blipsman

blipsman t1_iu0q6wf wrote

The basic answer is using leverage and good debt to snowball value of real estate holdings...

Say somebody starts out buying a $500k rental property. They put down $100k (20%) as a down payment and have a mortgage for the remaining $400k. Their tenants pay rent, which then goes to pay the mortgage, paying down the debt and building equity. Additionally, all gains in property value go to the investor. So let's say 5 years later, the building is now worth $600k, and loan has been paid down to $350k. The investor could sell, and that would have turned their initial $100k into $250k. They could then use that $250k to buy a building worth $1.25m, collecting higher rents to pay the higher mortgage. And maybe a few years later, the building is worth $1.75m, seller now has $950k is equity ($250k down payment, $500k in value appreciation, $200k in loan paydown). Now he's got almost $1m to use to buy a $5m property!

But landlords don't even need to sell to upgrade. They can also borrow against their equity, and use that to acquire more properties. Maybe instead of selling the building for $1.75m, he borrows $500k in equity and buys another $2.5m building, bringing his buildings' total value to over $4m. While there are mortgages and debt on those buildings, the tenants' rent payments are paying down those loans.

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blipsman t1_itvqc4g wrote

There are a lot more to airline flight costs than just distances flown. Supply/demand, competition also comes into play. So two flights on busy, competitive routes might cost less than the single route. Also, airlines will often show lower price but higher hassle flights to get you to spend more for convenience. Miami to Madrid isn't more expensive because it costs more to fly you there vs. a connection in New York, but because the airline knows you'll pay the $200 extra not to have to connect in New York and get to Madrid 6 hours later.

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blipsman t1_itvfbnn wrote

When you extract and burn oil, that oil no longer exists. Eventually, our reserves of oil will be gone. However, no matter how much wind a turbine captures or sunlight a solar panel collects and turns into electricity, that has no baring on how much wind and sun will be available tomorrow. Nothing has been depleted, as there is an endless supply of wind, sunlight, etc.

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