All Forum Posts by: Michael B.

Color me skeptical.

I guess if you define 'Big Data' widely enough there may be something of interest to real estate investors. However it has to bring value enough to get people to pay on an ongoing basis. Else the data aggregation won't remain current or vital. And with a pretty crowded field of both free and pay information services out there I'm just not seeing the value of another being run on a shoestring.

So I guess I'd be interested in seeing a more specific proposal on what type of data you want to aggregate, how you propose the gleaning works. What access would people have, etc.

But only interest as a curiosity seeker, not a real estate investor. Just not seeing the need at this point.

Hey @David P.

What your friend is getting at is the idea that the Feds call 'Disparate Impact'.

In a few cases you can get into trouble for that if the correlation is too great between a protected class and other words. For example it's OK to say you won't rent to people from certain occupation. However if you pick an occupation that tends to have lots of one racial group and you're really using that occupation as a proxy for race then you can get into trouble.

However I don't see any strong race (or other protected class) proxies in your ad. But I'm pretty sure that's what your friend was getting at. And I'm pretty sure he's overreacting to these words. Of course, I'm not a lawyer and may be wrong.

Sorry, but cash flow is not a simple rent - mortgage equation. I'm guessing that you'll lose money on this in the long run.

To figure your cash flow you have to take into consideration all of the expenses of maintaining a house. This includes capital expenses (like a new roof) and appliances, repairs, and vacancies.

On this site there are lots of articles on the "50% rule". The idea of the 50% rule is that you'll end up spending half of the scheduled rents on the items listed above. In this case you're spending $600 on the mortgage and another $500 monthly on upkeep (maybe a little less if you're self managing). But in any case there will likely be little or no cash flow here.

Another thing to think about: When you get to the three year mark and want to sell there will be significant "freshening" that will need to be done to the house -- new paint, new carpet, etc. A house that's been rented for 3 years looks like a rental house, not a home. And that will probably cost more than any appreciation you're likely to see in just 3 years.

So I'd say sell now and pocket the $10,000 and get out now. It's likely to be the best time to sell it.

I want to eventually get to 50% in real estate, the rest in stocks. I'm currently at about 30%. I'm rather slow in the transition, but I'll get there eventually.

After retirement (10 years) I'll probably gradually cut back the real estate portion ahead of the stocks.

One of the reasons I got into real estate was as a hedge against the stock market. Hopefully they won't move in lock step, but who knows?

Of course fix the icemaker. It's the tenant's job to pay rent and take care of the premises. It's your job to fix things that break.

When a landlord refuses to fix something that breaks it sends 2 really bad messages. 1> I don't care how inconvenienced you are. 2> This house is crap.

Why would you expect a renter to take care of the place when the owner doesn't care enough to keep his end of the lease agreement? You rented it with a working ice maker. Assuming it wasn't broken by renter negligence or brute force, it's on you to keep it working. There are suggestions in this thread to get rid of it before the next renter, but that's for another day. Today, fix what is your responsibility to fix.

As a Floridian, my answer is ... neither.

Figure out who you are and where you want to be. Get your career going and save some money first. Most homepath properties need more than $10,000 in renovation just make them pass health codes, much less be rentable. And a landlord (not to mention a homeowner) needs funds to address problems as they come up.

It's no fun being an undercapitalized landlord. And living next to your tenant isn't for the faint of heart either. Before you buy, save at least triple what you have (maybe quadruple) and then take account of where you want to be, where your career skills will be put to best use -- essentially who you both want to be when you grow up.

Also learn how to budget, save, and invest your money, knocking out any consumer debt you've accumulated on the way.

Your time to invest will come, but not now. Get your careers going and save money. When that time comes there will still be places to buy in both Florida and Wisconsin.

The hesitation I have is the $30 association fee. Are you sure about this?

I have never seen a condo fee anywhere approaching that low. A couple of things to check out if you haven't already:

1> Is the condo association actually functioning? I would fear that they just went bankrupt and are informally collecting just enough cash to cut the grass and clear the snow. If that's the case there will have to be a reckoning at some point that finances the condo association so they can do the things they need to do. And that means the owners will have to cough up lots of cash.

2> Is this the only condo association involved? Frequently you will have your condo association + a 'Master' association. Frequently for the Master association the dues are really low like this. But they don't do much and don't need a lot of cash. Your association may still be out there looking for $300 / month.

Just a couple of things I would verify and reverify.

The value of your time.

Are you working full time while doing this? If so then translate that to an hourly rate for the number of hours that you'll put in. If not, what could you be earning instead of swinging a hammer.

This is the most common mistake for entrepreneurs across the board. Your time has value. If you don't include that as a cost you're not fully understanding the cost of the project.

Hey @Benjamin Kelley , it looks like I'm late to the party and it sounds like you've already made a decision, but I'll add my thoughts anyway.

Real estate investing is a long term process. Most successful investors have been at it for multiple decades. I know you're fired up and ready to start investing, but my thoughts you should slow down and get ready to invest. Put your personal finances in order so you're ready to move. Much more boring, but necessary.

And I'd disagree with @Ned Carey 's statement that investing in real estate now is the equivalent of getting a CD for 5.375% interest. Understand the difference between an accounting profit and an economic profit. Ned's right if you're only looking at an accounting profit. However an economic profit considers not only the dollar return but the risk and your time.

Economic profit = Account Profit + Risk Premium + Value of your time.

Since an investment in your own debt is risk free and requires virtually no time the Economic Profit = Account Profit. Not so for real estate investing. There's risk that things will go south AND it will require a good dose of your time. Consider both.

So spend some time knocking out your debts to prepare to invest. Since you have 2 incomes capable of supporting current spending it shouldn't take long. Cut back your lifestyle and throw everything against the debt and make it go away. The sooner the better.

I once heard Bob Knight, head basketball coach at Indiana and Texas Tech speak at a banquet. The thing that jumped out at me was the value he put on preparation. One quote was that he didn't want the player who had the 'will to win', he wanted the player who had the 'will to prepare to win'. The idea is that everybody will play their heart out on game day, but not everybody will play their heart out for hundreds of hours prior to game day. Preparation is key both in basketball and investing. Spend some time getting your personal balance sheet ready to invest. It'll pay off for decades if you do.

Yes, in my opinion you're badly over leveraged.

I don't know you're income, but just based on the assets and liabilities it looks pretty bad. The student loan is much larger than average, the car loan is too big, and a rental property that leveraged is probably costing you every month.

I'd be paying down the debt as quickly as possible. Take a multi-year hiatus from investing and get your balance sheet cleaned up. It will make you stronger and better able to invest when you come back.