Mindflayers journey to 100k PMNI
You can tell I have been around for a while from my join date and number of posts. PMNI = Passive Montly Net Income.
I used to post on 2+2 and read here every day when I started (the poker threads) then i move to (business finance and investing) when I moved out of poker and into business and real estate. When my business plans started to work, i stopped coming here and reading/posting. I did visit frequently but i moved to (health and fitness), but that stopped as well when that started to work too!
My current goal is to make 100k per month in passive NET income. That may sound ridiculous, but my last goal was set too low and when I hit it I retired and it took me a long time to get my mind turned around.
I have been putting my notes onto paper and plans into action for about two years now and wanted a place to refine my plan and have anyone who follows poke as many holes into it as they can find; show me the weaknesses that I cannot see.
I am going try to post maybe 5 times per week at the start and go up or down from there depending on how busy i get.
Feel free to post, ask questions, even tell me I am full of it and it can't be done.
I look forward to having you follow me on my journey.
Cheers
really interesting seeing your perspective on that - ty for posting that
did you stop RE investments and mgmt?
sorry for grunch
2) When the value of your RE investment dips below your initial cash down payment the bank will NOT call your mortgage to be paid in full and foreclose on your house. You just need to keep making your mortgage payments. I have had margin calls on my accounts before, but never a call from the bank
For this reason people who want to invest with leverage in the stock market should just buy long dated ITM options. For example I bought SPY options for September 2025 with a strike price of 415 when SPY was at 545-ish. The risk-free cost of capital is built into that (I paid 15000 for the option, not 13000), but on the other hand you can't get margin-called if the option goes out of the money, you have a floor on the potential losses and you can do leverage like 4x too*
*If do more than 4x than that it starts to behave more like a normal option than simply using leverage, though that depends on the term to maturity - for tax reasons I personally need to hold to maturity then hold the underlying ETF for 366 days, so I need long dates.
No. Yes.
Real estate investments are not stopped. I am constantly looking for investments and trying to find good deals.
Think of now (end of 2024) as a time similar to end of 2008 or mid 2009. You can't tell where the bottom is, but it is close.
Depending on what you are looking for, you can keep track of certain metrics. For investments, I keep an eye on cap rates,
inventory and Dollars per square foot.
Depending on where you look, prices are in general still falling BUT should bottom out soon. This has a lot to do
with the declining interest rates.
It is a race between investors that have to renew a mortgage (maybe a 4year term) that is about to renew now: old rate 2.5% .. new rate 5%
(must list the property for sale OR suffer negative cash flow for a year)
and the dropping interest rate. If they had a 5 year term instead of a 4 year term, they can renew it after a few more drops at 4% and
do not have to list the property for sale.
I think RE investing is 95% waiting and looking for good deals and doing tons of home work and research. I think of it very much like Warren Buffet views
buying companies. You only have to make one decision each year, but that decision has to be a good/the right one.
I quit my property management job about 18 months ago. I went from managing 300 residential units to only managing my own
local property. That will go from 1 warehouse to 0 in December. Everything else is managed by other PM companies.
1a) Went to a few more open houses with my older son. Saturday I viewed a unit with him. The sellers had it on the market for 60 days with no offers, so they dropped the price the day before we saw it. (if they did have an offer recently, it fell thru see ** below) It is the right unit to make an offer on. Went back to see it again Sunday. Today I am meeting with my managing broker to discuss some finer nuances. Will likely put an offer on it tomorrow.
This is the advantage of speed. It has only been showing for 2 days at the new lower price and we will put an offer on it tomorrow.
Patrick Bet David
PBD, a youtuber, that I watch made an excellent video on speed and knowing your number.
This is how you make your own luck. Ie. I have been preparing by going to open houses for 6 months, getting my son to have preapproved mortgages, and his first time home buyers and RRSP accounts in order and 'knowing our Price.' (and location)
It is a 2+2+den. Located in a great location for a young adult; close to transit and all the 'cool restaurants and bars.' The price is right, especially for an investor. Enough updates that you don’t have to upgrade anything to make it a very nice apartment. It just needs some nice coordinated and stylish furniture.
Other + is that they have 3 new elevators with safety features, and have redone/renovated their swimming pool/change rooms amenities. If/when my son does not live in the unit, it has great renting potential. I estimate $3900- $4100/month.
An extra + is that the seller is not in a rush to sell. They own several properties and are dual US/CDN citizens and are currently living in LA. This means the offer I put in will have an extended closing date of Feb 4th .. a few days after the Jan 29, 2025 Bank of Canada interest rate announcement. I would expect that there is a ¼ % cut on Dec 9th and ¼ % cut on Jan 29.
The negatives about this unit.
** It has a large special levy upcoming in the next 4 years to replace all of the exterior windows of the building. If you are US, consider this a HOA fee for major repairs. The building is 29 stories tall and the work is estimated at $18,000,000 for the entire project or around $100,000 per unit! What is good is that even with the extra $100,000 cost, the unit is at the lowest cost per square foot to buy (a Real estate investor metric)
The building is also being sued by Otis elevators. I assume for amounts unpaid when they upgraded the 3 elevators recently.
All of the information described here is from reading the last few years of Council minutes and reviewing the Building Depreciation report. (if this was a house, that is equivalent to a building inspection report)
I will need to get the last 3 months of Strata Council meeting minutes to see if the Otis issue has been resolved.
I am meeting my managing broker TODAY to discuss this property and hope to put an offer on it tomorrow.
Will see how this goes.
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2) Delta Warehouse: Messaged the ex tenant two days ago. Still waiting for the next payment. Still about $2200 outstanding.
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3) Equities Investing. Same: submitted paperwork for expanding my HELOC with a larger amount. Will take some time to get approved.
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4) Hamilton House. Got a new PM experienced working on the empty unit two weeks ago. 18 years as a PM. We talked for 10 minutes and have a slightly more refined strategy to get the unit rented to qualified applicants.
(update) He got the unit already rented out. $50 less, but the renters are qualified. He gave an excellent description of how and why it worked. Individuals look at the monthly number and skip everything else if your asking number does not match what they can afford. Etc.
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5) Edmonton RE. Las Vegas RE. Continuing to study Edmonton and added Calgary to the mix now. Continuing to Read about Calgary and Edmonton news daily. Unlikely in conjunction with my younger son now as he has accepted a job with a RE company.
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6) Registered for the AI class, but the December one was cancelled. (not enough interest?!?) I will start January 28, 2024. I intend to try to immerse myself in AI.
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7) RE meetups: Went to a few more meetups and had breakfast with one of the more experienced RE investors. Individually owns many duplexes, triplexes and two apartment buildings. He likes the “own 100% of the deal so I don’t have to answer to anyone” philosophy. The control is there, but growth is much slower. Asked tons of questions and got some great tips on how to raise prices in a city with government regulated rent increases. His advice was to use Cash for keys. Ask me if you want to know what that means.
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8) Detroit homes: Same Nothing of note to report. Rents all being collected on time.
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9) Vancouver Warehouse. Waiting for the Dec 18th close.
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10) Wainwright Storage. Nothing to report.
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#11) Sarnia Ontario. Nothing to report.
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#12 Currently reading: Re reading ‘Never Spit the Difference’ by Voss because I am putting an offer on a unit in the next few days. Still reading Gullivers Travels by Swift. Still reading: ‘Buy It, Rent It, Profit!’ By Chavis was a gift from my wife. It is a beginners book. From my point of view it has several flaws, because it makes many assumptions about the reader.
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#13 Future Authoring program. Still meeting and talking to people about how they got to the next level. There are many possible future ‘me’s’ out there. One of them is totally retired and only works on maintaining health. This future version of me happens if/when I get bad news from my doctor.
Currently I am doing fine. I had a phone meeting with my dermatologist and he reviewed my bloodwork and gave me the thumbs up.. reducing my skin meds to the lowest dosage before going to 0.
I say this version (me totally retired) took up a bunch of my thinking because I saw a friend of mine who is 5 years older than me at a party this month. I have not seen him in about 3 years but he looks, talks and acts like a really old, old guy. He is telling me that he has problems walking straight and sometimes ends up walking into walls and off the sidewalk into the bushes! His has lost a lot of hair and what he does have is scraggly and gray. He is seeing his doctor about brain scans etc.
Talking to him, made me realize that I do not have much time left on this earth. I am hoping for 17 more good years.
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#14 Real Estate Agent's license. No Action. Will have to take two mandatory courses in 2025.
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Update on #1.
Put an offer on a property. Got a counter offer yesterday. Working on a counter-counter offer today.
we are only 1.76% off in price so I think this will go through.
Will let you know in my next update.
