All Forum Posts by: Colt Savage

@Colt Savage couple spelling mistakes, my bad haha

@Ben Bartels There’s many ways to invest in real estate, but I will speak to a portion of my experience. For me, my real estate investments have had far better returns than my stock portfolio... and, it’s not even a close comparison. My first owner occupied property purchased 7 years ago has doubled in price. It also had a MIL Suite, so I’ve always had additional income every month while I lived at that house. Again, let me repeat, I’ve received a paycheck from that house every single month since I’ve purchased it. Now, while I’m living there I’m only paying a fraction of the mortgage cause I’m getting payments from the MIL which allowed me to save even more money for other investments. Once I move out, I purchase another property and repeat the process. I’m a firm believer that a dollar saved is a dollar earned, so I’m never ever paying full market rent or even paying my full mortgage. That extra money is allotted to other investments whether it be more real estate, bonds, crypto, stocks, etc.. The way I look at it, is that I’m able to leverage real estate to collect monthly payments, achieve appreciation, and minimize my monthly living expenses which allows me to invest even MORE money into other investments than someone who has to pay full market rent or mortgage, has no additional tenant(s) giving them a paycheck every month, and is ONLY getting appreciation off stocks. My way (house hacking as it’s called) allows me to get monthly payments from both my property and stocks (dividends), get appreciation from both real estate and stocks, and because my monthly expenses are lower due to having a MIL, I’m able putting that much more money into the market than someone paying full market rent or a full mortgage. Repeat this a few times over the span of 10 years and now you’ve: 1. never paid full market rent or mortgage resulting in more money to invest. 2. Always have monthly paycheck(s) 3. Someone else is paying for your entire investment. You can purchase an investment property worth $500k at 20% down = $100k investment and have someone else pay all $400k of that loan. In 30 years, the loan is paid off by someone else costing you zero dollars. Now, due to 30 years of appreciation, your house has doubled and is worth $1mil. Essentially, you’re $100k investment turned into $1mil. That’s also “assuming” 100% of cash flow was reinvested back into to the property (which is it never is) . Lots of ways to look at it. Numbers will obviously vary depending on where you invest but you get the point. All of this, and I haven’t even mentioned the TAX BENEFITS....

This is also just my opinion and something that has worked for me over the years. Additionally, I look less at numbers and more of how much time I can gain from my investments while still receiving income and appreciation.

 Would you be able to elaborate more on this, please? I'm trying to find out how I can utilize life insurance for the tax free income down the road, but also would like to leverage the policy to create additional wealth through real estate. Thanks in advance!

If you purchase a property and rent it out immediately then banks will consider it an investment property and will need to put down 20%. If you intend to purchase the property as an owner-occupied and rent it out a year after you've already lived in the property, then you would only need 5% down and it would be your primary residence until you decide to rent it out. Now, to your insurance company (at least mine), any property that I rent out, regardless of the units, is treated as a commercial property in their eyes. I don't know a bunch about land, but from my understanding it's a commercial property with commercial financing. I think you're getting caught up too much with the 30-year loan. You can have a 30 year loan, 15 year year old, etc. on a owner-occupied, rental property, etc. It really depends on how you set up your business. 

@Curtis Robbins Just did a cash-out refinance at 3.00% with a 30 year.

@Kurtis Schreck Sorry for the late response. I haven't had any bad experiences with split-levels, but I do think they're very cookie-cutter and lack character. I've also interacted with buyers that said they specifically do not want split-level houses, so I think the buyer's pool for split-level properties is a lot smaller.  Again, this is just my opinion. Some people don't care either way and that's absolutely fine! For me, however, I try to stay away from split-level properties and don't plan on adding any to my portfolio. Have you had any unique experiences with split-level properties?

My first property was purchased in 2014 for $240,000. It's a SFH with a MIL downstairs. The day after I moved in, one of my buddies moved into the MIL Suite downstairs and is still there to this day (April 2020). It's been a win-win for my buddy and me. He's been constantly living for 20-30% below market rents, and I've been able to create additional income with him living there. I moved out of the property in 2017 to purchase another property. As of this date, I'm residing in the property and in the process of doing a cash-out refinance on it and scheduled to close on 5/6. The appraisal came back at $445,000 which is about $205,000 worth of equity in 6 years. The upgrades to the house are: New windows, floors, doors, trim, carpet, and new kitchen. The cash-out money will be used to purchase additional properties and continue building the portfolio. Something I wish I knew when purchasing: I wish I would have bought a multifamily property. The SFH works but it makes much more sense to have a property that was built for multiple residency.

I wouldn't respond to her Facebook rant about it. If it was on a review page, then I would write a professional response. 

There's a lot of good ones here, and I think they're all good things to note. For me, things that immediately turn me off are: Negative cash flow, split-level home, inadequate drainage, HVAC system or electrical is extremely outdate or damage, age of windows, is the roof destroyed? Single family properties that have been hacked into a multifamily property. If the property is on a main road or has an awkward driveway. This are just a few off the top of my head. If the numbers make sense, and I can budget into my rehab replacing a roof, fixing electrical, heating/cooling, etc. then it’s fine. It all depends on the property!

Has anyone had to experience or work through a Tenant abandoning one of your properties? I'm currently in Washington State, and the Washington State Tenant Law states that someone is considered to have abandoned the property if they owe rent and they have verbally, written, etc. told the Landlord they were moving out (see below). Both of these were true, so I proceeded to hold the items in the property for a month (by law), then the next month I moved the property into a Storage Unit (I gave the tenant a key, the code, numbers, etc) and held it there for another month before I proceeded to donate everything to the Goodwill (In total, there was about 2 months worth of availability for the Tenant to collect their belongings) Currently, this Tenant is now saying that I illegally removed his belongings from the property and is looking to sue, and I'm curious if there's anyone that has had experience in this subject or had to work through going to court in a similar situation. I did talk to my attorney before moving his stuff out of my property and into the Storage Unit and am in the process of working with him in case the situation goes any further. However, I didn't think it would hurt to gather other people's opinions and experiences. 

Thanks!