This is about as close to a free lunch as you’re ever going to find in investing. It’s heads I win, tails the bank loses.https://twitter.com/LAForeverHall/status/1254193270009155585 …
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Replying to @LAForeverHall
I think I get it -- but why do the deficiency judgments matter?
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Replying to @mgirdley
If the house price goes down you can default on the mortgage and the bank won’t be able to collect the difference between what it sells the house for and what you still owe on the mortgage from you. Lack of deficiency judgment = embedded put option on the home.
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Replying to @LAForeverHall @mgirdley
(Besides the ethical issue of borrowing money and not playing it back) the problem is that defaulting still screws up your credit. Every loan application I sign has a "have you ever defaulted on a loan" question.
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Replying to @moseskagan @mgirdley
Guess that is a problem, yes, if you plan to use credit again sometime soon. For most people it’s probably a very +EV trade to make though.
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Replying to @LAForeverHall @mgirdley
I agree. Key is to understand that the cashflow being levered is your income. So, if you're income is pretty stable (particularly if you have a working spouse or partner) it's a good trade. I would recommend doing a 4plex and living in a unit, though. Better play long term.
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Replying to @moseskagan @LAForeverHall
I'm sure my wife would love that. BRB after I talk to her about it. :-)
2 replies 0 retweets 1 like
Moses coming in with the advanced real estate strats! Love it. 

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