quote:Originally posted by glassman: if there's a moral lesson in this, it's that lack of regulation leads to excessive risk taking.
It's exactly what I been preaching all along.... I'm not for overregulation but I do believe in some regulation for most if not all industries or at the very least the ones that affect our economy more then others like the financial and banking industries etc... as well as food industries... etc..
I always say that regulation is Reactive.... and this is why... when deregulation happens, greed rears it's ugly face and disaster happens... we are the one country where the saying of below never applies:
Those who do not remember the past, are doomed to repeat it.
-------------------- Let the world change you... And you can change the world.
posted
Cash flow is the money left over each month after the expenses and debt are paid. In the rental property business, the cash flow is determined by subtracting the operating expenses and debt payment from the rent.
really? gosh, thanx for the update. is that in the first half of the one minute to real estate riches or the second half? seriously dude, i've read several thousand quarterly reports (10Q's) this year...
i wouldn't know depreciation from amitorization
one thing i do know is how much paint costs...
i know how to properly prepare a "unit" for turnover, and that's one months rent... taxes? that's another months rent...insurance, another month... yearly interest? six to nine months... you are lucky to pull one month a year "cash flow" from a reasonably maintained halfway decent property... i hear that in the slums they just pocket the cash flow and forget about the "unimportant stuff"
no wonder you complain so damn much about your tennants being stupid and lazy... they're the only people that would pay your rent if you aren't taking care of your property...
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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quote:seriously dude, i've read several thousand quarterly reports (10Q's) this year...
I don't know what that has to do with the fact that you don't know what cash flow is or that you thought that once you "pulled out" cash flow, it is gone. That just shows a misunderstanding of the most basic financial elements of running a business.
quote:you are lucky to pull one month a year "cash flow" from a reasonably maintained halfway decent property...
Actually, if you do everything right, in most non-bubble areas you can generate about $100 per unit per month in positive cash flow. In addition, you can EARN another $100 + dollars per month by doing the management and maintenance yourself. So, the per unit spendable cash each month is relatively low. That is why you need a lot of units to live off the cash flow. THAT IS THE RENTAL BUSINESS!
[/quote]i hear that in the slums they just pocket the cash flow and forget about the "unimportant stuff"[/quote]
All of my rentals are properly maintained. Since you like to quote from my website and ****, you already know that. In addition, all Section 8 rentals have a HUD inspection before the initial lease-up and then every year thereafter. My properties almost always pass the first time, which is rare in the Section 8 business.
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posted
There is VERY little positive cash flow in the rental business PM...VERY LITTLE if any.
I have owned many rental properties, and how I made money in that business was when I SOLD those properties after they appreciated in value...not from the rental income.
You are either FOS or just plain stupid if you state that you are not concerned about your properties values...
quote:There is VERY little positive cash flow in the rental business PM...VERY LITTLE if any.
That's because you paid too much for your properties. You can not pay retail for rental properties and expect them to cash flow.
quote:I have owned many rental properties, and how I made money in that business was when I SOLD those properties after they appreciated in value...not from the rental income.
That's not the rental business, that's what is called speculation. In the rental business, we make money via cash flow, not appreciation.
As I said, I am not the least bit concerned about the property values. Whether they go up, down, or stay the same, the cash flow doesn't change and I have no plans to EVER sell the properties.
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quote:There is VERY little positive cash flow in the rental business PM...VERY LITTLE if any.
That's because you paid too much for your properties. You can not pay retail for rental properties and expect them to cash flow.
quote:I have owned many rental properties, and how I made money in that business was when I SOLD those properties after they appreciated in value...not from the rental income.
That's not the rental business, that's what is called speculation. In the rental business, we make money via cash flow, not appreciation.
As I said, I am not the least bit concerned about the property values. Whether they go up, down, or stay the same, the cash flow doesn't change and I have no plans to EVER sell the properties.
Actually, PM, you are not in the rental business.
You are in the business of gathering money into your own accounts via abuse of government assistance programs for the needy.
You are little more than a blood sucking leach, bleeding the economy for your own sake.
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quote:There is VERY little positive cash flow in the rental business PM...VERY LITTLE if any.
That's because you paid too much for your properties. You can not pay retail for rental properties and expect them to cash flow.
quote:I have owned many rental properties, and how I made money in that business was when I SOLD those properties after they appreciated in value...not from the rental income.
That's not the rental business, that's what is called speculation. In the rental business, we make money via cash flow, not appreciation.
As I said, I am not the least bit concerned about the property values. Whether they go up, down, or stay the same, the cash flow doesn't change and I have no plans to EVER sell the properties.
Wrong as usual...I bought years ago and sold when real estate values peaked....I made next to nothing while owning them...that's the nature of that business.
posted
Have any of the rest of you noted that no matter what the topic of a thread, it seems always to be altered to PM lecturing on how to use the slum lord business to collect government funds and declaring that that process amounts, in his brand of skewed logic, to some sort of proof that the free market IS christianity (the least tolerant varieties) and is the only religion that the Constitution allows?
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posted
Wrong as usual...I bought years ago and sold when real estate values peaked....I made next to nothing while owning them...that's the nature of that business.
i'm one of those people that fixes just about anything found in residential properties or commercail/light industrial except for air conditioning compressors and heat exchangers... and totally agree that if you aren't willing to do all of that work? you are going to have negative cash flow. (i'mnot good at carpet installation either)
in order for PM's "plan" to work, (i again point out that PM says this too) he pays "less than retail" and i know very well what this means.
he convinces himself that he's getting a bargain.
the thing is? there's no such thing as "less than retail" in real estate...
real estate is worth exactly what people are willing to pay for it... (just like stocks).
there are plenty crooked bankers and mortgage brokers and appraisers that are happy to adjust the values on paper to obtain loans...
as a matter of fact? that is a considerable portion of the problem we are in today.
you see the same thing in the used car business too..
a banker will give a dealer a large line of revolving credit, say 1$,000,000.
the dealer buys cars at auction for "less than retail"...(this is a real thing in the used car business)
the dealer then turns around sell the junkers on the "pay here" plan...
that keeps the used cars on the books under his larger revolving credit account...
the dealer still owns the cars and collects the payments themselves.. they make their credit payment to the bank in one lump sum...
on three separate occasions? i repoed the whole car dealers inventory when they got behind on their payments, OR in one case they failed to maintain the agreed upon amount of collateral on their inventory.
while used cars and real estate are not the same? there are quite a few similarities...
PM admits he operates in the worst areas, which means he is buying RE that nobody else wants... and of course he says he will never sell, he likes having his "bottom of the barrel" (buy here pay here) tennants to look down upon and complain about... makes him feel good about himself...
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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posted
"while used cars and real estate are not the same? there are quite a few similarities..."
Yep.
Once they were "horse traders".
Always they are only interested in what they can get out of your pocket, honestly or not.
Bet, with either long or short odds, on any single thing any one of them says being fictitious and self serving and you will generally make a good profit. Not just things they say in their sales pitches, the tendency is systemic and pervades their ever constant atmosphere, like the oder downwind of a privy tells you where it is.
(The easiest route to understanding why Faulkner won the Nobel is to read some of his tales of horse traders.)
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posted
I am a licensed building contractor and I too did all of my own maintenance, repairs, updates, and management.
I also bought at the right time...
But....there are a few items that PM has left out of his profit/loss equation that most certainly exist in the rental business....things like:
Non payment of rent....By the time you get a non-paying tenant evicted, you have lost at least 2 months rent, that I guarantee you will NEVER recover.....this is the single largest expense that most rental property owners don't count on when determining profit & loss. This alone ate up nearly ALL of my monthly profits.
Destruction of property.... I can tell you horror stories about how some of my properties were literally destroyed by renters before they moved on....way beyond carpet & paint...this cost actually put me in the "red" as far as monthly profit/loss goes.
Court Costs....landlords have to pay all court costs up front to get a tenant evicted. Again a cost that you will NEVER recover.
The ONLY profit in the rental business is if you buy and sell at the right times...
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