All Forum Posts by: David Krulac

@Charles Perkins  One key factor is how high are the coindo fees, many places have high fees.  Also watch for extra fee to cover a big upcoming expense.  And at some condo they either have a limit on rentals, like no more than 10% of the units or they prohibit rental totally.

We've bought land, houses, condos, and notes in our IRA. We've never used the checkbook IRA LLC method, buy have borrowed money privietely by individuals or their IRA to fund these purchases with non-recourse terms. I forgot the exact figure but a custodian representative told me that something like a third to half the funds they hold for the IRA are not deployed in an active investment.

We've owned many condos as rentals, never occupting ourselves. The grounds maintenance and the building maintenace (like roofs and siding) arer covered by the condo fee.  And often there are also some some other utilities or insurance incldued in the condo fee.  At one condo development where we have owned 7 individual units, the condo fee also includes trash and building insurance.  In the first build section there the heat and hot water are also included in the condo fee.  Units built there subsequently have seperate heat pumps and hot water heaters so there the condo fee does not include heat and hot water. In that development there are only 1 and 2 bedroom units and as a result there are very few children and the population is young single people, couples, and senior citizens.  The condo fee is based on the square footage of the unit so bigger units pay more condo fees.  There are also amentities there including swimming pool, club house and tennis courts. We have always had no problem renting the units or selling the units.  Which brings up another advantage of owning condos.  You can sell individual units, which you can't do with apartment building without condoing them. (we did condo an existing building but thats another story.)  And the second big advantage is that the buyers of the condos are largely owner occupants who pay more more per unit than the investor buyer poays for apartment units.  We of course are not buying at retail of the 7 owned there 3 were foreclosures, which were bought at below market prices, then rented for years, sometimes as long as 20 years then sold to mostly owner occupants.  Two others that we bought there were from long time owner occupants who moved on to bigger single family house and we purchased at below market due to the economy at the time and updates needed.  We've owned other condos in other developments as well as apartment building and have done well with both, and there are advantages to both. 

@Joe Villeneuve agree 100% and have said the same thing here and other places.  There are deals on market and off market.  And it doesn't matter what's going on in the economy, its true in up markets, down markets and stagnant markets.  Recently bought an on market house listed since July, paid $123,000 less than appraisal and a formerly listed on market price.  It was still on market and got the big discount due to days on market.  3 other brand new houses, listed on market were bought from builder and got through the builder below market 30 year moprtgages of 4.25% interest and 4.75% interest.  Also bought a property at Sheriff Sale, obviously off market for about $60,000 below market value. So there are deals both on market and off market, but the key is you need to know what the value is.  If you don't know vlaue you can not know what is a deal or not.  

yes we would usually offer an incentive, but depending on the overage, that might be more than enough overage.  Sometimes the overage is plus $50,000 to $100,000

We have bought over 200 tax sale properties. We have gotten Quit Claim Deeds from the former owner, or filed Quiet Title Actions if former owner was not found or decesed, and we have also owned for over 21 years and claimed adverse possession. You will find that many former owners have NOT received notice.  The must recieve all 3 notices. One is a certified letter which many don't bother to pick up. The statue of limitations does not start until the former owner gets notice.  If the owner is deceased, then the heirs need to be notified also.  We had one property where there were 21 heirs, and the former owner had died in 1910.  It was a massive amount of research and costly Quiet Title Action.  Another case we had to Quiet Title a person who didn't sign a deed from 1897.  

Four of the biggest advantages of long term landlording are property appreciation, rent increases, debt pay down, and tax advantages. Long term tenants pay down the mortgage until the mortgage is paid off and then cash flow sharply escalates. Property prices have escalated tremendously over the last 5 years, further propelling values of rental properties along with the rent of the residential market.  Compare 2019 prices with today's prices, and in most places there are big differences. Our criteria for buying rental properties are desirable neighborhood with mostly owner occupants, good schools and low crime rates.  We have had tenants stay over 30 years and the average tenancy is 12.5 years. One multi building we owned for 37 years, improving the property over the years and ended up selling it for 6X what we paid for it. Another multi unit building we owned for 24 years and sold for 3X.  A single family detached house we oned for 25 years and only had one tenant we sold for 3.25X in 2019 and it now worth $100,000 more than we sold it for.  An extraordinary deal we did we bought a house for $30,000, and the first tenant paiud $2,050 a month in rent. We owned it for 22 years and sold for $435,000.  It was well worth owning as a landlord.  

There has been talk of Section 8 cuts for literally decades.  It never happened!  There might be a crack down on waste and fraud in the program, but the program still will survive, too many tenants and landlords depend on it. Haven't seen any changes locally.

You should be looking at Chicago REIA groups where there are investors and money.

Personally, I'm not a wait on the sidelines type of person, so maybe what I would do does fit everybody. But here goes, I would not wait, I just bought 3 brand new houses and got 4.75% fixed for 30 years and 4.25% fixed for 10 years then variable for thenext 20 years. And these were on investor, non-owner occupied mortgages. If I was in your shoes I would buy a place, single familt, 2,3, or 4 untis, and occupy one and use my VA 100% financed zero down entitlement. BTW, thanks for your service. After doing that and moving to the new place, and renting out the old place I would get a second mortgage or HELOC on the old place and get about $45,000 in cash and maybe buy another place. And keeping the existing 3.25% mortgage on the old place. IMHO, I think its a great time to buy, besides the 3 new construction, I also bought 2 other properties and have an offer on a sixth property right now, crossing my fingers. One of the resons that I say don't wait is that while others sit on the sidelines that means less competition from other buyers and when interest rates do decline two other things will happen: 1. more buyers will come out of the woodwork increasing buyer competition AND 2. Prices will rise as demand exceeds supply and you will have to pay more. I'm always a buyer, but I still believe that now is a buying opportunity and I am putting my money where my mouth is.