my whole thesis is to invest in opportunities which one can control the outcome and yield higher IRR’s. with stocks, its so dependent on factors which are far beyond one’s control and its in a game where the average investor isnt on an even playing field. my uncle, who had his own business, told me, with stocks you are hoping other people make money for you. starting off in my early financial dealings, i couldnt get to where i need to get to by earning 10-30% returns. just didnt have the patience nor did i want to have the large networth after years of accumulation and compounding. so investing in stocks and things like rentals were not optimal for me.
I WANTED IT BIG AND I WANTED IT NOW.
i would wait for opportunities where i could put my money to use that could return large returns >50%. i wasnt taking crazy risks as i always looked for investment with limited downsize risk. its the dream scenario to have your money work hard for you, not working hard for the money.
everyone will talk about diversification and asset allocation. that works if you are trying to get market returns. i adhere to the principle of putting all your eggs in one basket and watching it closely. by actively managing the investment, i believe it reduces risk. it also gives you the best chance to earn a robust return which when done a few times the compounding impact gets you to the 1% club. especially if the capital is limited, its so important to laser focus the investment to the one opportunity that can return astronomical returns. this is more potent that living frugally. again, my objective is to get to 100m, not reach FI in 17 years.
there are plenty of blogs who talk about budgets, saving, regular type of investing. i want to focus on high IRR investing. hoping to build a community where we can help each other reach our financial goals by being smart and earing high IRR’s with our investments.
to this day, i have very little investing in the stock market. mainly IRA money. i can generate higher returns myself in alternative investments. real estate right now is a great wealth creator.
Posted in Misc | Leave a Comment »
my agent had told me about a listing that was going to come on the market. they werent sure when the bank was going to list the tri-plex, they just told me to be ready.
particulars – triplex, each unit with 3bd, 3bth, 2 car garage. currently renting for 2,000/month. the tenants hadnt been paying rent due to them realizing the owner was in default to the bank. the bank would have to evict the tenants, this is how stupid and inefficient the whole foreclosure process. the tenants were good tenants, just got caught in the middle. any other owner, would have struck a deal with the tenants and forgave some of the back rent to keep them on as tenants.
so the bank evicted the tenants and had to sell the triplex vacant. i would up buying for 679k with 25% down or 170k. i have a monthly mortgage of 2700 but am getting 6000/month on a rent. i quickly rented the units within 2 weeks of ownership.
numbers – after mortgage, insurance and taxes, i am netting 28k a year on my 170k cash down payment. this equates to a 17% cash on cash return. this doesn’t factor in any principal paydown of the mortgage. that is just icing. furthermore, i got an appraisal on the triplex with its tenants in place. 1,035,000. that’s 350,000 in equity i gained.
here are 2 tricks of the trade – 1) the triplex had 14 offers in 4 days and my offer wasn’t the highest. how did I get the property? my offer had no contingencies. i had gotten he chance to do the home inspection and spent the 350 dollars without knowing i would get the property. this made my deal a for sure deal to the bank since it had no contingencies in the offer. the banks have to deal with so many flakes that they value the certainty of the deal.
2) the other factor was that I had made an all cash offer that would close within 21 days. a mortgage banker friend did the loan for me in 3 weeks allowing me to finance.
i’ll write about the value of reputation and how it pays off.
Posted in Real Estate | 1 Comment »
so up until 2008, i never owned any real estate. i couldnt afford anything nice and what i could buy, i didnt want to live in it. i had so many friends telling me i was stupid for sitting out. they were making money so easily. there was no end in sight…
life is about cycles. my dad is a perpetual pessimist, his extremely cautiousness and fear has made a profound impact on my decision making. in the late 80′s ( i would have been ~12-14 at that time), my dad was warning me about the then real estate market. the market crashed around 1990 and people couldnt give away their homes. having seen what happened then, it was eery to what was happening in the early to mid 2000′s. pricing on real estate was going up just because of the greater fool theory. i’ll pay high because someoone else will come and buy higher. so i sat out the market and for many years felt like a fool.
so we all obviously know what happened. this post isnt about a ” i was right”. who cares. honestly, if i really knew what was going happen and why, i’d be the richest man in the world. i certainly never saw real estate dropping 50% in the manner in which it did. all it was for me was a lack of comfort in playing in a market that i felt was way overpriced.
now that the pricing has dropped and banks are dealing with REO’s and short sales, its the perfect opportunity to invest in rentals, flips, and construction. “go where they aint”. about a year and a half ago, i started buying rentals. in that market, quickly saw some flips and now are on to building homes. i;ll post entries about each one soon to highlight the good/bad moves. in the past year and a half, i have made probably 2m+ on flips and builds; with another 3M+ gain on unrealized equity because i bought at the right price points.
this recession is creating the greatest wealth building opportunities.
Posted in Real Estate | 3 Comments »
my grandmother was the one who raised me as both my parents were working full time jobs. she always taught me to be grateful for what you have and to not boast about it.
the last few years, i have been able to really accumulate a lot of wealth all in the backdrop of the great economic recession. the recession itself presently a lot of new opportunities to me. so amid all the difficulties surrounding us, it was definitely not Politically Correct to discuss our success with friends and acquaintances who might be suffering from the economic malaise.
my wife and i were both raised middle class. we are both very simple people, i more so than she is. she is after all, female. i spend about 500/month and she about 2,500. both of us dont wear fancy clothes nor designer anything. no one would know that we have money. because of our lifestyle we dont hang around other wealthy people. very few wealthy people live as frugal of a lifestyle nor would want our lifestyle. not associating with other wealthy people, we dont really have anyone to talk to about our situation. its been though, not being able to discuss financial manners with other people. i am very collaborative and am always seeking advice. this time, we are stuck alone.
a part of me wants to scream – ” I MADE IT”. there is a part of me that feels talking about the financial success is taboo and would bring unwanted bad luck. there is a saying, talk trees catch a lot of wind. thus this anonymous blog. hoping the anonymity will allow me to share information i couldnt otherwise in the effort of helping others reach their financial goals.
additionally, i am really really busy. would love a way to meet thousands of people through the efficiency of the net.
Posted in 1% / wealth | Leave a Comment »
when i was 16, my sister asked me to help her then boyfriend move. i didnt know he lived on a second story and i further didnt know that i was going to be 1 of only 2 other people helping. when i showed up, her boyfriend had the coolest of toys and things. just way too much of it.
i remember the three of us trying to get the frig down the stairs using that Uhaul trolley. to top things off, the stairs pivoted 2 or 3 times, so it wasnt even a straight shot down. now i was scrawny back then and the amount of work there to me wasnt worth it.
the second moment of shock was when we finished loading everything up. it was a sense of accomplishment, until it hits us, WE ARE GOING TO HAVE TO UNLOAD THIS STUFF AT HIS NEW PLACE.
i swore from that moment on, i would never accumulate so much stuff.
we are putting our house for sale in the next 2 weeks. moving to a newly built home.(tax reasons – will post later about this). lets see how little stuff i have.
do you own things or do the things own you?
Posted in Misc | 2 Comments »
I’ve been ready a few personal financial blogs and got inspired to create this Blog. I’ve done some things right and obviously some things wrong. In all the sites I have read, the theme seams to be, 1) live below your means 2) dont use debt 3) invest the rest to reach financial independence.
I thought I share my journey of how I was able to reach Financial Independence at a young age (age 26 before I got married, 33 when I got married – definitely will need to post about this later) because I was able to achieve tremendous IRR on my investments. A penny doubled 32 times gets you to 1 Million dollars. I think we all can start off with more than a penny.
Hoping to meet a ton of interesting people. so dont be shy in contacting me. investlike1percent AT gmail DOTCOM
I will mostly blog on weekends or during other downtimes. I am hoping my daughter can read this blog someday when her old man is long gone and learn a thing or two. PS – love you, K….
Posted in Misc | 5 Comments »