All Forum Posts by: Account Closed

LOL - A little bit of paint, a little bit of minor plumbing.  A little drywall here and there, a new roof and some flooring, you'll be good to go.

Seriously - it doesn't look too bad.  Looks like a great start.

Power outage may be a rolling blackout to keep electrical usage down during the day.  That's beyond your control.  Why would you pay for something that's beyond your control?

The alternative would be to upgrade the house to a natural gas generator to kick on when the power goes out - but you're looking at about a $3,500 bill for the equipment plus an electrician's time.

I'm not sure it's really worth it.

@Alexander Felice  I am speaking from the fact that if you aren't making a profit, then you CANNOT scale up and you have NO flexibility.  It doesn't matter if you own the house outright or if it's financed.

If you go the route of paying cash, and you aren't making money, then you're going to end up paying money out of your own pocket in order to not lose the house.  You aren't going to be able to scale up because you don't have a profitable pool of money to pull from on your next deal.

If you go the route of financing, and you aren't making money, then you're going to end up paying money out of your own pocket in order to not lose the house - and you aren't going to get any more financing because you aren't making any money.

Without knowing what your net income is (which the OP doesn't in his original post), then you don't know if you're making money.  Making money is absolutely relevant.  Accounting for factors like insurance and property taxes is absolutely paramount.

@Ryan Lee I currently own ten liens.  I had one that was cashed in this year (that earned 19% from the property owner).  I have two liens I am currently working with an attorney to foreclose on (should have title around the end of the month).  I have five liens that are eligible for foreclosure next year.

I have invested in liens in Colorado and Arizona and I have participated in auctions in Indiana (not winning the auctions)

Dennis is exactly right.  There are various places you can go to on the web to buy tax liens/certificates on items that did not sell at auction.

This isn't necessarily true.

We know gross rents on both properties - I want to know what your NET PROFIT is.  What's your profit from each one (i.e. how much are you going to actually MAKE)?

You need to factor in variables like landlord insurance; are any of the properties in a flood zone - financed properties will require flood insurance; what is the age/condition of the houses and how much deferred maintenance are you going to have to perform; what are the property taxes going to amount to; a house purchased for cash will have less up front closing costs (no appraisal required, no inspection required) is that a factor in your purchase price; etc. etc.

If you leverage yourself to the hilt, and you have no options for deferred maintenance and they do not cash flow (despite gross rents), then you have NO flexibility.  Period.

Since you have to replace it anyway, I'd just replace it and let it ride.  Some battles aren't worth fighting.  Home Depot is having a 40% Fourth of July sale on appliances.

For what it's worth, I have a rental where it took me 3 months to get stove and refrigerator from Lowe's  (it took them that long to deliver it - I was not happy).  A week after the set arrived, we finally had a tenant ready to move in.  They asked if I could get rid of the brand new refrigerator because 1) it was too small (20 cu ft); and 2) the freezer was on top.  They wanted to use their own "bigger" refrigerator with side by side doors.  I was beside myself I mean seriously, that fridge is bigger than the one in my own home.

The rental is in Indiana - I'm in Colorado.  I wanted to oblige, so I called my aunt that lives a few miles away and offered it to her for free.  She said she didn't have any use for it.  I considered donating it to a local charity but seriously, I don't want to have to buy new appliances every time a tenant moves in and out.  I told the property manager that the fridge was staying, the tenant was free to move it to any other room in the house if they didn't want it in the kitchen (basement, a room made into a pantry, etc.) but the tenant was still responsible for any damage outside of normal wear and tear.  It hasn't been a problem since.

This is not true - talk to a financial adviser.  You can withdraw amounts from your traditional retirement plans prior to "retirement age" as long as they are "Substantially Equal Periodic Payments" - the rule is under IRS §72(t)(1).  You will need to pay income tax at your regular rate for these withdrawals.  Under a ROTH, you can withdraw following the "5 year rule".  It's not locked in for 30 years.

Worst case scenario is you pay a 10% penalty on the withdrawals and (in the case of a traditional IRA/401(k)) you pay income tax on the transaction.

The other alternative is once leaving the company, moving that money into a "Self Directed IRA" and using that money to invest in real estate (no company executives making a profit - just you)

I have no match to my 401(k).  In my instance, it makes little sense to contribute.

My research suggests buy and hold real estate appreciation averages 3% per year - very small and about matches inflation.  The power in real estate though is forcing appreciation by buying very low up front, fixing up the property, and then holding (or selling after two years for tax advantages).

I'm not big on leverage - makes no sense at my age (I am much closer to retirement than you are)...but at your age and at Scott's age, it makes a bit more sense to leverage into multiple income producing properties in order to have that equity later in life.

If I were you, at your age, I would max out 100% on the ROTH, allow for the 100% match in a Traditional, and then diversify between large cap stocks, small cap stocks, corporate bonds, international stocks, and some cash (CD's & Money Market type funds).

My thoughts - the first priority is to get the leak fixed.  Leaks between walls can be difficult to find and even more difficult to find behind shared walls.

The second priority is to allow everything to dry.  Once everything is dry, THEN (and only then) will they be able to fix the hole in the ceiling.  Sadly, these things do happen - whether it's a leak between units in an apartment building, or a leak in the roof that hadn't been discovered.