All Forum Posts by: Frank Adams

From Bob Brinker (whose advice I used to follow until I thought he went off the rails); Reaching critical mass should be your goal during your working life. Critical mass is when your investments can support your desired lifestyle. You've reached critical mass when you wake up in the morning on your 40' plus sailboat on the intra-coastal waterway and the only decision you have to make that day is whether to sail north or south.

From Robert Ringer, author of "Winning Through Intimidation". When you hear about a deal that sounds like it could be very profitable, go check it out, NOW. Don't wait to "think about it", don't sleep on it, don't go get a haircut or have a beer with your buddies. Go look at the deal, NOW. You'll likely beat out all of those who did one of the other time killing things.

Yep, absolutely. One of the better deals I ever found I did by doing this. Maybe I'll write about it in another post.

 Sorry you feel that way. I've made a lot of mistakes in my life and the only reason I post on bp is that maybe I can save someone from doing the same. 

Jim Sestito, you said it again; 

"Main kicker is the estate would have to pay about 80K in cap gains tax post sale." So the gain is in the $530,000 range?

When you say "estate" to me that means that the owner has passed on. I'm not sure what a trust has to do with the rules of descent and distribution (I'm not a lawyer, but I did inherit from a trust once) but why wouldn't the heirs get a step up in value?

Since this place is the better part of an hour away that's strike one in my book.

You don't know, or know how to calculate, the ARV. Strike two.

You (for some strange reason) want to "do right" by them. You don't have "investor" in you. Strike three.

You believe the story they told you. Strike four.

The house has one bath and you don't mention being able to easily add a bath or half bath for under $1,000. Strike five.

Do you want me to go on?

 Thanks Greg. I've seller financed 40 or more SFHs in Texas, many of which refinanced over the years and I've never had this come up. The note and other documents have been notarized.

Frank

 Sorry I wasn't clear Jon. Lender said it would have to be recorded and suggested I do it now. Maybe I should ask her for the underwriter's phone number.

Thanks Jon

Im carrying a seller financed mortgage on a house in Texas. Buer is talking to a local lender about refinancing and the lender called me to ask if the NOTE was recorded. I told her no but as is the usual and customary practice the WD and DOT were.

She said the first thing the the underwriter asked was if it was recorded and I said I'd never recorded the now and none of my other borrowers had any difficulty in refinancing. She suggested I record it now.

I called the clerk's office to confirm the cost and they said that nobody ever records notes. I had always thought that making a public record of personal debt might violate credit laws but the clerk's office didn't know anything about that.

I'm kind of stuck here and unsure which way to go. Any Texas attorneys have any thoughts on this?

Thanks in advance.

Frank

The answer to how much liability insurance you need is the amount that you COULDN'T STAND TO PAY OUT OF POCKET. Run away from any agent that says $300,000. I'd say a couple of million is the minimum but you may already have that handled via your umbrella policy. 

They may be either "tamperproof" Torx or Tamperproof "Allen head. Torx look like a six pointed star and allen screws are an internal hex-six sided. The business has changed since I was a fastener rep in Texas but I know there are many fastener distributors in the Metroplex that will carry the tools for these.

Even Fastenal, the big chain might be able to help you out. Some of the bigger/contractor oriented Ace hardware stores could also have, or be able to order the drive bits with about a 2 day delivery.

We're financially free with an income in the $150K/year range. We are 70 and 74 years old.

I had one rental in CA that I couldn't sell when I accepted a job in TX because the Proposition 13 election was coming in a month. People would ask about property taxes and I'd lay out the three possibilities and they'd say, "oh, I can't make an offer without KNOWING what they'll be". So we kept the house and rented it at a small, about $40/month positive cash flow.

Five years later the oil crash hit the Houston RE market like a ton of bricks. The average house in Houston lost 1/2 it's value and the VA and RTC foreclosures were 2 to 3 pages in Friday and Saturday's newspapers. By 1990 the market was turning and we started buying, often for cash. By 1995, 2 months after buying the most expensive house we'd ever bought, I quit my salaried job to open a new, unrelated to RE, business. 4 months later my wifelost her job so we had no health insurance. Within about 2 1/2 years we'd paid that house off and haven't had a mortgage since.

Neither of us had pensions  because we worked for smaller companies but we both had 401k that we always CONTRIBUTED THE MAXIMUM ALLOWED TO. 

Some of the keys that allowed us to retire early and have more money than we'll ever spend:

We always lived below our means: When we took out that last mortgage in 1995 I was earning $62,000/year, my wife was earning about $47K/year and we had another $35K/year in net income from seller financed mortgages. As I said above that was the most expensive house we'd ever purchased and we paid $125,000 for it, about THIRTEEN MONTHS of our salaries. Both the Realtor and lender told us we needed to be buying a much more expensive house. No thanks.

On living below our means: The first new car we ever owned was my wife's Lexus purchased 2 years after I had retired. She retired 4 years earlier.

I did a lot of my own work on my houses. I've re-framed walls that were termite eaten, sheetrocked, installed new shower pans and re-tiled, replaced roofs, and obviously painted more than my share of places on turnovers. I once even did the "scut" work for a cut-rate guy who was jacking up a cracked slab. I was the least productive guy on that team but following that I decided that if I ever needed to I could do that job!

We have a net worth of about 3 1/2 million and no heirs. Until 3 years ago we were both in excellent health but I'm fighting my second bout with cancer in that time and waiting until I feel well enough to head to France and Spain for a month, probably in June.