All Forum Posts by: Bill B.

@Hank Sun

I would try turning on just the hot water and let it run for 5-10 minutes. See if it every gets hot. It does take almost a minute in our sfh in Las Vegas to get hot water at our farthest bathroom in the winter as the pipes are running through th cold ground. 

There are point of use water heaters but I also assume the previous renters got hot water during their rental period.

I’m certainly not telling you if you have access to the water heater to turn the red dial on the bottom to a hotter setting. 

I agree that most investors I talk to want to make “X per month cashflow” when they don’t need the money and it shouldn’t be the deciding factor. Almost nobody on this site would have their life changed by +/- $100/mo cashflow  

Still not as common a problem as people who call an entire mortgage payment an expense. A cash flow negative property can still generate a lot of income.

(Negative cashflow of $200/mo while paying off $1,500/mo in debt for example.)

Some here would end up buying a property that cash flows $200/mo and makes $400/mo while not buying the above property that makes 3x as much. 

Can’t afford to buy 100 negative cash flow properties but is $200-$400 is going to make or break you, you shouldn’t be buying real estate. I’m a small guy and I bought two water heaters last month. There goes $200/mo on one property. 

@Will Kirkendoll

Hey Will,

If you find yourself with some free time during your trip I’d be happy to talk real estate.  Hit me up and we’ll talk. 

I agree with russel. I’ve seen quite a few converted fourplexes that have one unit twice as large. The financing alone can make it a better deal. 

Not a cpa, not a tax attorney. If your gain is less than $250k you should be fine. If you want $500k tax free you MIGHT both have to lived there for the 2 years. But that’s a cpa question. 

If you lived there for a full 2 years before renting it out, and you sell within 3 years of moving out, you get 100% tax deferral of the gains up to those amounts. 

If any of the  years comes after it was rented out for even one day then you only get a percentage tax free. (Years occupied over years owned.)

Especially if you have to run the ac in February. 

Especially in a 10 year old house. 

I assume he’s cheaper than your next best option or you would have moved. 

@Kaveh Jafari

GL, no matter which you choose, almost anything will be better 10 years from now than not buying anything.

-B

@Kaveh Jafari

Yes. I’m thinking interest rates will be at least 2% higher 10 years from now. 

You are right it’s weird that it says arm but it’s not adjustable, misleading but in this case in a good way. 

If you don’t plan to pay it off in 10 years you’re going to owe almost exactly 80% of the original balance in 10 years. 

If you don’t plan to pay it off or sell within 10 years, I’d say look at the 15 or 30 year fixed rate loan. Unless they are more than 5.5-6%. 

Don’t forget as well 30years down to 15 is only 50% higher payment. And 30 down to q0 is only double.  With today’s near historically low rates it just doesn’t seem like a good time to only lock in 10 years and force a refi in to your future.  

Also just MHO. 

@Brett Trammell

Brett, the bonus depreciation for purchases were usually for larger deals. You need to pay a professional to do a cost segregation. (What part of the purchase price was appliance, what part was for flooring, what part was for roofing and so on.) this then allows you to get bonus depreciation on portions of your new purchase but you can’t do it yourself. The real estate guys radio podcast had a episode on this lately it was probably the Tom wheelwright episode.

Figure out if you can pay it off in 10 years. If not, look at your amortization table for your balance in 10 years. See what the payment would be at 6.5% & 8.5%. Can you afford those payments and make money? How often can the rate increase? 

The only arm loans you would catch me in are ones I plan to pay off before they adjust. Are you being denied any fixed rate loans?