All Forum Posts by: Jack B.

 Dude, calm down. As I've repeatedly said in my OP and other posts, I plan on taking it out of their deposit, not eating the cost. And again, spending thousands on vacancy and turnover costs over $200 that I can take out of their 3K deposit on a house I make 60K a year off of is just plain bad math. 

I agree with you that they suck as tenants. As I said, I stopped responding to their texts when they asked if they had pics. For one, you have the same notice I have, I sent you what they sent me after all. Second, you have a bankruptcy, a brand new Lexus SUV, and all kinds of past due utility bills and I've personally witnessed and photographed many of the violations they sent you. No debate, pay the fine or I will give you notice to move out since you are on a MTM lease and I will take it out of your deposit. Good luck with a bad landlord reference, a bankruptcy, etc. finding a new place to live...

Heck, since I don't want to press the issue to much until rental season (spring/summer) I may just go along for now without saying I'm forgiving the fine. Then I will just give them notice in April and take it out of their deposit, send them on their merry way into the trailer park they belong in.

All I know is anything BUT carpet will be going into my rental when the carpets need replacing. Each and every single tenant craps on them like it's 1999.

The other thing too, google street view is very telling of a neighborhood...I avoid investing in the ghetto. 

Hmmm...I could see that, though I have not read it anywhere. I suspect areas like Detroit, Compton, St Petersburg, etc. are going to be much rougher tenants and much higher PM turnover. 

I've never used a PM to date, so take it with a grain of salt, but in my opinion, even though they deal with the day to day plumbing emergencies, rent collection, leasing and paperwork, you're still on the hook in court, financially, legally, emotionally. They just get a new client. You could be sued for millions. Buying properties in C areas is just plain problematic. Higher cap rates be damned, not all things can be measured with cap rates...I'd much rather buy an A or B building. Pay twice as much, buy half as many (The Magic of Thinking Big).

Crime maps on Trulia works real well. Also, City Data Forums are good if you need more information about trends or general areas to avoid, etc. 

 So funny you mention that. I've been considering doing just that as I don't want to have all my assets in RE. Right now I'm about 17% cash 5% stock, with the rest tied up in RE. I have enough equity to buy a large complex, but I want to keep maybe 500K from a cash out refi long before an exchange. I can use the money to spruce up the houses a bit too. Perhaps keep my favorite one as well. Exchange to a different type of rental. Eventually when prices dip again I will deploy that 500K into highly leveraged houses in Seattle again, maybe more, riding another wave of equity up. 

It really is true about equity. Out of the 200K a year I make from my small portfolio of houses here, 75% of it is from appreciation while the rest is from principal pay down and cash flow. Gotta love it. Make good money while you sleep. And I've only been doing this a few years, adding a property every 2 years or so. It's been incredible in just a short period of time even while slowly adding to the portfolio. Can't wait to see it really snowball now that it's in place.

For example, I set aside a specific amount for each rental. Each year it comes out to about 7,500 in reserves to cover vacancy, maintenance, for each of a small handful of rentals (let's say 3). It's really rare I have to touch it. An odd repair of a $100 here and there, that's about it. A little bit of vacancy, that's about it. Of course it is set aside for anything damage deposits don't cover, and cap ex, though I'm leaning toward flipping every few years to avoid cap ex, as it will eat you alive if you hold forever. I'd hate to have to spend 30K on a new roof, 40K on a kitchen remodel, 15K per bathroom on EACH bathroom remodel, paint, carpets, etc. as it needs updating over 30 years...

I figure pooling it is kosher since there I operate the rentals like a multifamily as a single owner. Thoughts? To date I'd say I have yet to spend more than $1,000 on repairs, capex or vacancy combined per year so far. In four years...But I have two roof replacements coming up. If I sell next year I may perhaps come out even further ahead by keeping these extra 6.5K each year...

I agree with you, but when you said CA RE I thought your were buying 700K properties that go up 50K+ a year each, etc. Sounds like you're using the BRRRR strategy if not at least in part. Brilliant strategy on the escrow transfer from the lender. That's how the mega wealthy pay almost nothing in taxes. Borrow against their assets...Pay the debt back with devalued dollars. Refinance, repeat...

From what I've read online/Nolo if you didn't buy not deductible.

 This is one thing that worries me about selling my fancy houses in Seattle and exchanging them for apartments is the fact I'd be losing this fantastic appreciation. Alas, I will have to do it eventually as you say. I want to preserve my capital from residential real estate cycles at some point.