All Forum Posts by: Jad Allen

Well the high property taxes in Texas are a double edged sword. Paying those property taxes keeps you from paying state income taxes and also helps suppress the purchase price of properties.

Unlike most here and pretty much anywhere else I think college hurts more than helps. The only people who should attend college are doctors, nurses, and professions where a particular degree is required to start.

Most majors are a complete waste of time and money. First about 50% of students drop out before graduating. Then those that do graduate often work in jobs where there degree is completely unnecessary.

Here is a video I saw earlier this year about this exact subject.

How useful is college really?

What useful skills does college really provide? Little of what I learned in college is useful. I believe this to be true for most people. College leaves most students with a pile of debt ($35,000 on average) and the lack of any real skills to succeed.

This answer can be broken into two separate groups, new and experienced investors.

For New investors the biggest pitfalls are

- not knowing their market well.

- allowing emotions to affect their decisions

- Thinking this is a way to get rich quick

- Under estimating expenses: buying, repair, and holding

- Thinking that the gurus are selling something that is worth buying.

- However the biggest one is lack of knowledge

For experienced investors:

- being over leveraged

- focusing on # of deals or properties instead of cash flow

- not keeping an adequate cash reserve

- Not being honest with them selves about the true expenses of holding properties.

- I think lack of cash flow is the biggest killer to experienced investors

I have found that vinyl planks work great in rentals. They are very water resistant and easy to repair and replace. It also looks better than tile and is cheaper to install. I prefer the wood plank look.

2003 GMC pickup with 135,000 miles. I will drive it until it dies or until I come across another really good deal. I will always have a truck.

Sidebar, I think the money spent on cars more than anything else in this country keeps so many living pay check to pay check. It amazes me how many people struggle financially but have new cars.

Ohh, and when the weather is nice I have a 1966 Gto convertible.

It really depends, but for myself I would pay cash for 2-3 and use the rest to finance some properties. Low interests are great for long term return and wealth, but cash flow is king for a reason.

Most real estate investors who go bust, go bust because they are over leveraged.

Some other less obvious suggestions I have:

- Install high velocity toilets when buying a property, a backed up sewer line can cause a lot of damage
- Do not have garbage disposals. They break or get broke way too often.
- In the yard grass is your friend and flower beds are your enemy ( unless you enjoy digging cigarette butts out of bushes) Or paying someone to clean them up for you.
- Make sure no trees over hang or come close to touching your rough. Squirrels can really do some damage once they find a way into the attic.
- Always install heavy duty door stops!!!!
- When remodeling a property use orange peel texture for walls, It is the easiest to match when doing a patch job.
- I am very pro installing floating vinyl plank flooring. It is very tough and does not need replacing after getting water on it. If a section is damaged it is very east to repair.
- Have at least one unique feature in every property to separate it from the competition and save on idle time. For example a nice shower head will make a big impression on a high percentage of potential renters
- Always and I mean Always really check the condensate drain for AC units.
- In single family homes, put a clause in the lease saying not to store anything in the attic. If they put stuff up there they will leave it ( and no you will not find old baseball cards, gold coins, or a Shelby cobra up there. Instead it will be half of a Christmas tree and the elf outfits)
- Use cheap mini blinds, anything else will cost too much to replace

Any way that is just a few

There are pros and cons with both approaches. In high price areas such as LA, NJ, or Washington leverage has to be used. In the south and Midwest this is not the case.

Something to always to think about. Probably 90% of people who fail in owning real estate are overleveraged and lack cash. Might be closer to 95%.

Leverage is the fastest path to wealth, but it is also the fastest path to bankruptcy!!

Moderation and patience are greatly undervalued in business.

Brian excellent post. In this thread your post is the first that shows a true understanding of the current economic siltation and what the real possibilities for the future are.

Deflation is bad for the over leveraged which is why governments will fight it with printing presses. The great Depression was not caused by deflation, but more because of government intervention which prolonged and worsened a needed market correction (due to easy money policies of the mid to late 20s).

In Dec of 1920 the stock market crashed 47% and the economy went into a very heavy recession. Wisely the government allowed the bad investments to be liquidated and the market to correct itself. The economy was back on track within the year.

If the same action had been followed in 1929 then the great depression would have been a short blip in the growth of wealth in this country.

Unfortunately the government was to blame for the great depression and they are to blame for the current struggles. The government’s solution to problems they create is more government.

I have been installing granite in my rentals for the last year or so. I do the labor myself so of course there will be some saving there.

Anyway, I buy prefab 8ft counter tops that look great. After including the price of blades, epoxy, sealant, and core bits I am usually between $12-$16 a square foot.

My rentals are middle class (no war zones and no rough areas) and installing granite is an easy way to separate my properties from others. Almost every potential tenant loves them.

Installing granite is not all that different from cutting plywood after some practice. The key is to have help and the right tools. It takes some time and patience but the savings can be significant and they look great.

Just be careful, after word got around about how cheap I was installing countertops for I had a bunch of friends asking for my help.