All Forum Posts by: Bill Sargeson

@Amanda Hoening , congrats!  Very exciting!

It's not the same for "high, high" wage earners (those above $150K per year), thank you IRS/Govt. for taking away the depreciation deduction for high-wage earners (NOT!), but for those that earn a modest income, the write-offs of depreciation and slight losses (for improvements) are to me like "enforced savings".

@Martin Mazurik , not entirely true....those write offs are not "lost" but deferred to a year that your income falls below that threshold.  I have also been able to take some deductions/depreciation to offset profits which reduces my tax liability.  I am not a tax expert or CPA and no advice given here....just speaking from past experiences.

Cash flow.  If your business isn't making money every month how long can you make it?

@Gautam Venkatesan , my local bank does them.  They used to do 10% down....now it is 15%.  5% fixed rate, 15 year amort, 5 year balloon.  You have to submit a financial statement, they want to see cash reserves, your purchase need to cash flow, and you have to have good credit.  They also want my tax return every year to look at my schedule E to see that I am truly bringing in the rental income.

@Bao Nguyen I feel I need to chime in on this one...Yes it can be done...I am getting very close myself to reaching my goal of financial independence after 2 years(not counting my first purchase).  @Joe Villeneuve is correct it all depends on what you have to work with.  I work a 60-70 hour/week a job with a a six figure salary so this has helped me getting started as well as absorbing financial mistakes along the way.  Timeline short and sweet.

2006 - Bought my first property - Condo in Raleigh near NC State(nice area) 10% down financed the rest, Barely cash flows each month.  Lesson learned in buying condo investment.

2012- I bought 4 SFR, paid cash for the first one($25k), then secured a credit line on that property to help fund future purchases, used my cash flow to pay down the credit line and repeated the process, and financed the rest with a portfolio lender.(10%) down

2013 - Bought 6 SFR, financed all them, 10% down again

2014 - YTD I have bought 7 SFR and 3 Duplexes, the bank upped the down payment to 15% down.

It was and still is a TON of work.  I spent numerous vacation weeks and days off fixing up properties to get them rent ready.  But once they were ready and rented I really don't get many calls.  I have 21 properties now and they range in price from $18k-$52k.  No war zones,  mostly blue collar working class neighborhoods here in central NC.  Right now I am at about $80k pre tax income...I never bought these properties for appreciation, I bought them for cash flow. 

 @Walt Payne I completely understand what you are saying and yes I have had to replace furnaces, roofs, main plumbing drains, etc....but at the end of the year I still come out very well.  I know two years is probably not enough time to see how the expenses will average out over time, but the properties that I have fixed should be good for a long time before they will need repairs again, but in the mean time I take those cash flows and save them in my reserve account or buy more properties.

I have never found a way to make a lot of money with out hard work and real estate is no different. 

The advice above is absolutely correct!  My housing authority could care less who works on the properties and has never asked.  What does replacing an electrical panel have to do with mold?  I agree with @Marcia Maynard most mold issues are surface issues and easily fixed, you just need to find the source and fix it and get a new property management company!

I was able to take a few more pics today.  It looks like the water storage tank splits, one pipe feeds the utility sink, washing machine, and a half bath in the basement, the other pipe looks like it feeds into the water heater.  It also looks like it also feeds into another pipe that goes outside through the foundation.  The pic I took outside is roughly where the pipes exit.  There is a concrete slab(cover maybe) that can been seen in the pic, but just to left of the concrete just underneath the soil is concrete.  I didn't have any tools with me to try and pry them up or dig.  

I can't tell where the pipes go, they disappear through the foundation wall.  There are no out buildings, pool, or sprinkler system.   I will try and go by the house tomorrow and take some more pics of the plumbing from the tank.

I wanted to see what you all thought of this.  It might be no big deal but I haven't come across this before....looking at this house for a buy and hold and in the basement(basements are rare in this part of NC) sits a large water storage tank with a pump.  I thought to myself this house must be on a well, I called the city and they said no, it is hooked up to the city water and sewer.  Any idea why it would be there?  The utilities are off right now so I couldn't check if everything is working.  I just don't see the point of it...any thoughts?

Check your state to make there isn't a law regulating late charges.  In North Carolina we can only charge a maximum of 5% of the rent for a late fee.  Due on the first late after the 5th, eviction filed on the 10th.