, in the U.S., at least in the commercial sector, real estate investing, because of the hands on work involved, can be classed as a business, therefore  I think that the landlord is eligible for pandemic related loans to keep them going. I imagine it is the same for residential real estate--but not sure. Please correct me if I'm wrong.

    I still think the onus should be on the investor, or landlord, to be prepared for vacancies, and other issues that come up with otherwise wonderful tenants to help them recoup from their own misfortune, whenever this is possible.

    It can be a difficult row to hoe as the landlord doesn't want to come across as a complete mark either and shouldn't have to subsidize a tenant in perpetuity who makes stupid business or life decisions.

    Sorry you felt insulted Brushhog. But the 'left, left, left' thing becomes grating. Nobody is taking anyone's private property from them.

    Netlej, Thank you for your comments.

    If real estate if viewed purely as an investment, there is another saying..."never invest any money you aren't willing to lose." In that case, real estate investing should be one of several different income streams and your portfolio is a way of cross subsidizing.

    If it is your sole source of income? Be prepared. Live below your means, way below your means, if need be. Have a pile of money in the bank, as soon as you can accomplish that.

     

     

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  • Sat, Jan 23, 2021 - 3:06pm

    smah

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    Brushhog...

    The landlord -rental business is a big Ponzi scheme, the owners have very little of their own skin in play, if any, it is all debt.  I don't feel sorry for their plight.  And by the way I am not a Bernie bro, you missed, hah !  Your comments represents typical right-wing talk, anybody having a differing opinion is a socialist, communist, Bernie bro.., sure " I don't want to be political...".

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  • Sat, Jan 23, 2021 - 3:24pm

    ao

    ao

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    Netlej, i have some questions for you

    You say that "Everyone deserves to have a home to live in".

    Does that mean you are in favor of public housing projects where our tax dollars are used to house those who are not capable of providing their own housing?

    Or do you instead think landlords should let people live in their privately owned buildings free of charge or should grant concessions in rent such that the landlords are not making any profit but rent their properties as an altruistic gesture or possibly even at a loss because they may (or may not) possess more than their tenants?

    Furthermore, I am interested in what else you think "everyone deserves to have ...".  I am interested in things beyond food (which is partially available via public assistance programs and charity giveaways), income (which is coming in the form of UBI and is available, at least partially, now for many in the form of public assistance, social security, etc.), health care (which is available to the poor but often not available at a reasonable cost to the working and middle classes), education (which is available to all at below the level of higher education and now becoming available at the higher education level as well), and housing (which is often but not always available in the form of public assistance to lower income individuals or in the form of public housing). 

    Are those enough or do you think people deserve other things as well?  Clothing?  Communication devices?  Cable connection?  Insurances such as property, life, disability, etc?  Vehicular transportation?  Retirement plans?  Burial costs?  Or ...?

    Do you think equality of opportunity is sufficient or do you favor equity of opportunity?

    I'd be interested in hearing your thoughts on these things.

    I don't have all the answers either but, unlike you, I'm not aware of anyone else who does either.  Would you be willing to share the identity of those who you think do?

     

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  • Sat, Jan 23, 2021 - 3:42pm

    agitating prop

    agitating prop

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    Good for you Lisa!

    You're doing the best thing living with your parents and saving right now. And thanks for highlighting just how difficult it is for people younger than yourself (and wayyyy younger than me!) in the last decade. Sometimes I wonder if people are so atomized in their own echo chamber worlds that they don't even know any millenials, let alone appreciate what they are up against.

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  • Sat, Jan 23, 2021 - 3:55pm

    Netlej

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    dreamer, I know

    ao - I believe that homes, food, education, healthcare, communication, retirement, transportation, and a few other things not mentioned, should not be allowed to be used as "investment" opportunities. Otherwise they WILL eventually become unaffordable for the average person.

    Your list of what is already "available" to the bottom 75% of the population is fantasy land and the reality is ALL of those things are becoming more expensive and not because of inflation but because of "middle men" demanding their cut. All of those things are also, for lack of a better descriptive, undergoing crapification for all but the wealthy few.

    My extended family and their circle of acquaintances are very wealthy indeed and I have found myself somewhat banished for forsaking that path. I grew tired of hearing "if they can't afford _______ then maybe they don't deserve it".

    You ask what I believe. I believe in the beauty of humanity and all of the natural world.

    What I know for certain is that if we continue on with the cherished norms that you obviously believe in the world will continue to become violently and ugly.

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  • Sat, Jan 23, 2021 - 3:58pm

    ao

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    smah, i think you have a skewed view of real estate investment

    You may be thinking of a large scale real estate investor or a real estate investment syndicate.  Even then, if they've incurred debt, they usually have some skin in the game.

    For the small real estate investor, the individual who rents out a second floor of their home, an apartment over their garage, the other half of a duplex, or a single house or two, let me assure you, they almost always have skin in the game.  I know with my small commercial real esate investment, I certainly have skin in the game.

    Let me ask you this.  If you have a mortgage on a private residence, do you have any skin in the game?  You bet you do.  If you bought a car on a car loan, do you have skin in the game?  Absolutely.

    Can you explain your rationale for how you perceive the "landlord-rental business" is, as you term it, a Ponzi scheme?  From that statement, I wonder if you understand what a Ponzi scheme actually is.  And from your post as a whole, I also wonder about your degree of financial and economic literacy.

     

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  • Sat, Jan 23, 2021 - 4:14pm

    ao

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    Netlej, your response leads me to other questions

    What DO you think someone should be allowd to invest in?  Or do you think investments should be banned altogether?

    I don't like being put in the position of defending the present system as I recognize and am certainly not immune to many of its problems.  But I don't see your way of thinking providing any workable solution.  Your response was, quite frankly, vague and imprecise and inaccurate to boot.  To say,

    " ... ALL of those things are becoming more expensive and not because of inflation but because of "middle men" demanding their cut."

    flies in the face of reality and suggests to me that perhaps you should go back and review the Crash Course in its entirety.  I'm curious.  Have you even bothered to watch it? 

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  • Sat, Jan 23, 2021 - 4:49pm

    Netlej

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    Netlej said:

    ao - I need to stop now as I do not do this for sport but I will say if you don't understand;

    " ... ALL of those things are becoming more expensive and not because of inflation but because of "middle men" demanding their cut."

    Then I have no hope of communicating with you.

    I communicated with Chris before he even put the Crash Course together and while I don't agree with everything of his I do believe the above statement I made is well in line with the concept. We will/are experiencing "peak everything" and the basic thinking is that that means everything will just become more expensive so from an investment perspective it seems fairly clear. I believe, and so far have been close to right, that peak everything means the economy shrinks and fewer people can afford anything so prices stay even or go down. The other effect is that "assets" become less liquid. How much is something worth? It is worth whatever someone can afford to pay for it. I know you know this, sorry for being obvious. Also I want to be clear I am not talking about stagflation. I am talking collapse with lots of suffering and death.

    We had a pol back in the oil drum days that went something like this;

    Do you believe ultimately oil will go to$ 50 and we muddle through or to $100 causing the global economy to collapse?

    Some of us said it would only go to $50 but fewer and fewer people would be able to afford it until the economy collapsed.

    I think part of the problem here is I tend to think on an all of humanity perspective, I just can't do otherwise, and I believe you are talking an Amerocentric perspective.

     

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  • Sun, Jan 24, 2021 - 2:15am

    #24

    davefairtex

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    rental property

    I totally agree about the math - buying a property with borrowed money, with presumably enough rental income to cover the payments, and letting inflation eat away at the debt over the next 20 years.  You just need to defer enough spending to make the down payment (not an easy thing), and also have a cushion for the vacancies which can appear - especially during the bad times.

    From my limited experience though, rents don't cover mortgage payments.  You have to feed the property.  My dad called it "an alligator."  It takes 5-10 years of inflation to make the bite stop hurting.

    But in the end, it worked out.  I saw it.  It was a good plan.  It did require a whole lot of savings.  And a reserve for repairs, vacancies, and accidents.  And definitely, take care of those reliable tenants.  If they have a rent issue one month, its fine.  As long as its not a regular thing, flexibility is just a good idea.  Vacancies and uncertainty are far worse than the occasional burp.

    But now, with the whole "no evictions" thing (but no holiday from mortgage payments for the small landlords), the small landlord would seem to be in quite a pickle.  How many more years will this go on?

    If the government wants to make it so the tenants don't have to pay, they should give that same gift to the property owners for their mortgage payments.  And why not do this for all loans?  Cars, boats, planes, rentals, houses.  Everything.  Unless, of course, this is just a squeeze designed to destroy the savings of the middle class by bankrupting them and/or forcing them to sell their properties at a discount, thus making their properties available for purchase by the big companies and hedge funds.  Like what happened in 2008.

    Perhaps - once "enough" of the wealth transfer has happened, the eviction requirements will come right back online.  "Surely you didn't think this would last forever?"

    What a wonderful set of coincidences for the hedge funds.  How lucky can they get?

    "You won't own anything.  And you'll be happy."

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  • Sun, Jan 24, 2021 - 2:58am

    #25
    RandomMike

    RandomMike

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    Ben Franklin and Inflation

    When Ben was in France he handled a lot of America's money. He was amazed by paper money. In Chapter 21 of Van Doren's biography, Franklin says:

    "The effect of paper currency is not understood on this side of the water (France). And indeed the whole is a mystery even to the politicians. how we have been able to continue a war four years without money and how we could pay with paper that had no previously fixed fund appropriated specifically to redeem it. This currency, as we manage it, is a wonderful machine. It performs its office when we issue it; it pays and clothes troops and provides victuals and ammunition; and when we are obliged to use a quantity excessive, it pays itself off by depreciation. "

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  • Sun, Jan 24, 2021 - 4:28am

    Mysterymet

    Mysterymet

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    Everyone does not “deserve” a home

    Sorry, no. There is this thing called personal responsibility. I believe in a safety net but when the same people keep using the same net constantly and they are perfectly capable of fending for themselves and choose not to, that is a real problem. Also, no I do not own rental property. No, I was not born into wealth. I busted my ass for everything I have. I was born poor. I went in to the military for the GI Bill and used that to get a good degree. Now I work 60+ hours per week, pay my bills, invest, save money as well as donate to charity. Many rental homes are not owned by slum lords or big corporations. They are owned by people who are normal middle class people. Not everyone buys rental houses for investment. The guys I know at work who have some got them by death of parents or moving but unable to sell the house in previous location in a timely manner so they started renting it out. In all cases I know they are now very worried about this economy and what this could mean to them.

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  • Sun, Jan 24, 2021 - 9:49am

    Lisa

    Lisa

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    Exactly Davidfairtex..

    Perhaps - once "enough" of the wealth transfer has happened, the eviction requirements will come right back online.  "Surely you didn't think this would last forever?"

    What a wonderful set of coincidences for the hedge funds.  How lucky can they get?

    "You won't own anything.  And you'll be happy."

    IMHO all part of the plan. This would be the easiest way to that objective of the masses not owning anything. Then roll out CBDC right in time, UBI of just enough to have nutrient depleted food, clothing and a most likely dilapidated roof over your head. Centralized control achieved. There will be most likely the 1% and the 10% that do still own something. Historically the 1% use the 10% to enact their control and keep a buffer between them and the masses. I am not a socialist, dare anyone accuse me of that. I believe in true free market capitalism.
    But we have not had that in a very long time ....

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  • Sun, Jan 24, 2021 - 9:50am

    #28

    Mark_BC

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    Mark_BC said:

    I think what we're seeing in this discussion is another example of the "divide and conquer" strategy being used to impoverish us all. We are the 99% debating over who gets the last of the crumbs, blind to where the rest of the loaf of bread is.

    The elephant in the room, the connection that people are not making, is that there will NEVER be a fair system of debt/ownership/rental for the masses when the elites start owning everything.

    The problem isn't that hard working middle class investors are finding it hard to make money off their risky real estate investing; the problem is that they find that they have to make those risky investments in order to get ahead. The problem is that there are not enough jobs / wages in relation to real estate prices to allow renters to buy their own properties, when at the same time there is an overabundance of housing in N America. There is absolutely no fundamental reason whatsoever why everyone who isn't a complete screw-up couldn't, and shouldn't, be able to own outright a house without any debt. The fact that we are all squabbling over who has it worse -- the tenant or the landlord -- only speaks to the depravity we have increasingly been subjected to over previous decades as the financial system owned by the elites has forced a system of debt serfdom on us all whose ultimate goal appears to be to remove personal ownership of anything of significance. Why do you think interest rates are so low? Could be part of the plan to enslave us all?

    This transition has been slow enough that few of us actually see it or understand it. We just complain of increased cost of living of everything especially housing and blame it on Peak Oil or money printing (well, money printing is a part of it, yes). Well the Peak Oil argument doesn't work because housing was built before oil became scarce (and it isn't scarce yet).

    Come on people, let's identify this for what it is. It's the emergence of neo-feudalism. Ask this question: There is a huge amount of wealth in N America. Who owns it? Renters don't, by definition. Middle class landlords investing their lives into real estate don't own it either because they are in debt to the banks; so the banks own it. Who owns the banks? Who owns the farmland, factories and stock market? Not the 99%! No society ever functions that has such a huge disparity in wealth ownership. It's not about renters-vs-landlords -- think bigger!

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  • Sun, Jan 24, 2021 - 11:17am

    #29
    Curt504

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    We live off our rental net income, know a bit about SFR/rentals, too much off base info / comments here!

    I only want to say we live off our rental income quite well.  Thankfully have not had any doors go net without catching up.  only 3 asked for rent deferal, but all have caught up.  All are long term families with dogs (our business model).

    We own many doors in the Atlanta and Chattanooga area but in general I'm happy to help new investors get started anywhere.   I've been offering education in my local REIAs and on line orgs like biggerpockets.com (Curt Smith profile).

    We live in a time where we should not believe everything we hear, even here.  Do our own research, join expert orgs like REIAs.  Take education.   Talk to RE experienced CPAs (not all CPAs are equal) and decide for your self if one investing avenue is for you or not.

    We have done very well owning a bunch of rentals.  I have a paper I'm happy to share;  How To Buy a Bullet Proof Rental Porfolio.   If you follow the simple but non-intitive business rules you'll become like us, the maytag landlord.  Little to do except to answer the phone (texts actually) re the AC is broke, or the septic tank is full etc etc.  Its easy to collect rent checks (electronicly via erentpayments.com) and call contractors to fix stuff even remotely while traveling.   If you use google voice phone number you can even be on a cruise ship and no one will know or care (when that was possible last year).

    Stop digging up reasons why something _might_ be a problem and figure out how to make it happen.   -- do what others won't --   There's a good living in doing things others won't or can't.  IE the now free book;  Think And Grow Rich.

    Best to all, take care.  Curt / [email protected]

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  • Sun, Jan 24, 2021 - 11:18am

    #30
    Netlej

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    No one buys a home any more they buy an investment vehicle.

    Mysterymet - You proved my point. "If someone can't afford______ then maybe they don't deserve it".

    Yes some people abuse the safety nets and millions are lost. The average person accessing safety nets actually do need them at no fault of their own. Just as many or more abuse the finance/banking/taxation system and trillions are lost. People in need are not the reason that education is crap and expensive, that healthcare is crap and expensive, that US infrastructure is crap, it is the wealthy and corporations demanding their piece of the action then skipping out on paying their taxes.

    I recently heard an interview of a very wealthy German who was asked how he can accept paying 60% or more in taxes and he replied angrily "because I don't want my country to become a shithole country.

    No one buys a home any more they buy an investment vehicle. Where I live with 2 to 5 acre min lots and several larger farms, several of the houses around me have turned over 3 or 4 times in just the last 10 years. The people who buy them mostly have kids but have zero interest in getting to know their neighbors.

    I feel sorry for your friends who received a free house and might not get lots of money out of it. I rented a house in town 10 years ago for 5 years, I also did all the maintenance, landscaped, and more paid a total of $70,000 over that period then learned that the landlord got the house for free then paid paid $15,000 to get it up to snuff before renting it to me. Not complaining but am sick of hearing landlord complaints.

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  • Sun, Jan 24, 2021 - 12:46pm

    agitating prop

    agitating prop

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    Morality an issue

    You may be thinking of a large scale real estate investor or a real estate investment syndicate. Even then, if they've incurred debt, they usually have some skin in the game.

    As opposed to the renter who has his entire epidermis, muscle tissue and bone in "the game." So much of current investing by people trying to get ahead, as MarkBC describes, relies on making moral compromises. This has always been the case, to some degree, but now it is ramped up to the extreme.

    Curt504.

    Stop digging up reasons why something _might_ be a problem and figure out how to make it happen. -- do what others won't -- There's a good living in doing things others won't or can't. IE the now free book; Think And Grow Rich. --Curt504

    Wow, you make the impossible sound so easy! This mentality is everything that is wrong with the U.S. There are work arounds but very very few, and as people exploit those, the initial cost of ownership is driven up even more. Again, hat tip to MarkBC.

    My husband partnered with a couple of people in the eighties to create a real estate corporation. The amount of money to get in was ridiculously low, the cost of real estate, very very low at the time. This situation is not possible to duplicate anywhere in the developed world, currently.

     

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  • Sun, Jan 24, 2021 - 12:56pm

    #32
    Mohammed Mast

    Mohammed Mast

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    Uh No One Buys a House Anymore Just an Investment Vehicle?

    Having been a Real Estate broker that bit of hyperbolic nonsense was pretty easy to spot. This is capitalism , or sort of. Yes a house is an investment, for most the largest they will ever make. I was a landlord for 10 years. Let's sit down and have a cup of Chai and I will share some of the finer points of being a landlord.

    For the vast majority that house is a home. For many in 08 the investment thesis went up in a puff of smoke and many innocent homeowners lost homes and equity. A landlord puts up his capital and takes on risk. You don't like that your former landlord got a house for free, put money in it and rented it out for a profit? You gonna love what's coming then.

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  • Sun, Jan 24, 2021 - 1:07pm

    agitating prop

    agitating prop

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    agitating prop said:

    The idea that the government has a humanitarian obligation to allow a tenant to not pay his landlord -- Brushhog

    During a pandemic? You would rather see the streets everywhere lined with the homeless? I am not sure if you are quoting me or not, but I did mention that governments had to intervene during the pandemic.  The 'investor' has access to interest free govt. loans to pull him through. Why should investors have equal access to govt. help? They are investors.

    If you lose money in the stock market do you expect to be bailed out? You should not be living so close to the wire, as an investor, that non payment of rent for several months is going to throw you into a financial ditch and ruin your life.

    Only invest what you can afford to lose. If you have mortgaged your own home, to buy others and the markets turn on you, that is really sad, but it is a consquence of going out on a limb and handing the banks way too much power.

    Think and grow rich, is a fine maxim, when things are going your way, but how many people were crushed by it by overextending themselves during the financial crisis.

    When I read responses to my comments, like yours, Brushhog, I am so so happy I have experienced extreme poverty in my life, so know exactly what renters are up against today.

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  • Sun, Jan 24, 2021 - 1:22pm

    agitating prop

    agitating prop

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    Mohammed Mast

    Having been a Real Estate broker that bit of hyperbolic nonsense was pretty easy to spot. This is capitalism , or sort of. Yes a house is an investment, for most the largest they will ever make. I was a landlord for 10 years. Let's sit down and have a cup of Chai and I will share some of the finer points of being a landlord.

    If part of the urgency to buy a home is to shelter dollars, due to asset inflation and misallocation of capital, it becomes, at the very least, a vehicle for wealth preservation. This was not true in my parent's time. You bought a home to live in and it might appreciate a little during the course of a life time, but it wasn't purchased as a requirement to avoid potential financial ruin.

     

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  • Sun, Jan 24, 2021 - 1:53pm

    #35
    2retired

    2retired

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    2retired said:

    The most successful recreational rail estate investor I knew, would pay down his mortgages, then "refinance" and pocket the differential, always maintaining debt. Never really appealed to me. Most of my friends had spotty success (and failures, some catastrophic), mostly because I think it requires a lot more attention than it seems.

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  • Sun, Jan 24, 2021 - 2:06pm

    ao

    ao

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    Netlej, i don't know if it is purposeful or accidental

    But you certainly managed to avoid answering most of my questions and then came up with the "flipping over the table" statement of: "I have no hope communicating with you."

    Plus, when I'm talking apples, you start talking oranges. 

    I'm not saying this is so in your case but in so many others who take a similar tack, they talk a good game but the walk is often lacking.  I don't see many of them giving away their time in volunteerism, actually breaking a sweat to physically help others, giving a substantial portion of their wealth to those in need, etc.    

    The most precious commodity one can have is time and I think I'll preserve mine for some more worthwhile discussions.  Thanks for the discussion and so long.

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  • Sun, Jan 24, 2021 - 2:12pm

    #37
    ao

    ao

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    AP, please explain further, if you will

    You say:

    "As opposed to the renter who has his entire epidermis, muscle tissue and bone in "the game." "

    I don't see that at all.  The renter has many choices and can, in the present environment, essentially walk away any time, maybe losing a security deposit at the most (although many of them will select not paying a final rent amount equivalent to the security deposit and so will incur zero loss).

    How is that having skin in the game?  Their options are many and their potential losses are negligible to nil.

     

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  • Sun, Jan 24, 2021 - 2:34pm

    ao

    ao

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    Curt, I've read Napoleon Hill

    And I've successful applied principles from the book.  But nothing goes as smoothly and uneventfully as you would seem to suggest.  Ole Napoleon had his ups and downs  if you remember.   **** happens and **** is messy to clean up.

    Many people around here head south for the winter.  Leaving your own home, much less a rental property, does not always go smoothly.  We had a sewer back up once.  A friend had a roof collapse from heavy snowfall.  Another had a break-in.  Another had a water heater leak.  Another had a furnace go out and pipes freeze.  All had measures in place to deal with such contingencies.  But we live in an imperfect world and things don't always work or work out as planned.  None of these incidents were resolved neatly and completely remotely.  That being said, those folks still head south every winter and we'd be cruising if international travel were safe and feasible at this time without taking outsized risks.  Life is a full contact sport. 

    You may find in soon-to-be-socialist America that those SFRs cease being the fairly reliable cash flow machines they once were. 

    Pride cometh before the fall.  

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  • Sun, Jan 24, 2021 - 2:50pm

    Mysterymet

    Mysterymet

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    Joined: May 23 2020

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    5

    Renting and doing house maintenance

    If you were renting a house and doing all of the home maintenance on the place for free you are a fool. Yard maintenance can be the responsibility of the tenant but home maintenance like roofing, hvac, etc is the responsibility of the owner. My friend who inherited his parent’s house did not get a “free”  house and want to make a ton of money off it. He inherited the estate of his parents when they DIED. I am 100% sure he would have taken his Mom back in a heart beat. The house was sentimental for him. It was the house he grew up in. He wanted to live there but because of distance from his job he couldn’t. So, he decided to rent it out. In the mean time there is still property taxes, home maintenance, paying off what was left of the mortgage etc. none of that was free. As far as safety nets go there are a ton of people who need them but also a ton of people who take advantage of them. I don’t want to pay 60% tax. Children, sick and elderly should always receive help. Grown adults that are perfectly capable of working but don’t should not.

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  • Sun, Jan 24, 2021 - 4:36pm

    agitating prop

    agitating prop

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    skin in the game

    To an investor, losing a tenant can be real pain in the neck. But the tenant has to find new shelter, in what could be a tight rental market. If they have kids or a pet or both, their lives are going to be severely impacted. They also have to arrange to move physically. That's bad enough. But in a pandemic, to be turfed for non payment of rent would mean finding new accomodations with no way of funding it. (if govt. hadn't stepped in)

    They have their entire beings in the game, not just their skin. It's the roof over their head, and could be impossible to find alternative place to live.

     

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  • Sun, Jan 24, 2021 - 6:37pm

    Mohammed Mast

    Mohammed Mast

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    LOL

    It must be comforting to be a liberal democrat socialist and not care one iota for anyone who invests time and energy, becomes successful, owns real estate as an investment and then accuse them of misallocation of capital. What utter nonsense. Most houses are owner occupied.

    Amerika at one time was a land of equal opportunity not equal outcome. Landlords have families to feed too. You obviously hate capitalism. You hate people being successful. Well too bad.

    Where are all those renters going to live if there are no landlords to provide rentals? Oh wait Burnie, Joe, Kammy, Obomba and the Clintons will provide it for them. Right.

    A little anecdote I just remembered. I spend a lot of time in India. There is a spiritual site of pilgrimage I am quite fond of. There was a man who was very connected to this place. He happened to be the mayor of the town which was pretty large. He was very wealthy. He had a movie theater, a cafe, a car dealership and other investments. In the early days there was very little accommodations and people would stay in hotels. The mayor had a very large house and compound with other buildings that could accommodate quite a few of these pilgrims, most of whom were young idealistic, liberal type spiritual seekers. They were aghast that the mayor had a huge amount of servants. He patiently explained to them the number of families that he was supporting because of the jobs he was providing.

    Why do I even waste my time with fuzzy headed liberals?

    New New Years resolution. Leave the fuzzy headed liberals be, let them sleep.

     

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  • Sun, Jan 24, 2021 - 7:27pm

    ao

    ao

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    AP, i think you're being a bit melodramatic

    But that aside, I also think I have the solution to the problem you allege exists.  Since approximately half the population is compromised of "liberal democrat socialists" described by Mohammed in his post #41 (which, BTW, I wholeheartedly agree with), how can these displaced tenants not find a place to live?  Wouldn't the supposedly more enlightened half of our society offer to share their homes to the displaced persons to stay in until those unfortunate individuals found a place of their own?  I mean, it's the decent humanitarian thing for someone like Netlej to do, someone who believes in "the beauty of humanity" and has an "all of humanity perspective" and comes from wealth. There should be no problem if these supposedly altruistic individuals actually walk the walk. 

    For what it's worth, a Christian pastor that I know does just that.  He has one couple in an apartment above his garage and another couple with their child sharing the house with his family and just had a missionary who stayed with them for a couple of days on his way elsewhere.  He and his wife are wonderful people who rarely talk about these things.  They just go out and do them.  And they are obviously of modest means.  Think how many people these wealthy technocrats and the Hollywood types could put up in their palatial homes and estates.

    How could it be impossible to find an alternative place to live in a world where the supposedly more socially and politically enlightened actually acted without hypocrisy?

    P.S. FWIW, I lived in 8 different apartments while working my way up, 3 of which were essentially ghetto hovels, and I had no where near the skin in the game nor the work nor the stresses involved as in owning a piece of rental real estate.  BTDT.  YMMV. 

     

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  • Sun, Jan 24, 2021 - 8:11pm

    #43

    davefairtex

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    6

    because, pandemic

    It is so interesting to see all the things that are blamed on the pandemic.  When Trump first said "eviction protection because, pandemic", I wondered: how it was going to be possible to end this program?  Same thing with foreclosure protection.   Such things are easy to start, but terribly hard to end.  What if "the pandemic" never ends?

    Call me crazy but the pandemic just seems to be a "build back better" wealth transfer mechanism that ends up destroying small business, and small landlords, redistributing the wealth and centralizing the profits to the Biden Donors: Wall Street and large corporations.  Last numbers I saw: 30% of NYC's restaurants had shut down; this was as of August!  Heaven only knows where it is now.  "The Media" isn't reporting on stories like this.  I wonder why not?

    Is all this happenstance, do you think?

    Projected state of the world in 2030: "You won't own anything.  And you'll be happy."

    Step #1: In 2020, we arrange it so you won't own anything.   [Because - pandemic!]

    Step #2: you have 9 years to find a way to be happy about it.

    Perhaps its just about location.  The "Build Back Better" states - I think there will come a time to buy there - plunging SF property prices come to mind - but between now and then, the "Bad Government Risk" right now is off the charts.  They'll be broke (because, pandemic), and desperate, and in a very confiscatory mood.

    The "old normal" states (like Florida) have high property taxes (2%!) but I suspect property values will rise due to - regular people (as well as the very rich) that deeply appreciate the "old normal" and the absence of that destructive Build Back Better policy.

    This, from my on-the-ground reports from Florida.

    "Location, location, location."  Trite, but probably more true now than it has ever been.

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  • Sun, Jan 24, 2021 - 9:03pm

    #44
    agitating prop

    agitating prop

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    Following Christ's example

    AO, I have provided both food and shelter to several displaced people in the last decade, for months at a time. I don't have a huge income either.

    I only mention this because of your suggestion that all the liberal, lefties team up with displaced tenants, as if democratic socialists aren't doing some of that already.

    Beyond political or religious affiliations, it seems to be the compassionate thing to do. As far as the pastor you mentioned goes, he seems to get it.  It's not so much about believing in Jesus as being moved by his example.

    You have no right to describe Netleg the way you have, not knowing what he has done for others.  He seems like a kind giving soul to me.

     

     

     

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  • Sun, Jan 24, 2021 - 9:14pm

    agitating prop

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    Mohammed Mast

    i hope that post wasn't meant for me.  Nothing in the post seems to be in response to anything I have written, particularly the part about not caring one iota about landlords. I am one, so that's an odd statement. The other thing is I go beyond caring about you, I actually pity you.

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  • Mon, Jan 25, 2021 - 10:31am

    ao

    ao

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    AP, please go back and review

    I would suggest you read what I actually said regarding Netlej compared to what he said about himself.  I don't think you'll find anything I said that is at variance with what he said about himself.  That's why I used his words.  Then read further and ponder what you may have mistakenly extrapolated from what I wrote due to less than precise comprehension or interpretation of my statements (on your part, not mine) and incorrectly assumed that I said when I, in fact, did not.  Your emotions may be outpacing and muddying more accurate, rational cognitive perceptions.

    He may very well be a kind giving soul or at least want to convey that impression.  I'm not arguing that point. 

    That aside, he did avoid answering the majority of questions I posed to him, for whatever reason.  

    Also, while it is laudible you did what you did for several displaced people, can you deny that if everyone on the left who had the means to do so did likewise, the magnitude of the problem we are discussing would be markedly reduced, if not eliminated, at least from the standpoint of providing housing for everyone?  I'm not saying this is an ideal solution nor is it even a good one over the long term but it would ensure that no one would go homeless in the short term which was the point I was making.   

    Furthermore, this was obviously a hypothetical scenario that I posed and in no way frees the right from a certain responsibility to act likewise.

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  • Mon, Jan 25, 2021 - 11:41am

    #47
    Netlej

    Netlej

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    A metaphor for real estate and other self imposed middle men.

    A guy goes grocery shopping and is approaching the milk fridge but is stopped short by a guy who says “you are going for a gallon of milk right? Well I can get that for you and you can go about your shopping. I will check dates, inspect the carton, and a few other things I know about to make sure you are getting the best gallon of milk you need and it will only cost you a few %”.

    Then that guy goes to the store owner and says, “I can sell these gallons of milk for you in fact I have someone right now who I can get to buy one. I can get lots of gallons sold for you and you don’t have to do anything different. I will make sure they sell and I will make sure the buyers can indeed pay for them. All this for only a couple %. Soon the guy has locked in most sales and can now convince the buyer and the seller that demand is getting high and supply is not growing fast enough so price increases and now he is rolling in dough without adding any real value to the world.

    Disclaimer - I have bought and sold 3 houses, 4 including my dads but just did that as a dutiful son. I have also bought and sold 5 businesses over my 65 years. All without an agent or broker. If people knew how easy it is to open escrow they would never use a Real estate agent again. Escrow agencies I have dealt with actually have a fairly low opinion of RE agents and were always very happy when I handed them all the info they needed to do their job. I am sure there are some circumstances that would benefit from using a RE co. but that would only be maybe 10 to 20% of what it is now.

    About the comments above; Charity mostly sucks! It makes the one giving it feel less guilt, makes the ones receiving it feel bad, and makes certain that the problem doesn’t get fixed.

    Disclaimer #2 - I owned a Soup restaurant for many years and made it known that if any one was hungry and broke I would give them food. I also, at the end of the day brought what did not get served to the local womens shelter which was packed (those lowlifes ;-).

    Again several of you imply that you somehow got successful so everyone can do the same if they weren’t so lazy.

    America has a middle man problem sucking the life blood out of the country. The FIRE economy is the largest and growing segment of the economy and it adds zero value it extracts value.

    People with solutions; The Late David Graeber, Michael Hudson, Steven Keen, Nate Hagens, and more.

    Back to farming now, I got a break cause of the rain.

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  • Mon, Jan 25, 2021 - 2:51pm

    ao

    ao

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    Netlej, i may be missing something here

    You obviously think that middle men are a primary source of the problems so many are facing.  I don't.  Also, to my knowledge, there's nothing in the Crash Course citing middle men as a problem.  There is a lot of information, however, citing the "out of control" monetary system ( as Chris terms it) with being a primary source of the problems and I agree with that whole heartedly.  I guess I just don't get your connection of middle men in the country at large with real estate investment in particular, but I will write more on that particular issue in a bit. 

    You recognize income inequality as being a source of problems.  I whole heartedly agree with you there.  And other forms of inequality such as educational inequality are a source of problems as well.

    You also recognize that "what is happening now will not stand".  I absolutely agree with you there as well.  It will not and it never has.  Circumstances have never stayed the same ... ever.  Change is one of the few constants in this world.  Everything is cyclical.  That includes political, economic, and monetary systems.  Not a single one of those systems has ever been designed, adopted, implemented, and embraced that has stood the test of time.  Not one.  They've cycled in and out of existence but have not stood for much longer than the life span of the average civilization or nation and usually, for a much shorter duration.  That's a fact of history.  If you can cite a historical example showing I am wrong, please do.  I'm always open to learning.

    For what it's worth, I don't particularly like real estate as an investment.  In fact, twice over the years, I've posted a fairly extensive list of the non-emotional reasons here why I don't care for real estate as an investment.  And from an emotional and personality point of view, I don't particularly like being a landlord.  That being said, I also recognize that more people have become wealthy via real estate investment than through any other single path.  More power to those folks.  But it's not my preferred investment.  

    My "investment" in real estate was more for reasons of protecting my practice location than for making money but I certainly didn't want to lose money.  And prophetically, although it has generating a fair return in recent years, it's been my least profitable investment over the whole term that I've held it.  Plus, I've seen the hand writing on the wall with the decline of the commercial real estate market in recent years, an occurrence which has made me more eager to exit my position.  It's fine now but I'm not so sure it will be in the future.

    I'm still interested in hearing what else you feel "should not be allowed to be used as "investment" opportunities" besides your list of: 

    "homes, food, education, healthcare, communication, retirement, transportation, and a few other things not mentioned".

    Does this mean REITs, food companies like General Mills, healthdare companies like Johnson and Johnson, communication companies like AT&T, transportation companies like Southwest Airlines, and so on should NOT be allowed as investments?

    And again, that naturally leads to me repeating the unanswered question I asked:

    "What DO you think someone should be allowd to invest in?  Or do you think investments should be banned altogether?"

    With regards to your fairly broad negative view of real estate agents, I can understand that.  I have a mixed view of them.  We had one who cheated my grandmother when she sold her last house and the one who I chose to sell our first house looked out more for his interest than ours.  On the other hand, I recently used a RE agent to sell my mother's house and this woman and her husband were a godsend.  They went so far above and beyond the call of duty that I actually paid them a bonus to their commission.  They were flabbergasted and, to their credit, tried to decline it but I insisted.  Was that technically a bad decision from a business point of view?  Some may say yes.  But was it the right thing to do from my perspective of rewarding her for a job well done and thanking her for saving me a great deal of money, time, and effort and reducing my stress?  Absolutely!  And the ultimate outcome is that I made friends of those two wonderful people.

    With regards to your negative view of charity, I can understand you thinking that way but I take the opposite view.  Giving to others is a blessing for the giver and a blessing for the receiver.  And very often, it's all the receiver needs to get through a difficult phase of their life and ultimately rise above it.  Would you favor banning charities as well? I think not.  You yourself provided charity and that is commendable.  It does make me wonder though.  If you take such a dim view of it, why did you provide it?  

    With regards to your accusation of labelling others as lazy, that is your interpretation and assumption.  It's not objective reality, at least not with regards to what I posted.  Some won't do the same because they are indeed lazy, that is true.  But some may not do the same because they are not interested or they value something else more.  Or they may not be able to, either due to environment (i.e. temporal, spatial, or other circumstances, etc.) or genetics (they are not mentally or physically capable) or some other reason.  I, for one, fully recognize this. 

    With regards to the FIRE economy, I agree with you.  It's grown into a great big fat parasite.  But I don't know if the term "middle man" accurately applies to it.  And, to play devil's advocate, would you prefer no one have access to those services?

    With regards to the people you say offer solutions, I'm only familiar with half of them and there are indeed bright people with good ideas.  But they are not saviors.  I guarantee that NONE of them have solutions that will stand up long term.

    P.S. Out of curiosity, where are you located that you had to take a break due to the rain while farming in the middle of January?  The Southern Hemisphere?

     

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  • Mon, Jan 25, 2021 - 4:51pm

    #49
    Netlej

    Netlej

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    Netlej said:

    ao - The answers to most all your Qs are in my original comments. It's not hard to see what I am talking about. As for PP we are bumping up against peak everything which means everything gets more expensive or so goes the thinking so those in a position to do so have unleashed banking/finance and pour a steady flow of money in in an attempt to address that problem. The problem is that money needs to go somewhere and that is mostly stocks and bonds. Money has one goal in life and that is to become more money, Feed Me Seymour! So that money has been buying its way into any and all operations where money transactions occur. Private equity firms, venture capital, private "investors", equity funds, mergers and acquisitions, buy anything with a heart beat and skim off the profits and if there are no "surplus" profits they sell off assets, fire staff, and mortgage the acquisition to the hilt to pay themselves money and leave the company to pay the debt. America has been gutted.

    If you don't understand this or how healthcare has been a victim of similar process you really have not been paying attention. The "cycle" you mention is happening but it is the mother of down cycles ending in possible extinction of humans.

    Where do you think the money comes from when you "invest"? Is there so much extra money in the production of food and healthcare that all the investors get to have their cut? There is zero extra. The money comes at the expense of those who would use those things. I would only allow "investing" in the non essential economy, things that the average person would not be negatively impacted by regular price increases caused not by physical realities but by "investors". I would tax money made from money at 90%. The benefit of all that would be a wonderful society that anyone would be proud to live in. To be clear there is a common misperception that "investment" is beneficial and in fact necessary for the advancement of the modern world. The opposite has been proven true, it sucks profit out of the economy and into the hands of fewer and fewer people and is the cause of inequality. History shows that communities are fully capable of funding their needs. Development is slower then but that is exactly what have happened and is what we need to have happen.

    I am for banning the causes that create the need for charity. A person would have to be a fool to ban helping someone in need, that was a ridiculous question.

     

    As to FIRE; F - The postal service should have its budget quadrupled and low to no interest banking included in its mandate. I - Again communities and the Fed Gov should provide this service at a cost of a few dollars to each person instead of making a hand full of people morbidly wealthy. Health care should be single payer just like all other first world countries, the 20 or 30 countries that have better/cheaper health care than the US. RE - RE is possibly a reasonable service for some but they do not do anything that warrants a %. It should be a service just like any other and charge a price that is appropriate. If it was hourly I think most people would be disgusted by what they now demand.

    Disclaimer - I did property maintaince and construction for a very big RE firm in the Bay area for years, my daughter is in the industry, and know intimately how it works.

    The only way any "solutions would work and be sustained is if people are educated enough to understand what the problems are and can get somewhat on the same page. A tall order I know but it is what Chris and others are trying to do.

    Farming is a 24/7/365 thing. I am in the PNW and I have endless chores, maintenance, pruning, predator abatement, greenhouse, etc. I am just finished trimming wins of a new batch of 50 blue orpington chickens so they don't fly into the field and get picked off by the half dozen or so predators slinking about.

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  • Mon, Jan 25, 2021 - 7:18pm

    Mohammed Mast

    Mohammed Mast

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    ap rotflmao

    I suggest you save your pity for someone who cares what you think. In case that isn't clear enough,,,, I really don't care what you think about anything. Capische?

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  • Tue, Jan 26, 2021 - 10:54am

    #51
    ao

    ao

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    Netlej, I appreciate your comments

    But I think you are east and I am west and never the twain shall meet.  For example, some of your comments such as,

    "Money has one goal in life and that is to become more money"

    fly in the face of objective reality.  Money is a tool, no more, no less.  It can be used for evil or for good.  The choice is up to the possessor.  

    Most of the utopian solutions you are hoping for (and I hoped for the same things at one time) have been tried at one time or another throughout history and none have endured.

    For example, I was just reading about Robert Owen recently.  He took a good shot at it, had his successes, but eventually failed.

    https://en.wikipedia.org/wiki/Robert_Owen

    This doesn't mean we shouldn't try.  It only means we should look higher than most look now and to a source other than the self.

     

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  • Tue, Jan 26, 2021 - 1:43pm

    #52
    agitating prop

    agitating prop

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    Capitalist systems

    Disparity of income, with the wealthy becoming more and more wealthy while everyone else loses ground, indicates capitalism, as it is structured in the U.S. does not work, it creates asset bubbles.

    Part of the answer is to keep corporate taxes low, and raise marginal income tax and capital gains tax.  Asset bubbles are generally blamed on the federal reserve keeping interest rates low, but some form of misallocation of capital, would be created by a capitalist system, regardless.

    The reason property taxes are so high in much of the U.S. is a simple offloading of federal responsiblity onto local governments.

    There are no easy answers, but there are a few obvious solutions.

    You can't have infinite growth on a finite planet. Chris has made this point. Things have to slow down, and wealth tax will do that. Capital gains from stock market investing should be taxed at 50%.

    That money can be taken and used to subsidize small farms, cooperative housing etc...

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  • Tue, Jan 26, 2021 - 1:46pm

    agitating prop

    agitating prop

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    MMast

    ....and it's the non caring that had you respond?  You care very much.

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  • Tue, Jan 26, 2021 - 4:45pm

    #54
    Mohammed Mast

    Mohammed Mast

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    LOL

    Don't flatter yourself

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  • Wed, Jan 27, 2021 - 3:32pm

    #55
    cgarcia

    cgarcia

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    Grand Solar Minimum may make northern real state prices crash

    Just read a bit a bit about the upcoming Grand Solar Minimum.

    Northern states or countries could become Alaska-like cold. So nobody would like to live there.

    Time to ditch northern real state and move south, while you still can.

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  • Wed, Jan 27, 2021 - 3:50pm

    VTGothic

    VTGothic

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    Funny you should say that,

    @cgarcia said

    Just read a bit a bit about the upcoming Grand Solar Minimum.

    Northern states or countries could become Alaska-like cold. So nobody would like to live there.

    Time to ditch northern real state and move south, while you still can.

    I had an electrician in a couple days ago. He works with area realtors. Told me the real estate agents who helped so many Boston and NYC folk buy their country homes last spring and summer are now starting to bitch about how cold Vermont is in January. So they're expecting that the prices that were driven up in 2020 by big city money will be plummeting in 2022 as many of those expats decide to repatriate home, or at least head for Florida, the Carolinas and Arizona.

    That'll suit me just fine. So will your Solar Minimum. With luck, we'll become half our current population. Again.

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  • Wed, Jan 27, 2021 - 6:40pm

    #57
    agitating prop

    agitating prop

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    Earth Sky site quote

    This is interesting. Lifted it from a post on this site by a Michael Troy.

    "Astrobiologists investigating panspermia theory say the pandemic is related to a 150 year low in solar activity. They believe the weak magnetosphere allowed the virus in to earths atmosphere. They even predicted the pandemic based on sunspot activity but now are warning the sun recharges the magnetosphere with a return to solar maxima. The last big event was in 1921... as the 1918 pandemic ended. Coincidence maybe but that event was as big as the Carrington and would have caused massive damage to modern technology. Given panspermia is now being actively investigated by NASA and ESA and JAXA....shouldn’t the alarm bells be ringing?"

    https://earthsky.org/space/sunspot-cycle-25-among-strongest-on-record-says-ncar

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  • Wed, Jan 27, 2021 - 7:20pm

    #58
    Mysterymet

    Mysterymet

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    My feeling on giving my hard earned property to the “common good”

    I would rather destroy everything I own, poison all my food and burn my crap to the ground than be forced to give it to someone who didn’t earn it. I enjoy volunteering, donating to charity, starting an endowed scholarship etc but I have done that all on my own terms. Try and force anything on me and I would rather have nothing than be compelled to contribute.

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  • Thu, Jan 28, 2021 - 4:19pm

    agitating prop

    agitating prop

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    Scorched earth

    I would rather destroy everything I own, poison all my food and burn my crap to the ground than be forced to give it to someone who didn’t earn it. I enjoy volunteering, donating to charity, starting an endowed scholarship etc but I have done that all on my own terms. Try and force anything on me and I would rather have nothing than be compelled to contribute.

    As applied to being a landlord, don't tell your insurer that.

    Are you referring to the government moratorium on rent during the pandemic? If so, in civilized countries during any kind of severe crisis, people generally want to unite and help each other out, whether that is by govt dictate or not. You prefer the scorched earth policy. Hmmm....

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  • Thu, Jan 28, 2021 - 5:25pm

    Mysterymet

    Mysterymet

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    You are allowed to destroy your own stuff

    you are allowed to destroy your own stuff as long as you don’t commit insurance fraud and try and pass it off as an accident.  You can get your local volunteer fire department to burn your house down as a controlled burn or just take a bull dozer to it. If you don’t have a mortgage you can do what you have to do.  If I owned a rental property I’d rather evict all the renters and bulldoze the place. Open land is easier to deal with.

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  • Thu, Jan 28, 2021 - 6:08pm

    #61
    agitating prop

    agitating prop

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    Shoot yourself in the foot

    ...and you can shoot yourself in the foot, too. It's probably perfectly legal.

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  • Fri, Jan 29, 2021 - 12:03pm

    Mysterymet

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    Depends where you are when you do it.

    Some locations would consider it reckless discharge of a firearm. Also, I would never intentionally injure myself or injure another unless it was self defense. I would never damage someone else’s property but I  would most certainly go full scorched earth to keep people who didn’t earn my property from getting it. If you don’t like it don’t do it. Give your property to the collective. Hey just get a jump on things and start a commune.

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  • Wed, Feb 17, 2021 - 6:43am

    #63
    cgarcia

    cgarcia

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    Are farms are better real state investment than homes or commercial properties?

    Are farms are better real state investment than homes or commercial properties?

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