LOL yes.

DL has hired more simply because they have added more mainline capacity to the bottom end than the others. That's a process that is still continuing, although to a slower degree that will flatten out at some point obviously. There are about 2500 more positions on the list than post merger, and there is still a very large retirement wave about to hit in the coming years. Even after the wave starts to subside, it will still remain a powerful force for a very long time.

DL has brought a lot of the former RJ flying in house and brought more pilots on to cover it just like most of us hoped they would do. The other legacies seem much further behind in that regard. We need much more work on large jet scope that has the potential to add a lot more people to the list.

Anyone here invest in apartment buildings/commercial properties, or just single family?

Yes, several on this thread invest in those asset classes. Do you have a specific question regarding commercial or multifamily properties?

Trying to purchase one as my first property. I live in NJ, but am seeing that most properties in NJ/NY are expensive and some do not even cash flow. Where are you guys investing in some of the bigger properties w/ more units?

Look outside where you live.

Texas is good. Bigger properties w/ more units is a little vague, but once you start getting over $20 million you are competing with institutional money and will have a tough time cash flowing. If bigger is something larger than a 4 plex, you will find properties that cash flow in several different areas. Management of properties outside of your local area will be one of the bigger obstacles to overcome.

The best thing you can do is get tied in with some local real estate investors, find a few RE blogs and podcasts. Sites like biggerpockets, podcasts from Jason Hartman and books by Robert Kiyosaki are good starting places if you don't know much about real estate investing yet.

A big factor in deciding where to invest is state and local tax. Avoid places that will have you doing crazy paperwork on your time off other than signing a few things. Just my opinion.

To be more specific, maybe 15-20 units. Using ~$300k as a down payment on one large property is one I’m shooting for. At least we can non-rev anywhere should we need to be there, but a property manager is something I would consider. Thanks!

Memphis is the worst choice you can make in Tennessee. Knoxville or Nashville are far far better. That being said, my mom passed away a couple years ago and I still own her condo in Cordova. I'll sell it at basically break even just to gtfo of Memphis.

How much?


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If you're looking at 15-20 units then a property manager is pretty much a given. Otherwise you'll be spending a lot(nearly all) of your spare time taking care of little piddly repairs or screening/showing prospective tenants. PITA if you ask me. A good manager is very much worth it and not that much of an expense overall.

+1 Freezingflyboy

A good manager is essential as you grow your portfolio beyond just a few units/homes. I'm a big fan of specialization and division of labor. Focus on your profession and pay others for the skills in their profession. You may be able to show units, screen tenants, make minor repairs or even remodel a bathroom and put on a new roof, but it's a waste of your time. Pay experts for their skills at market rate and then go use your skills at your market rate. If you are doing all the work yourself, you just spent 300k on a second job.

Around $185 It is in a defacto over 55 complex. It's a nice place really, but I have zero intention of ever stepping foot in Shelby County once I sell it. Out by Bellvue Baptist Church.

Are you really that much better off by putting down 300k on some apartments then you would be if you kept that money in the market? I genuinely don’t know.

Seems like a whole lot of effort and a big gamble for potentially not much more gain than if you just let that money work for you. Plus you have it liquid in case you really need it.

I’m lazy. Which is probably why you guys who do real estate will be much better off than me lol.

The short answer is "YES!".

Long Answer is also "YES!", especially if you are lazy due to long term passive income.

A leveraged piece of income property has several unique characteristics that are not found in the market.

1) Property appreciation - Typically tied to inflation over the long term, let's use 3% in this example.
2) Principle reduction - Each monthly mortgage payment reduces the principle balance and increases equity in the property.
3) Cash flow - After paying the mortgage and management fees, accounting for replacement reserves and vacancy cost, there is money left over (in a typical investment).
4) Tax advantages - A residential property is depreciated over 27.5 years (commercial is 39). This reduces the taxable income while the asset is actually increasing in value.

The math.

$1,000,000 commercial property (780,000 improvements, 220,000 land)
$250,000 down payment
$750,000 loan 30 yrs @ 5% fully amortizing

$108,000 annual rents ($9000 monthly or .9% per month)
$27,000 annual operating expenses (management, vacancy, maintenance, insurance)
$14,000 property taxes
$37,250 interest expense
$11,050 principle payments

Profit
108,000
-27,000
-14,000
-37,250
=29,750 or 11.9% return

Cash Flow = 18,700 (29,750 Profit minus 11,050 principle) 7.5% cash on cash return
Appreciation = $30,000 (assuming 3% of 1,000,000)
Total return $59,750 or 23.9%

Depreciation = $20,000 You just made nearly 30K, but only paid taxes on 10K.

The appreciation is taxed at the capital gains rate when you sell the asset, the same as any market investment. The advantages of real estate are the 1031 exchange and the option for equity stripping via a cash out refi.

In year 2, the rents increase by $3,000 (3% inflation) and expenses increase $1,200 (3% inflation), which results in a $1,800 increase to the cash flow. Carry this out 5 years, the cash flow increases by 50% principle payments increase by $3,000 and interest reduces by $3,000.

The example above is purely hypothetical, but easily attainable with reasonable effort. It takes more work than buying shares of a mutual fund, but the returns are far better. After a decade of quietly investing in income property, you will magically appear to be an overnight success to those watching from the sidelines. Once you get established as a real estate investor, your real estate friends will start asking questions about your "Side Hustle" as an airline pilot. :D


DYODD, YMMV, JVSCOPE, etc...

I was wondering the same thing. My main interest would be diversification and cash flow in retirement. Leverage has always been one of the big draws in real estate investing. I've never been a fan of debt so I'd rather pay cash which makes it less attractive from a return stand point. If I didn't include leverage and possible appreciation what rate of return could be expected owning residential property, specifically single family homes?

Edit: Just saw Gunfighter's post above. Thanks

I do wet work....

https://youtube.com/watch?v=vh0yLaWv6Fs

6-9% annual return indexed for inflation. It beats the heck out of any annuity you can find. Factor in the tax favored treatment of the asset (depreciation) and you are miles ahead of the market, even without leverage.

On a side note, you can find non-recourse financing for certain properties. It takes away the personal liability for the debt and changes the personal risk:reward ratio.

Stocks take into account inflation too because companies have to raise prices.

Real estate is high risk because if there is a market downturn in real estate you can get hosed, especially if you're leveraged.

Owning tens of thousands of stocks properly diversified across multiple asset categories is the safest investment (lowest risk) for the highest amount of return. Portfolio should double ever 8 years if done right.



But you might be right about the tax advantages making it even more profitable.

Diversification is key. I've got the index funds and all in retirement and taxable accounts, but real estate helps diversify even more. Although if I had $100k to use, I can only buy $100k in stocks. 100k in real estate can be leveraged for a 400k property.

How I lost money in real estate before it was fashionable, Part I: Impossibly Naive.

Real Estate investing can work for some people. Real Estate has experienced a bull market since 2009, so it's easy to point to success stories. Many of the hypothetical examples make it sound much easier than it is.

If I were going to invest in real estate, I would buy VGSLX.

https://investor.vanguard.com/mutual.../profile/VGSLX

Personally, I just put everything in VTSAX.

https://investor.vanguard.com/mutual.../profile/VTSAX

Would you invest on margin in equities?

https://investor.vanguard.com/investing/margin

In my opinion, the leveraged nature of real estate is a negative characteristic.

I might consider margin on equities if the leverage were non-recourse, but I haven't come across a non recourse margin account. The reality is the leverage does increase risk, even with non-recourse financing. Many people richer than me (Dave Ramsey comes to mind) only invest with cash. Others with even more money have gotten there with leverage, including a couple people I call friends. I've been both a cash and a leveraged investor, depending on the nature of the property. The key to success if using leverage is having sufficient debt coverage ratios and adequate reserves, while investing in stable properties. I like single family, multi family, RV/Trailer parks and self-storage. I stay away from retail strip centers, but would consider a single tenant NNN property that doesn't exceed 15% of my portfolio.

I agree completely on the diversification front. For the last decade and change, I've put a similar amounts into retirement accounts (mostly index funds and BRK stock) and real estate. One of those is now much larger than the other and produces cash flow that is spendable before 59 1/2. It took quite a bit of effort, but still less work and more pay than flying planes.

Thanks all for the feedback re: Delta hiring

In regards to asset classes, there is no wrong asset class nor right asset class. All of them can make or lose you money, that is the nature of any and all investments. If anyone else is telling you different they're stupid or lying.

Leverage is both good and bad. When it's good it juices performance, when it's bad it juices losses, a double edged sword if you will. In this respect it is not good nor bad, it just depends on what your risk tolerances are. I personally love leverage and employ it whenever possible (responsibly of course).

As far as asset classes for pilots, as stated in a previous post, I think real estate is the most viable and as many have mentioned there is depreciation, inflation adjusted income, tax advantages etc., and in general a passive income stream.

Equities (from someone that has seen the great times and horrible times from an institutional perspective) has much more volatility than real estate. Real Estate by nature has some intrinsic value, equities can go to zero. Real Estate can always be redeveloped, rented etc. Equities however have unlimited upside. AAPL from where it started to where it is now? Solar stocks back in the early 2000's? Financials on the down swing and then back on the upswing? Volatility and leverage CAN be your friends but to trade equities, derivs or fixed income you need to be there every day in front of the screens and even then you are at a disadvantage compared to larger institutional players.

As a pilot you are away roughly half the month or more, while flying it is doubtful you can call in orders or execute on your phone while at 35,000 ft. Real estate as a while is more macro driven (on a portfolio level) and tends to react slower so you could potentially sell an investment, yes you might realize a loss, but that is driven on more how you manage the sale as real estate itself is like an OTC market. One of the main drivers of real estate as an investment class in the US are the tax advantages. Once you layer in tax advantages most real estate funds outperform equity funds. To give you an example, most Real Estate CRE funds target 15% to 25% returns with much less volatility than comparable sized equity funds.

As far as NJ for your first multifamily / CRE investment, I would do some research on tax implications but would also focus on landlord friendly states (TX,FL). NJ as a state and each individual town is very tenant friendly. You have to read each town's bylaws to completely understand eviction and rent stabilization statutes as well as relevant recent case law. TX and FL however have a lot of land and vacancies are often longer than in high population MSA's. There are pluses and minuses, you have to figure out what risks you are comfortable with and which ones you are not comfortable with.

In regards to the use of leverage in real estate, if you are uncomfortable with leverage (a personal preference for some) I would say buy 1 or 2 properties with leverage and see how they operate with plenty of cash on the sidelines so you are comfortable with the asset. You can pay down the loan at a later date or simply buy another asset. Use the cashflow from all the assets to pay down 1 asset at a time. Your holding entity needs to be formed correctly to allow this and please speak with a tax professional before doing so, but essentially use the cashflow to pay down assets and then use the cashflow to keep buying properties. You might have 1 or 2 assets with high leverage which you are constantly paying down but on a portfolio level you are very low levered.

In regards to real estate ETF's - you don't really get all the benefits with ETF's. Depending on structure etc. you don't really maximize tax benefits etc. which are a huge component of the asset class.

As far as single family or multi family, large institutional players have already been active in the fix and rent out segment of this market for some time. You are competing with the Blackrocks etc. but you just don't know it. Zillow is contemplating entering the fix and flip / fix and rent market using their pricing algo's as the backbone (which I don't really see working because their values are way off, but then again what do I know?)

Thanks to anyone that listened to this entire rant.

And now back to aeronautical charts and airspace classifications.

Actually index funds aren't really very diverse in most cases.

And if you do it correctly, with tens of thousands of different stocks, you're guaranteed to get some real estate companies in there.

As far as leveraging, that's a potential quick trip to bankruptcy.

I happy with my index fund that tracks the S&P. Having no commission fee and low expense ratio is nice, too.

The key is understanding what creates the potential. Leveraging speculative properties like fix/flip, land, development or anything where you are trying to buy low, sell high is a recipe for disaster. Those should be cash deals. The stories I hear about personal bankruptcy in real estate involve over leverage by an under capitalized investor, limited or no due diligence and speculation on appreciation or lease up rates. Using Dave Ramsey is a good example. He didn't go bankrupt with buy and hold rentals, he went bankrupt with short term financing on speculative deals where he signed personal loan guarantees. When the loans came due, he couldn't cover the principle and was forced into personal bankruptcy.

Long term fixed rate leverage on stable income properties with proper due diligence is a different story. It is an effective way of increasing returns. Using non-recourse financing takes personal bankruptcy off the table. Admittedly my view is skewed due to past performance.

That is a smart choice for a hands off investor. It takes time and discipline when investing in income properties. I follow a similar approach in my retirement accounts. I even park excess capital reserves from my income properties in an S&P 500 Index ETF.

Before the tax law changes, group real estate investment schemes were a dime a dozen, I wish I had that money back.

Not to mention gold mines, oil leases, ostrich farms, and cattle embryo futures. Then the IRS retroactively banned interest deductions for non-recourse loans and demanded back taxes plus penalties. Then many of the deals turned out to be frauds from the beginning. Thanks to S/O poverty, I was spared those temptations. :D

One of several reasons being a direct investor vs syndication is a better choice. Or maybe I'm just a type A with control issues...

Anyone have rental property that is in another state, in which the tenants dont have same bank? How do you receive money the cheapest and safest?

Through the property management company.

Several options.
-by mail (Due on the 1st, not mailed on the 1st. Encourage them to mail early and post date if they feel it is necessary or set it up automatically if their bank offers online bill pay)
-ACH through your bank (ask them how)
-online payments by ACH (not CC)

https://www.biggerpockets.com/forums...ollection-tool
https://www.biggerpockets.com/rei/pa...payment-tools/
https://www.landlordology.com/collecting-rent-on-time/

Excellent! Thanks for that

I miss this thread...

Me too, but the topic is alive and well. The WB flying schedule has been a side hustle dream this year, except for a MD penalty lap through ATL. I've taken advantage of the time off and rehabbed a 3/2/2 rental house just for fun with my wife and daughter. There are lots of investors shopping right now, so there isn't as much meat on the bone as there was in years past.

Income producing real estate is still the king of the hill in my book. I'm on hold with Fidelity right now, so I can get the penalty free 100k COVID withdrawal. That money is being put to work in a couple passive multi family investments.

As a side note, spending most of my time in one time zone vs regular ocean crossings has me rethinking some domestic options once the international fleets start getting busy.

Think it through carefully. Think of turning on your phone after you land, and having it explode. Several times a day.

Could be a blessing, or not.

I enjoy reading about your investing. Lot of food for thought, thanks for sharing what you've learned

With all the appreciation of homes and increase in real estate investors, are you still finding some properties that are worth your time?

Ignoring my cell phone is my superpower. I can let a call go to voicemail without even checking caller ID on X days.