All Forum Posts by: Account Closed

And you wonder why the wholesale business has a bad reputation?

A lot of silly fear mongering about the risk of a paid off home. First of all simple low cost insurance protects you against almost all foreseeable risk. Homeowners if your house burns down. Umbrella insurance if you get sued. Paying tens and hundreds of thousands to a bank to prevent something that can be protected by a few hundred dollars a year is pure foolishness. As is the tax deduction argument. Paying a dollar to save 30 cents is equally stupid. If you want to buy cash, don't let anyone here tell you not to do that. Some of the richest people in the world plonk down millions of dollars cash for properties. It depends on what your goals are.

This is no more double taxation than any tax on investment income. Dividends or interest or rent is all taxed. As is capital gains. 

Negative cash flow is not always a bad thing. Where is this property? How much is it worth and how much did you put down? If you have a very small down payment (less than 20%) its not surprising that its negative cash flow. You can think of it has paying the downpayment in installments. You are also paying down the mortgage to a certain extent and so your actual return is probably close to zero. But if you already put down 20% and the property is not expected to appreciate then maybe just sell. Especially if you are living away from the US.

My point is, everyone has good and bad luck. But people who are prepared see the good luck and can take advantage of it. If he wasn't making so many offers his chances of coming across this would not exist.  By simply doing more, you put yourself in the way of more good "luck". 

Most of your rental income should not be taxed anywhere. Thats what depreciation is for. Property tax rates are far more important a consideration than state income taxes.

I made an offer on just about every one that hit the market and I was on a roll.

That is the most important part of the story. If not for that level of determination and grit, this kind of windfall would not have come your way.

I am in the same boat. I have an upcoming vacancy in my Bay Area townhouse. I am in Singapore, 16 hours time difference. I posted the vacancy on Zillow. In less than 5 days had a new renter.  My current tenant showed the property to the new one. A family member  will handle the move out and move in. All my tenants agree to handle minor repairs by calling appropriate repair people for a quote(I do have a plumber on call for leaks etc) and just get my approval on the cost. I collect rent by direct bank transfer. At $3700 rent I don't want to pay even 5% to a PM. In a year I may get two maintenance requests.

I also have a few Indy properties at 700-1000 rent range. There is no way I could manage those without a PM. Constant repairs, chasing for rent, vacancies etc etc. Still profitable but not without a ton of work. is 10% worth it for that? Most definitely.

Im going to assume that this $50K represents close to your total savings. If not you can disregard this. Buying a beater house in Indiana is a highly risky place to put all your savings. A lot can go wrong. Unless you have a ton of reserves and patience this is the last place to go unless you are local to the property. Syndications that are credible need you to be an accredited investor. So unless you have $1M liquid net worth or >250K income you are precluded from a lot of that. So having said that a primary residence in San Diego, maybe a condo, would be the best thing to do in real estate. Or buy the dips in the stock market in to index funds. Maybe that's not what you want to hear but out of state investing with your entire savings is not a great idea.  If 50K is throw away risk capital then go ahead.

What competent sellers agent would have their sellers sign an assignable contract below market value to somebody who doesn't have the means or intention to close?