Monkeynomics 101: Debt Isn't Wealth

um, do you know anything about breaking even or somewhat close to even by having a mortgage but renting the house to pay for it like is this really stupid for a reason I don't know or is it not worth the effort or what? I know next to nothing about investing but I am trying to learn.

The dude is describing a typical **total return swap** "https://www.investopedia.com/a....rticles/investing/05

Basicly he is exchanging 2 cashflows a fixed rate (mortage rate payed over 20 years) vs a floating rate (income from renting the real estate)

Here is a quote (the term "securities" can be replaced with any assetclass).

A total return swap gives an investor the benefits of owning securities, without actual ownership. A TRS is a contract between a total return payer and total return receiver. The payer usually pays the total return of agreed security to the receiver and receives a fixed/floating rate payment in exchange. The agreed (or referenced) security can be a bond, index, equity, loan, or commodity. The total return will include all generated income and capital appreciation.

So yes the PUA is right, only he is explaining it with a lot of sophism which is a shame, because it is a legit way of investing,

The caller who this is responding to was just some cubicle jockey LARPing about being a millionaire real estate guy.

1) A 30 year fixed rate mortgage is going to have a high rate of interest that will eat the ass out of your rental income.

2) Banks aren't fucking stupid. They don't go around lending to every LLC like they're some standalone entity. They are going to look at your personal debt load and income, and I guarantee that mortgage to your LLC will be on your personal credit score. Furthermore, even if you get away with one mortgage on one LLC because you personally have good credit, they're going to cap that shit quick. You likely won't get 2, and you definitely won't get more than that.

This kind of "get-rich-quick" shit is aimed at lazy men 25-35 who think that theyre smarter than everyone else. Stop believing in this crap just because you can't handle reality. You can get rich, but you're either going to need to work really fucking hard or get lucky...or both.