Results for ‘Debt’ category

How to determine what your mortgage payment would be

As part of WordPress, the software that runs this blog, I can see the search terms that land people on my site. Almost every day, there is someone asking Google something like “what are my payments at 5% on $400,000”. Figured I’d share with you how I estimate those. If I’m doing a spreadsheet, I

Hot rental market = hot market for apartment buildings

The LA Times had an interesting article a few days ago about the state of the LA rental market. Here’s the money quote: “Few new units and tight standards for home loans add to the pressure. The average monthly US rent is at an all-time high, and a 10% jump in Los Angeles County over

How I feel about Frost / Chaddock invading Sunset Junction

I, for one, welcome our new mixed-use overlords. You’d think I’d be pissed about a developer coming into Silver Lake and building 300+ rental units. After all, the rules of supply and demand would seem to indicate that this new competition will drive down the rents on my units in the area. But I’m thrilled

How leverage (debt) magnifies outcomes

You heard me say in numerous pieces that leverage (debt) magnifies outcomes. What do I mean by that? Well, let’s examine two identical fourplexes with different capitalization structures. First, here are the operating details: Acquired for $600,000 Annual rents of $60,000 Assume costs of 35% or $21,000 Annual Net operating income (rents minus expenses but

Why do people hire dumb brokers?

Buying a home or income property is a big deal. You’re committing a chunk of your (or your family’s) hard-earned capital, plus taking on an enormous amount of debt. All kinds of things can go wrong, from structural problems, to tenant issues, to badly structured loans, to city inspection concerns, etc. So why do people

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