All Forum Posts by: Val Csontos

@Chris Martin It does sounds great, and definitely keep us updated. This information can hopefully save you, I and others who are about to dispose a Sec 8 rental, many thousands of $$$$$!

I wonder if @Joshua Dorkin agrees, that may be we should Sticky the above posting so many of the BP members could become aware of it? I don't believe that even the seasoned RE investors have heard of this IRS rule yet. I know it is new to our CPA!

@Colleen F.  I have been telling our two boys since age 10 and 12 about at least once a week sometime more (I am a bit OCD) that they should follow their dreams when it come to choosing  career BUT in order to have a back up plan and live a worry free life, they should start investing in real estate early on , this way the financial pressure is off and they can really enjoy what they do! I gave them the example that our pluming contractor was let go from his job after 20 years of hard work with the same company.  Since you are a head of us by at least five years (our boys are 13 and 15 now) , I would be interested in your take on this. 

I am strictly doing "buy and hold" so I am probably not working as many hours on a regular bases as some others here on BP so they can visualize RE maybe easier as a part time possibility.

There is a catch of course, but that is normal when dealing with the IRS.  However if you have a long time Sec 8 rental, and you wouldn't mind to sell at ZERO Cap Rate this is your lucky day!!

Read the details on this directly from the quote below from the IRS publications:

Low-income housing. Low-income housing includes all the following types of residential rental property.

• Federally assisted housing projects if the mortgage is insured under section 221(d)(3) or 236 of the National Housing Act or housing financed or assisted by direct loan or tax abatement under similar provisions of state or local laws.
• Low-income rental housing for which a depreciation deduction for rehabilitation expenses was allowed.
• Low-income rental housing held for occupancy by families or individuals eligible to receive subsidies under section 8 of the United States Housing Act of 1937, as amended, or under provisions of state or local laws that authorize similar subsidies for low-income families.
• Housing financed or assisted by direct loan or insured under Title V of the Housing Act of 1949.

The applicable percentage for low-income housing is 100% minus 1% for each full month the property was held over 100 full months. If you have held low-income housing at least 16 years and 8 months, the percentage is zero and no ordinary income will result from its disposition

@Account Closed  That myth that you need money is keeping a lot of people of of the RE game, especially the poor ones with low self-esteem.

I would mention, thatWe started out my "buy and hold" investing with $1800 in mutual funds and a yearly income of $14000 in late nineties. I purchased owner financed properties/foreclosures with all no money down ( I searched for a buyer's agent who would lend me his commission at 0% interest for 60 months so i could reduce my closing cost to a minimum at closing table.) 

I built up a portfolio of properties (B properties in B neighborhoods), i had purchased for about 20% discount. I leveraged up to about 105% and with an cash flow of about $50-100, I had no reserve but my risk was very low as most of these SFR properties were only 5-10 years old and i had no net worth to worry about, other than real estate.

So where are those properties today?  They tripled in value  and just about tripled rents too! (you could say it was luck BUT I was new in this area an was only willing invest  in counties/town where the census data was showing a stable population gains, past and future)   Noways I have about  $1000 true cash flow for each, including reserves,  dept service etc.......

It is called creating wealth from thin air! All you really need is s burning desire to invest and a strong follow up.

@Patrick Britton  No offense but how can you fail of RE Investing? I don't believe this can be done. You can have temporary short term missteps or set backs and than learn from it and you move on and do a better job next time around.

And you should be able to take advantage of the only investment vehicle that afford ANYONE with a decent amount of persistence and work  an upward mobility. 

RE Investing reminds me to the Drivers License testing, it is not hard but some people afraid of it anyway, and sometime you might have to try 2-3 times to get it right,  but 5 years later when you are rolling down the street, who cares that it toke a few tries right?

@Cal C.  Actually we did not wait until our kids were 18, to talk to them about Investing. We have been asking them to help out and do their part.   Our older son is 15 and we started  to train him on updating our spreadsheets (tax prep/rent-roll) and both of them start helping out with cleaning painting vacant units etc. 

As far as career goes we have been telling them:  they should go for what ever they enjoy doing BUT in order the sleep good at night and not be vulnerable to the "empoyment at will" they should invest in RE so they have some investment income to sponsor a worry free/happy life and career of their choosing.

@Marisa Dickson Bigger Pockets is a great source to educate yourself for free about Real Estate Investing. You don't really need anything more really to get going. However if you would like to read something motivating and structured I highly recommend the Weekend Millionaires, I have re-read it recently and for the most part i had find it to be very relevant for today's RE Market. 

     You can buy it on Amazon for about $5. 

http://www.amazon.com/Weekend-Millionaires-Secrets...

You really don't need a mentor to get started. My personal believe is: it is more useful, and will have a better chance of success finding someone  (Mentor) to help you when he/she sees that you toke the time and effort to educate yourself and perhaps did a deal or two, because it shows that you really are committed to RE investing, so it is worth for an experienced RE Investor to spent the time and energy on you to help you along. 

Good Luck to you!

@Kyle J. Here in Maryland Licensed Mold-testing Companies will not perform the test unless they have the owner's permission. 

1.        I believe this a topic worth talking about, since most insurance policy do exclude this from their liability clauses. And you never know when you get a similar call. 
2. The property in question is an SFR built in 1998 and (the tenant has been there for about six months ) Our tenants asked us the other day to give an ok for him to do a Mold Test. He said his 10 months old baby has continuous sinus infections and he would like to eliminate Mold as a possibility. We have laminate floors (no carpet) in that home BUT they have a dog (possible allergies maybe)
3.        Another thing worth mentioning, vacancy for the above property is about $100 per DAY so i have to be thoughtful about this one.
4.        I have been an Investor/PM for many years but fortunately  never have any mold issue in any of our properties as my team does take pride in maintaining our units in above average condition. So what would/or did you, you do in situation like this?
5. Thanks 

@Justin Escajeda  in our area we write leases for $150 more than market, (we advertize the unit at market rent but we explain the tenants about the rent discount if they pay on time) and we discount the rent by $150 if they pay on of before the 4th of each month! 

     This is very effective as almost no one is ever late! This way now we only "collect" rent for 4 days a month!

      Also we gave the tenants our Business Bank Account Number and they deposit the rent they just write the address on the deposit slip(we can see copy online from the bank). If they send me a check than they must pay me $13 handling fee for each! So now i no longer collect rent either just verify the amounts. 

Check make sure this is legal in your area. In our area this works fantastic. I personally tested the rent discount in court and it did work!

Good Luck!