Originally Posted by
Jordan
I'm not investing any time in the real estate that I own a partial interest in. Returns are still acceptable.
I'm not forgetting anything about location. Not at all. Time and time again on this board I've discounted the claim of there being extreme levels of shadow inventory because it's all in the same localized markets and relatively unimportant. I asked wgadget about his thoughts on national prices because he routinely talks about national prices and national concerns (like shadow inventory.) Since he keeps talking about shadow inventory, a national phenomenon, I wanted to ask the question in such a way that he can answer. Pretty simple logic to follow.
You're not paying attention to what I'm saying at all.
The company owns real estate that it rents and real estate which it flips. It does both, just depending on what the best deal is at the time. If someone wants to rent, cool - if someone wants to buy the house at a premium giving the company a huge IRR, also good.
I don't own MBS. That's ridiculous. I already said something to the extent that I don't care what happens to the owner's cash flow after they buy a home in a flipped deal. Why would I say that? Hmm, IDK, probably because I don't own the note on the home. Follow the logic, man, seriously.
Minority owner means someone who does not own a control position in a company. Basically, someone who owns less than 50% of voting shares - you probably shouldn't be participating in investment discussion without knowing that. I mentioned it because at the time it was important to note that the person managing the company is a pretty big shareholder and thus has a lot of his capital invested in the company, so he's not going to make decisions that he wouldn't make with his own money. Only reason it's relevant - oh, and because I can compound without having to buy into a whole property. Additionally, it gives me diversification, in that rather than owning...say 10 properties at 100%, I can own 10% of 100 properties. Finally, scale has its own advantages. Cheaper per hour to hire a full time electrician than hire one once, or a plumber, or carry working capital and fixed investments like a truck. It has its advantages, too.
Also, keep in mind that I'm not remotely concerned about beating inflation, by the way, since inflation is so incredibly low and will be for some time. Rather, I wanted to introduce the concept and idea to people on RPF, since RPF is obsessed with inflation. I thought it'd be a good thing to discuss. Instead it's turning out to be taxing, since it seems that this board is full of people who have plenty of opinions and very little skin in the game.
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