All Forum Posts by: Carl Fischer

@Paige A.

I am near retirement and I would tell you to do real estate in your Roth IRA or Roth 401k starting today. It is the same advice I gave my sons who are slightly older than you. I say real estate because we know it and grew up around it. Some people make 15% plus in the stock market but it is like gambling to me-stocks are not for me. Invest in what you know and understand-mitigate risk and maximize return. Use the tax advantaged plans and strategies -it just makes sense and will get you closer to your goal faster. Congrats on thinking this way at your age.

@Terri B. Do you own and manage properties yourself?

@Tech Cheng

Think about taking the 401k distribution, rolling it into a SDIRA so you can do alternative investing. That “rollover” satisfies “paying back” the distribution thus no taxes have to be paid.

I have found UBIT to be less of a problem than many think. You are allowed to deduct depreciation against a loan in the Ira thus reducing UBIT. You can also eliminate UBIT by paying off the loan a year before you sell it.

IMO “no tax” is better than “getting deductions” so think about Roth’s.

@Stephen Lyons invest in gas and oil companies, water filtration systems or ATMs that have almost 100% depreciation the first year to offset the gains. I would seriously consider paying taxes at today’s rates because I believe the rates will be increasing. The top tax rate when JFK was president was 90% and the when Reagan was POTUS it was 28%-Today is 37%. I’m not sure when taxes will increase but I feel it will the way they are spending money.

@Tiffany Loftus everybody is chasing yield. Bank CDs are paying less than 1%. Let people know you will pay more maybe 4%. Also look at people who have IRAs and 401ks that want to make money with them and borrow that money.

I think you want to get to a point of making passive income-holding instead of flipping. The banks make interest 24/7/365, landlords get rent every month wether they are working, sleeping, vacationing, etc you have to focus on getting out of the rat race and expose your children to that way of thinking. It sounds like your family have the skills to bring to the market place now it’s time to look at moving to the next level. Good luck-I feel confident you will get there.

@Harish Verma

Why do you want to refinance? Message me with the terms scenario and I will see what can be done.

@Anthony Then

KISS -invest in what you know and understand- that pays the best returns. I learned that from warren buffet and I am lousy at stocks and bonds. I have real estate in my genes.

@Adam Zach

I think engineers figure out very quickly that real estate investing provides income wether you are working or playing. It provides you “passive” income with tax benefits. It doesn’t take a rocket scientist to understand that RE can provide a better quality of life and more time to enjoy it. All in the analysis. 😀

@Matt Tennie

I think @ Ned Cary has it correct don’t pay it down if you can invest at a rate better than your loan interest rate. If it is about making money and cash flow it is not a personal decision -it has a mathematical answer.

People say “it is a good feeling not having a mortgage payment in bad times and I will be safe.” However, You always have a tax payment due.

Secondly- mortgages act as asset protection and may thwart law suits. If your home is mortgaged a creditor an their attorney know there is not any equity in the home. Think about using a home equity line of credit (at3%)to lend to a rehabber at 10% - thus net 7% equals $7k on a $100k or $35k on $500k. You get the point. I want my money and assets working as hard as I do.

@Brian Hosier

I won't do a deal unless it nets 15% minimum COC. I include NOI, any tax benefits saved, and any principle paid down on the mortgage-as profit centers. I do not count appreciation until it is captured and would add it in only at the sale.

ROI changes based on many factors, is the property bought in a tax advantaged plan such as an ira or 401k where you don't get depreciation to offset income unless your ira/401k has debt. But you don't pay any taxes either. Your income level can also postpone any annual losses.

Interest rates and age of loan which affects the percentage of principle and interest being paid also changes ROI a little.

I utilize different types of properties-commercial and residential, office, SFHs, multi family, industrial, and have properties in multiple states for diversity. ROI changes some over time and economic conditions. It is harder to be spread out without a large base in each geographical area because you don't get the economy of scale in pricing of labor or materials. 30 properties in one area gives you a lot more clout than one with trades people. I also use the lowest rent in the area because I want the best tenant. Bad tenants can be very costly and blowup your model and your return.