B Russ Investment Journey

Discussion in 'Trade Journals' started by B Russ, Sep 27, 2017.

  1. emmett kelly

    emmett kelly Well-Known Member

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    $200 a month income on the rental? If the A/C goes out that would wipe out the income for about 2 years wouldn't it?
     
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  2. B Russ

    B Russ Well-Known Member

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    Funny u mention that. I am a (licensed) HVAC tech. I don’t currently work in the field, but am plugged in still. I did just shell out a $500 roof repair bill from a storm that blew threw last week. A hazard of the trade. But could also fix the AC 100% condensor and furnace changeout for 1k. Construction And real estate, in some fashion is also my background....this also makes me more comfortable as a landlord.

    the $200 mentioned is a swing in current income, if i refinance. Not the total monthly income on the property.

    law makes me hold 1 month rent in a separate bank account already. In my case, it is $1,350.

    i also hold a credit card with zero balance, but a 7k limit, that is just for this property. In case of unforseens.

    my mortgage is $928. A refi could cost me $12k equity ( to be determined when paperwork comes in).
    But that would make it look like this....

    $1,350 income in (Rent)
    $ 928 Out (Current mortgage)

    $ 422 current monthly profit.

    sorry if it looks stupid. Im typing on my phone. May edit a few times.

    new payment should look like
    $ 828 out
    $1,350 in

    $522 profit.

    But hidden in for a 30 yr finance is 10k worth of tesla that got absorbed into a mortgage as opposed to a monthly payment at a much higher APR, but that i have no means of overpaying on, to reduce the APR impact.
    And in true investment mentality, i believe tesla appreciates much more than my home, or any offset in a refi.
     
    #62 B Russ, Jul 24, 2020
    Last edited: Jul 24, 2020
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  3. B Russ

    B Russ Well-Known Member

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  4. emmett kelly

    emmett kelly Well-Known Member

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    Damn! Could've used you a couple weeks ago. Had some condenser repair done but didn't have to replace it. My furnace is a Goodman and about 10 years old. Condenser is at least 20 years old and just a matter of time before it blows. Anyway, here's wishing you the best. Being a landlord is not in my DNA, no patience with tenants. I'd have to sell and walk away with the cash.
     
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  5. B Russ

    B Russ Well-Known Member

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    Haha. Thanks. Edited the main one a couple times since your response. I have been landlording for 5? Yrs? On my second tenants right now. These people offered to steam clean the carpet before they even moved in. I insisted i would have it professionally done. They insisted further. They have since improved the property (which was already realty ready). I have been lucky. One late payment by 3 days in 5 yrs. knock on wood.
     
  6. B Russ

    B Russ Well-Known Member

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    i want to elaborate on this......

    this is where i differentiate, or draw a distinct line between holding shares for investing, for trading, or whatever else, we may throw money at. This could be for stocks or real estate. It all depends on the glasses u are wearing when u look at the income.

    As stated above, i see this as an investment, not a monthly revenue of income.

    Even if it were the $200 per month profit, i was looking at, i am also considering equity.

    every payment the tenant makes on time, adds $394 and counting, above and beyond the $200 profit in question, to my total net worth based on a flat housing market. because that is how much principal i pay off, off the income They provide. If market goes up, my net worth does too. My market is up currently from when i bought, so that adds more equity for the time being.

    so with those numbers, even if it were only $200 per month above rent, i also gain equity every month. Equity of $398ish principal per payment. So i calculate my net worth, increasing by $598 per month, under that scenario.

    i am also leveraging housing market inflation, making my net worth per month, more like banking on it. And in the event of a downturn, or other income loss, i have lower monthly payments to further protect myself and still have equity in the property, if needed. Though ultimate goal IS payoff 100%
     
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  7. B Russ

    B Russ Well-Known Member

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    But i also know these rates could creep lower, but not much. If ever were a time to refinance for lower payments, we may not see it again for yrs and yrs.
     
  8. TomB16

    TomB16 Well-Known Member

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    Great thread, B Russ. It sounds like our trajectories aren't that different.

    A bunch of us landlords get together every month or two for breakfast at a local restaurant and chat about various thorns in our respective paws. Based on this, I think I'm on safe ground to present the idea that it's not possible to make money as a landlord in this area contracting out 100% of work. We need to do as much as we can ourselves with the least outsourced labor possible.

    The folks I know who are successful are actually quite successful but they are either current tradesmen or are familiar with the trades through experience. Around here, calling a plumber in to swap a running flush valve in a toilet is a $275 problem. A tree root blocking a sewer is $600 to start.

    When a job is bigger than I can do myself, such as a driveway, I form it myself and then bring in day labor.

    As for gains vs cashflow, I know landlords who don't understand the idea so it's not surprising someone wouldn't fully comprehend it.

    40 years ago, a man who was in his late 80s then told me that if I could buy 10 houses of any kind and somehow hang onto them for 20 years, any way possible, I would become extremely wealthy. That didn't sound very smart or sophisticated at the time but I realized the wisdom in his words after a few years of being a landlord.

    R-E is a get rich slowly type of a thing and only if you do a good job of operating the assets and containing costs. In that regard, it's just like any other business
     
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  9. B Russ

    B Russ Well-Known Member

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    Scratching an itch. Wanting to gamble a bit. Bought 30 shares LI On IPO day. $16.85 per share. Planning a round trip today.
     
  10. TomB16

    TomB16 Well-Known Member

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    Li Auto?

    Interesting choice.
     
  11. B Russ

    B Russ Well-Known Member

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    Its a sector and hype (trader) play. Not investment. I fully admit. If i can skim pennies for the risk, i have scratched the need to get rich quick for another day. Lol
     
  12. B Russ

    B Russ Well-Known Member

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    In more relevant news, i am proceeding with the refinance. I have about two weeks lag in which i need a credit report to get updated. All the paperwork is in place. Just need everything to get the red tape slapped on it.

    once it is, i will give a very thorough assessment of my valuation. Past and current cashflow net worth, On that property, projected cash flow, and when/what yr, i expect the new move to intersect current trajectory to be profitable.
     
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  13. B Russ

    B Russ Well-Known Member

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    Wish i had numbers to post as promised on JUL 30. It may not happen. I have had an intersting few months as far as employment goes. Went from a full time job with a part time. Lost full time job. Part time job became my full time job. The underwriters didnt like that.
    I unfortunately was not approved for the refi at this point i. Time. I was told not to change jobs for 3 months and try again.
    I am currently looking to change jobs, as the one i currently have is entry level. I also have begun working part time hvac again. But wont be able to include that for a while. If i change jobs, i start over on work history for a refi, but will be getting almost 40%~60% more pay based on the one i just interviewed for yesterday. so it will be the better outcome than a refi anyway.

    all that to say, i may or may not refi the house. I will if i can, but not at the expense of putting a career on hold.

    markets....i am down to holding tsla and my 4 shares of aapl. @WXYZ ;) (100% tech...i read your post today as i read all of them. Love them!). I Sold everything but those two to cover margin (due to casino options mistakes) they were basically tech or EV anyway, and tsla is the frontrunner of both, imho. But never ever sold a share of tsla that i didnt buy on margin....oh yeah. I bought some shares on margin on the way down. 354 and 342 entries. Sold the margined shares i sold them at $447 i think it was?....but also to buy one more option.

    bought one Jan contract on tsla, a couple weeks ago. Bought atm which was $366 strike. (Also on margin). So far so good.

    for what its worth, the reason i dont post real time trades Isnt because im hiding losses...it is because i found i get into my own head once i tell the world what i did. Then i feel obligated to try to excel in said trade. I have to check my ego and others input.
    I will always tell if and more likely when i f up...but i just need to do my moves and process internally. Then write the journal.

    my tesla call was made after the sell off. It was climbing back up. Battery day, sales, and qtr reports all on the horizon before the option expires. (SP Non inclusion was already old news).
     
    #73 B Russ, Sep 19, 2020
    Last edited: Sep 19, 2020
  14. B Russ

    B Russ Well-Known Member

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    Picked up another Tesla jan call. Earlier at around market open.

    jan 15 $368 strike.

    i posted in another thread, i closed my last one. It was also jan 15, at $366 strike. Today it dipped below and climbed back through the resistance line i had charted. A couple looks at what i am looking at....
    6D132172-CAA4-4D85-B0B4-F27E58477E1D.png
    6D132172-CAA4-4D85-B0B4-F27E58477E1D.png
     

    Attached Files:

    #74 B Russ, Sep 24, 2020
    Last edited: Sep 24, 2020
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  15. B Russ

    B Russ Well-Known Member

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    Never posted this in my journey, but in the stock market today, thread. Pics just for reference/timestamp. Disclaimer, it was a $410C, not $405. ;)
    I admit luck had much to do with it, SP being 100% the catalyst more than the chart, arguably. but regardless, it is still open. I plan to try to exercise this one as long as it doesn't do a mass correction. Right now, it will pay the loan i took to fund my account to buy tsla in march in the first place. plus buy more shares. So my mental stop, is before it dips below the loan payoff, at least.

    It will be my first time to actually call the option if market and my brokerage allows. I dont have enough to pay for the shares outright, so am hoping i can free ride? At any rate, there is still a lot of time between now and june, but right now, my home refi is in my court. Pending this wild tesla ride and interest rates after, i may or may not even pursue it anymore.

    4BF2BE35-97FB-40E2-A41A-31AFC9F00360.png D6A7F84D-9219-447E-9761-C0EA7E0948DD.png
     
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  16. B Russ

    B Russ Well-Known Member

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    I am full aware tsla could shed 20% in the coming month or so.

    that said, after inclusion, regardless if the market likes it or not, i expect a beat again. But with the stock as swollen as it is, i think an early ramp up would be the next catalyst. That or FSD mass release. I am keeping up with it the best i can. Updates dropping a couple times a week, improving everyones car from the week before. They have this mass learning thing right.

    I expect the market to continue to underestimate the energy potential as well. Until they realize it snuck up to be as big as auto.

    though solar roofs are hard to get, its qualified installers, not product, that is hard to find. The home batteries are in such high demand, they actually raised the prices on them a month or so ago. The biggest battery in austrailia, again...trumping their first biggest ever....lots of energy permits being filed in europe....

    maybe this belongs in the tsla thread, but i havent updated here in a while. And while i know i said i options burn me. I also felt very very strongly when i bought that one. It was worth the risk. I was willing to pay the piper if i was wrong.
     
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  17. B Russ

    B Russ Well-Known Member

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    Just an antidotal post. Every day, i am seeing the value of long term hold, opposed to trying to swing or scalp.
    I got very lucky and happened to be holding a tsla june 21 $410 strike, purchased before the announcement.

    as that call, and my shares gained very nice value, i saw fit to try to capitalize on the volatility. I have done much daytrading on this run up. That said, more often than not, the scalp plays ended red. If i had a green one, it was a lucky good one that countered 3 or 5 bad ones.
    Some plays, i purchased, fomo, some were dips. All have been more profitable when i didnt buy or sell on emotion. And more importantly, the further i set my target date to be right, the less volitile the option. Derp. But its easy to preach. But when u are looking at 3 options with the same strike purchased at different times, one is red and one is green, the other is anywhere else, it puts into perspective, the longer your vision, And obviously (the better your buy in) the more chance you have to be right. And vol is huge!

    this morning i bought a dec 18 call when stock was $620. It was green once when it hit $628 then took the morning dip. I closed it for a $25 loss when it bounced back to $632. I already have two calls and that one was not worth the anxiety.


    Just a reflection on options and time, vs buy and hold...
     
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  18. B Russ

    B Russ Well-Known Member

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    All my calls are closed. The June call, did its job. Netted $16,000. Enough to pay off the loan i took back in march. Also bought me 3 shares of TSLA stock which are ride or die!!! and will buy each of my children a share each of tsla in their custodial accounts, once funds clear :). Which is really cool for me. It will be the first time i could even afford to do that for them. They are new accounts, just opened a couple months ago.


    I will add i didnt keep the best records through my daytrading this runup, but simple math, i have added 10 shares of stock avging say $550 per share. Margin never increased. As i ended a trade and or rolled it to another (when it was profitable) i was always trying to pay my real portfolio in long shares before i doubled down.

    but this isnt all me being an awesome trader. Before the announcement, i was feeling like the worst daytrader ever. I was making bad decisions and burning through account value. This entire runup and lucky run, has only gotten me to almost, but not even par with where i would have been had i bought, held, forgot.

    that is also assuming i hadnt paid off my loan yet. Which not even i know what my target would have been had i been in different portfolio.
    At any rate. Still paying some tuition costs at school of hard knocks, but this month, (there is always next) but this month feels nice to be getting paid back for some of those tuition fees.
     
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  19. T0rm3nted

    T0rm3nted Moderator
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    Congrats and that's great doing that for your kids @B Russ
     
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  20. B Russ

    B Russ Well-Known Member

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    Thank you @T0rm3nted honestly, im happy with getting my own retirement in order/portfolio I never expected this rocket launch from march. I am so grateful and humbled at the same time.

    (disclaimer). Stoned rant, but true.....i am more proud of the single tsla shares i could buy each of my my kids than the ?x that the portfolio I keep ranting about, will provide. (That will go to them anyway, but they can enjoy theirs while we are together) and hopefully i can help them navigate the waters, as they hopefully pay more attention. Teach a man to fish.........

    my entire goal in life is to first and foremost, die comfortably (financially speaking, and with no burden to my loved ones. I don't need millions....just not stressed for cash. And i dont want to be a burden on my loved ones when i do. and hopefully, provide a (big) head start for those i brought into the world that didn't ask to be brought here, by the time they are adults.

    thats all. Anything above that, and i feel like i have won.
     
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