All Forum Posts by: Alan Grobmeier

@Taylor L., not exactly 100% true.  I can partner w my Roth & SDIra in a new llc.  Each entity would have a certain percentage of ownership on day 1 & that percentage can’t change.

Roth.   11

SDIra.   16k

Me        50k

And UBiT is a pain.  Don’t even try it.  The rules are horrific and the terms are ugly.

@Len Miller I live in Phx & have managed a property in San Diego for over 10 years.  I use a home warranty as my first line of defense.  If it’s all rehabbed, all you gotta do is spend a weekend (or maybe 2) to find your tenant.  I realize that phl-Tpa is further than Phx-San, but I think you can save money overall & a lot less headache.

Best of luck!

@Steve K. there are a lot of non-boomer properties in sun city.  They are doing very well.  I’d stay out of the 55+ demographic for a few reasons, many of which you noted  Once you get outside of SCW (sun city west) prices go up in a hurry.

@Stephan Kraus - SDIra = Self directed Ira.  ;-). The property is in Gilbert, AZ.  

I think Trump owns a few.  ;-)

@Monica Painton, obviously you would get the value of the property & furnishings.  After that it gets kinda iffy.  Many places are regulating str’s, almost to the point of putting them out of business.

I think, under those circumstances, that 1x the gross would probably be reasonable.  It will probably be difficult for a buyer to get a regular fha/conventional loan.  You may want to add some type of owner carry as well.

In addition, if you are looking to sell all to 1 person/entity, I think that brings up more complexity.  And more complexity = discount.  ;-)

Best of luck.

@Allen Lee, pm’s suck.  If your property is in Dallas & so are you, why aren’t you doing the pm?

Alan

@Stephan Kraus, although you never mentioned the seller, I bet he/she is probably an older person trying to make sure they have enough thru an inflationary future.

What the seller isn't doing is helping you on how you are going to make money off this deal.  That's the real reason why it won't work.

An option MIGHT be to go back to the seller with a 5 or 10 yr interest only, followed by an agreed upon standard interest rate on an amortized 15-30 yr fixed.  It almost sounds like the seller wants what they want today, with some future earnings to defray against inflation.

And that's probably the reason for the high down payment.  If you are in it for 80k, you will stay in the deal.  Almost no matter what.

My SDIRA owns a property.  I've looked at seller financing.  But if I truly think we are at the top of the market, I am better off selling vs seller financing.  If I seller finance and the market takes a dump, I have a property on my hands that is worth less than I sold it for.  Even when I take the down payment into consideration.

As far as 'overpaying', I guess I am probably the poster child for 'overpaying'. ALL my properties have come off the MLS. I dont have time for yellow letters, fix & flip, wholesalers, etc. I also have a very targeted business model that most wholesalers will never find for me. So, I guess, I've always overpaid.

But I've still never lost any money, which is rule #1.  ;-)

@Chiedozie Orabile, I became a 'reluctant landlord' in 1996, at the bottom of the housing market in Bakersfield.  Got divorced, got house.  House was worth 10k less than we paid for it with no end in sight.  Was able to rent it out for YEARS.  Same family.

The ONLY thing that saved me was the RE bubble.  PPL from LA were investing in Bakersfield in droves.  Prices were being driven up beyond belief between 2002 - 2005.

I am an engineer by trade, not an economist.  But I do know that ppl making $15 an hour can't afford a $300k house.  Even with fuzzy math.  I bailed, at almost the very top, and sold.

My 'returns' were basically compressed in the 2002-05 time frame.  Prior to that I would have either been break even or loss.  

Had I, for some reason, kept that house thru the downturn, I would probably have gone underwater for a 2nd time.  :-(

Hope my explanation helps.  ;-)

@Terrell Garren, is that anything like renting out your place to a family member?  ;-)