All Forum Posts by: Chris Masons

CONGRATS BP!!!!!  What a great milestone!! Glad to be part of this awesome community!!! And thanks to all the staff for all your hard workand contributors who take the time to share their knowledge and insight and make it what it is today! 

I can remember clear as day when I first came across this forum at work. I was in shock and in awe that such a place existed! Needless to say I spent many work hours frolicking around the site discovering all that it has to offer.... And not much has changed since!  :)

Keep up the great work guys!

Next stop  2 million!!!

Chris

It's hard to get an accurate ROI the way you are asking as you lived there so you have paid the mortgage on it for a number of years which will skew the numbers...

At this point look at the cash flow and base the cash on cash return off of your down payment and current monthly expenses..

OR, look at it another way, how many years or renting it will it take to get your initial down payment back?

good luck,

Chris

Thanks John.

What is the max a couple filing jointly can make in order to be able to deduct the 5500 from a traditional IRA?

Chris

I would keep your money in your Roth so you have some diversification and aren't 100% invested in RE.

While RE is my bread and butter as well I max out a Roth yearly and a work 401k as well to create additional truly passive income.

The other thing not mentioned is while a Roth is a home run as far as taxes go, a traditional can still be beneficial to the RE investor who has W-2 income of under 150k as with a traditional IRA you can deduct the 5500 against your taxable income allowing to maximize the 25k passive loss allowance. This gets phased out between 100k and 150k of income.

regards,

Chris

Congrats Jordan!! Great job! Doing this at 20 years old is really an accomplishment!! Keep it going next one will be even more profitable for you.

Time is on your side. The best piece of advice I tell people when they ask me for advice is start young, younger the better. Having time on your side and gaining this experience at this age is such a HUGE advantage.

regards,

Chris

It depends on your point of view. If you buy right and manage right you can absolutely be profitable and supplement your income with one property. Will it be life changing probably not but it will definitely help you save faster, give you extra discretionary spending and if you occupy it while renting out the other half (2 family situation) can give you a HUGE advantage allowing your tenant to pay 1/2 or even 3/4 of your mortgage payment (this is how I got started) over time this can really snowball into something big if you are diligent, patient and choose to keep going...

regards,

Chris  

I believe the Bank (even though it is a cashiers check) can still put a stop payment as Jon stated. There is usually a fee associated with this which I believe in NJ is 25 to 35 dollars that you can charge tenant for.

Lastly, before reissuing a replacement I would have tenant send you a letter stating exactly what happened and that he/she is requesting a replacement check. Ask them to include dates so you have an accurate timeline so that you are covered.

Here in NJ we have 30 days to return security deposit or we can be sued for double the amount.

good luck,

Chris

Closest I have come to truly passive in Real Estate is a contract for deed on a property I sold to my tenant. He is now responsible for any and all maintenance on the property.

I pay the quarterly taxes and insurance via his monthly mortgage payment to me which is electronically direct deposited into my checking account.

I probably spend 1 to 2 hours a month on book keeping on this property. COC return upwards of 18%

Chris

Hi Amanda,

Sounds like you need a credit partner AND a cash partner to do the deal conventionally... Is owner willing to hold the note with very little down being it is acquaintance? Probably not but worth a shot.... You can get very creative - justs depends how open minded the seller is

Other options are to being in a couple family members on the deal who have the credit and cash needed. Or can you borrow against a retirement account for down payment? 

You have to ask yourself what will it take to get access to funds needed for down payment and or closing costs? If you borrow from family members how quickly can you pay them back. If you bring them in on the deal than the profit is split and return goes down.

How bad is credit? There are loans available for less than stellar credit

thx,

Chris

CJ,

The end game is whatever you decide, as you have multiple options in that you can hold long term and even pass it on to your heirs giving them a step up in cost basis (huge tax advantage & strategy) Or you can hold until you pull out all your initial investment  (hopefully by that time you have made some improvements to the building and got some nice appreciation and equity) and than sell giving you a nice windfall of capital to redeploy elsewhere or maybe invest in something a bit more passive if you are older and want truly passive income. OR you can hold it until you have paid it off in full, and than you have even more options as you can sell and owner finance (this means you become the bank) or you can just sell conventionally and cash out for a LARGE lump some of cash!

I have not decided what I want to do but I know that when it comes I have many options with my portfolio of single family, multi family and condos. I am still young (45) but have a nice portfolio of properties producing great cash flow and I am still at my day job making decent W-2 income so for now the idea is to accumulate and build wealth. 10 to 15 years from now I will evaluate my situation, my wants, and where the market is and decide what is best, but the best part is there are many exit strategies.

Hope this helped and gave you some ideas

regards,

Chris