biophase
Platinum Contributor
FASTLANE INSIDER
EPIC CONTRIBUTOR
LEGACY MEMBER
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
I have certain criteria that I look for in real estate and to be honest, some are intangible. If I looked purely at the numbers, I wouldn't have purchased many of the homes I have. That's why I'm saying that just going by numbers in the stock market won't work in the future.
So in real estate,
Let's say that you value a home by its long term rental income potential. Let's say that a home that rents and nets $1000/mo is worth $200,000 based on your mathematical model.
Someone else who has 2 kids and loves the neighborhood and its school district is willing to pay $250,000 for the home and the comps in the neighborhood show this home is worth $250,000.
I come along and determines that by using this home as an Airbnb, that home can net $2000/mo. So by my Airbnb calc. model, the home is worth $400,000 because it returns X% to me.
So who is correct here? Well there are 3 different ways each person is evaluating the home's value.
The old "long term" rental calculation may not work anymore. The new way of calculating value may be using its Airbnb potential income. This is a brand new factor in evaluating a home's value that wasn't existing 5 years ago. The guy buying houses based on comps may not be pricing his home correctly either.
All I'm saying is that there are new factors that move the market now and that fundamentals are factored in less now than before.
If you look at what's a good PE ratio, I remember it used to be low like 10-15. Amazon's PE ratio was 250 in 2016. Google was between 25-30 which was considered really high in the 90s. The metrics need to change with the times.
Getting back to real estate, I'm going to factor in alot of other things like proximity to neighbors, distance from hiking trails, effect of global warming, unique architecture, etc... so when it comes to stocks like TSLA, I'm also going to factor in things like, who's the CEO, how is he on social media, do people like him, what do its customers say about the car, etc...
Dislike ads? Become a Fastlane member:
Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)
Membership Required: Upgrade to Expose Nearly 1,000,000 Posts
Ready to Unleash the Millionaire Entrepreneur in You?
Become a member of the Fastlane Forum, the private community founded by best-selling author and multi-millionaire entrepreneur MJ DeMarco. Since 2007, MJ DeMarco has poured his heart and soul into the Fastlane Forum, helping entrepreneurs reclaim their time, win their financial freedom, and live their best life.
With more than 39,000 posts packed with insights, strategies, and advice, you’re not just a member—you’re stepping into MJ’s inner-circle, a place where you’ll never be left alone.
Become a member and gain immediate access to...
- Active Community: Ever join a community only to find it DEAD? Not at Fastlane! As you can see from our home page, life-changing content is posted dozens of times daily.
- Exclusive Insights: Direct access to MJ DeMarco’s daily contributions and wisdom.
- Powerful Networking Opportunities: Connect with a diverse group of successful entrepreneurs who can offer mentorship, collaboration, and opportunities.
- Proven Strategies: Learn from the best in the business, with actionable advice and strategies that can accelerate your success.
"You are the average of the five people you surround yourself with the most..."
Who are you surrounding yourself with? Surround yourself with millionaire success. Join Fastlane today!
Join Today
