All Forum Posts by: Chris Masons

These are the scnarios where I wish here in NJ we can require at least 2 months of security deposit vs. 1.5. I alwyas ask for 1.5 so at least I have a half month of security should the tenant try and use security fro last month in which I say if you do this the bal. of the security will be lost due to breach of contract.

I guess you only have 1 month security? It varies from state to state the max security you can ask for upfront.

It may be borderline whether it's gonna be worth the headaches to pursue in court but give all indications that you plan on pursuing legally and maybe he will end up paying you.

good luck Cheryl and remember it could have been ALOT worse.

Chris

I would definitely compensate them in some small way financially. IE. 100 dollars off 1 months rent seems reasonable.

PErhaps another 100 when he does another big upgrade. I think that goes along way and it makes the tenant feel like they are appreciated.

just my opinion.

Chris

Congrats Nathan. 100% financing in this climate is pretty dang sweet!!

If I could pull that off here in NJ I'd be one happy camper!!

Chris

Start the eviction process ASAP. Well here in NJ it is a judgement for posession. Actually it is pretty cut and dry in NJ for non payment. You get a court date and if tenant does not pay judge awards you posession and the tenant has approx. 15 days to get out. worse case you have to get a warrant for removal served but it is pretty standard. You usually meet with a mediator first before going in front of the judge.

For reasons other then non payment of rent it can get trickey and complicated IE. you have to serve a notice to cease then a notice to quit if the tenant is breaking and rules or regulations set fourth in the lease etc......

best advice I can give is to start the process ASAP don't delay it. Longer you wait longer you will be without rental income.

good luck,
Chris

Steve, Precisely why I changed them. Federal Pacific was based out of NJ (newark I believe) so you find ALOT of homes built with them here.

Never had any trouble with them but didn't want to take the chance and wanted to sleep peacefully at night!!!

Etida, My Electrical service upgrade cost around 4300. This included everything new from the pole in. Also included various rewiring of the apartments as alot was wrong. Lights were on wrong tenants meters etc....

Chris

I did a similar upgrade on my 4 family about 6 years ago. I had old Federal pacific breakers adn each apt with a total of 100 amps total for 4 units. Definitely not adaquate for todays standards.

I upgraded to a new 200 amp service. I did this as I also upgraded my old steam bolier that serviced whole house to 4 seperate heating units so each tenant pays their own now.

Definitely a good upgrade to do that will add value in the long run.

I have a question why are you adding 5 water heaters and not 4? Also that price seems very high for water heaters. I am in NJ BTW.

regards,
Chris

When you guys borrow against your IRA for say a 60 day loan typically what kind of investments are you holding?

Big negative I see is (and correct me if I am wrong) if you have been saving dilligently say dollar cost averaging into a fund or stock or whatever security it may be, to borrow these funds would mean you would be forced to sell at todays market prices potentially triggering a taxable event whether it be a loss or a gain? I guess if this loan will generate a fair sum of money for you it wouldn't be as bad.

I mean you can always rebuy what you had owned before taking the loan out but it may be at alot higher of a share price or it could be at lower share price point.

My point being aren't you realizing gains and losses by borrowing against your IRA, (assuming it is invested in securities)

chris

"You don't pay taxes on it now but will have to pay possibly more taxes on later when you pull them out. While if on a Roth IRA they get taxed now but then grow tax free and when you pull them out, you "should" be in a higher tax bracket and will not have to pay taxes on them"

Argeed Luis, a Roth is a great savings vehicle IMO more so then the traditional IRA. However when one retires you say "you should be in a higher tax bracket" but I feel if you are a smart investor it is my opinion that you should be in a LOWER tax bracket when you retire. This all depends on how savy an investor you are. Speak to @RichWeese about this. Granted taxes in general may be and probably will be higher in 15-25 years but I plan on being in a lowet tax bracket because I won't have any W-2 income but just passive income from RE investing activities which as you know can be creatively written off much easier then W-2 income therefore reducing your tax liability and or bracket.

"It absolutely depends on the match you are getting from the employer. The only real benefit of a 401k is the match from your employer. You should contribute up to whatever your employer matches 100% above that you are better off investing somewhere else. "

Hi Luis, I disagree with you in that that is the only true benefit of 401k contribution.

You have the ability to defer taxes on up to 16,500k is it in 2012? That equates to several thousand dollars of earned income you do not have to pay taxes on now.

The other big benefit is it also can help you out with your allowable passive RE investing losses. We are allowed up to 25k if we make up to 100k of w-2 income, from 100k to 150k this gets phased out. SO lets say you make 116k and you max out your 401k this give you ~99k of taxable w-2 income which allows you to take advantage of the full 25k passive loss allowance where as if you did not contribute at all you would lose a portion of your allowable losses. Well I shouldn't say lose you would carry it forward and eventually you could use it down the road.

I like to max out my 401k from my employer because A. I can afford to as I have a fair amount of passive income coming in from RE rentals and B. I think it is a nice diversification to invest in stocks and securities and not just real estate. Real Estate is great while it is passive income it is still hands on management where stocks and bonds are much more passive IMO as you sit back and watch your companies either do well or not so well lol. Less control then real estate but less headaches as well LOL

I have begun investing in quality companies paying a nice dividend and have been very happy with the outcome. While Real Estate will always be my area of expertise I always liek to look at other ways to bring in passive income as well...

just my opinion.....

Chris

yeah 11k is really high. Not much money to be made with taxes that high unless you have a 4 unit or above.

I pay about 9k on my 4 family. But it also has a basement apt that I generate 675 a month for which pays a good portion of the taxes.

I tend to get above average rents for most of my units b/c I offer some nice perks. Higher property taxes vs investing out of state for me the lesser of the two evils is higher property taxes with piece of mind that I can be onsite to any of my properties in 15 minutes.

But If I got an offer like you did Nate I think I would jump all over it! lol

Chris