MattKatz Posted December 20, 2016 Report Share Posted December 20, 2016 Seriously...we dont need a full accounting class here....Way the fuck off topic and just dick swinging at each other for no other reason than to try to claim your correct. Just Stahp. Quote Link to comment Share on other sites More sharing options...
Zx2guy19 Posted December 20, 2016 Report Share Posted December 20, 2016 Seriously...we dont need a full accounting class here....Way the fuck off topic and just dick swinging at each other for no other reason than to try to claim your correct. Just Stahp. Lol dude that's what this forum is, and I think we're all okay with it. I'm not name calling or anything, just talking about assets vs. liabilities. Calm down brother. Quote Link to comment Share on other sites More sharing options...
Supplicium Posted December 20, 2016 Report Share Posted December 20, 2016 Sorry folks, Lauren is right (fucking kill me now). Anything that does not make you money is a liability, plain and simple. And Bigger Pockets isn't "some blog"...it's the largest real estate investing site in the world. wow wow wow The value does not have to appreciate for it to be an asset. If I have a house with a fair market value of 200k and I OWE the bank 100k, I have an asset/equity worth 100k. It is an asset because I can sell it at 200, give the bank 100k and im left with 100k. Please take a lesson from a book and not an oxi-clean infomercial http://www.investopedia.com/terms/e/equity.asp Quote Link to comment Share on other sites More sharing options...
LJ Posted December 20, 2016 Report Share Posted December 20, 2016 Sorry folks, Lauren is right (fucking kill me now). Anything that does not make you money is a liability, plain and simple. Not even close. Quote Link to comment Share on other sites More sharing options...
LJ Posted December 20, 2016 Report Share Posted December 20, 2016 wow wow wow The value does not have to appreciate for it to be an asset. If I have a house with a fair market value of 200k and I OWE the bank 100k, I have an asset/equity worth 100k. It is an asset because I can sell it at 200, give the bank 100k and im left with 100k. Please take a lesson from a book and not an oxi-clean infomercial http://www.investopedia.com/terms/e/equity.asp Well your asset is $200k, your liability is $100k, and your equity is $100k. Liability+Equity=Assets Quote Link to comment Share on other sites More sharing options...
Zx2guy19 Posted December 20, 2016 Report Share Posted December 20, 2016 I guess I just view it a different way. I view assets as something that makes me money, as do some of the most successful investors in history. If I have a house worth 200k and I owe 100k, I view it as me having 100k in equity. Not the house as an asset. Andrew/Supplicium, please, don't assume that because I don't view it the same way as you that I need any type of lesson. I'm well aware of how to run an effective investment business with multiple assets. Quote Link to comment Share on other sites More sharing options...
LJ Posted December 20, 2016 Report Share Posted December 20, 2016 I guess I just view it a different way. I view assets as something that makes me money, as do some of the most successful investors in history. If I have a house worth 200k and I owe 100k, I view it as me having 100k in equity. Not the house as an asset. Andrew/Supplicium, please, don't assume that because I don't view it the same way as you that I need any type of lesson. I'm well aware of how to run an effective investment business with multiple assets. Your view is wrong. Asset -property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies. Quote Link to comment Share on other sites More sharing options...
Zx2guy19 Posted December 20, 2016 Report Share Posted December 20, 2016 Your view is wrong. Asset -property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies. Yeah, I get the way a bank views it and the traditional definition. It's just not the way I view it (clearly I'm wrong, because you said so). Quote Link to comment Share on other sites More sharing options...
LJ Posted December 20, 2016 Report Share Posted December 20, 2016 If I have a house worth 200k and I owe 100k, I view it as me having 100k in equity. Not the house as an asset. It's a $200k asset, because if you sell it it pays off the $100k liability and provides you with the equity benefit of $100k. Quote Link to comment Share on other sites More sharing options...
Zx2guy19 Posted December 20, 2016 Report Share Posted December 20, 2016 Again, since I seem to have to repeat myself: I view an asset as something that makes me money. When I finish a house rehab, I typically have 30%+ in equity (always my goal), but I don't view that house as an asset until it's rented and providing me money every month. Maybe there's another name for what I'm referencing, but until I find it, I view my rental properties as assets because they're income producing, and my personal house as a liability (even with over 50k in equity). Quote Link to comment Share on other sites More sharing options...
Zx2guy19 Posted December 20, 2016 Report Share Posted December 20, 2016 https://www.google.com/#q=rich+dad+poor+dad+asset+examples Is this guy a quack too? Owner of over 5k properties and worth over $100M, sold millions and millions of copies of his book series. He must be an idiot. Because your narrow minds say so. Quote Link to comment Share on other sites More sharing options...
LJ Posted December 20, 2016 Report Share Posted December 20, 2016 https://www.google.com/#q=rich+dad+poor+dad+asset+examples Is this guy a quack too? Owner of over 5k properties and worth over $100M, sold millions and millions of copies of his book series. He must be an idiot. Because your narrow minds say so. Yes. Because he is changing the definition what an asset is. An asset is not something that puts money in your pocket. That is just a revenue stream. An asset is the offset to your liability and the difference is your equity. The point is not a bad one, it's just been worded incorrectly for years. You don't buy a house and then hope that you gain all kinds of money from it. You buy a house and it is a real property asset that is an offset to your liabilities. If you sell it, you can pay off your liabilities, and if you are lucky, get some of the money left over. Quote Link to comment Share on other sites More sharing options...
Zx2guy19 Posted December 20, 2016 Report Share Posted December 20, 2016 I'll just agree to disagree. My mindset is working. Every month, I have a sum of money deposited from my assets, and I write a check for my liabilities (including my personal house). I bet you do 401k too :gabe: Quote Link to comment Share on other sites More sharing options...
LJ Posted December 20, 2016 Report Share Posted December 20, 2016 I bet you do 401k too :gabe: Well I work for OSU now, so I don't pay Social Security, pay 10% in, and they match with 14%. Quote Link to comment Share on other sites More sharing options...
Turbs3000 Posted December 20, 2016 Report Share Posted December 20, 2016 It's a $200k asset, because if you sell it it pays off the $100k liability and provides you with the equity benefit of $100k. Honestly, you guys can debate this all you want but you'll just be going around and around. There's a reason this is a debated topic in all investment circles and has been for decades (think Rich Dad Poor Dad). Like most things there are 2 schools of thought. Quote Link to comment Share on other sites More sharing options...
BStowers023 Posted December 20, 2016 Report Share Posted December 20, 2016 If you own a car outright, is it an asset or a liability? Same concept essentially. Quote Link to comment Share on other sites More sharing options...
Zx2guy19 Posted December 20, 2016 Report Share Posted December 20, 2016 If you own a car outright, is it an asset or a liability? Same concept essentially. Does it make you money? All of my cars cost me something every month, between gas, insurance and general maintenance. Liability. Quote Link to comment Share on other sites More sharing options...
BStowers023 Posted December 20, 2016 Report Share Posted December 20, 2016 Does it make you money? All of my cars cost me something every month, between gas, insurance and general maintenance. Liability. Does your car get you to and from work? Quote Link to comment Share on other sites More sharing options...
Zx2guy19 Posted December 20, 2016 Report Share Posted December 20, 2016 Does your car get you to and from work? That's slicing it down too deep. I could make the case that my house is an asset because it allows me to shower to get to work. The car cost me money every month and doesn't deposit money into my account. Liability. Quote Link to comment Share on other sites More sharing options...
coltboostin Posted December 20, 2016 Report Share Posted December 20, 2016 This thread has me thinking. For those of you who are buying a new house and selling your old one, what's the easiest/best way to go about it? Do you start shopping before your current house is sold? Seems like there are risks either way. The same way someone buying their first house and renting should start the process- CALL YOUR LENDER FIRST!! Find out what you actually can qualify for-and if you HAVE to sell to buy. If you do, contingent sales are not abnormal in this is market, but does show as a "weaker" offer if your involved in multiple bids on a home. I, or one of the people of CR that work in the industry would be happy to help answer anyone questions on the subject. Rates are still great, and remember that we folk live on referrals Quote Link to comment Share on other sites More sharing options...
kirks5oh Posted December 20, 2016 Report Share Posted December 20, 2016 Does it make you money? All of my cars cost me something every month, between gas, insurance and general maintenance. Liability. i consider anything i own that is worth more than i owe by a margin of 20% to be an asset. people can view things differently, but that is how i see it. that is why i will always put 20% or more down on a car/house/etc. i understand your argument, and i don't think its wrong to look at things that way. you see the guy who has a $200k house, and has $100k equity, $100k mortgage as just breaking even at best. the reality is that if he dies tomorrow, his family can unload the house immediately for $200k-20%, and pay off his mortgage, and have $60k liquid cash. he sees it as a physical asset that has tangible value, against which he can borrow money, and eventually sell at some point for a profit---most would consider that an asset. when you drive a car off the lot, most would tell you that the car is immediately worth 20% less. if you put 20% down on the car and have to sell it in a hurry, you've broken even and the car is neither an asset or liability. because you use it for transportation, gas/maintenance/insurance don't necessarily make it a liability because seemingly you couldn't function without it. the same reason your clothes aren't a liability because of the detergent you spend money on to wash them, or your body is a liability because you have to spend money to feed it. i'm not trying to give the op a lesson in economics. there are advantages to renting and simply not taking the risk of owning property Quote Link to comment Share on other sites More sharing options...
Supplicium Posted December 20, 2016 Report Share Posted December 20, 2016 https://www.google.com/#q=rich+dad+poor+dad+asset+examples Is this guy a quack too? Owner of over 5k properties and worth over $100M, sold millions and millions of copies of his book series. He must be an idiot. Because your narrow minds say so. so the guy with 5k properties is telling you its a liability to have a property and that its not an asset but you are a successful property investment guy with assets that are not assets because the rich dad lesson you are following says so?????? but they are assets and you have assets :dumb: Quote Link to comment Share on other sites More sharing options...
Brandon Posted December 20, 2016 Report Share Posted December 20, 2016 i'm going to go against the grain and tell you NOT to buy a house, unless you're ready to make a 10+ year commitment. what could go right:::: the housing market does well, and you make 5% profit on your house after you subtract realtor fees, taxes, repairs, etc. what could go wrong::::: you sell the house after a couple years because-----relocation for work, find another house in a different location that you prefer, get married, kids, and need a bigger house, realize you hate your neighborhood/location, need to upsize, need to downsize the housing market stays the same or does worse---you lose money. remember if the house sells for the exact amount that you paid for it, then you lose money. realtor fees, and repairs will FAR outweigh any equity that you've built up during such a short ownership put a roof on the house?? new furnace?? A/C?? appliances?? yes, these are all things that you will lose money on, since the next buyer gets to keep them, assumes that the house will have them already, and they DON'T add true value to a house. the new owner thanks you for the new roof, but won't pay extra for it. again, this offsets any potential equity that you've built up. maintenance---this costs money. no one buys a new lawnmower, snowblower, weedeater, or anything for that matter, to upkeep their apartment/condo. not to mention this takes time, and time is money to some people. if you aren't interested in taking the time to manicure your yard to match the neighbors, then home living may not be for you. upgrades---i can guarantee everyone posting in this thread (myself included) has put some serious upgrades on their house. you don't typically see the return on these. it will increase the worth of your house, but not by the same amount you've paid. in other words, when i spent nearly six figures to gut my kitchen and upgrade the fuck out of everything imagineable, it did not increase the worth of my house by anywhere near that figure. again, this is money lost. nothing parties like a rental. if something breaks in your apartment, you likely don't really give a shit. you don't have to worry about taxes, upkeep, homeowners insurance, if you have to call the plumber for an emergency fix, you simply don't give a shit. home-ownership is not the investment it was 30 years ago, no matter what anyone here will say. i'm just as guilty as the next, owning a big house that i will never get out of it, what i put into it. i enjoy the hell out of it though---but it is NOT an investment. few are. All very accurate, and I share a similar sentiment. ** The only catch I would say is that the only real equity you can gain in a home value is doing work on your own, that is the "savings" your investing. Like above, we did a expensive kitchen , granite, painted cabinets soft close double oven yadda yadda, however I did enough of the work on my own to net up our investment cost, but not by much. Also dont over invest in your home relative to others in your direct market. In other words don't go ham on upgrades to your 150k home to think you can make it worth 250k, when all the other homes are only still selling for 150k...Or dont build a 500k house in a 100k neighborhood, common sense so to speak. You will not see the return. But by all means if you plan on staying, upgrade away, with the knowledge you may not get out some of the money you have spent. I also will note that home equity is still cheap money right now, in fact it is still the cheapest imo. Quote Link to comment Share on other sites More sharing options...
Supplicium Posted December 20, 2016 Report Share Posted December 20, 2016 If you own a car outright, is it an asset or a liability? Same concept essentially. Its called a depreciating asset always no way around it aslong as there is no debt owed and is working. Quote Link to comment Share on other sites More sharing options...
Zx2guy19 Posted December 20, 2016 Report Share Posted December 20, 2016 so the guy with 5k properties is telling you its a liability to have a property and that its not an asset but you are a successful property investment guy with assets that are not assets because the rich dad lesson you are following says so?????? but they are assets and you have assets :dumb: Damn, you must be dumb. He has 5k INCOME PRODUCING properties, which are assets. This entire argument is based around a personal house, not investment. Since you're clearly ignorant, I'll put it even simpler: Personal house (non income producing): Liability Investment house (or anything income producing): Asset Quote Link to comment Share on other sites More sharing options...
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