Here’s Why You Always Add a Buffer to Your Reno Budget

If you have done a couple large renovation projects then you know what I’m talking about.   When estimating rehab costs – always add a buffer on top of your total number.

Here’s Why You Always Add a Buffer to Your Reno Budget

This isn’t about how good an investor is at estimating the costs of repairs and replacements.   Most of us can get good at that with some experience.

This is about the stuff that you generally can’t foresee. The stuff that just pops up, and trust me there will be things that pop-up.  Especially if you are working with properties that are much older.  In fact, the older the property the more likely you will have “surprises.”

Real Life Examples

I’m going to keep it simple and give you a “cheapie” I’ve personally experienced so not to scare you off.  Just know, the surprises can range much higher is cost.

This is one of the reasons I stress performing as much due diligence on a property as you can before purchasing.

There are many “surprises” that can be avoided – then there are some that are just part of doing business.

My latest example fits into that category.

Main Water Valves and Sleeves

We are finishing up a major renovation on a property that was built in 1901.  However, along the way we got caught with a few surprises.  One of which had to do with the main water shutoff and the sleeve pipe that runs to the water department’s main valve.

Long story short is the sleeve had become so cockeyed that it was not possible to access the valve to turn it back on.  Considering you need water in a home this was a bit of a must fix.

The real question was – is the sleeve bad or the valve too.   Either way we needed to have a qualified operator come in a do his thing to repair.

After widening the opening to the exterior piping/valve and doing a little digging out the earth he was able to access the sleeve to replace and test the valve.  

Good news – valve was fine.  Bad news – sleeve needed to be replaced.  $1200 later all is good an we can got water turned on.

Unexpected cost, yes, but at only $1200 feelt like a win.  Here’s the things though.  What happens when you have 4 or 5 items come up that cost that?

Since this property was so old that is exactly what happened because things needed to be up to code.  Replacing the side door entrance became a $1500 costs instead of $300 because of all the layers of siding that had been slapped on over the decades.  The flashing had been bumped out so far it was a mess and we basically needed to re-frame it.

These examples are the cheap ones.  I have heard plenty of stories from other investors that got hit with $5-10K “surprises.”

Add a Reno Budget Buffer

This is why on the majority of big rehab projects I always slap an extra $10K on my total expected budget.

If the numbers still work with that then I know in the end I should come out in decent shape and better yet, if the “surprises” are limited or not existent than the deal becomes even more profitable.

Always be working your numbers and buying right!

To get the full guide on how I buy right check out the videos or the book.  Remember to use the property calculator when analyzing deals!

STEEM: we should have hit the bottom already…

yep, I know what you think right now… this may be just another post trying to bring positive vibes on our beloved STEEM… but definitely, no matter which pair you check right now compared with STEEM, all of them are showing signs of reversal according to a DIVERGENCE on the Daily RSI.

For me the most important currently is to compare STEEM vs BITCOIN on the daily chart and this is what we see today:

During one month STEEM has been ranging between 1550 and 1800 Satoshis, with a light descending trend in overall but with a clear divergence on the RSI

Same is happening if you compare the second most important pair, STEEM vs ETHEREUM:

…and also STEEM vs BINANCE COIN:

The conclusion that I get by observing these three charts and respective divergences on RSI is that STEEM is timidly getting stronger in front of their competitors. worth to say that just around one month ago, STEEM was placed on the 88th position of the Total Market Cap….

… while today, even if the total cap of STEEM has decreased since then, we can see STEEM at the 79th and sometimes reaching below that place:

We can also see that change of trendline if we compare STEEM vs USD:

The price of STEEM is ranging between 0.16 and 0.19 USD since weeks already, RSI is also behaving very similar to the other pairs but, of course, the way the price is decreasing here, in USD, depends at the 95% I would say, to what is going to do BITCOIN in the coming days…

If BTC falls, which is very likely according to my expectations, the complete altcoin market will suffer another hit versus the dollar, included STEEM as well…

…the only thing different here is that STEEM may have reached its bottom versus BITCOIN while others not…

@toofasteddie


Disclaimer: This is just my personal point of view, please, do your own assessment and act consequently. Neither this post nor myself is responsible of any of your profit/losses obtained as a result of this information.

BITCOIN: Double combo Correction (WXY)

Back form holidays but still not working since we are on the weekend but, finally I have time to analyze the Daily BITCOIN chart in a more accurate manner. I have redone my EW-count and I think I found an structure that will fit with the current situation.

The structure is a Bouble Combo Correction (WXY) which is composed by the combination of three main Legs:

W Leg: Can be any Zig-zag or Flat correction

X Leg: Can be any Zig-zag, Flat , triangle or combo as well

Y Leg: Can be a Zig-zag, Flat or a Triangle

Only one triangle is allowed and it can be formed either on X or in Y but not in both. If it was the case that two triangles were formed at X and Y, the pattern would be different (Double Zig-Zag) with different results, so since the X leg is a ZIG-ZAG, a triangle may be formed on the Y Leg…or not :-)..

So, in my opinion there are two main scenarios in order to end the correction:

  • Y leg ending in a pure Flat Correction: Level of price would be similar or slightly below “W” , i.e. around 9000 USD as the main known support
  • Y leg is a triangle which will push the price lower, in search of the inclined blue line, i.e. 7600 USD

Looks like September is going to be an excellent month for the whole Crypto Market.

@toofasteddie


Disclaimer: This is just my personal point of view, please, do your own assessment and act consequently. Neither this post nor myself is responsible of any of your profit/losses obtained as a result of this information.

Intermarket Relative Strength Analysis Report For The Week Starting 8/11/19

Instead of looking at financial markets or asset classes on an individual basis, intermarket analysis looks at several strongly correlated markets or asset classes, such as stocks, bonds and commodities. This type of analysis expands on simply looking at each individual market or asset in isolation by also looking at other markets or assets that have a strong relationship to the market or asset being considered.

The US economy is still the largest in the world and the US dollar is still the most powerful currency in the world.  Over half of all foreign currency reserves in the world are in US dollars.  Thus, the asset classes relative strength will be compared to the US Dollar.

Bitcoin

30 Yr Bond

Copper

Euro Dollar

Gold

Oil

Soybeans

S&P 500

Based on the moving averages and the last daily closing price, relative to the moving averages,

the asset classes’ relative strength, relative to the US Dollar are the following:

Two Weeks Ago

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

World Stock Market Relative Strength Analysis Report For Week Starting 8/11/19

The Standard & Poor’s 500 Index (known commonly as the S&P 500) is an index with 500 of the top companies in the U.S. Stocks. Because the S&P 500 Index represents approximately 80% of the total value of the U.S. stock market, it’s the bellwether index for the U.S. stock market. In addition, the U.S. stock market is the largest stock market in the world, it’s also the bellweather for equity markets around the world. The S&P 500 is arguably the most important stock market index on the planet.

Source Image

Because we live in a global economy, the global equity markets interconnected and highly correlated.  However, some will outperformance other in the short term and long term. When constructing an equity portfolio, for the best returns one needs to have the ability and the capacity to assess all the major equity markets around to asset allocation purposes.  However, the first step is to determine the relative strength of the major equity markets, relative to the bellweather, the S&P 500.

DAX (Germany)

Dow Jones (US)

FTSE 100 (England)

Nasdaq (US)

Nifty 50 (India)

Nikkei 225 (Japan)

Shanghai (China)

Russell 2000 (US)

Based on the moving averages and the last daily closing price, relative to the moving averages,

the world equity markets’ relative strength, relative to the S&P 500 are the following:

Two Weeks Ago

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Why to Use Land Trusts to Transfer Your Property to an LLC

It’s amazing how many tools there are at our disposal when it comes to real estate investing.  I’d like to talk about one that can come in handy when dealing with the issue of getting loans, but wanting to have your property in an LLC.

Note: this is not legal advice, please check with your attorney when making any such transactions.

Get the Loan – Then transfer into LLC by way of Land Trust

Using a land trust is always a good idea, regardless.  It provides anonymity for the owner which protects you because you can’t get sued if it cannot be proven you own the property.

Additionally, when a title is transferred to a land trust it doesn’t trigger the due on sale clause that is part of a traditional mortgage. 

Generally when title changes hands it triggers the loan to be paid in full.

Now push it to the LLC

Once the property is in your land trust you can then transfer the title to your LLC.  Then make sure your LLC has an operating agreement in place to manage that property within the trust. 

Basically this gives us a way to take a property that we buy in our own names, usually in order to qualify for a traditional mortgage, and move it into our LLC.

Remember – owning investment properties in your own name is a liability risk.  Yes, insurance is great but only goes so far.  Having properties in entities like land trusts and LLCs provides protection for you and the assets you’ve worked so hard to accumulate.

If you are just getting started in real estate investing then check out the ScaredyCatGuide to Investing in Rental Properties Video Tutorial

 

 

The Only Reason Why The US Equity Markets Reversed Where It Did

Arthur D. Cashin, Jr. is a managing director of UBS Financial Services Inc. and the Director of Floor Operations for UBS Financial Services at the New York Stock Exchange is a well-respected figure on Wall Street. 

Traders are trying to remain positive as stocks came off their sharp morning lows, veteran trader Art Cashin told CNBC on Wednesday.

“If we rolled over here and violated the morning lows, then it would really begin to be a problem,” said Cashin, UBS director of floor operations at the New York Stock Exchange. “For now, everybody is kind of crossing their fingers and whistling past the graveyard, saying, ‘OK, we tested Monday’s lows,’” he added, around midmorning as the worst of the sell-off was abating.

“The S&P held, so I guess we can be in good shape,” said Cashin, who predicted rocky markets for the next few weeks as global trade tensions mount. “I think volatility is here to stay.”

Source

However, there is one reason and one reason only why the US equity markets are off the Monday lows.

The moving average is the most ubiquitous and simplest technical analysis tool used by discretionary and system traders, market analysts and those pestering algos. The 200 moving average, the king of moving averages is used on a daily chart to determining the overall long-term market trend over the last 40 weeks.

Discretionary and system traders, market analysts and those pestering algos also use moving averages for support and resistance. For example, in February and April of 2018, the 200 moving avg. (yellow line) served as support for the Market.

In October of 2018, the same thing happened.

And again this week,

Whether you trade cryptos, stocks, forex, but don’t have the 200 moving average on your daily chart, consider plotting it on your daily chart as it might offer you an additional edge to accompany your trading strategy.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

The Oil Exploration & Production Companies Continue To Decline Too

When oil dip to a low of sub $30 in 2016 and came back from the dead, I assumed all the derivative play would follow, kind of like the tide rises all boats. 

It was only when I started analyzing the relative strength of the SPDR sectors against the SPY, that I notice the energy sector didn’t follow oil and has been on this steady decline. 

This means Wall Street is saying the valuation of energy companies today at $50 barrel oil is lower than the valuation of energy companies years ago at $30 barrel oil.  This is a really big deal if one can connect the dots.  One theme is cheap credit / junk bonds funding the expansion of the shale companies, who are having a hard time paying their debt back…this one theme has enormous consequence to the state economies of Texas, the Dakotas, etc.  However, that’s another post for a different time.

Last month, I spoke about VanEck Vectors® Oil Services ETF (OIH®) which seeks to track the overall performance of U.S.-listed companies involved in oil services to the upstream oil sector, which include oil equipment, oil services, or oil drilling and how the chart suggest OIH is headed lower over time.

The Oil Service Companies Continue To Decline

OIH ONE MONTH AGO

OIH NOW

I have another ETF that I think is worth shorting is the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).  XOP seeks to provide investment results corresponding to the total return performance of an index derived from the oil and gas exploration and production segment of a U.S. total market composite index.  Top holdings include: HollyFrontier Corp, Phillips 66, Marathon Petroleum Corp, Hess Corp, Valero Energy Corp and Marathon Oil Corp.

XOP looks very similar to OIH, with one exception.  XOP breached the monthly demand and is now at all-time lows.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Volatility…..It’s BBBAACCCKKKK

The CBOE Volatility Index, VIX aka the stock market fear gauge, is a popular measure of the stock market’s expectation of volatility implied.

Devesh Shah, an applied mathematician and hedge fund manager who formerly worked for Goldman Sachs, was one of the creators of the CBOE Volatility Index

The VIX is quoted in percentage points and is the expected annualized change in the S&P 500 index over the following 30 days, with a 68% probability. VIX values greater than 30 represent investor fear or uncertainty, while values below 20 represent complacent in the Markets.

Source

Just in the past week, we have seen Fed Powell cut US interest rates in attempt to keep the party going, President Trump issue more tariffs on Chinese goods, 900 DOW stock plunge and what appears to be the start of a currency war.

Experts say there could be lots more bad news to come for stocks this month beyond Monday’s big selloff. That’s because August is typically the year’s weakest month for U.S. equities.

Stock Trader’s Almanac Editor Jeffrey Hirsh blames the month’s historically weak performance woes on summer vacations that take investors’ eyes off of the market. “Everyone is in the Hamptons, out playing golf or in the backyard with the kids,” he said. “So, you get a vacuum of lower volumes, and the path of least resistance is down.”

LPL Financial found that while the S&P 500 hasn’t fallen every August, in the years that it’s done so since 1990, losses have averaged 4.6% — the worst showing for any month during that period.

Source

So any one long the Equity Markets or who have family members with IRAs and/or 401ks, buy some protection and hedge your hard earn dollars.  One way to hedge your portfolio is to buy VIX call options if you think volatility in the Markets are going to increase over the next 3-6 months.

And the newest alternative at our disposal as a hedge, is to buy BITCOIN.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

BITCOIN: As expected…

… BITCOIN is now testing the Upper Resistance line within the Bullish Flag.

And, as I wrote in this post a couple of days ago, there are two options, both of them positive:

OPTION 1:

Correction is done and we are in wave three of the continuation of the Uptrend.


OPTION 2:

Still one retest of the lower ground of the Bullish Flag would be expected on (e) around 8250 USD in order to end the II wave in violet, then, strong rebound upwards.


24 Hours Volume seems to support the breakage of the upper resistance and also the RSI on the Daily still show a healthy status since it is moving within the limits.

Trend is our friend so, wait to see next move and decide wisely.

Enjoy!

@toofasteddie


Disclaimer: This is just my personal point of view, please, do your own assessment and act consequently. Neither this post nor myself is responsible of any of your profit/losses obtained as a result of this information.