jsonmez

Just laugh and do it anyway.

The only thing worse than mixing religion with politics is mixing business with politics.

Drivel

Would love to interview you for Simple Programmer, YouTube and podcast: http://YouTube.com/simpleprogrammer

Completely agree. My volume is high but I do upper body x 2 per week and lower x 1. And that works just fine. I run 40 miles a week though as well.

Yep take a look at newer videos. Fixed that mostly. I prefer to not have huge traps or neck, but good observation.

You want to get the benefits of hard work without the hard work or time. You can't lift for 3 months, read a bunch of shit and try and sell a fitness product. You need to look the part. That means you have to put in the work and the time. Great start, but you don't even look like you lift weights at all. In 5 years you could have something. Your guide isn't bad, but until you look the part and have actually seen what it takes to develop a real physique, you can talk about the theoretical, but not the practical.

LOL. Just LOL. I hate to be negative. But look at author. Look at his pictures. He's got no clue what it really takes or what he is taking about. Not bad advice, but not great. I've spent 20 years building my physique (http://YouTube.com/simpleprogrammer) and I can tell you that no one has it "figured out." I have learned one thing for sure though. Never trust someone who doesn't look much better than you do.

Yes. Vetting a good property management company is difficult. I've fired more than a few.

But, now I have good managers in place.

Typically, you can expect 10% of rents for management fee--well worth paying.

You should factor this in when considering a property.

For major expenses, I have some reserves and I figure a 10-20% buffer again off of the rent of the property.

This covers the average expenses over time.

I live out of state. Never visit them myself. Best this way. I used to live near by some of them and it becomes emotional instead of business.

Yes, it puts a large number of people out of play--but not software developers.

That's why I recommend it to them.

You can find deals for $100k where you put down $10-$20k. Which is a lot of money, yes, but I know it's possible, because I saved that much in a year as a SW dev.

And then you can have cash reserves of $5k or so (which could be 401k or something else.)

Even a Heloc could be a cash reserve if needed.

There are ways to make it work.

Great question. I like how you think.

The catch in, IMO, is that you need the right knowledge to pull it off. It's not as easy as it looks and it does take some cojones--like you said.

Most people say, "sounds like a good idea" and never do anything.

There are very few people who will teach you how to do it without ripping you off and selling you some scam.

Honestly, that is why I put my course together.

Yes, it's $500. But if you actually follow the advice, it's dirt cheap and I'm not selling you a bunch of get rich quick BS, like most real estate "scammy" stuff.

Here is the link if you are interested: https://simpleprogrammer.com/products/simple-real-estate/

a) leverage cuts you both ways. Great when the market goes up, terrible when it goes down (particularly with a Loan-to-Value ratio of 90%).

Not exactly. Only if you sell. My strategy is to buy and hold--pretty much forever.

I get to get the leverage benefit and flip something if there is an opportunity and if not it's still a great cash flow deal to hold onto.

I also get to have depreciation which I never pay back.

I get what you are saying, but when you invest in real estate properly--not speculate--it's about cashflow, not appreciation.

Appreciation is a bonus you sometimes get but don't rely on.

Over a long period of time--say 20-30 years--you'll get appreciation in almost all cases, but never count on it for the short term.

a') futures or broker margin trading give you leverage in other markets, too. Doesn't mean it's prudent.

Yes. Different kind of leverage though.

Risk in real estate is essentially capped. It's like having a hedge in options or futures trading.

BTW, I've done both. I've traded all kinds of complex spreads. Real estate is much better--trust me.

b) much harder to diversify, because of the big chunks (you can buy shares for 5k, but not a house. You can sprinkle 100k into different equity/debt markets in different countries, but not into many houses in different countries).

Yes, but also less critical if you are talking about cash flow and in it for the long haul.

I am diversified over 26 rental property units in two spots in the country.

Yes, really bad things could happen, but it's very unlikely.

There will always be some risk.

c) massive transaction costs. Round trip can be 10% or more.

Yes. Definitely.

That is why buy and hold. Flippers get stuck holding the bag.

Really good point though. People need to understand this when investing in real estate.

d) much less liquidity. If shit hits the fan, you can sell shares and have cash at hand in a few days. Try that with a house.

Yes, another great point.

You need to have cash reserves if you invest in real estate. Don't lose all your liquidity and get in a squeeze.

I keep plenty of cash on hand or in a more liquid investment for emergencies.

Great point.

f) again, regarding diversification: you could get bad tenants that trash the place and/or don't pay rent. If you own a large number of properties, it's a quantity you can average over and deal with. If not, it's a gamble.

True again, but this can be highly mitigated with skill and volume.

I've been holding properties for about 18 years. I have not had more than $4k of damage done at once. And there are remedies.

Mostly this is a non-issue.

Don't buy expensive interiors. Buy middle-end and mitigate possible damage.

Another really good point though.

g) rates are pretty much as low as they can go (though, to be fair, everyone's been saying that for some 7+ years now...) but seriously, they'll have to come up. That would put pressure on real estate prices. (Of course, you can avoid liquidity issues with fixed rate mortgages, that's prudent, as long as rents hold up).

Yes and no. Could actually go lower. I don't think it will.

Most likely they will go up.

Never in history been a better time to buy in my opinion.

Don't know if we'll see rates this low ever again.

Again, I don't care about prices. I care about cashflow.

h) inflation has not really been an issue for several decades. It is prudent to keep it in mind, though, but clearly real estate is not the only real asset.

True, but when rates go up. It will be.

And when it does if you get caught with your pants down, it hurts really, really bad.

i) Lastly, there might be something of "picking up pennies in front of a steamroller" to it. I have no doubt that what you are saying is accurate - but you might have been lucky, and avoided a massive downside. And clearly, it is not a feasible strategy for everyone to own 26 properties and rent them out (because someone actually has to live in them and pay rent...)

Not everyone can do it, not everyone will.

But there is a huge opportunity here.

I've survived the good and bad. Solid strategy will give good results with minimal risk.

Most real estate investors don't have solid strategy.

Thanks for bringing these things up.

For those of you serious about this and have questions. I offer some officehours: officehours.io/people/jsonmez

Glad to help if I can--for free.

I have two commercial units.

Usually the biggest headache, because you can't find property management to manage it and it's much more difficult to get leased then residential.

I think some people make commercial work, but it's a different ballgame and less reliable, IMO.

Completely outsource. I answer maybe 2-3 emails a month and say "approve."

I kid you not.

BTW, would love to hear more about your success. Email me at john@simpleprogrammer.com if you get a chance and I'll be happy to give you some free advice in exchange for hearing more of your story.

Awesome! Glad I could help. Well done on taking action. Most people never do. Congrats man. Really happy for you.

I wouldn't do that at all. Instead invest in a more steady market.

A good investment is one that has good return, regardless of market conditions.

"Investing" in a boom market is speculation.

You'll pay too much.

Look for good rent vs price situations where you can cashflow.

Midwest markets are good like Kansas City.

Mostly traditional bank / mortgage through conventional loans.

A few commercial loans.

And my locations are Boise, Idaho and Kansas City, Missouri.

Reason is because of cap rates.

So, I thought I'd type up a bit of more detailed explanation of my story and why I think real estate is a great investment for software developers, since my previous comment was a little lacked.

I bought my first house when I was 19.

It's a little two bedroom shack in Boise, Idaho, which I bought in 1999 for $68,000.

I still have that little shack. Today it's worth about $135,000 and the tenants I had in it essentially paid the mortgage on it and I own it free and clear.

I've actually got 26 total rental units and I generate about $10k a month of almost completely passive income off of them, net.

I made a ton of mistakes along the way, but I learned quite a bit--which I'm happy to share.

Over the years, I tried to buy one property every year.

At first I could only afford small properties and would put 10% down, so I was a bit leveraged.

But, eventually I was able to afford bigger properties and put more money down.

I always bought properties using 30 fixed loans and that ended up working out well.

I watched in horror as many of the other investors I knew--who were really speculators--went under, during the big housing crash.

I actually thrived during this time, picking up properties for cheap.

All the time I was working as a software developer, I had this goal of retiring early.

I kept saving as much as I could and investing real estate... little by little.

Like I said, I made mistakes, but learned from them and got smarter as I got more experienced.

Eventually, I had built up enough cash flow to actually "retire." This happened a few years ago.

Why is real estate such a good investment?

Well, I think there are two main factors: leverage and hedging against inflation.

Leverage is extremely powerful.

A bank will lend you a large amount of money, sometimes 90% or more, for you to invest--if you buy real estate.

This isn't the case with other investments.

So, you can buy a house for $100k, put $10k of your own money into it and if it goes up 10%, and is worth $110k, you make 100% return on your $10k.

That's insane. I don't know other investments where that is possible with such low risk--if you mitigate the risk properly.

Now, I don't depend on appreciation--and you can't count on it--but, you don't even need it.

Just the cash flow alone can get you excellent returns on your money. Again, with little risk and huge upsides.

Hedging against inflation is also a beautiful part of real estate investment.

Most other investments are hurt by inflation, real estate isn't.

In fact, if you owe money on a mortgage and inflation hits, you actually owe less.

Home values go up with inflation, as do rents.

I know it's a bit difficult to believe--I probably wouldn't if I hadn't done it myself--but, I have done it and I did escape the rat race.

Anyway, if you'd like to know more, let me know and I'll post the link to my YouTube videos and the video course (that is in beta) that I am releasing on specifically real estate investment for software developers.

Actually, check this out: https://www.youtube.com/playlist?list=PLjwWT1Xy3c4VWM_cpbXXY...

It's a playlist of all the free YouTube videos I've put out about real estate investment.

Similar, but better, more focused content in the course.

Good point. It's pre-release. So, I'll be adding much more content, including a sample video.

I'm here in Beijing and I just experienced this first-hand. Amazing.

Came over here for the launch of the Chinese translation of my book, Soft Skills, and I am amazed by the tech community here.

Biggest flaw in article: assuming all "weight" is fat.

Nope. Not when I'm fasted all day before the meal.

I'm 6"3' and 210 lbs, about 9% bodyfat. Probably about 1,500 calories when I am cutting on this routine, otherwise 2-3k cal.

I take a few BCAAs before working out and the key it that you get protein and carbs after the work out. I've seen muscle increase during the period.

Took me about 2 weeks. Then it became easy. A little hunger, but you get used to it. Helps that you can look forward to a bigger dinner meal.

I cook my dinner, but I rather not cook multiple meals a day.