All Forum Posts by: Chris Masons

Hey Darren,

Coune me in! Look forward to seeing everyone there!!

Best,

Chris

Eric,

I actually do put alot of my profits from my passive rental income into the stock market. This serves two purposes:

For 1 it is diversifying my portfolio into additional investments such as REITS, utilities, MLPS, Blue Chips and BDCs which are all income generating investments for the most part.

and it also give me a hedge against my RE income portfolio.

As I get older I am looking for TRULY passive income in the form of distributions, dividends and appreciation.

I am still young now and love actively managing my portfolio of rentals but I can see myself at 65 or 70 wanting to either sell some RE and or pass it onto my children and hopefully by that time I will have built up a big enough portfolio of securities that will replace some of the passive income that my Real Estate threw off.

Working full time and having the RE income allows me to really max out the retirement accounts as well as invest in the tock market in a non tax sheltered account as well.

regards,

Chris

Great discussion here! Love it!

While I love REI, I also love a good savings/retirement vehicle! The Corp. 401k is a great option if given to you. As others have stated yoaa re essentially turning down "FREE" money with the company match option if offered. At the very minimum one should contribute to get the max Company match. I take it a step further and opt. to max out my 401k from my W-2 income and here is just 1 of the reasons why....

As we know the 401k contribution is pre tax allowing a full  deduction, as we also know as RE investors when you hit a certain threshold in W-2 income I believe it is 150k, (starts to get phased out at 100k) you lose the 25k passive loss deduction from your passive RE investing activities. Well now you can basically make another 17,500 before losing that valuable 25k deduction in same tax year!

I love RE and consider myself an investor/landlord and invest heavily in it, but I also feel I want to be diversified and invest in quality blue chip, high dividend yielding/paying secutities as well. (I LOVE PASSIVE INCOME) So being I have nice income from my RE holdings this allows me to max out my work 401k and my personal roth IRA as well.

If I had to choose one or the other I would go with RE as it has created more wealth for my hands down along withteh amazing tax benefits it provides, however opportunities like a 401k plan and a Roth IRA should also be taken advantage of.

best regards,

Chris

As mentioned my goal is to create wealth and passive income over time so eventually these things (my RE income and my portfolio income will replace my W-2 income) and hey of social security is still aaround in 25 years when I get there that is just a bonus but I am definitely not counting on it!

Hey, I never said it was easy.......

Which is why I just invest in them!  :)

regards,

Chris

Wow, sorry to hear about the sewer issue. As much as I'd like to say you have some recourse I am not sure that you do being you closed already.

Was there a home inspection done? I guess you didn't run a camera down the sewer line as this would have picked up the issue for sure. As Jon said alot of home inspection due dilligence now includes a sewer line to be scoped to see the condition of the line.

Maybe you can reach a compromise with the sellers and split the cost? The one thing in your favor is this issue didn't appear overnight and definitely took some time to build up so  any expert could prove and testify that this moreo then likely existed before closing.

I replaced a sewer line a year ago in one of my rentals due to a bad belly in the sewer lateral. I was snaking it every 6 months but eventually it got to be too much and I bit the bullet and replaced it.

Good luck and let us know the outcome.

best regards,

Chris

Yes Jon and the rest who answered are correct. You are taxed on your real estate income.

OR...... if you really don't want to pay taxes on your rental income there is a perfectly legal way to do so....... Form a REIT entity and file for REIT status! :) Not only will you not have to pay taxes you will have to pass 90% of your earnings to all your shareholders!! :)

regards,

Chris

Hi Jon,

I am from and invest in NJ RE and have dealt with this exact issue. Are current tenants on lease? month to month or yearly?

You can have a conversation with them and explain what you are trying to do. Depending on how they respond you may have to wait until their lease is up for renewal....

I had a 4 family with 1 old steam boiler so I was paying the whole house heating bill (what a nightmare)  I ended up seperating adding 2 gas hort water boilers for two first floor units and 2 forced hot air furnaces I dropped into attic for 2nd floor apartments.

I planned this major upgrade right when leases were up for renewal and told them there would not be a rental increase for the next 2 years however you would now be responsible for paying your own heat. Each apartment now had their own thermostat and controlled their own heat! YAAAAY!

I had a little pushback but all and all it workekd out well  ESP. because the old steam boiler was so hard to balance and keep the building evenly heated.

If you have yearly leases in place technically you should wait until leases are up for renewal to present this to them. Also be aware most towns in NJ are governed by rent control which is controlled by each municipality so you have to be careful how much you can raise rent on a yearly basis.

good luck and hope this helps,

Chris

The 10 year treasury was all over the place yesterday and ended up lower I believe. REITS both Mortghage and Equity REITS responded positive to this.

I think RE is in a slow steady up trend (slow and steady wins the race) The short term volatility in the sstock market is to be ignored IMO. Focus on aquiring great properties at great long term  interest rates in great areas...

Just my opinion

regards,

Chris

Mike,

In alot of NJ towns basement rentals are frowned upon by the down due to egress issues, ceiling height and a variety of other issues.

Soudns to me like you have a legal 2 family with another apartment in the basement. One option is to try and rent the first floor to a larger extended family and you would rent basement and first floor as 1 unit and get somewhere in between what you could rent them seperately for and what first floor would rent for...

Where I have properties there are yearly inspsections that take place as there are so many "illegal basement apartments that are rented out.  It is ok to have a stove,kitcen, closets down there but when the town sees a bed they freak out.

Hope this helps,

Chris

Oh the joys of eviction! The worst part for me is the anxious feeling between not getting the rent on time, knowing you have to file, and up until actually filing. Once it has been filed I am still anxious as I worry about a mix up or a court error or something silly that may happen! Once I get the post card with an assigned docket number I am happy as a clam!!

regards,

Chris