One of the reasons why I will never remodel again is because I hate dealing with contractors and building inspectors. It is an unfair playing field because they hold more power even though the homeowner is the one with the funds.

Please spend time remodeling while you’re in your 20s and 30s for economic returns. Once you’re in your 40s, unless you’re a masochist, you won’t want to remodel anymore.

The main way contractors hold homeowners hostage is by getting you to sign an attractive bid. Once the contractor collects your deposit or starts the work, you are at the mercy of the contractor’s timeline and business practices.

If a contractor finds a more lucrative job, he will likely delay yours indefinitely. If a contractor wants to charge more for some work, he probably can up to a certain extent. In the scenario where you have a great contractor, hold onto them for dear life!

Switching costs are extremely high, which is why savvy contractors can get away with charging more and taking a longer time to complete the project. They can always blame something for the delay or the extra charge and you will have a hard time doing anything about it.

In this latest episode, let me share with you how my remodeling contractor tried to hold me hostage to extract more money. It is a new strategy I hadn’t experienced before.

By sharing this story, it will wisen you up so you can save money and have a better remodeling experience. Further, I hope this story also propels you to invest in real estate more passively to protect your sanity.

As someone who has been consistently invested in private real estate deals since late 2016, I’m now firmly in the window for receiving distributions. My investment thesis to invest in heartland real estate has turned out well, partially thanks to the bad luck of the pandemic.

Although a couple of my investments in one fund turned sour due to a lack of equity cushion, poor execution, and the shutdown of commercial offices, the vast majority of investments have provided positive returns.

One such investment was a multifamily investment that paid out $122,423.04 in distributions on July 6, 2022. The invested capital should be about $60,000 for a ~15.3% compound annual return over five years. I say should be because it is part of a fund that invested in over 10 properties.

One of the things I’m curious about is how real estate crowdfunding platforms add value for their investors after acquisition. Therefore, I asked RealtyMogul to share an in-depth look at one of their successful value-add multifamily real estate deal from start to finish.

When I was a young man, I would enthusiastically spend a lot of time expanding and remodeling properties to add more value. Now, as a middle-aged man with two young children, I simply don’t have the time or the desire any more. I’d much rather pay someone to add value for me.

Let’s take a look at RealtyMogul’s case study to get a better idea of what they do for investors.

There are three must-have amenities when I buy a home. A hot tub, a deck, and Toto Washlets (bidet). With work-from-home here to stay for millions, having both a hot tub and a deck can dramatically improve your quality of living. And once you go electric bidet, you will never go back.

If you find a home that has all three things, it will likely trade at a premium. The idea is to create a spa-like atmosphere at home so you feel more relaxed. The happier you are at home, the higher your productivity and the better the family life.

If the home you’re eyeing doesn’t have these three amenities, make sure there’s enough space to install a hot tub and build a deck. For the Toto Washlets, you need an electrical outlet nearby the toilet. Forward-thinking remodelers will install the electrical outlet near the base of the wall behind the toilet.

Food costs a lot more today than it did a year ago due to rising inflation. But what’s really going on in the US agriculture industry?

Let’s take a look at what global trends are impacting the market with some insights by FarmTogether, a leading farmland investing platform and Financial Samurai sponsor.

Historical Farmland Investment Performance

Farmland returns have performed well as an investment over the last several decades. Returns are generated through income (via crop sales) and capital appreciation through the underlying land value.

Between 1992 and 2021, annual farmland returns averaged just under 10.75%. That’s higher than the average returns from stocks, bonds, and even real estate, in the same time frame.

Farmland’s strong performance stems from the rising land valuations we’ve seen over the last decade. From 2020 to 2021, average cropland values per acre across the United States increased by an average of almost 8% to $4,420. That’s the highest growth rate since 2013.

Some regions, such as California, averaged nearly $11,000. Farmland has also historically produced consistent operating returns. The USDA estimates the average cash rent for irrigated cropland across the United States in 2021 to be $217 per acre, up 1.4% from 2020. 

In the past, I used to think the best house floor plan for a family with young kids was all on a single floor. The house would have 700 or more square feet per person and be spread out over a large lot. However, with many parents now working from home, I’ve changed my mind.

My original thinking was that with a house all on one floor, there would be fewer to no steps to trip over and cause potential injury. Further, parents could more easily keep an eye on their kids if the floorplan was more open and on one floor.

However, I live in San Francisco where land is extremely expensive. Thus, having a good-sized home all on one floor is uneconomical. As a homeowner, you would be foolish not to build at least two levels or more if you can afford it.

Inflation, like a boa constrictor, is squeezing us most noticeably at the grocery store and at the pump. Beyond tightening our budget, staying patient until prices eventually decline, and growing more passive income, what else can we do?

Today’s post is sponsored by RealtyMogul, who writes how multifamily real estate may be used as a hedge against inflation.

Inflation is a double-edged sword for real estate. On the one hand, inflation acts as a tailwind for real estate prices and rents. On the other hand, inflation that is too high for too long will force borrowing costs to rise, thereby, cooling down real estate prices.

When inflation finally turns, appetite for risk assets will likely reappear. Therefore, while we wait, it’s good to get educated about current and potential opportunities.