Sorry, I did not make some things clear in my post yesterday. Our refi took about three months. It was slow. And I got denied by two other lenders, because my wife and I have 15 properties with sizable loans. The third loan officer kindly was willing to do it. The time that I personally spent on it was only a few hours. But the entire process took about three months.
Thank you for reading my post. I saw quite some feedback. I share a method that I myself am using and it is lucrative, hoping that some other people may also benefit from it.
If you have good methods, please share. I am very willing to learn. However, on this platform, name-calling and personal attacks are inappropriate. We should have the decency to share and discuss with dignity and respect.
Regarding our investment returns:
. In 2011, my wife and I had a total of about $800,000. It was mostly in 401k and our primary residence, not investable. Our investable fund in 2011 was about $150,000.
. In my area, the housing value appreciation from 2011-2019 has been about 3-4% annually. It is slow. If our houses had appreciated rapidly like in CA or Seattle, we estimate that we would have had a few million dollars more in total wealth. For investors in CA and other booming areas, congratulations to you. But those high appreciation rates cannot be reproduced in many other places in the US. However, our area of 3-4% is similar to the historic US housing appreciation in the long-term. Therefore, it is more reproducible by ordinary people. Furthermore, our 3-4% appreciation, similar to the historic US average, indicates that my neighborhood is unlikely to crash in the near future.
. I am not handy and cannot do repairs, and do not have much time. My wife and I have full time jobs and three kids. I spend only a few hours per week on investing. Other investors who are handy and have more talents and more time can buy broken houses and then renovate and repair them. Their rate of return will be higher. My investment is limited by my willinness to spend only a few hours per week.
. We sent three kids to college with no student loans. We send money to parents and relatives. We give to church. So, we did not use all the bullets in investing. Otherwise, our wealth would be a little more.
. The positive carry method that I posted yesterday basically means that you borrow money from the bank at a low interest rate, then you give it to SP 500, and it pays you a 10% return. You pocket the difference as your positive carry. Passive. Very little time and effort. It works. The key is (1) dollar cost averaging, and (2) long term.
. There are safeguards such as “Tell me where I am going to die so that I will never go there.” And “Protect the down side, and the up side will take care of itself.” The safeguards and minimizing the risks are described in my book.
By David Meng, author of book “$5 Million in 8 Years: Real Estate Investing on the Side.”
I believe most of people here know that. I'm glad that it works out for you.
Actually it is easy to say and hard to do. Greed and Fear always play a big role in the stock market.
I totally agree with you about DCA and the long term investment, But I don't encourge people to borrow money
from the houses to do so. That's risky. That's it.
We are doing also very well in the investing by DCA and the long term investment. But we also "diversify" our investments.
do the clicks on my computer to push in nearly half a million into SP 500, I was nervous. I was afraid that tomorrow it would crash. I clenched my teeth and did it. It turned out to be OK and our net profit is more than $200,000 so far this year, but I was nervous. You are right; it is a fight between fear and greed.
DCA呀！你教别人做DCA 而自己却做all in moment去赌赢。那你all in 赌输了呢？
The plan is, 2020, cashout refi, invest in SP500, then
2021, cashout refi, invest in SP500,
2022, cashout refi, invest in SP500, etc.
Because money is put in over the years, it is dollar cost averaging.
It still takes courage to execute.
The math is clear. It should work long term, for a decade or longer. The idea is simple. But to actually execute it, as I found out while doing the clicks to invest, it still requires courage.
in the 1990s he sometimes even used credit card. He used up all his bullets. It took a lot of courage. And 老朽兄 is very successful. Someone may not feel the need for courage until he or she actually tries to do it. My positive-carry math made sense. The long-term plan should work out fine. But to actually execute it, I was nervous when I did the clicks. It was courage that helped me to execute it. I had to remind myself to focus on the math and ignore my emotions.
"do the clicks on my computer to push in nearly half a million into SP 500,"
What kind of DCA is that? :-)
You are abusing dollar average cost concept.
We did refi in 2020 on houses and put the cash into the SP 500.
We hope to do another refi in 2021 on other houses, and put the cash into the SP 500.
We hope to do another refi in 2022 on some other houses, and put the cash into the SP 500.
We hope to do another refi in 2023 on other houses, and put the cash into the SP 500.
Because money is invested year after year after year, we put money into the SP 500 via dollar-cost-averaging (DCA). Some people think that DCA is only monthly. But actually DCA can be weekly, monthly, and yearly. This example of mine is about yearly DCA.
Thank you for your warning. Your point is well taken. My weapons for risk-control include dollar cost averaging and holding for the long term, and my properties spit out $100k to $150k annual positive cash flow. My LTV is about 65%. The lenders would not give me more loans beyond that. So we wait for house value apprecation and principal reduction, then do refi. Then we wait again for house value apprecation and principal reduction, and then do refi. And then repeat. So, these are some of my safeguards. There are entire chapters in my book on these, including "Tell me where I am going to die so that I will never go there", and "Protect the down side and the up side will take care of itself." I appreciate your point of risk awarenees.