Seminars, courses, training

Real Estate
1

Hello,

after only 3 months I’m bored with ETF’s and I’m looking into real estate. After listening to “Rich Dad, Poor Dad”, I was slightly taken in. After another podcast, investing in real estate in Switzerland doesn’t seem entirely unrealistic to me. Especially the leverage via the mortgage in the bank seems to be an advantage. But also an obligation… I have already read one or two articles about comparisons between renting and buying. But I am looking for knowledge on how to realize the whole thing.

I have seen Marc’s course. Has anyone done the course? Is the course worth the money? Can you recommend other training courses? Or sources of information?

Best regards

2

I think it should be boring, doing something because it sounds more exciting doesn’t seem like a good reason. (And is a good reason to get lower returns).

Allocate a small sum on play money/stock picking if that’s really an issue?

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3

My choice of words is misleading. I am still convinced of ETF saving. I enjoy the simple passive saving without much effort. The forum teaches me a lot :slight_smile: And I am also involved in stock picking. However, I like the analytical approach and you also need knowledge to assess stocks according to factors.

Isn’t it wrong to simply rest after taking a step in the direction of investing? The good thing about ETFs is that they are boring and you have time for other things :wink:

In my opinion, becoming a real estate investor requires more effort and knowledge. There will be opportunities in my family environment later on. I would now like to prepare myself for this. This is not a short-term amusement. It’s not that I have money to spend on real estate, but I still want to get involved. Therefore the question, after a seminar or something.

4

Rich Dad, Poor Dad was a life changing book for me.

However in CH the market and maths are totally different than in US. It is a struggle to find a safe yield

Regards seminars I went to a free “Rich Dad, Poor Dad educational seminar”. I was not impressed and I won’t say much more because I have to be careful what I write on a public forum. My recollection is they were advertising an investment service that you could sign up for but gave scant details. They did not allow much time for questions and it ended abruptly. I recall several people in the audience shaking their heads in disbelief, laughing or leaving early.

5

The book itself is alright for absolute newcomers to the personal finance area.

But after that, with all the programs/seminars etc., Kiyosaki didn’t contribute much other than to the thickness of his wallet, IMHO. :sweat_smile:

You can get much more useful ideas and knowledge by reading other (free) blogs (e.g. ERN)

6

Personally, I evaluated around 10 objects in my immediate surroundings, nothing had a realistic chance to beat an ETF. I started with a free downloadable excel tool for RE - investments (Germany) and then built something for the Kanton Aargau. It is still really simple though and thought as a first screening evaluation. Since nothing passed the first stage, I didn’t invest more time into it yet (best case was around 2% on invested capital). I think building an excel tool is pretty easy. Just buying costs vs cashflow (negative and positive).

If you want to know more about management and the legalese in renting etc, I would look into HEV (like what is Nebenkosten and what is included in the rent etc. - maybe it is also worth to look up the counterside from the MV, but from what I have seen, they have mostly similar positions on the actual legal situation, just their wording is a bit different, in HEV it is always about the bad renter, in MV about the bad landlord. Their position on how it should be is of course more different, but that is another topic).

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7

Well I would say it depends where in Switzerland you plan to invest. For instance I am convinced that one can achieve decent yield in Jura or Wallis for instance.

Of course you have to be really selective about where you invest and don’t buy crappy area with theoric high yield.

Don’t forget that if you make just one good deal you can then leverage more debt and therefore get back the cash you invested to invest in others properties.

Another thing is that Lomard loan is easy to get here, you can get up to 60% of your etf value for an downpayment so you are both exposed to stock and RE.

And I definitely agree with you, RE is much more exciting than ETF passive investing. Of course you must have a lot of time to do your homework but I think it’s more likely to make money with RE than the market IMO

8

I would diversify my sources of inspiration away from Robert Kiyosaki. “Rich Dad, Poor Dad” is a work of fiction that he has presented as a true story in order to sell books and build for himself an aura of authority. He has then used such aura to grift, selling books, courses and seminars.

9

As far as I know, the bank will ask of a 30% downpayment for a investment RE in cash (not backed by a lombard loan). If this is really the case, I do not know, however I am personnally not willing to push my risk profile to these extends through leverage. Either stocks or mortgage, but certainly not a mortgage backed by stocks.

Through personal experience (or rather my parents), RE can be a fricking money pit if something big comes up, and all your wealth is concentrated on a few, if not a single object (I guess most of us can not have more than 1-2 objects in the beginning).

Basically every object I saw needed to be negotiated by about 50-100’000 CHF if a 4-5% cash on cash return has to be achieved, which I do not see happening (I might be wrong here). That is before seeing the flat and estimating costs which are already seeable (right now, I am using a specific m2 price for renewal fund).

BTW, most objects are just staying on market right now (several months), so I guess they are overpriced. There might be an opportunity here in the near future.

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10

Nope you can still find some banks accepting 25% and Lombard loan is considered like hard cash but count in your 33% debt ratio.

On accumulation phase when you keep DCA on ETF every month I guess the risk reward is positive.
But you must have a plan B : someone of your family ready to lend you cash quickly in case of krach to avoid margin call on your Lombard loand

The hardest part is finding a good undervalued property, hard but not impossible!

11

High level observations :

USA

  • Can relatively easily find properties with >7% net yield
  • Fed rate is 5.25-5.5%
  • Mortgage rates still high ~7% which is above the long term historical interest rate
  • Inflation has peaked and declined to 3.4%, interest rates are likely to decrease

CH

  • a median property has net yield of 2-3% after maintenance.
  • SNB rate near all time low of 1.75%
  • Mortgage rates ~2.5%, below the long term historical rate
  • limited scope for rates to decrease by very much

In the US if you believe mortgage rates will decrease to 5% the Rich Dad, Poor Dad model can be applied in a safe way and you can earn attractive returns. For example you could buy cash now and mortgage later.

In CH, it is challenging. Unless you have a specialist skill and can use your own time (builder) or you have inside knowledge

There are important practical aspects in CH too: the rental market is dominated by professional investors who are happy to buy cash at low returns (pension funds), property is more social and tenant protection is higher, high capital gains tax, high purchase tax in many cantons

12

+1 the book is great the seminars was by far a disappointment.

13

Thank you very much for your feedback on the book and the real estate situation in Switzerland. I have assessed the book roughly as you have described it. It is inspiring, but not a manual. Especially not for Switzerland. Certainly not based on a true story.

It’s a pity that nobody attended Mr. Pittet’s course. :smiley: As expected, it will take a lot of effort to get to grips with the subject. The resistance is much greater than with ETFs.

Let’s see what time will tell.

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