SSS #244: HFD + 4 Tweets


Happy Father's Day to all the Dads reading this.

Real Dads

I want to talk about real dads today. Not fathers, but I want to talk about dads. Anybody can be a father. Takes a real man to be a daddy, though. See, sometimes being a father, just like being a mother, is a thankless job. You put your all into your kids and you don't know what you mean to 'em. When you're a kid, you don't necessarily understand or even appreciate what your dad is trying to do for you. But it's only when you get older, you step back, you move out the house, maybe even start a family on your own. You start to really realize... Man! What that man meant to me. My dad, what he tried to teach me. All the lessons.


Livin' La Vida Luna y Luca

HFD Apron

Luca made me an apron! 🥹

I'll wear it daily while making "bwekfist" for the fam.

4 Tweets

Can you imagine selling a property for $1.5M more than you bought it for 6 years and only breaking even?

Well, that is about to happen for us on a 40-unit property in Portsmouth, VA.

You've heard it before... Only 1 thing matters when it comes to Real Estate: Location, Location, Location.

This deal is a prime example. C Class asset in a C Class location.

COVID torched our returns. So many residents stopped paying during the eviction moratorium and we recovered a tiny fraction of what we were owed through the State's ERAP (Emergency Rental Assistance Program).

That, combined with low integrity on-site management made for a Molotov Cocktail on our investment returns.

I applied for a $500K loan on a primary home 60 days ago. After submitting thousands of pages of documentation (literally), I was unceremoniously rejected for the loan this past week.

Uncomfortable Truth: Banks will extend $500K in loan principle to a $100K salaried employee well before they'd consider touching a self-employed individual who earns $500K* with a 10' pole.

*I don't make that much.

Nothing irks me more than finding out someone thinks Rent = Landlord's Cost + Premium.

Two things:

1) Rent is a function of the local market's supply and demand for the unit offered!!!

2) If Rent = Landlord's Cost + Premium, two homes in a cookie-cutter neighborhood would have drastically different rents based on how they were financed. i.e.: Rents would be lower on a home bought with cash than a home bought with 6% loan amortized over 15 years.

Common Question:

Why would anyone rent out their property for less than the monthly cost to own it?

Literally happens all the time. Spoke with a potential investor a few days ago who recently listed their primary home in Short Hills, NJ. They're asking $10K/mo in rent for a property that costs $12K/mo in PITI only.

Their house is worth $1.5M and although they lose $24K/year in cashflow, it only takes the home appreciating at 1.6% ($24K/1.5M) per year to wash out that loss. I don't love the strategy, but I can understand it.

+90% of our retirement funds are in FZROX or equivalent.

  • Up 13% YTD
  • Up 21% Trailing 12 months

The stock market (SP500 Index) has been our family's best-performing asset class (by far).

It pains me to see full-time real estate investors who think the equities market is a scam because it's not tangible.

The day we can comfortably live off our stock portfolio will be the day I sell every single piece of real estate we own.

After a certain point, Return on Hassle is far more important than Return on Investment.