All Forum Posts by: David Roberts

I fear over analyzing my way out of deals.  I already did this twice in the recent past but I gained some lessons from it and now I'm about to make 2 deals.  But I tend to worry and second guess my decisions due to a lack of confidence and lack of trusting the math.  Hopefully with experience this will change. 

I fear the unknown. 

And forget calling and asking 'advisors' any questions about anything.  At least with the company I have to deal with, they don't know sh*t.  Sorry.  End Rant :).

Saw this thread featured somewhere...it's a bit old...what did you end up doing?

There are many smarter people posting in this thread than me, but this is my 2 cents, because I have until recently, struggled with the idea of debt.  I hate my personal debt (even though I'm in a great situation).  I have my primary mortgage and about 20k in student loan debt at 2.75%.  That's the extent of the debt that  I can't stand to tell you the truth.

I struggled back and forth (but did nothing) with just paying off my student loans.  I had cash on hand (well, invested in the market, but in an after tax account) of 60k.  But what wouldn't let me is giving up the future compounding dividends I was acquiring.  I also struggled with taking a 50k loan from my 401k and paying it back over 5 years (yes I hate long loans, woudl rather suffer through it quicker lol), and adding 50k cash, and getting rid of the 100k left on my home.

There is a 'sleep' factor here that I only saw 1 other person mention.  It's got to be a great feeling to be free and clear of any of your personal debts (forget investment debts on properties, you're not paying them).  It has to be absolutely magical.

Sometimes that feeling of less stress is worth a few percentage points.  But most people on this board are financial guys and I can appreciate that.  And the financial guy will give you the best way to leverage the most you can, for the best returns.  I get it both ways...but sometimes sleeping a little easier at night knowing your primary home is free and clear and you owe NOBODY, feels good.  Well, you still owe the city something every year...oh well :).

I'm jealous.  I can't wait for the day I pay my primary mortgage off.

I have an employer matched 401k up to 6% fully vested (which I am).  This is an interesting question though.  Pay the tax now, and leverage the money into real estate with a cash on cash return of 20+% or put it in the tax deferred account and earn on average 7-8% a year for 30 years...

I do not like the stock market.  Some say it's rigged, some say it isn't.  I think the market is too large to be 'rigged' entirely, like a puppeteer pulling strings. However, the big money moves markets and if you aren't on the same page you can get killed quickly. 

But the main reason I don't like the stock market is because I have no control on a company I purchase or a fund I own for the dividend.  I can't do much other than choose to buy a  stock or not.  With real estate I have a lot more control over the earnings of my money.  Not complete control, but a lot more than the stock market...

For the record I currently max out my 401k to get the most deduction on income that I can.

EDIT:  Someone mentioned 401k fees.  Slowly but surely the government is forcing banks to reveal more fees.  I tend to think most ordinary people with 401k accounts never look at what's going on with them other than maybe the quarterly statement, and then just look at what the account is worth.  If you research the 12 funds available to you, youwill see how many dollars per thousand you are charged a fee on.  It gets rather ridiculous with some of the funds.  Then the bank running the fund charges annual or quarterly fees.  Mine is through wells fargo, and I guess what's annoying is when the non-transparent fees start becoming transparent.  I thought my company paid the fees for the plan...but as you find out with business, the devil is in the detail.  The plan fee maybe, but not fund fees.

Yeah, i didn't think so.  I assume I could offer anything.  They could always reject it.  My guess is they will do their due dilligence (the bank will) after an offer is accepted by the homeowner, to find out if the bank's loss, or profit is acceptable, and then make a decision yes/no, or counter.

If a house is listed on the MLS as a short sale, and I wanted to put an offer in, does the offer have to be the asking price for it to be accepted, or do lesser offers get accepted?

My real estate agent said she was pretty sure it had to be the list price that I offered, and I didn't think the home was worth that yet, based on recently sold comps in the area.  House was listed for 50k, and I wanted to offer 45k.  

But if it is just me as the sole member and I'm doing single family homes and not apartments or other commercial buildings, do I still need the operating agreement?

I just read those scenarios in the thread that was offered.  Fantastic.  Thank you very much.  So the key is when there's work needing to be done, have a pro do it.  

I thought operating agreements were only for if you had multiple members. If I'm the only member in an LLC what would I need an operating agreement for?

Also about insurance, as it is now I get insurance on my single family homes from my typical insurance agent. I have 500k in liability. Is there different insurance for an LLC or can Ijust continue to get this kind of coverage for each home?

Do I need an operating agreement if it's only me as the member in every LLC and i were to only do 1 LLC per property (no governing LLC)?