All Forum Posts by: Edward Wills

Brandon - Great info.  It's not clear how Property Taxes against a Rental Property are treated.... do these aggregate under the personal $10K SALT cap or can you still deduct Property Taxes paid against a Rental Property on Schedule E?

 Owen - 

Would also like a PM referral in the Omaha area. I'm looking for someone who can manage 1-4 SFR properties. Thanks!

@Ali Boone 

Thanks for the offer to help - The cash crocodile appears to be due to a Special Cause.

I had a tenant engaged in criminal (drug-related) activity, and the front door was damaged during the police raid.

The PM's maintenance contractor repaired the damaged entry door and hardware- Passing the bill on to the PM (and ultimately myself) without alerting the PM that something nefarious was going on at the home. My first notification something was afoot was I received a snail-mail hategram from the HOA.

The cash burn on this unit was driven by damage, vacancy, and re-marketing expenses. 

I've straightened out the relationship management stuff with my PM and have renewed our PM agreement for another year.

Update for @Curt Davis and @Dean Letfus :

After getting a good referral for a Memphis PM from Dean, I interviewed an alternate PM and discussed my expectations with my current PM.  

Long story short, I signed a 1-year extension to stay with my current PM and am placing one of the under-performing properties for sale.

I'm now considering branching out to Vacation Rentals either in my local area (Carlsbad California / North San Diego) or Hawaii.

Thanks so much @ Curt Davis and @ Dean Leftus.

I will be interviewing Property Managers soon.

Hi All.  Name is Eddie and I'm from the North San Diego area, which includes Carlsbad, San Marcos, Encinitas, etc.  When I'm not at work or chasing the kids, you can find me in or on the water.

I'm a forty-something Wage Slave, and the wife and myself own multiple SFR properties out of state (Memphis TN area). I invested through a Turnkey outfit run by a former work colleague.

We have been homeowners since 2000 and purchased our first rental property in 2012.  My career is in Engineering, but I also have a Master's in Personal Finance.  My family chose to invest in Real Estate to add some diversification to our investments.  We feel that direct investment in Real Estate provides some 'buoyancy' to our portfolio.

I consider myself to be a 'Journeyman' real estate investor. I'm clued-in enough that I know how to run all the functions on an HP 12C, I can calculate an amortization (and depreciation) schedule, I can estimate before- and after-tax cash flow, and I can calculate IRR/XIRR based on assumptions about a property.

...But I'm also naive about some aspects of real estate investing. For example, one of our properties recently hit us with a 'Lease Up Fee' (which was, in fact, in the Property Management contract we signed). I just had no idea that what this really means is that when the tenant leaves, I not only miss out on rent but I also have to pay a full month's equivalent rent to acquire a new tenant- All while still making the mortgage payments. Guess I should have added this in to the 'management fees' portion of my SFR cash flow analysis spreadsheet :(

Overall, we're pretty satisfied with how things are going so far with our SFR properties. Some specific experiences:

• One particular property is a Cash Crocodile for this year.  One of the things we're struggling with is how to figure out if this cash burn is management-driven, location-driven, property-driven, or just a particular run of bad luck.
• Another property has a good tenant who has asked to sign a Lease Purchase Agreement.   On the advice of someone I trust, I am pursuing the Agreement on the belief that (1) the tenant will treat the property more like an Owner, and (2) this gives me an exit strategy with Capital Appreciation a few years down the road (note I have NOT inked the deal yet).

I'm not actively pursuing any deals right now until I determine the root cause of the Cash Crocodile listed above.  My goal is to to maintain an overall asset allocation of 20-25% towards direct RE.  At this point I do NOT have aspirations to drop everything at work and become a full-time RE investor.