All Forum Posts by: Damon Kellar

Not related to any investments, I had this happen on my current personal residence.  

First, never pay 100% up-front.  If they are asking for it all up front something is going on behind the scene.

My contractor ask for the money for supplies and 1/3 of his labor - ok fair.  Several $k paid supplies (bathtub).  He did the entire demo and started the frame out.  Once down to studs and with most of the plumbing out told me the company he was buying the tub from lost the order (I was nagging him for weeks).  Finally I told him to give me the money back and I'd buy the tub.  Finally comes clean he spent it on his bills.  Not my problem.  Told him to pay or I'd take him to court; told me to F' off.  

Filed in small claims court ($6k limit here), tried to settle w/ him but still a big F off.  Explained the situation to the court (you can do it yourself); his defense was that I was difficult to work with and yelled at him.  Court found he had stolen the money and ruled against him for more than my original claim and took it to the limit of their jurisdiction.  Ultimately, he didn't want a lien against his assets so he agreed to pay it off in installments (which he did).

Make sure your friend keeps documentation of everything.  It will be relevant in court.  Small claims (if the limit covers it) is relatively easy to navigate.  I went to the courthouse, filled out the paperwork, paid the notice of service fees and everything was set.  If it's in excess of SC liability limit, hire an attorney.

I found the post comical but spot on, but the few days I've been here have seen a lot of that.

But that's entirely how I got caught up in the process.  I recently went to Maui for vacation and started doing the math at how much of this condo's mortgage I'm paying.  Thought - I've got to get into the action.  LOL Started trying to find something there and got sticker shock.  That wasn't realistic.  BP has tempered my expectations a lot.  I've got a lot to learn and a long way to go, but the desire is there.  Sometimes it's so overwhelming I just want to take the funds and find a syndication to get into (that's a whole different level of effort.) 

 I'm in the exact same place as Durjan in trying to find a starting point and I'm all over the place.  My bigger issue is the SO and getting her comfortable.  She's always been risk adverse and she strictly wants to invest in our area.  Houses here go for way more than I want to take on and are typically priced out of the rent range in order to cash flow.  I'd like to do other areas but she's resistant for now.  

While BP is a great resource, I completely agree w/ the comment above that some of it's clickbait, especially the podcasts (I listened to that exact podcast during this morning's workout).  I've had to go back to the older days to find more practical advice.

Ultimately, I understand people's reluctance to help noobs especially if they don't have the right mentality - it's hard to gauge that over a forum and 1 wrong question.  

Random question - when you were first starting out (brand new to the business) did you find BPCon to be worthwhile?  

I'm still in information overload / analysis paralysis phase (less so me more so my SO), and want to make sure the investment is worthwhile.  

If I registered today it would be 0 investments; hopefully it's several more than that by the event.

Thanks. 

Congrats on finding the passion so early.  I read the entire Rich Dad series decades ago and wanted to go crazy but got side tracked with career and family.

Few recommendations (I'm sure there are more educated out there that can provide better advice but my .02).  

First, if you're not 18, either you will have to have your parent enter into the agreements for you or you will have to wait till then.  Any contract signed by someone <18 is non-binding on the part of the <18 person but binding on the counter party.  Thus, this will be a hard requirement.  

Second, keep doing what you're doing. Read and go to REIA meetings in your area. Find someone willing to put you to work (help them flip, drive for $, etc.) in exchange for letting you learn from them. Most mentors want something for their investment.

Third, get a credit card (parents will have to cosign) but start building your credit.  Use it - pay it off; never carry a balance.  Repeat.  This was my biggest issue with my first personal home.  Credit sucked.  Parents never taught me the benefits credit or lack thereof.

Finally - start saving.  Aside from credit - work and build a pocket of money you can use to invest in yourself.

I'm still looking for my first real property investment but this is what I would focus on in your shoes.  Good luck.
  

^^^^  This.
Most decent brokerage firms will keep track of the basis in various distributions you have.  Depending on your income / current effective tax rate (the rate that applies to the next $ you earn), I would seek to minimize the overall impact.  LT capital gain is typically at 20%, whereas ST capital is at your ordinary income effective rate.  

For example - I bought 100 shares of AAPL 8 years ago.  If I sell those shares (or a portion of those shares) it's all LTCG.  But if I sell the dividend reinvested shares that I just got it could be a mix of STCG or LTCG depending on age.  Those shares also have a higher basis that if I sell those I would recognize less gain since I paid tax on the dividend as I received it.  Again your brokerage firm should be reflecting these amounts in the tax lots view of your account.  If not, they should be able to tell you somewhere.