All Forum Posts by: Dave G.

@Amber Tippett

If the numbers make sense, I highly recommend this strategy or variant (HELOC) depending on your circumstances.

I've done cash-out refis on my primary rez several times to support buying rentals. This was when interest rates were going down. Then, with rising interest rates, I wised-up and for the last ~6 years, have used a HELOC as well as loans against my 401k for acquisitions.

Good luck to you,

Dave

This is an interesting situation.

If it were me in AZ (a gun-friendly state) I would simply confirm with law enforcement that the guns were not used in a crime. Then I'd check with my RE agent about disposition of abandoned personal property after COE. Then, if legal, I would keep them or sell them. 

If the expense of an attorney or similar SME were required, my course of action would depend on what kind of guns they are. If they are not anything special or of particular value, I'd probably just give them to the police to handle. 

@Bryce M.

Regarding a solid team to help you, you'll find a lot of discussions in the forums about self-managing vs hiring a property manager. Either way as a new investor you'll want to be fully prepared to navigate the minefield of being a landlord. 

For me, I have PMs that manage my properties and I love the insulation it provides me from the tenants as well as the expertise of a qualified PM dealing with situations that arise. I would consider this even with house-hacking as I would not want the tenant next door having such convenient access for questions, concerns or requesting favors/leniency. Even if you plan to self-manage, you may want to calculate potential deals with the expense of having a PM as there may be a time when you choose to no longer self-manage.

Recommend you also be sure to have cash reserves set aside for unplanned maint/capex expenses. When I started out, like so many newbies in BP, I was a low-money/no-money down investor and did not have any reserves set aside. This was a long time ago and it killed me putting a lengthy pause on my real estate investing until I was better capitalized to get back into the game.

Best of luck to you,
Dave

@Christian Nachtrieb 

As stated in this thread and pretty much all BP inquiries about tenant situations......

.....Follow the terms of your lease and local laws. Period.

In AZ, the Arizona Landlord Tenant Act defines how to proceed in this situation. Not sure about MA. If you still need help figuring out legal requirements for compliant entry, you'll need a lawyer, a qualified PM, or maybe just another BP'r in Boston to offer knowledgeable local guidance. 

Right now all I see on here responding to your post is a bunch of non-MA people, including myself.

@Christian Nachtrieb I agree with @Bob B. that you pursue unit inspection access per the lease terms. I would also bring another person along as a witness when you enter the unit. Be sure to document any damage findings or maintenance needs (HVAC filter changes, leaking toilets, etc) since this would be legally a unit inspection versus a communication concern.

I've borrowed $50k against my 401k multiple times (then paid it off early) to contribute to all-cash acquisitions. The autonomy and ease was awesome as I hate bankers. You just need to be sure the repayment plan (mine was 5 year amortization) falls within your budget/investment strategy. 

The HELOC I have with my credit union has been awesome. I've used it for cash acquisitions multiple times over the years then paid it off. Have also done loans against my 401K, then also paid them off. I love the autonomy these two sources provide me for RE purchases.

I have 6 condo rentals in 3 different B+ class complexes. Agree that you need a sensible HOA for things to not get unreasonable. Also, you need to plan your reserves/capex differently. But otherwise, they have been a great investment. They were low-cost entry vs SFR and earn a higher rent per square foot than SFRs. And they've all appreciated significantly, commensurate with SFRs. My regret is I should have bought more back in the fire-sale days.

I have the funding and am ready to pull the trigger, but have not bought anything in 2018 yet. Having a hard time finding deals where the #s work. 

I'm will go against the grain with most folks and say you can time the market to some degree. I'm not a young person and have seen multiple real estate cycles over the past 40 years. As @Russell Brazil pointed out, if you're in certain parts of the country the cycles are more extreme and can be (admittedly imprecisely) played. My wife and I saw the lunacy in 2004-2006 and sat on the sidelines. We started buying in 2009 with acquisitions nearly ever year since.

Our we in 2008 again? I don't think so for many reasons already pointed out in this thread. Labor supply constraints in the trades is also a big limiting factor to the overbuilding 10 years ago that contributed to the collapse. 

So I am still bullish, but will only buy when the numbers work. 

For comparison, here's how I'm set up:

I have my six properties all in the same LLC. My rentals each have a State Farm landlord/investor policy that has $2M in coverage. For my wife and I, all of our personal assets are covered by Allstate policies , including a $2M umbrella policy. I've been told by insurance reps and lawyers that settlements exceeding $1-$2M are rare. I was told by one attorney that the worst claim is where someone becomes disabled as a result of an incident on your property. He explained that because the person did not die (not to sound insensitive) and cannot fully heal, the claim amount is arrived at considering the hardship/loss over the period of the plaintiff's remaining lifespan and that this can turn into a really big $$ value. This is rare, but this is one that worries me a bit. However, you can only do so much and agree it is a highly personal decision.

We also have a trust, and the trust owns the LLC and all of our significant personal assets. Recommend giving the trust a nebulous name that would not intuitively tie back to you. This was a mistake I made and am not happy about. When setting up our trust, I kinda knew this and asked our lawyer specifically about this and he said it didn't matter (he recommended putting our names in the name of the trust). He had been a lawyer for like 40 years so I followed his recommendation. Not sure how big a mistake this really is, but I wish I wouldn't have.