Before reviewing my 1Q 2021 and discussing what’s next for various asset classes, let’s talk about hard things.
Waiting for the opportune time to propose after buying an engagement ring is hard. The ring just starts burning a hole in your pocket. But do you know what’s even harder? Writing an April Fool’s Day post and not responding to a single comment for two days! I’m sorry for tricking y’all folks. I hope you will forgive me. I’m a jokester at heart.
Ever since I was a kid, I’ve also been a dreamer. Over time, I’ve noticed the more you dream, the more good things tend to come true. It must be due to one part positive mindset, one part taking action to achieve your goals. If you go about your day-to-day like a zombie, never dreaming about a better future, I’m not sure anything special will ever happen.
Buying that beachfront dream home in Hawaii costs closer to $15 million, not $10 million as the online estimates say. Sadly, there’s no way I can afford it. The funny thing is, one of my good friends can easily afford it, yet he still refuses to live it up!
If the house can earn a $900,000 a year net operating income, a 4% cap rate would give it a valuation of $22,500,000. But it probably earns closer to $500,000-$600,000 a year as the house sits empty most of the time when asking between $85,000 – $250,000 a month in rent.
When in doubt, follow this real estate investing rule: Buy Utility, Rent Luxury. It’s much cheaper to rent a luxury home than to buy one. The ongoing maintenance costs are a killer.