Trump #NotMyPresident

27 Jan

I’ve never really cared much about politics.  The two-party system sucks, and neither the Republicans nor Democrats represent my ideas well.  If I had to label myself, my views align best with libertarians, but I have some problems with their platform as well.

Despite my apathy for politics, after Trump won, I was pretty shook.  I spent a few days trying to reconcile the Trump fist-pumpers.  I went to my local gym after the election and they were all cheering, reminiscent of when the OJ verdict came out.  “Go back to Mexico!” chants at a public gym.  WTF.  I somewhat understood the anti-Hillary voters, but the true, “Make America Great Again,” crowd; I did not understand.

Clearly, no one supports all their friend’s opinions and actions.  We have friends that say and do things we don’t agree with all the time, but they are still our friends.  However, there is a line.  An extreme example, you’re not gonna be friends with a serial murderer cause he’s a fun guy at the bar.  I took some time to think about whether Trump support crossed that line, and I know I wasn’t the only one.  In Michigan, that would have left me with close to zero friends.

I decided that most Trump supporters just weren’t properly informed.  My final thought is that Trump lovers are either misinformed, ill-informed, or do not share the same values and vision for America as I do.  No in-between on that.

I’m not a polished writer, so this blog is going to be a (lousy) stream of consciousness on why Trump sucks.

American Exceptionalism.  “In its classic forms, American exceptionalism refers to the special character of the United States as a uniquely free nation based on democratic ideals and personal liberty. Sometimes this special character is inferred from the nature of American political institutions founded in the 1776-89 period.”

“It’s a cruel world,” my friend Eddie used to say before back-stabbing our treaty in RISK.  Growing up, we were taught that the United States was the harbinger of justice.  The purveyor of goodness in the world.  As I got older, I realized that this was mostly bullshit – we were trying to advance economic interests and intentionally created many humanitarian disasters.  But, I’d like to return to American exceptionalism.  As an aside, I think a lot of the distaste for America through the world has come from the dissonance of saying that we were protectors of justice, while covertly doing terrible things for economic interests.

When I stand for the flag, I’m not standing for the military.   I’m not standing for the government. Those are dynamic entities that I may or may not support at any given time.  I stand for the American ideals; the Constitution: life, liberty, and justice for all.

I want America to prevent terrible things (within economic reason) across the globe.  If I have to pay more in taxes, okay.  If I have to pay more in health insurance, so that a person with a chronic disease can get care when they otherwise wouldn’t, okay.  The most frustrating thing about my personal circle of “Make America Great Again” friends is that they are financially well off.  Great jobs, houses, boats, 2nd homes.  Not one is struggling because they have to pay a few more bucks in health insurance, yet they all bitch about it.

Global Warming.  If you are on the other side of 50 Nobel Laureates and Stephen Hawking, you’re really just wrong.  In DUCY, by David Sklansky (a cool book on thinking), he makes a point that if someone is clearly, tangibly smarter than you – let’s say 50 IQ points, and you are on the other side of  an argument both of you have both thought about extensively, the chance of the less-intelligent person being right is very small.  Shockingly small.  I know people will find the IQ angle unsettling and obnoxious, but consider this, would you debate a renowned physicist about relativity?  Would you argue a chess problem with a Grandmaster as a mere beginner?  You could literally argue chess ideas your entire life with a Grandmaster and never be right.

When Stephen Hawking says the greatest threat to mankind is AI, I’m all ears.  I’m not very religious in the traditional sense – if someone I really looked up intellectually came out and said he was 100% down with a fundamentalist view of the Bible, I would listen to his opinion and reassess mine.  If you don’t think global warming is a problem, you’re an idiot.  At least if you don’t are about our Earth in 50 years, (which I think is more where Trump is), your stance is philosophically (although not ethically) tenable.

Fascism.  I don’t know if Trump had a plan to go full-fascist, but we are six days in and he’s discredited the media, silenced the EPA twitter account, and threatened to cut off the internet.  He’s literally opened up half of the Fascist playbook in six days.  We have a non-zero chance of completely losing the democracy in four years. Why are Trump supporters cool with that?

One of the most important steps toward going full fascist is create a common enemy/threat, real or invented.  Just remember that in the coming years.  It’s 100% coming.

Inauguration crowd size.  Nobody cares except Trump.  He called the National Park Director to lie about the number –  when he refused, he shut down all their access to the public.  Classy.

Media.  The liberal bias is like 5%.  The right-wing bias is completely absurd.  I’m a pretty stock libertarian – save a few issues – so I think I’m qualified to judge.  I’ve watched a lot of both news cycles.  Fox News is off the rails.  Also, it’s great we are trying to go full propaganda in the first 6 days as well.  Let’s just start the Trump TV now.

To the “give him a chance crowd.”  Trump cannot succeed for me.  The economy can grow, he might bring manufacturing jobs back – but he’s emboldened racists, pussy-grabbers, xenophobes, and the LGBT community.  He’s already embarrassed America, the damage was irreparable before he took office.  The leader of the free world needs to be respectful and dignified.

To the “bring back manufacturing crowd.” Why would you focus on manufacturing, when all those jobs will be gone in 10-20 years?  The future economies have so much potential, can we just wake up a little on that front.  I know people have a nostalgic view of the 60’s but the 60’s actually comparatively sucked.

To wrap this up, here is a list of Trump being an incompetent moron off the top of my head.  We need to do better than this.

  1.  He won’t release tax returns.  News Flash: He’s not as rich as he says, he’s in Russia’s pocket, and he hasn’t paid taxes in decades.  Mostly likely all three.
  2. He sends Sean Spicer out to lie for every press conference.  It wasn’t raining.  The largest crowd ever.  Alternative facts.  It would be nice if our president wasn’t a joke.
  3. Kleptocracy.  Should be impeachable under the Emoluments Clause.  He’s putting private interest right in the middle of national politics. How anyone can stand for that is beyond me.
  4. The cabinet appointees are so brutal.  I’m not gonna spend time on each one.  Let’s just start with Linda McMahon picked for small business administrator – completely unqualified to hold the position.  Largest campaign donor.  Imagine if Hillary did that.  It would be easily the most corrupt thing she had ever been found guilty of.
  5. Racist, misogynist, xenophobic, homophobic.  I’d like to think I’m none of the above, Trump a champion for all of the above.
  6. Trump is still using and insecure phone and the some of the staff using insecure email. The Republicans sure seemed to care about Hillary’s irrelevant emails that were much better protected.
  7. The wall.  2 trillion dollars, when they are just gonna tunnel under it.  Trumps grand plan to get Mexico to pay for it has failed.  Plan b is a 20% Mexican tariff which anyone capable in economics would call a U.S. Consumption tax.  (Props to my buddy Dean – for laying this out on twitter.)  So if you want your avocados it’s gonna cost you 20% more and the GDP will be hurt as a result.

I am willing to defend some of my positions in comments, but if you dispute facts let’s say inauguration crowd size – you better be willing to gamble and escrow money against an impartial third party at 1:1.  If you are not willing to gamble, I question your conviction.  If I am not willing to gamble, you win.  That’s how it should work.

Only real estate blogs after this one.  Have really high hopes for 2017.

New Investment, Updates and Chicago.

11 Aug

It’s been quite a summer.  The market in Metro Detroit has been STRONG.  Prices in some areas are  3-4 times their 2011 prices.  Because of this, we have shifted some of our focus to traditional flips.  My partners are logistical wizards and rehabs are running very smoothly.  Big shout out to them.

One thing, I learned from my time at poker is that opportunities can change quickly.  Everything changes. Economic profits become normal profits.  Bad markets become good markets and vice-versa.  Not exactly earth-shattering, but it’s easy to stay narrow-minded when you have a model that is working.  I’ve been trying to learn as much as I can about many different real estate related avenues in preparation for the inevitable shifts.  I love investment real estate and I realize that I want to be involved in this for a long time, so I can’t just stay pigeon-holed with ideas that are currently working.

The first new direction we are headed towards are multi-family rentals. I have been looking diligently all summer.   We finally found something that is a great deal near where I live.  We have placed an offer and if it gets accepted, we will be looking to raise $200k-$250 in financing.  The plan is to extensively rehab the building. Increase rents.  Then either refinance and hold it, or sell it to an investor.  The multi-family market is smoking hot nationwide with people looking to park money.  As always, our company will still retain a 1-1 equity to investment ratio.

If you are interested in investing the annualized return will be 10% for a period of 1 year.  Please email me at JustinSadauskas@gmail.com to discuss all the details! 

Also, if you are looking for a multi-families in A/B class areas – hit me up as well, we will have a great asset in about 3 months ;). 

Lastly, we had our first offer accepted in Chicago.  We are only in the infancy of the Chicago Project but it’s very clear we can great deals there.  If you are interested in Chicago as many of you have said you are – please email me.  Most of the deals in the beginning will be wholesaled to experienced investors. In the future, we will consider partnerships but as for now the plan is for us to find the deals for experienced investors.   Thanks for reading.

Blue Moon Acquisitions

14 Mar

Last February, two partners and I started a new real estate investment venture, Blue Moon Acquisitions, with the plan of  buying , rehabbing, renting and ultimately selling the final product as a turn-key asset income-producing asset.  The idea was that we could provide a lot of value for the investor that wanted the ROI/appreciation but none of the headaches.  Everything went according to plan.  As our company grew, we expanded into traditional rehab projects, and we are starting to have good success there as well. Our focus now is equally split between traditional and rental flips.  For the curious, here are 3 assets that we have for sale on the rental sale side of the game:

8654 Ford St, Warren, Mi 48089.  ford

Price – $40,750

2 bedroom, 1 bath, rented $825/mo.

 

23574 Columbus, Warren, MI 48089 columbus.jpg

columbus 2

Price – $43,000

3 bedroom, 1 bath.  Rented – $850/mo.

 

11076 Hudson, Warren, MI 48089 hud

Price – $44,500

3 bedroom, 1 bath,

rented $875/mo

If you are interested in purchasing these assets, feel free to contact me.  We work with a excellent management company that handles all the B.S. so that the investor can just collect checks.  All the assets have full picture files and everything you would need to make an informed decision.

Here is an example of a retail flip that just went under contract today:

http://www.zillow.com/homedetails/22026-Alger-St-Saint-Clair-Shores-MI-48080/83568641_zpid/

Investment – One aspect we didn’t expect is that we would find more deals than we could buy, but we are there.  Instead of turning down deals or wholesaling them to other investors, we would like to keep buying.  We are offering a 12% per annum return for investments of $10,000 or more.  We are looking to raise $100,000 on a first come first serve basis.  The term is flexible, we have started most people out for either 6 months or 1 year.  The investment would be a business loan and secured by the assets in the company and a promissory note with me personally.  We currently have two times more equity in the company than we are looking to borrow, which speaks to the security of the investment.  Email me at JustinSadauskas@gmail.com with all interest and questions.

I’m back

11 Mar

Posted a little routine on facebook, it was well received, so I’ll try it here.

chipotle

Chipotle done properly:

Burrito.  Make em put on the peppers.  Fierce eye contact to establish ingredient skimping will be not be tolerated. When the server is sufficiently intimidated, you hit them with “double meat.”  The key here is that you don’t jump the gun.  Let them pile-high then “Double it.”  They will be forced to match the meat tower.

Two salsas minimum. Guacamole optional. By this point a veteran salsarista will know that you know – that guacamole is extra. However, a rookie might try a quick little gambit – “Guac is extra!”  You have to see it before it happens. “Double Guac!” <double finger pistol> big smile – game over.  You’re walking out of there with a budget buster and they can’t stop you.  The dent will probably will show up on their quarterly earnings.  There gonna have meetings to try to stop guys like you.

If they can wrap the burrito without tearing it, you’ve made a mistake somewhere – take a mental note.  Always to-go. Take that hog back to a no-judgement zone. Nobody wants to see you eat that in public.

A final tip for the man that rides that fine line between winning with class and taunting: by the time you’ve hit them with all your best moves the crowd will be in your pocket. Call loudly for a wheelbarrow.  Tell them to double bag it.  Pretend it’s too heavy to carry.  Take a victory lap to the tobascos while singing “Gold Bless America.”  All gold.  Use em all.  Never leave a laugh on the table.

9075 Brace, Detroit – An Investment you might like

22 Jul

1271933_001$49,000 asking price

This is our rental property – 9075 Brace, Detroit.  1500 sq ft, 5 beds, 2 baths.  Solid street in Detroit (streets are important and often vary quite a bit). Rented on a 2 year lease for 800/mo.  The asset is on the West Side, which is the “hot” side of Detroit – with easy access to the expressways, casinos, stadiums, bars etc and that drives demand.  There is just a lot more happening on the west side.

Numbers:

Yearly     Monthly
Current Rent   $9,600      $800
Taxes                   $1392       $116
Insurance          $744         $62
Cash Flow        $7464        $622

This has a 15.2% ROI.

And also, the renters are on a two year lease and will probably never leave.  They love the house.  They cried when they signed their lease.  Very sweet, hard-working people.

Fair market for rent is probably 900/mo.  We liked the renters in the property so we didn’t want to push the price. We think the $ 49,000 asking price is fair and on top of that, we will guarantee rent for 12 months.  Meaning that we will take 12 months rent and put in an escrow account and after 12 months if your renter misses a payment, it comes straight out of the escrow.  Or better yet, we pay you the entire escrow up front and then collect the rent on our own for one year.  It’s a testament to the belief we have in our tenants that we rigorously screen.

If an investor from this blog buys this asset, he will have the option to put a management team to manage the asset.  We have three highly qualified teams to choose from or he can manage it on his own.

Lastly here are two other houses in the same subdivision that sold as investment assets for much more and are not nearly as desirable.

9584 Warwick St, Detroit – $50,400  http://www.zillow.com/homedetails/9584-Warwick-St-Detroit-MI-48228/88661901_zpid/

9341 Piedmont St, Detroit – 56,300  http://www.zillow.com/homedetails/9341-Piedmont-St-Detroit-MI-48228/88751708_zpid/

We will be offering it to the market at some point, but I’ve had good success and interest with blog readers in the past.  So, if you are interested in this asset, or just want to learn more, feel free to hit me up with some questions.  If you buy an asset from the blog, I will be able to guide you and give you tips should you ever run into a new situation.

 

Justin

June 2014

8 Jun

I’ve wanted to write this blog for a long time, but didn’t quite know how to go about it.  I think one reason people enjoy reading my blog is because I’m more open than most about my ventures.   Unfortunately, going forward that is going to change.  Our company entered into litigation with two companies in separate lawsuits where settlements were reached.  Agreements were signed not to disclose any details, nor to disparage or disrupt future business of the defending parties in any manner.  It would be impossible to illuminate the ups and down of business over the last year without really getting into those details, so for the most part I’ll be forced to write in vagaries and broad strokes.

As you might imagine, lawsuits are stressful and far from ideal.  2014 has been a rough year, the high stress has really taken a toll on me.

We are about a year from wrapping up the third and final asset pool and I’m just trying to stay focused and work as hard as I can until everything finished for our investors.  Thankfully, things are a little less stressful, now that the major litigation is settled.

People have asked me, what my plans after the third pool wraps up, and the answer is I really don’t know.  A lot will be determined on how the next year plays out, but I’m sure it will be some combination of poker and real estate.  I might stay in the NPN business, but it would be on a smaller scale.  I haven’t been actively looking to acquire assets, but my understanding is that most pools are going to hedge funds in the 50M+ range.  I do think there is a lot of value in the secondary markets, and I really think we are very good at extracting  value out of notes.  We will see how things play out.  Maybe I’ll give ice-cream truck driving another run – like Ali, coming out of retirement.

I am currently in the process of selling all my rentals.

29810 Greater Mack, St. Clair Shores – bought for 62,000, sold for 95,000.

22624 Mylls, St. Clair Shores – bought for 63,000, pending for 95,000.

23430 Allor, St. Clair Shores – bought for 30,000, 10,000 repairs, pending for 65,000.

23103 Avon, St Clair Shores – bought for 50,000, listed for 94,500 – no takers yet.

Overall, buying and renting houses was a great experience and something that I will surely do again.  The only suggestion I have is that renting property is not a “passive” investment.  If you want a passive investment, buy performing notes with good equity built in –  they yield good return and  are actually passive.  I have sold a few performing notes through my blog and at some point, I may sell a few more.  However, if you are down with a little extra effort, I’d highly recommend buying rentals.

Look for more blogs in the near future and thanks for reading as always.

 

 

NPN Update

19 Oct

It was surprising that not even one person showed any interest in the performing note I offered a few blogs ago.  It was such a good deal!  I really considered buying the note myself (through my SEP-IRA), but after some research I found that you have to conduct all the SEP-IRA transactions completely at arms-length.  While, I’m not 100% certain, I think my affiliation in both companies would make it unlawful.  That said, you guys should think about using your retirement funds to get into a high-interest, well collateralized performing note is a really good idea.

All of our current notes have been sold, but our company will have other deals like in the future, so I want you guys to start thinking about those type of investments.   I’m sure I will offer up some more.  (The first step in doing creative IRA stuff is to get a self-directed custodian).

As far as our packages are going, the original 27 house list is getting close to wrapping up.  We expect to end up right around a 75% return.  We had hoped to clear 100%, but we made a few mistakes and overall could have been more efficient than we were.  Our biggest mistake by far was trusting the homeowner’s too much.  So often, they would seem on board with our plans to help them out.  Then, they would just straight flake out.  I guess that seems obvious that you shouldn’t trust dead-beats, but some people are just so damn believable.  Lesson learned.  I think if we went back in time, with our current knowledge, we’d clear a 100% return, no problem.

The 55 house list is still going strong.   It is however, taking longer than we had hoped.  We had a miscommunication with our foreclosure attorney that costed us some time – again I chalk it up to growing pains of a new company.  If you are an investor, you will probably get 3-4 more quarters of interest, and with a big chunk of your investor capital coming in 2-3 quarters.  After March 31st, tax season, there is really no reason to hold any money in our account, so it will all be getting distributed back to investors.

The third project has been quite a roller coaster thus far.  We got an amazing deal buying it as I mentioned before.   The problem was that in return for getting the package for pennies on the dollar, we had to take on some title issues.  Well, they ended up being worse than anticipated.  That wouldn’t have been particularly problematic, if the seller wasn’t a total putz and acted even close the the way he was contractually obligated.  Because of his ineptitude, we’ve incurred much expense and wasted time.  He sends us replacement files, so we spend a week doing due diligence, and then he says he find the files.   Stuff like that has made this process unbelievably frustrating. We are asking for a large settlement and/or will take him to court for the damages he’s caused.

Anyway, we do have clear assets now, and while we’ve decided that while we are still open to selling them if the price is right, we are going to work them through.  That’s pretty what our company does bets.  These assets are strong and have a BPO of easily over 1.5-2x the original investment (even thought it’s only 60% of the files!).  Anyway, with all the files, our team and I are going to be working like a crazy over the next year.  I’m in my element when I’m singularly focused, so although it’s just a ton of work, I’m feeling really good about it.

I justed finished a spreadsheet of some of the files we are working.  I’ve done a  BPO analysis and a lot of preliminary work needed to start a project like this.  If you are serious about the note game, I’d be more than happy to share it via email.  Just hit me up.