Comments on: The Sominex Account http://www.bawldguy.com/the-sominex-account/ Real Estate Investing through Purposeful Planning Tue, 02 Dec 2008 03:48:52 +0000 http://wordpress.org/?v=2.0.11 by: Tuesday’s Tip #55: How to Survive and Thrive | Land Chasers | Cash flow real estate http://www.bawldguy.com/the-sominex-account/#comment-8083 Wed, 30 Apr 2008 00:00:55 +0000 http://www.bawldguy.com/the-sominex-account/#comment-8083 [...] The important thing to understand is healthy reserves not only protect you from serious problems, but they also allow you incredible peace. They are absolutely necessary. As BawldGuy states, “A generous reserve account is not merely an option. In no way is it a luxury. How long can you go without sleep?” [...] […] The important thing to understand is healthy reserves not only protect you from serious problems, but they also allow you incredible peace. They are absolutely necessary. As BawldGuy states, “A generous reserve account is not merely an option. In no way is it a luxury. How long can you go without sleep?” […]

]]> by: Real Estate Leverage | Peter Pays Paul | Real Estate Investing and Sales in Walnut Creek, CA http://www.bawldguy.com/the-sominex-account/#comment-927 Tue, 01 May 2007 01:37:56 +0000 http://www.bawldguy.com/the-sominex-account/#comment-927 [...] This can mean reap huge rewards for a real estate investor. Imagine an investor with $100,000 of capital for investment in addition to their Sominex Account. With this capital as a 20% down payment they can purchase roughly $500,000 of investment property. Assume the property appreciates at a (moderate) rate of 8% per year for three years. At the end of the three years the equity in the property has increased over $120,000, a return on equity of 120%. When was the last time your IRA performed so well? [...] […] This can mean reap huge rewards for a real estate investor. Imagine an investor with $100,000 of capital for investment in addition to their Sominex Account. With this capital as a 20% down payment they can purchase roughly $500,000 of investment property. Assume the property appreciates at a (moderate) rate of 8% per year for three years. At the end of the three years the equity in the property has increased over $120,000, a return on equity of 120%. When was the last time your IRA performed so well? […]

]]> by: BrokersFirstRealty.com  |  Shining Some Light on the Local Atlanta Real Estate Scene » Blog Archive » Investing In Atlanta Real Estate - A Tale Of Two Investors - Part One http://www.bawldguy.com/the-sominex-account/#comment-362 Fri, 02 Feb 2007 23:43:00 +0000 http://www.bawldguy.com/the-sominex-account/#comment-362 [...] Now Jane, on the other hand, has many options. She has adequate reserves for your famous “Sominex” account, as well as adequate funds for investing… as well as additional equity in her home. She has no debt other than her home… and that is a modest debt. [...] […] Now Jane, on the other hand, has many options. She has adequate reserves for your famous “Sominex” account, as well as adequate funds for investing… as well as additional equity in her home. She has no debt other than her home… and that is a modest debt. […]

]]> by: BawldGuy http://www.bawldguy.com/the-sominex-account/#comment-219 Fri, 29 Dec 2006 01:24:10 +0000 http://www.bawldguy.com/the-sominex-account/#comment-219 I rest my case. :-) I rest my case. :-)

]]> by: Cher http://www.bawldguy.com/the-sominex-account/#comment-218 Fri, 29 Dec 2006 01:13:45 +0000 http://www.bawldguy.com/the-sominex-account/#comment-218 Murphy has been on my tail for a few years. Anyone having a poison pill that works for a BIG Murphy, I'm all ears! I so agree with you Jeff. I can attest to life without a sominex account and it is NOT fun. So heed the words of the master, guys. Here's one more mistake NOT to make. Be sure to do your re-fi's BEFORE you go into acquisition even if the lender promises a "package". Get yourself in the power position first, then buy. Borrow money when you don't need it. Funny, my father used to say that! And plan for 70% LTV even if the lender tells you 80%. Like when you remodel your house, you count on 20% more than the contractor says. It's the same with new acquisition. Plan on more than you think could possibly ever happen. For instance, I forgot that even new houses can have long vacancies and that outfitting the houses with shutters cost nearly 2k each....there goes half the sominex accounts. New homes...who would have thought there wouldn't be instant cash flow? Expect changes to happen and if you get overextended, be sure your Karma is good with old invesor friends and relatives. Sometimes they can be Godsends with a bridge loan. Another emergency stategy is the IRA rollover for 60 days...will get you thru until the rent starts kicking in. Don't mean to scare you guys, but might as well let you know what happens when you don't have the sominex account. Murphy has been on my tail for a few years. Anyone having a poison pill that works for a BIG Murphy, I’m all ears!
I so agree with you Jeff.
I can attest to life without a sominex account and it is NOT fun. So heed the words of the master, guys.
Here’s one more mistake NOT to make. Be sure to do your re-fi’s BEFORE you go into acquisition even if the lender promises a “package”. Get yourself in the power position first, then buy. Borrow money when you don’t need it. Funny, my father used to say that! And plan for 70% LTV even if the lender tells you 80%. Like when you remodel your house, you count on 20% more than the contractor says. It’s the same with new acquisition. Plan on more than you think could possibly ever happen.
For instance, I forgot that even new houses can have long vacancies and that outfitting the houses with shutters cost nearly 2k each….there goes half the sominex accounts. New homes…who would have thought there wouldn’t be instant cash flow?
Expect changes to happen and if you get overextended, be sure your Karma is good with old invesor friends and relatives. Sometimes they can be Godsends with a bridge loan. Another emergency stategy is the IRA rollover for 60 days…will get you thru until the rent starts kicking in.
Don’t mean to scare you guys, but might as well let you know what happens when you don’t have the sominex account.

]]> by: BawldGuy http://www.bawldguy.com/the-sominex-account/#comment-217 Thu, 28 Dec 2006 16:44:45 +0000 http://www.bawldguy.com/the-sominex-account/#comment-217 He sometimes loses sleep for a different reason. He has two great boys, both smart as whips, and both no doubt qualified to attend Ivy League schools. You are so right about the speculators who haven't had to face down any consequences arising from their inexperience. I have clients in Phoenix, and some have had Murphy follow them around a bit. Their reserves have made the difference. Now they're preparing to trade to a different market. Thanks for the kind word. He sometimes loses sleep for a different reason. He has two great boys, both smart as whips, and both no doubt qualified to attend Ivy League schools.

You are so right about the speculators who haven’t had to face down any consequences arising from their inexperience. I have clients in Phoenix, and some have had Murphy follow them around a bit. Their reserves have made the difference. Now they’re preparing to trade to a different market.

Thanks for the kind word.

]]> by: Doug Quance http://www.bawldguy.com/the-sominex-account/#comment-216 Thu, 28 Dec 2006 13:45:42 +0000 http://www.bawldguy.com/the-sominex-account/#comment-216 That is some good advice, Jeff. But even someone pulling down $3-400K after tax per year probably doesn't sleep THAT good! :lol: (I'm pretty sure his employer doesn't just give him the money for showing up) The sad part is that many investors have done well in spite of not following this advice... though none have weathered the big storms. Others watch and think "I can do that, too!" - and now we are seeing the bubble breaking in many markets. Breaking because speculators didn't have the reserves you are preaching about. Good post. That is some good advice, Jeff.

But even someone pulling down $3-400K after tax per year probably doesn’t sleep THAT good! :lol: (I’m pretty sure his employer doesn’t just give him the money for showing up)

The sad part is that many investors have done well in spite of not following this advice… though none have weathered the big storms. Others watch and think “I can do that, too!” - and now we are seeing the bubble breaking in many markets. Breaking because speculators didn’t have the reserves you are preaching about.

Good post.

]]> by: BawldGuy http://www.bawldguy.com/the-sominex-account/#comment-215 Thu, 28 Dec 2006 06:21:25 +0000 http://www.bawldguy.com/the-sominex-account/#comment-215 I know what to do, and where to do it, but I always advise my ciients to bail from there plans. We take their money to better vehicles that not only produce much higher returns, but are literally tax free - for life. And - drum roll - it's not real estate. Let's get together for lunch. It's silly living in the same city and not met yet. I know what to do, and where to do it, but I always advise my ciients to bail from there plans. We take their money to better vehicles that not only produce much higher returns, but are literally tax free - for life.

And - drum roll - it’s not real estate.

Let’s get together for lunch. It’s silly living in the same city and not met yet.

]]> by: Brian Brady http://www.bawldguy.com/the-sominex-account/#comment-214 Thu, 28 Dec 2006 06:06:31 +0000 http://www.bawldguy.com/the-sominex-account/#comment-214 Jeff: A salient point the Kiyosaki disciples of today sometimes forget. How much do you know about using qualified retirement plan money (IRA, etc) for REI? I know little. My experience is in trust deeds with IRA money so I'm curious about what options there are. Jeff:

A salient point the Kiyosaki disciples of today sometimes forget.

How much do you know about using qualified retirement plan money (IRA, etc) for REI?

I know little. My experience is in trust deeds with IRA money so I’m curious about what options there are.

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