All Forum Posts by: Adam Christopher Zaleski

From my experience, if you have a single family home rental that appreciates rapidly, the rents will also increase, but you have to wait 1-2 years. 

I have 3 rentals (4 doors) today. I bought a college rental in Fort Collins in May 2007. The original purchase price was 182K and I spent 10K of rehab, with me doing 75% of the work. After the rehab, it would have probably appraised for 210K. The rent was around $1250/month. Now 13 years later, the home value and rent both doubled. 

From what I remember, 2014 was the first really good year for housing appreciation in Fort Collins, since the housing recession. I do not remember the specifics, but I'm sure that you can look it up. In 2015, I raised the rent from $1450/month to $1900/month with a new set of tenants. 

I had quite a few people tell me that at $1450/month, it was horrible cash flow and I needed to sell it asap. However, later that year, I rented it for $1900/month. Then another 4 years later, it rented for $2500/month. 

When you are in a fast appreciating market, I personally would be patient and wait for the rents to increase instead of selling. 

I moved to Pueblo West in August 2019 and we bought a primary home in Pueblo West in November 2019. I hope to start investing in Pueblo County in May 2022. 

I almost bought in Longmont in 2017. I was looking at a 4 bed/2 bath 1970's ranch in South Longmont. I think it was 280K and needed about 10-15K of rehab (mostly cosmetic), with me doing most of the work. If you include the finished basement, I think it was around 2,400 sq. ft. I was going to try to market it to CU students for a 9-month lease and then Airbnb during the 3 months of summer. This would be a very unique strategy, but I think it has potential. You can charge more for a 9-month lease and your occupancy for Airbnb will be closer to 75% for the 3 summer months.  

@Steve K. Your post is exactly how I feel about my Fort Collins rental that I bought in 2007. Due to appreciation in home value and rents, I didn't need to be perfect. I could make mistakes, learn from them and grow. One of my biggest mistakes was not paying close enough attention to market rents in an appreciation market. I was getting $1450/month in 2015. This increased to $2500/month in 2019. I should have increased rents sooner. I was a little late to the party.

All my rentals were previous primary residences. Instead of selling, we rented them out. I'm not in the military, but moved several times for my career. We bought a primary home in Pueblo West in November 2019 and love it. Super low taxes, good schools and not so good roads. 

@Daniel Haberkost Pueblo West resident since November 2019. I see the duplexes being built along McCulloch during my jogging. Looks like a great long term play. I would love to buy some multi family in this area and have rentals closer to home. I have one in-state rental in Fort Collins and have two out of state rentals in Hawaii and Florida. 

Dave Ramsey gives great advice for the typical American who is really bad with money. Dave does not recommend credit cards because the typical person carries a balance and pays a ton of interest. I have never paid one cent of credit card interest in my lifetime. However, I have received 10K+ in free plane tickets. About 99% successful people in business are going to carrying some sort of healthy business debt. 

If you do a cash-out re-fi on a rental property, what fees are tax deductible? Which fees are not tax deductible?

If you want to save money, do the digging yourself. Leave the plumbing to the plumbers. To snake a drain, I have paid anywhere from $110 to $350. For $350, they show up on the same day. 

I have two rentals and just purchased a primary home with a basement rental unit. The most common question or piece of advice is why I didn't sell my two rentals to be mortgage free on my primary home. This advice or question usually comes from people who are not very good with money or any sort of debt. They are obsessed with being mortgage free. Mortgages stress them out because they don't know how to handle them responsibly.

No, I'm not mortgage free. However, my rental cash flow pays for my primary residence (mortgage, taxes and insurance) and an extra $300/month. I use $0 of my W-2 income to pay for my personal housing. Isn't that the same as being mortgage free or better?

By keeping the rentals I also get principle pay-down ($525/month), appreciation (???) and tax advantages ($2000/year). For appreciation, my first rental doubled in value in 10 years. The second rental doubled in value in 4 years. While you can't count on it going forward, it was nice that it happened.

Leverage is a percentage of what you owe on the properties compared to what the properties are worth. The OP needs to include this information to answer the question. It's the most important piece of info. It's odd that it has not been mentioned yet.

According to the Millionaire Real Estate Investor the average millionaire with real estate has 40% equity. My goal is to be 40% to 50% equity. Once I get above 50%, I start to think of refinancing a property to get me back down to 40%.

Last year I was at 65% equity with two rental properties. Many investors would conclude that is too much equity or "dead money". 

I decided to do a cash-out re-fi on one property and I timed it perfectly to get the lowest rate possible in September 2017. This took my equity down to 45% and gave me money to purchase another property. I put 20% on a primary home with a basement rental unit. This took my total equity to 35%. After the rehab is done in about 6 months, my equity position should be back up to 40%.