All Forum Posts by: Bill B.

In MOST cases the tax office estimate means NOTHING. I wouldn’t sell any property I own for 25% more than the assed value, so MAYBE it’s worth more or less. 

On a home you can often borrow 70-80%  on vacant land it’s USUALLY 50-60%  

It’s going to be almost impossible to get a mortgage/heloc for an amount less than $50k. And if your estimate is right you’re talking about $15k to a max of $24k. 

You’d be way better off getting a Heloc against your primary or selling the land. If you have no equity and no desire to sell I’d say you probably have to save more before proceeding. After all. If you don’t want to sell.  You definitely don’t want to lose the land or your home outright if the flip goes wrong. 

@Ned Carey there are companies that offer basically doing a 1031 in to a REIT using Tennants in common. But as mentioned you could easily lose your entire investment if they needed to refinance and the financing wasn't available.

This is not the investment of choice for someone that likes to be in charge of decisions, timing, and risks. It’s for someone who wants to give up and get as close to stocks as possible. An alternative to DSTs. 

As a newb with only a google education. The teacher says California requires applications be processed in the order they are received. While you are somehow, even in California allowed to accept a later, better applicant. You are allowed to have a first qualified applicant policy to avoid discrimination claims. 

So, I ask with a smile. Is your policy to accept the first qualified applicant?

If so you can accept the first to complete the application and meet your written down, not made up in your mind standards. 

I hope you’re kidding about east of I15, unless you’re talking well south of the airport. If someone is helping you and they have you looking at the NE 1/4th of the valley, find someone else. Please. 

Look at the posts and maps from @Eric Fernwood.   Good luck. 

I charge the same for MTM as a 2 year lease. About $100-$200 more than a 1 year lease. (5-10%). The tenant is paying more for locked in housing expenses or the option to move at any time with a 30 day notice. I’m being compensated for being locked in to a deal for 2 years or not having any idea of when the property might go vacant. 

I truly used to be so naive as to offer discounts for 2 year leases because I wanted the reliability. Not figuring out that not only was I losing money the first year. I was losing even more money the second year when I could increase rents. So now I add 50-75% of my year 2 rent increase to 2 year leases. This locks in the 2nd year rent increase and actually pays off if they move early or quit paying rent. 

If he makes ANY type of investment with you benefitting, he will owe taxes on his entire IRA balance. Because the IRS will consider the account 100% withdrawn, not just the portion he invests with you.

If it’s truly a great deal for him and he’s over 59.5 years old. He could take the money out, you pay the income tax, and then he invests the remainder with you. 

I feel sorry for the youth today if they are living the same life I did and still can’t afford to buy a house, at least house hack one. 

That means no cable tv, no cellphone, no Starbucks, no streaming series, heck, no internet, (though you can rent a vhs tape or two per week.), eating out once or two meals a week at a fast food joint and once or twice a month at the fancy place. (Olive Garden/chillis). Don’t fly on a plane until your almost 18 and then take only weekend drive and camp vacations until years after you own a home. Drive a 10-20 year old car and certainly the only people going to college had a job, or kind of job in mind that required a degree. There weren’t any of the “feel good: degrees some kids take today. 

If they do that they should be able to buy a house the way I did. Get a co-worker, 2 friends, and a relative to move in with them and pay enough rent to cover the mortgage while you cover the utilities. 

Everyone that compares today’s youth to our generation gives ZERO VALUE to all the things they call necessities. My college age nieces have been on 2-3 week long fly vacations every year since they were 6 or 7. And they vacation out of the country every year. If you don’t count riding my bike to Mexico and Canada  I wasn’t out of the country until I was 35. I didn’t have money for that kind of luxury, I didn’t want to pay rent so I needed a house. 

Ps. They also aren’t big on taking any advice or help from anyone that desperately wants to help. Have you ever noticed how good you feel on the rare times you meet a genuinely interested and or polite “kid”? (I hate when the news calls college students kids and here I am referring to anyone 16-23 or 24 as a kid.)

Pps. I assume anyone that “can’t afford to buy a home” won’t even consider a rural or small town, I guarantee they could afford one there, but that’s below them. As are the people that live there now. It really bothers me when someone who lives in NYC, LA, or San Fran says housing is unaffordable. YES.  Yes it is in that location. So is Hong Kong or Brisbane. Nobody gave your the right to live in an expensive market because you want to.   I’ll add tot hat how mad it makes me when they say the average “XXX” can’t afford the average home. (Often a teacher, cop, etc.)  the “average” homes is a 3bd 2 bath home  why should a single person need that? (You might not notice, but they specifically don’t say household or it might not be true.)

Anyway. Thanks if you got this far. Rant off. Ignore most of this. Unless it hits home or applies to you. Then change your situation, if it’s not your fault you can’t fix it. 

@Mike Kirby

Yes. Until 2-3 years ago it just wasn't worth it. The average policy was only $400-$600. Now it's about $750-1,000. These are just replacement cost $400-$600k SFR, with $500k liability, no multi family and nothing fancy. I also keep a $2,500 deductible because I'm probably not making a claim under $10k. (I'm literally in the middle of my 3rd claim ever. Tenant "fell asleep after starting tub". They'll sue the Tennant's insurance after it's done and I'll get my deductible back from them or the tennant.

I don’t know if they’re busy because of all the other disasters going on or they keep a small Vegas office. But while the other 2 claims were finished in 10-15 days. This one while a little worse will probably be closer to 20-30 days. It took 10 days just to get an adjuster out. Luckily the GC was out in 2 days and wrote up a quote they basically just said ok to according to them. So claim could proceed without waiting for adjuster. 

If you wouldn’t buy this property as a rental today then I’d sell it today. Figure out what it’s worth, offer it to the current tenants for 5% less and skip the realtor. 

You aren’t even increasing the rent 18%. You are simply giving them an interest free 7 years loan just to pay for the capex expenses. You’ll be making exactly the same negative Cashflow if you count the increase as paying back the $40k, even at 0% interest. That’s ignoring the increase in taxes and insurance over the last 10 years. 

I’d look up the closest 5 comps and  start my pitch. 

You guys have been great, I really appreciate you. Unfortunately the property taxes have increased this much, the insurance has gone up this much. Here’s the 5 closest rentals that are comparable. 

If you’d like to buy I’d love to sell it to you. Otherwise I’m going to have to raise the rent to X. Please feel free to take a couple months to think about it. Let’s sat by October 1st. (Any later and you’re go to have more trouble finding renters and maybe buyers.)

If you’d can’t bring yourself to do this, please hire a property manager. Even after their fee you’d be collecting more net rent. Otherwise you might as well start writing them checks for $6k/year. If you’re going to give them $6k, why not $12k?

Good luck. I’m glad the rental got you through the financial hardships. 

Two comments.

First. My brother in law is a Corn/soybeans farmer in MN. (I go out there every year to run the combine for harvest.) He’s tried pigs and chickens.  If you’re not going to go at least semi-commercial it’s a hobby, a character builder, MAYBE it pays a well as a paper route for a kid.  
. 
You have to enter in to a contract with a large chicken processor to have any chance of meaningful money in the Midwest. They’ll build the buildings for you and provide the chicks  as long as you feed/care for and sell them back to them for “X” number of years. The “good” news corn/feed prices are in the toilet  as long as you aren’t required to destroy your flock because of an out break and you have the acres to dedicate to it away from your living quarters it’s probably as good a time as any  

@Joe S.

@Joe S. you can reply to or mention several people in one post instead of having to post 3-4 times in a row. 

Good question @user1 I never though of that. 
. 
thanks for your advice @user2 I’ll try that.  
  

Etc etc for @user3. They’ll all get notified you mentioned them. 

Ps. I just saw you and Mike Kirby are both in Texas so he might have a better take on how it works in Texas. At least in regards to if it’s a “paper route” replacement or if there are big companies involved. Since you don’t need as much shielding from winter weather maybe they aren’t involved.