Sinn Management, LLC

10/25/2023

Transitioning from a time of low interest rates, now to where the 10 year treasury most recently broke above 5%, Americans seem to still follow the fervor that cash is trash from 2020, and continue to spend and invest no matter the interest rate associated with the investments.

This video posted by Ed Mylett roughly a month ago perfectly embodies how Americans should be looking at the broader economy as mortgage rates surpass 8%, car loans can be pushing greater than 10%, and student loan repayments have recently started once again.

In a time with this uncertainty as to when a recession will come, one thing that is certain is the cost of debt continues to become more and more expensive. As Mylett speaks about in the video, the most important thing to have now is cash not only to insulate you and your family in the event of a downturn, but also to have the necessary cash to invest in different assets once the valuations start to make sense again.

What are your thoughts? Is cash still trash, or is it better to grow a cash portfolio in a high yield savings account that returns 5% while we wait to see where the economy goes?

This week I want to talk to you about something that’s near and dear to everyone’s heart.MONEY.I can’t give you specific advice or a great stock tip, but I c...

10/28/2021

An interesting post by CNBC focusing on various bubbles being created right now. To focus solely on the real estate sector - this is a common general comparison that individuals will make to argue that real estate is approaching bubble territory. Looking at the rate in which home prices have increased, as compared with the bubble just before 2008-2009.

A few factors that are not included in this analysis are current interest rates, lending requirements, loan terms, and the inflation rate.

Comparing to the last Real Estate bubble, we found individuals taking variable rate mortgages with all sorts of creative financing that later came to put people underwater. So what is different this time around?

With rates at all time lows (starting to actually increase in recent weeks), people are signing into more fixed rate 15 and 30 year loans than compared with variable rate loans. This locks in the monthly home payment compared to the variable payments that the majority of home owners had in the 2008-2009 bubble.

Second, there was a large increase in demand at the beginning of COVID due to a low supply of inventory coupled with the new work from home culture that has been adopted within the US. We have seen this demand slow in recent quarters, which is a good sign to show that the market is stabilizing with a post COVID demand.

Before thinking that Real Estate is in bubble territory, recognize that the majority of homeowners today have fixed loans that will not vary based on market conditions, and also are higher credit individuals which are a "safer" bet for banks to have repay the loans.

Lastly, with inflation hovering around the 5% mark, one must also factor this into the increase in price points - yes real estate might still be showing an absurd 11-12% increase year over year, but when adjusted for a 5% inflation rate, and factoring in all time low interest rates, the higher increase in price actually makes sense.

Our question overall as an investor is when will rents start to follow the increase in price? When you see properties increase at such a rapid rate, it is due to the factors described above and investors analysis that rents will follow the same upward trend.

So the question becomes, is it worth it to buy a higher priced house today with all time low interest rates fixed for 15 to 30 years, or hope that you wont be on the receiving end of increase rents in the upcoming years?

Richard Bernstein Advisors’ Rich Bernstein, an Institutional Investor Hall of Famer, is worried investors are getting too deep in risky trades and investments.

09/27/2021

This video posted by Frontline is the PERFECT video to watch when learning about the basics to the importance of investing for retirement at an early age, and how important it is to understand where you are investing your money.

The video talks about the length of time in the market and its importance, where you should look to be putting your investments, and who you can trust as a novice investor.

Ultimate takeaway from the video? Investing in an index fund for the long term is the best way to ensure you have a sizeable portfolio upon retirement.

Our goal is to help individuals find the right index funds that will provide the lowest fees for clients, along with the strongest return in the LONG TERM, rather than the short term profits. The main point to investing for retirement is to be able to invest in index funds that will continuously provide a solid return year over year. If you have any questions about retirement and how to get started reach out today!

Will your IRA or 401K accounts ensure a safe retirement? FRONTLINE investigates the big business of retirement, raising troubling questions about how America...

09/14/2021

How you could owe $0 in taxes in 2020!

In a recent article posted by CNBC, the average taxes due estimated in 2020 for individuals earning less than $75,000 per year is $0! Now, of course this does not mean everyone will have no taxes due for the year and receive all their prepayments back. What does this mean though? Based on past data, this is a perfect year for people to take advantage of lower taxes and take that refund to apply to investments for future growth.

When people like to get that refund check every year, why not focus on increasing your refund check you receive, or making sure that your taxes due each year goes down? One amazing way to do that is through real estate. Right now the market is very strong for real estate, but that also means that your property has a higher value to be depreciated.

When you look to start house hacking, as we like to advocate clients to do, come tax time you can "depreciate" or write down part of your homes value as an expense for the year. Without you doing anything except owning a home, the government will let you report an expense on your home that was never truly made. This can lower your taxable income that you make from your job every day, and thus lower your taxes!

With great programs for first time home buyers right now like the FHA program (3.5% down), or the Home Possible program that just came back (conventional 5% down loan - our favorite if you can take advantage of it), you can buy your first home - preferably a 2-4 unit home and rent out the other units to cover your housing expense. Then at the end of the year you get to take more deductions on your tax return to actually put more of your hard earned money into your pocket rather than the governments!

Just by a simple house hack, you can start building equity in a home, have someone else pay your mortgage to lower your housing expense while also paying down the debt, and then get a larger tax refund than years before!

This is the perfect way to start building wealth at a young age with a smaller amount of money required. Reach out today if you have any questions about starting in real estate with your first house hack, and how it can benefit you!

Taxpayers with income under $75,000 are projected to have no tax liability after deductions and credits for 2021, according to a congressional report.

09/08/2021

In an article written by CNBC, right now roughly 48% of renters worry they will not be able to purchase a home in the future. This statistic is not surprising to say the least, when the idea of a massive down payment for a home, along with a larger monthly payment in most cases to own can seem daunting.

In our approach with clients, we focus on how we can help make the transition from renter to buyer less stressful, and more exciting. Our approach is to offer advice in how to help budget for a down payment on a new home. The loans we like to use are either Home Possible (5% down) or the standard FHA (3.5% down). Both come with a catch though because the buyer will be paying private mortgage insurance to use the low down payment option.

This brings us to our next level of advice. To buy a home with multiple bedrooms and rent out other bedrooms, or to buy a multi family property (2-4 units) and live in one unit while renting out the rest.

This approach can help a renter transition to owner, and lowering their monthly housing payment by up to 90% in some cases. Want to learn more about how the standard "house hack" can help you go from renter to owner, and start increasing your net worth? Reach out to us today to learn more about this great approach to investing!

Some 48% of renters say they won't be able to buy a home in their lifetimes, according to a survey. That concern is largest among Gen X and millennial renters.

09/02/2021

An interesting approach to budgeting we found today was the 50:30:20 rule. The rule tries to breakout a persons after tax income to show how they can live comfortably while also saving money for the future. We think that this is a great way to start your investing career, and to ensure that you do get your debt under control if it is an issue.

Once you have started to become comfortable with this approach and gotten your debt under control, we like to push our clients to have a more aggressive budgeting rule of 20:20:60. This means, 20% for your needs - housing, vehicle, food, etc. 20% for your wants - travel, activities, eating out, and hobbies, and 60% for investing for your future.

Now, this approach is aggressive and hard to do for people who may be renting in a high end area, or paying for luxury items like expensive cars and single family homes.

What we do is update your approach to spending to be more focused on receiving returns from your "needs" of housing and vehicles. If you are able to find ways to cut expenses, or invest in things such as a house that you can rent out to others to lower your payment on the mortgage, it only helps you have more cash on hand to reinvest to your future.

Want to learn more about how you can change your current spending habits to attain an approach like the 20:20:60 rule while still enjoying life? Reach out to us today for an introductory call!

08/30/2021

A simple path to financial freedom is through retirement investing. The hardest part of being successful with retirement investing? Starting.

With a society that is more focused on instant gratification, it becomes harder to recognize the amazing opportunities to achieving financial freedom that investing early in retirement accounts provides.

The first step when looking to start investing would be to open a ROTH IRA. This will give you a great head start to achieving financial independence in life the sooner you start!

Second, when you join the workforce you want to research the company 401k plan. Understand what funds are available (find low cost funds to invest in), and then ensure you at least contribute to the company match.

This article goes a step further in talking about different types of retirement accounts provided through a company 401k plan, and how a ROTH 401k plan can be better!

Interested to learn more about retirement investment accounts? Reach out today and we can discuss all the different opportunities to invest for retirement, and the amazing tax benefits that each account will provide for you in the long term.

About 75% of 401(k) plans allow for Roth contributions. But the share of savers using Roth accounts is stubbornly low, according to retirement experts.

08/29/2021

When looking to make a move from renter to owner, one question always on the minds of the buyer is, “but what if the market turns?” The best way to ensure safety for a first time homebuyer would be to put down as much as possible to have the highest equity you can in the home. Is this possible? Yes. Does this happen with the majority of first time homebuyers? Not at all!

The best thing to do during a hot market like this is to look for a property that either needs some tender love and care, and is priced below market value. This helps you get instant equity from basic updates!

A second approach is one I personally use. Finding a multi family property (2-4) unit, and living in one unit while renting the others. As long as your numbers work and the property produces income, just hold the home in the event of a downturn of values. Your equity might go down for the short term, but you’re still making money every month!

Whether you’re renting out a home fully, or if you owner occupy, the amount of equity you have in the home doesn’t matter if you’re making money every month. If someone told you that the property was $10,000 less in value than what you bought it for because of a market downturn, would you care when your payment for the mortgage is $100 a month? You still would be saving thousands a year and owning an asset compared to renting!

If you have any questions for how to make this situation work for you, reach out to me today! We love to help people find a way to build wealth while also lowering expenses!

Bleakley Advisory Group's Peter Boockvar, who's critical of Federal Reserve policy, sees a troubling inflation trend affecting home prices and rents.

08/27/2021

The real estate market has started to slow as many are saying, but there is still a lot of buyers looking for deals! We have had multiple houses that worked for investment purposes that have been lost so far due to high demand.

If you find a good deal, be ready to be going well over list price. So far four deals we have lost have closed over $70,000 over asking. Truly absurd! This is the market we are dealing with today though!

The best thing about losing those deals is knowing we had calculated the highest and best number that made the property work for a long term investment.

Thinking about getting into real estate but don’t know how to do all the calculations? Reach out today and we can have an introductory call to give you an overview of the process!

08/09/2021

In a report by CNBC, roughly 4 of every 5 people in the US are living paycheck to paycheck. The fact that only 1/5 people during the pandemic are able to live comfortably is sad to see.

Our goal is to help clients be able to re-evaluate their current situation to see how we can help them become that 1/5 individual and start to focus on saving for investing and retirement. Contact us today so that we can evaluate your current plan and see how we can help you start go get closer to your goal of financial independence!

As the partial government shutdown drags on, 420,000 "essential" federal employees are working without pay, something the vast majority of Americans would find extremely difficult.

08/07/2021

The first step to working toward financial freedom is to know WHERE your money is going every month. We sit down with clients to look through their spending habits each month, find what items we could trim from expenses, to help clients instantly make more money through saving more each month!

Want to setup a plan to help you start saving a few hundred more dollars each month? Schedule your free call today to see how we can help you achieve financial freedom!