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Month Long Holiday

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If you’ve been following my Instagram this summer you’ve seen I took a cross country trip. I wanted to sum up the trip briefly for you.

We were able to drive across the country for a month because of how we set up our investments. We sacrificed a lot and now we have freedom. There aren’t that many people that can do this in life, we want to make this a priority in our family.

Our rentals are being taken care of by a management company. That I still have to talk to every couple days because something is always happening. We decided to do this and we just left with out all the hotels booked in advance.

After we left Chicago we headed to Mt. Rushmore. But on the way there we stopped by Mall of America. The place sucked. Don’t go there. But Rushmore was amazing to see. I brought binoculars and could actually see the irises in their eyes.

After that there is pretty much nothing and we were driving 95mph on the express way. We stopped to see Yellowstone Park, there were so many wild animals there and a couple buffalo actually walked within 5ft of our car.

Next major stop was Seattle. Hills, seafood, and legal weed. Its a nice city very hilly not walkable at all. The original Starbucks was there which is a huge tourist trap. Its right in their Pike Market district where we had the best clam chowder of my life. The waiters in the restaurants there make $15 an hr. So theres really no need to tip and its not encouraged. Which made me think, my first job after 4 years of college I made the same and these hipsters cleaning tables make that amount. They try to justify it and to be honest if the people still go there and eat, then the market supports it and it can continue. Im sure a few places did go out of business, but not where we where there were a lot of people all over in the bars and restaurants, so Im sure that rate will only increase over time.

The weed is also taxed at 16% there. I bought an edible and ate it before bed. Got a little dizzy feeling but that was it. Weeds really not my thing but I had to try it.

Went down to Oregon and thats where I started getting really pissed off. In that worthless state me being a grown man, I can’t even pump my own gas! The service at the gas stations is horrible, and I eventually asked what is going on. It turns out the state government made it illegal to pump your own gas because it would make the unemployment rate go down. What they did is create 30K jobs just by making that stupid law. So what ever Oregons unemployment number is add 30K people to it, because it takes away the option from the peoples free market and freedom of choice. Another example of the government cooking the books and controlling everything down to the micro level. Outside of that, Portland was a shithole. There were bums all over and garbage with food shacks on the street. We stayed for 1 day and got the hell out of there. (This was just the beginning of bums and garbage)

Drove through the redwoods and those were amazing. These trees are hundreds of feet tall, and thousands of years old. Absolutely amazing, you have to see these. The drive down California is so cool to see, the ocean views are something I’ve never seen anything before. Just seeing the vastness of our country is something I’ve never even thought of, there is so much land in this country and so much nature, forests, wildlife, and open space. So we saw a lot, did a lot and couldn’t wait to get to San Fran, our next stop.

OK when I think of San Fran I think of billionaire tech geeks, and an amazing city with so much to do. Well not so much. Our hotel was nice at $600 a night. But when we stepped outside the city was full of trash and bums walking around. There was so much trash in the street I have never seen anything like that anywhere I have traveled, including Asia. We literally couldn’t walk 1 block without being harassed by a bum asking for money. I heard the rumor that there were a lot of Vietnam vets that ended up homeless there, but this is clearly not the case any more. The majority of these bums were in their 20s and 30s, and all seemed able bodied. We were down at pier 31 eating crab and after dinner we walked into a CVS store to grab something. There was a woman about 30 years old in there buying a bottle of Mohawk Vodka and paying with a bucket of change that she collected from begging at the pier! She wasn’t buying food for her family she was buying booze with all her change. This is why I don’t give money to people on the streets. The next day there was another guy about in his 20s that walked into the coffee shop and just stood there until someone bought him a sandwich. These people that give them money are such losers that they don’t understand if you incentivize laziness you get more of it. Another reason there are so many bums on the West Coast, people incentivize it. I was sick of San Fran and ready to leave, there were beautiful houses there. The Golden Gate Bridge had a great view of the city, and the seafood was great! However I will never go back.

One last story of the trip, we experienced the exact opposite.

Probably the nicest place in California was Napa Valley. It was clean, the people were nice, and the drinks were great. We stayed in a small hotel in Yountville, we could walk everywhere and the neighbourhood was laid out so nice. We walked to the Chandon Vineyard and split a bottle there while looking across at the hills of vines. I brought a few bottles and glasses back to the hotel and I ended up drinking 3 bottles of sparkling wine before dinner. I couldn’t drink any more so I had a few waters and then we walked a block to this French restaurant. We ordered the 2 tier seafood dish. There was every kid of shell fish you could imagine on these plates and we ate the whole thing. I ended up having another drink while I was there too. At the end of the meal the waiter comes to our table and tells us he usually doesn’t see people finish the whole thing. I was so drunk I told him I left 1 oyster on the plate for my dead homies. I have no idea how I came up with that. However this area was so damn nice I will definitely be back, there was also hot air balloon rides but you had to be there at 5am, so that wasn’t happening.

There were many other places we saw and things we did, but this is already my longest post to date, and I could probably write a whole book on this trip.

I want you to think, where would you go if you were free? Would you travel across your country, or overseas?

What are you going to do starting right now to become free!?

Dead Dick

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I rented one of my units to an elderly gentleman named Dick. (Or who I though was a gentleman) About 8 years ago I had a vacancy and this man name Dick answered one of my ads for rent. He came over to look at the place wearing a suit. He told me he was looking for a place he could live in forever and didn’t plan on moving. I thought this would be a great tenant. He was proper and he wanted to stay forever. I knew I would always have my rent on time. He had social security and a pension from the city of Detroit. So I rented to him I was excited to have him in, I had great expectations.

A couple years go by and I have been receiving my rent on time and everything was perfect. Then I had the city call me and they told me they had to do their bi-yearly inspection. The inspection is basically just a shakedown to get $100 from every rented unit in the city and force you to do unnecessary repairs or they fine you.

So I don’t have a choice, I meet the city inspector over there and go in the unit.
The unit was a mess. It turns out this guy is a neurotic hoarder! There are newspapers all over and he apparently had a compulsion with bars of soap and tin foil. There were layers of tinfoil with bars of soap on them scattered all over the house. His bed had layers of newspaper on it instead of blankets. The place was a mess and there was old food left all over the place. I knew my dream tenant was turning into a nightmare. I asked him why the hell is there bars of soap all over the place? He laughed and said it wasn’t my business. Well now he’s being a real pain in the ass. The city made me do minor updates to the place, but what a mess. It passed inspection and he was paying me on time every month. What could I do? I remembered him saying he wanted to stay in that house forever, and I knew I would walk in on him dead on day. So a couple of years go by and I increase the rent slightly, he keeps paying me on time every month. He was still under paying and the neighborhood was increasing in value, new stores and bars moving in, and a lot of college kids. I knew I could get a couple hundred more out of this house but I didn’t want to ruin a good thing. I also had to replace the furnace in the house. Which isn’t cheap.

So I knew I’d eventually have to clean the place up one day, every time I go over there I see more newspapers and bars of soap laying all over.
In his 8th year of renting from me I get a Facebook message from a friend who lives on the same street and she tells me that there’s been a light on in the house for 3 days and hasn’t been turned off at night. Then I knew, I was in for some shit. Then she tells me the cops were over there looking in the windows.
I immediately go to the police station and ask what the hells going on. They said they were doing a welfare check because one of the other neighbors called them. I told him that Dicks really old and he’s probably dead. I asked them to come with me to the house. Which was smart on my part because what if he was murdered what if there was a break in, or he killed himself. So the cops come over, we unlock the door and one of the officers walks in and immediately says… “Well, there’s Dick”. I knew it Dicks dead.

Now I have a fucking dead body to deal with and garbage all over the damn house. The officer walks trough the house to make sure there’s nothing suspicious going on and I was just standing there like what the hell do I do now. The officer says he needs to call a coroner to take the body out. I say ok what do we do until then? He says wait and look for a trust or some kind of document with contact numbers on it. So we start sifting trough all the garbage in the house the whole time there’s a dead body here and it’s starting to smell. I would describe the smell as someone who hasn’t took a shower in months, but plus you can just tell that what you’re smelling is a rotting body. It was awful so over an hour goes by and the coroners finally come over and haul the body out. We don’t find a will or trust or any contact numbers and he never mentioned any family to me. I asked the cop after the body was taken out, OK what do I do with all this shit? He said it’s all your responsibility now. What?! He dies and leaves me with this fucking mess! I’m furious, I look through the house for a couple hours. I find an extension cord, a silver dollar, and a mag light. That’s it, there is nothing of value here! I lock up and go home, just thinking what the hell am I going to do?

I decide fuck it. The next day I contact a junk hauling company and had them come over and throw his entire house out. I told them anything that isn’t attached get it the hell out of here. Fridge, stove and all.
I cleaned the entire place, bought new appliances, painted, had a new kitchen floor put in, sanded all the floors, installed new fixtures, and faucets, and new windows in the bedroom. A month later I was able to rent it out for $200 a month more than what Dick was paying.

This was a nightmare I should have been more strict with Dead Dick and made him clean that junky house and give me emergency numbers. This was all before I used a management company. Now they deal with all of that. He was a great tenant and I didn’t want to disrupt the perfect timing of the rent. He paid down a lot of my mortgage for me over the years, but looking back there were a few things I would have changed.

This is just another experience you have to go through being a landlord. Everyone has to PAY THEIR DUES if you want to make it in this business.

How I Played The Brexit

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First of all I never though the Brits would leave the EU; I thought that would make too much sense and it would disrupt the globalist plan for larger governments across the world.  As we saw the mainstream politicians Clinton, Obama, Cameron, they all backed stay. They like that one government controls more people. The non-traditional politicians Trump, Boris Johnson, Nigel Farage, all wanted to see Britain a sovereign nation again.

When I heard the news my friend text me when I was on my way home from the Guns n Roses concert in Detroit. Having just experienced the best concert of my life, I received even better news, the Brits declared independence! Well, England did, with the exception of London city, Wales, Scotland, and N. Ireland, who all wanted to stay.

I knew I was going to wake up to chaos in the markets so this is what I decided to do. The market immediately when down, so with some cash I had on the sidelines I bought an index that tracks the S&P. It dropped right away and I slowly bought it. We have to understand that the stock market is like an emotional girlfriend; it will completely overreact from small problems. I knew this was just irrational fear.   A week later it recovered completely. It lost and gained 100 points in one week. As far as the talking heads on CNN, FOX, CNBC, etc. They will say one thing and the next day say the opposite. They need things to talk about or they don’t have a job. Everybody was saying this is going to ruin the markets, now everyone is excited.

 

Then I saw that the Pound Sterling hit a 35 year low! This was the lowest the Pound has been in my entire life. I didn’t get too crazy but I bought a little of the currency too. This is a long-term play, the pound will go back up and Britain will remain a financial and economic capital in Europe. People over react; I think logically. Buy when the sky is falling and have the courage to stay in, this will always be a lucrative long-term strategy.

This will be a good test for the whole western world; there will be more exits from the European Union and may even be a push to smaller governments.  David Cameron already announced he is stepping down in October because of this independence vote. The elections this year are going to be exciting and might for once actually bring real change.

How I made 25% in one month

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Being observant and aware of what’s going on around you can yield lucrative returns.

 

In March I’ve heard both sides of the argument about oil prices from the talking heads on TV and online. Oil was sliding and the Saudis said they weren’t going to stop pumping. I thought it was interesting and kept my ears open for more news.

 

One morning I was driving to the gym and I saw the price of gas at $1.30 a gallon! I though to myself that was the cheapest I’ve ever seen it since I stared driving.

I went to the gym and lost myself in my workout. The next day I remembered the price and I drove by again and I took a picture to remind me. Now it was on my mind and I started thinking about it and reading the news more.

 

This is where being a critical thinker pays off. The news again like every story will say one thing and completely change the next. I heard people say it’s going to bounce up immediately and others say it’s going much lower.

 

I began thinking there is no way that these oil producing countries are going to keep doing this for much longer. What has been happening is that the smaller shale producers in the U.S. are going out of business because the oil is so cheap, which is great for the big guys. Also there is a theory that the Gulf States are punishing Russia (an oil producing country) for bombing the Middle East.

 

Either way I would have no idea what reason is true and I don’t care.

I just began to think logically about this. I knew this wouldn’t last forever and I knew I couldn’t call the bottom. But I did know I had to get in. So I bough an index that tracked oil at about $31 a barrel, for myself and my clients.

 

It fluctuated for a couple weeks and then started to crawl up, just as I predicted.

In just a few more days I was up 10% and I knew it would continue. I sold a little at 16% profit, took a lot more off the top at 20% and finally sold the last of my holdings at a profit of 25%.

 

Now it is up much more, but I never want to get too greedy and get emotional about this. Once I started hitting double-digit returns I had to start slowly taking profits, it’s the smart thing to do. Every couple days I’d sell a little at a profit. As I can’t call a bottom, I can’t call a top, but once I was up 25% I decided that was a reasonable return in less than a month and I sold it all.

 

This is a trade you can only do if you are observant and have the time to trade. This will never happen if you are using a traditional financial advisor with a large firm. I asked all my friends at the large banks if they made this trade, none did. Why? Because their only job is to gather more assets for the firm, not to make money for their clients. How could they make a trade for all of their clients if they have around 1000 people to call and deal with. This can only be done by an observant person with the time to think and act.

 

The Best Tenant

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I had a vacancy in an upper unit 3-bed room in one of my properties. I put new windows in the bedrooms and updated a bit. It took me 3 months to get it rentable. Was extremely happy when I finally finished.

I hired a less than enthusiastic real estate agent to rent it out for me. He was searching for a good tenant to fill the vacancy, and he knew I’m very picky about my tenants. He finally found a factory worker that moved to Detroit for 10 years and was planning on moving back after she retired. He was very adamant that she sign a multi year lease. He got her to sign a 5-year with a 5-year extension option. I couldn’t believe it she actually wanted to stay for 10 years! The lease started at $750 a month and every year, increased $25 a month.

She moves in and she seemed very nice, she was a middle aged black woman.By the second year she realized she really liked the place and the neighborhood.

She started to update the house and pay for it. I couldn’t believe it; she bought new cupboards for the kitchen and decided to pay to have a granite countertop installed with a sunken sink. This was great, not only was the house improving but the value was too. A few months later she had the entire place painted too.

She even sent me before and after pictures. I went there after it was all completed and it looked amazing. At that time there was no way I would have been able to afford all of this improvement. She kept doing little things throughout the years too. On the front porch she put flowerpots out in the summer with beautiful flowers in them. I have no idea what kind they are but they look very nice.

The tenant just renewed her lease for 3 years with 2 left on her option. It turns out that there’s a 3 year maximum for a residential lease in Michigan. So she signed it and will stay for the remaining 2 to make a total of 10 years.

I was very fortunate with this tenant but at the same time there were a few things I did to attract a tenant like this.

The house is in a nice area that is still close to downtown. The houses are well kept and people are highly educated and care about their community.

When purchased I immediately fixed and updated everything that was needed to attract a new tenant. Including all new carpet, and new windows in the bedrooms.

She actually installed the rest of the windows in the living and dining rooms.

At that time it was hard to find a real estate agent that was motivated to rent out a house. When I found him, I hammered him and made sure to stay on him by reminding him I needed a good tenant and that I was serious about renting it out. I kind of think he was happy to get this rented for me so he wouldn’t have to hear from me anymore.

When something goes wrong for this tenant I immediately fix it and continue to improve this unit. I just installed central air last year.

 

Recently I turned the property over to a management company and rarely talk to her any more. I should probably drop her a line soon and

 

Keep it movin’

 

 

 

China vs. America

 

 

The subtle differences when you’re in china make a big difference.

There is definitely much more freedom on a micro level, even though it’s a communist country. I walked in to a little corner grocery store and bought a large beer for 60ç when converted to USD. I cracked the beer there and walked down the street drinking it. Its like I was being treated like a responsible adult. It was amazing.

I remember when I was in a suburb of Detroit at an outdoor fest and I went to order a beer and in the tent there was a kid working, he said he cant serve me because he wasn’t 18. I said whatever, I grabbed a beer and threw a $5 on the bar. Within a second an older lady came up from behind the bar and started yelling and asking what the hell I was doing. I told her there’s the money I grabbed a beer. Were at an outdoor fest with a beer tent, not the most prestigious place. She lost her mind and scolded me because even though I’m a grown man I can’t do that. I just laughed at her and said ok I’ll wait for you to serve me next time.

 

Thinking of neurotic Americans like this make me think that Adam Carolla was right, Americans ran out of problems so we need to make up new ones. Now if I walked out of that tent with my beer and onto the street I would be in jail and forced to pay money to the government in fines.

 

In China there’s no handicap parking spots you just pull up on the sidewalk and put your car in park. There is organized parking but many people don’t care they just park where it is convenient which is good and bad. What I like about it, is cops aren’t wasting their time giving out parking tickets and are actually focused on stopping real crime. Also the people that live there aren’t nosey and they mind their own business. If you’re driving on the side walk or smoking a cigarette in a restaurant no one says anything there is so much freedom and personal responsibility there its an amazing and freeing feeling .

 

Needless to say if you were to park on the street for too long in Chicago the cops will steal over $100 from you as a punishment. I do know that when someone parks in two spaces in America its completely rude but for the most park everything is more organized in the West because people like rules and like to enforce them on a micro level.

 

Another thing I don’t miss when I’m in China is when you’re checking out at a store no one says Hi, how’s your day, is it raining out? My grass could use it. No they mind their business and keep it moving.

 

 

Which do you prefer?

People all in your business, or people minding their business?

Organized laws on a micro level, or do what you want just be responsible for yourself.

 

Let me know…

Either way just keep it movin’

Closing on the Border of Detroit.

 

I found a house in my favorite neighbourhood that was still very cheap. I assumed that they were underwater still from the housing crash or it needed a lot of repair. Either way I knew they couldn’t afford it. It was an all brick duplex built in the 20s. I took around a lap around the house and noticed that the gutters were either off, or hanging down off the roof. The bushes weren’t trimmed and there was junk outside. I talked to a neighbor that said the gutters have been like that for years. Perfect! I knew the owners were hurting and I could probably bleed them a little more.

I got an appointment to see the bottom unit. The owners moved already and the top unit was occupied by her cousin.
My realtor and I looked around, and the place was trashed it needed everything updated. You could tell that the people couldn’t afford it. It needed a lot of work. But I knew I could do it and realized it was on the market for a few weeks to a month and hadn’t received any offers.
I slept on it for a day and decided to make an offer, cash. They were asking 140K I offered 133K cash. But contingent on me looking at the upper and a proper inspection. They accepted and I knew they were desperate. Because real estate is hot, especially in that area. I gave them a 5K good faith deposit refundable if I decide not to buy it.

I went back a week later and looked at the upper.
We walked in and were greeted by a young black man that said go ahead and check it out. So that’s what we did. He stayed in the kitchen and was packing up to move. We walked around the place and everything needed a total update.  I’m really put off by this place, now I’m thinking I have 2 units I need to update with paint, floors, windows, appliances, washer/dryer, plumbing fixtures, light fixtures, and everything else.  Then I need to find renters for them and could I get all this done during peak moving season?

I decided I didn’t need the stress I really didn’t want to do it. I would hire a lot of it out but still I have to basically be the foreman on this job and it’s going to take a lot of time.

Well now this shit happens…
My fucking realtor she keeps telling me I’m going to have to spend a lot more to get a place like this in rentable condition. I keep saying yea I know, I don’t care, I don’t have time for this shit now. Now get me my 5K deposit back!
She tells me ok let me call the selling agent.
I hear back from her the next day and she tells me the selling agent is being very difficult with the deposit. I told her I don’t care get the money. She says she will and will contact her managing broker if she needs to.
The next day she calls me and tells me the listing agent is saying I’m racist because after we saw the black guy in the upper unit we said no.
Now I don’t care what anyone thinks of me. If he thinks I’m racist that’s fine. Because if you ever hear anyone defending themselves that they aren’t racist they sound like a huge pushover. But this listing agent what a low life loser. He has to stoop that low, show his desperation and as a last resort he has to use the race card? It was clearly the last attempt in a losing argument.

Again get me my 5K now I tell my realtor.
A couple days go by and I get the check so I’m fine and realize I just have to deal with losers sometimes and just forget it, and keep on pushin.

A month later and I get an email alert that a house in my area dropped in price. It’s the same damn duplex with the race-baiting loser as a listing agent! It dropped around another 15K!

I call my realtor.  Give them a full cash offer and send an inspector out there this week.
They accept, the inspection was fine, I found a couple new things that needed to be fixed outside of noticeable things but not a big deal. For this price I thought it’s worth it to put in time and money into this place.

So were able to close right away. When you pay cash you can close in a few days and it only takes 10 minutes.

On my way to the closing I was thinking to myself I’m going to give this listing agent some shit and tell him he’s a loser and a shitty salesman.
I was furious and I kept telling myself that I got the better side of the deal no matter what happens.

So I get there and I’m directed into a conference room and there’s a black girl there maybe in her late 30s. This is the girl that’s selling the house. I talk to her and she’s really nice, telling me about the house and giving me her cell # if I have any questions about the house. I felt much better and was chilled out a little.
Then the selling agent walks in he’s a 5’3 black man that’s pushing 70.  He’s wearing an old gentleman’s hat. He says hello very, very meekly and I think, ‘I can’t bully this loser’. He was clearly pissed that he thought he lost a deal. I kind of felt sorry for him. Well, not really.

Whatever, I’m buying a house in cash and if he’s that upset I’m sure he’s struggling. So needless to say, I bite my tongue and say nothing. I know I’m doing much better than him.
I leave 10 minutes later, call my girl, and go get a steak to celebrate.
Great, I got a good deal on this place and there is some work to do but who cares it’s worth it.

 

Everyone runs into these stupid situations.

It doesn’t matter.

Just keep it moving.

A couple rules for my first post

 

  1. We never buy mutual funds. If someone is trying to sell you them, run!
  2. We never buy annuities. The fees alone will make sure you don’t keep up with inflation, and if you ever want your money out there will be penalties to wipe away any profit.
  3. Never buy a house with 0 down. Ill never understand how people promote 0 equity in real estate investing.
  4. Always keep cash on hand for emergencies.

 

 

 

Mutual funds are the biggest scam in finance today. They are managed by people you’ll never meet and are promoted as geniuses. Couldn’t be further from the truth.

The large majority of mutual funds don’t out pace the market and underperform index funds. The fees are usually 1-2% a year and/or up to 6% upfront. The upfront fees lower when you add more money in the fund. This is called a break point. So you’ll see financial advisors using different fund families so their clients never hit the break point and they can always charge 5% upfront.

 

 

Annuities are similar, they are mutual funds wrapped in a life insurance policy.

The funds are illiquid and if you want to get them out you have to pay a fee just to withdraw your money. They praise them with guaranteed life income or guaranteed this or that. Yes they have those options for an extra fee. Usually you’ll pay 2.5% a year for an annuity. You could just buy well-diversified index funds and make a lot more.

 

 

Having 0 equity in your house is not fun or productive. If your house value drops like it has before that’s what causes you to be underwater. Your house typically increases with the rate of inflation, so after inflation your house hasn’t increased in value at all. If you plan on renting your house and tenants are covering all expenses it’s less of a problem. If you buy a 300k house with 0 down and you do decide to live there forever (which no one does any more) you will end up paying an extra $247,220 just in interest. Your $300,000 house will end up costing you $547,220. Always put money down.

 

 

When you have vacancies in your rental properties or you need a new roof, or you find a great business to invest in, you always need cash. Don’t over extend yourself, keep the cash available to make future purchases or pay the mortgage when you have vacancies.

 

 

There are exceptions to every rule…

More to come.

 

 

Keep it moving

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