All Forum Posts by: Frank Adams

One of the things I used to do back when I had rentals was to use "screeingg" clauses in my lease. I would write in clauses that had the tenant waiving their rights to notices, waiving their right to their "exempt" personal property that could be attached, etc. Each of these clauses had a separate spot for tenants to initial.

If the tenant pointed out that such clauses were illegal under such and such a part of the Texas Real Property Code, or the Texas Landlord/Tenant law, or that the "People's Lawyer" on Channel Two said it was illega, I KNEW that this guy got familiar with the law at the expense of some "sucker" landlord.

From 1980 until 2000, I had between two and 16 rentals. In all that time I did THREE EVICTIONS, and one of those moved out before the hearing. Not a bad batting average.

all cash

There's no info on using a non profit because that's not the purpose of non-profits. You want to make profits so putting investments into a 501c3 would be illegal.

You say you want to start a company that deals with rentals. Deals with them how? Do you want to own rental ppty, just buy them. If you want to manage ppty for others you'd probably be best served by getting a RE license and obtaining the appropriate credentials; ie, initials behind your name.

good luck

all cash

I've been paying cash for everything for about 10 years now. I know a lot of people will argue the point but let's review:

1. Leverage works only in an APPRECIATING MARKET. The ppty has to appreciate faster than your cost of funds. OK if you're in CA, but I've lived in TX for almost 30 years, our houses appreciate about 2%-3%/year.

2. Your "costs" are much lower when you pay cash. No points, origination fees, loan fees, warehousing fees etc. Also your legals should be less as there is no Deed Of Trust needed.

3. Better neotiating position. When I can offer "all cash, 3 days to close", any idiot can understand that. If I'm offering that and a competing buyer has a financing contingency, or any kind of "creative" financing I'm miles ahead.

4. No added interest expense. I know someone will point out the "tax benefits" of paying interest to the bank but, that "tax break" can be obtained by making an equal donation to my church-paying the bank a DOLLAR to avoid payig the IRS TWENTY FIVE CENTS makes no cents.

5. As I own the place outright I can offer the ppty for sale the same day I purchase it on my "normal" terms: 3/2, owner will finance for $2000 down.

6. I save the 37 cents per month by not having to mail a check to the bank.

Finally, to see how dedicated I am to this theory, check out my name on this site.

all cash

Back in the '80s an agent and I were looking at some places that an "investor" owned and he was going under due to falling prices and falling rents. During the early '80s the average house in Houston LOST 50% OF ITS VALUE.

One we went to was occupied by a (recently arrived) Vietnamese family. Nice people, but they had converted 2 bedrooms to chicken coops! The had put visquane on the floor and covered it with 2-3" of dirt so the chickens could "peck" around in it. Smelled horrid!

Back then I walked into several places in the summer that had been empty for months. With no A/C on, in that heat and humidity fleas can be a huge problem. Sometimes we would look in at the carpeted area and see a "cloud" about 5" above the floor. It would be a cloud of fleas hppping around. Found a few pretty good deals in those!

all cash

This is America! It's perfectly "legal" to call yourself anything you like. What isn't legal is to use any TRADEMARK PROTECTED words in that description.

OK to call yourself a "Real Estate Consultant", or "Real Estate Advisor", but not to call yourself a 'Realtor", unless you are a member of the NAR.

OK to call yourself a "Financial Planner", but not a "Certified Financial Planner", that's a trademark term.

all cash

Hmmmm, losses?

If you're consistently LOSING money, it's not an investment, it's a HOBBY?

all cash

Prohabber;

I agree with your points, up to a point.

You wrote;

True, but having the right numbers to start with is only part of it. Interpreting those numbers correctly is the difference between making a profit and losing everything because you thought you had a "good cash flow".

You wrote;

See answer above.

Like I said in my earlier post, I often take a more "sarcastic" attitude, but it's not meant in a mean spirited way. I feel I've done a good job if when I look in a couple of weeks and see that there have lots lots of "views" on this thread.

My last post for awhile. Going to Utah tomorrow for skiing.

BTW, didn't I see an earlier post of yours about ppty on the Covgington side of the river. My MIL owns a place right around the corner from the old Robke Chevrolet dealership in CVG.

all cash

I'd save my money on the seminars. IMO you'll do MUCH better taking some finance classes at your local junior college. Best books (IMO) are Dave Ramsey's "Financial Peace" and ? Stanley's "The Millionaire Next Door"

Don't just read them, STUDY them and KNOW the lessons contained therein.

all cash

Well detchu, unfortunately that amount downstroke makes it WORSE. More out of pocket and you have the added expense of paying PMI on two loans since you didn't put 20% down.

Hey edge, I agree that housing generally keeps up with inflation, unfortunately the ppties are in OK so it'll probably be at the lower end, whereas detchu lives in CA where it's at the higher end.

Again, I stick by my original assessment. I'd get out of them NOW.

all cash

Hey detchu, good update. What about your "out of pocket" expenses for getting these places, down payment, closing costs, appraisals etc. Obviously that affects your payback period.

Again, not to rain on you too much, but the $18K discount on the second one is kind of offset by the $11K you had to put into it to make it rentable.

BTW, I'm sure lots of folks will take issue with my somewhat sarcastic attitude in my response to "edge" and "prohabber". I do that for a very good reason, if my resonse doesn't have any edge to it most people will just read the post and think, "oh, another opinion, I'm sure they're all correct", or something similar. Let's face it many (most) people misinterpret a lot of what they read.

By doing it the way I do, it ensures that many readers will go back and re-read all of the previous posts to see what the fuss is all about. This is particularly true if (as is often the case) we get a "heated" exchange going on. I have a thick skin and I assume others do as well, let's face it one of the "benefits" of posting questions on line is that you know you may get a bit "flamed" for your posts.

Again, I could just tell everyone "wow, you're a genius, you'll be a millionaire in no time" like the gurus do. But I don't believe in snowing people. They post here because they legitimately want the opinion of the "gray hairs" on the site. If we don't give them honesty (no matter how brutal) we do both them and EVERYONE ELSE who will read the post in the future a grave disservice.

Just my opinion, on which I am the world's greatest authority!

all cash