All Forum Posts by: James M.

Thanks everyone! I believe I have a better short-term vehicle for investment and then, hopefully, another investment property which nets out a slightly better monthly income. I was wondering if I was missing anything big, you all helped me work that out. I appreciate it.

As an "accidental landlord" from a home I purchased in 2005 and started in renting in 2011, I've been carrying a negative cash flow property for five years. It was my "starter home" and is now one of three rentals, with the others profiting an average of $350 per month (after expenses).

So now, with home appreciation back to 80/20 LTV, I have the opportunity to refinance the property. On a new 30-year loan, with a relatively decent interest rate, after expenses, I will profit about $15 per month. I'm still thinking about selling and being totally done with it, but I am wondering if there is some advantage I need to better consider.

In a perfect world, the property will continue to appreciate. I could eventually cut out my property manager, and gain about $100 more cash flow per month, but I am not at that point now. 

Any reasons I should choose to refinance instead of sell? Thanks!

Depends how you look at things. His book and research seem like they work out well. Bulls tend to say that the Bears will inevitably get it right every once in a while. that being said, if you followed his advice over the past couple of months, you would have made money, not lost it.

We have to see what it means for real estate.

I hope it works out that way for you, and anyone else reading this. I know that many people are fairly vulnerable to a bubble bursting and will not have the available capital to move ahead. In fact, they may be in a very bad situation. I've seen it and you've seen it. 

The reduced competition and lower prices may be because investors like you and I are out of the market. That's why we need to stay educated and smart in our investments. Reduced competition means that the majority of people in the market will be out and profitable deals may be harder than they have been since 2008. As the OP refers to, small investors may be in a vulnerable place if hedge fund managers decide to cut their rates or unload unprofitable homes.

@Hersh M.

I liked the book for the fact it was simple. One issue ties together all the others ... demographics, which should concern us as real estate investors as we need PEOPLE to buy or rent the homes we are providing. If we have mortgages out on rental properties (like me), we really need to be concerned about things like demographics as decreasing populations means lower rents.

That being said, the concern for Harry Dent and his bullish ilk are that the fears of deflation and a stock market crash is that it keeps people out of the market for many of the potential gains. As you saw in the original title of the books (it's been changed) that the great deflation was supposed to come between 2014-2019. I read his stuff every day and they always have a way to show why it didn't happen. I'm gathering that they have been saying the same things for the last few years and not a lot has happened since 2008. While demographics is important, economics are not simple.

Still, as for me, Dent's concerns line up with other real estate investor podcasts I've been listening to who advocate paying down the mortgages and owning the houses outright, rather than carrying many mortgages. When I started I thought I would aim for ten rentals, all with mortgages, and then start paying them down one by one. I am reconsidering that strategy for something smaller and more conservative.

All bubbles burst. It's just a matter of time. If Dent is right, we still have a few bubbles to burst. He says real estate is one of them. Small-time RE investors would do well to consider what a baby boomer sell-off will mean to their portfolio over the next 10-15 years, especially if you have a mortgage, and especially if your house is not nicely cashflowing. He is worth reading and considering for these things.

If you are interested in capitalizing on changing markets, he has a few subscription services that will help you invest and make money in a declining market. Then you can use those profits to buy more real estate. At least that is what I am doing.

Definitely yes I am chalking this up to experience. Thanks for all the input and discussion. In the end, the. tenant agreed to pay for a portion of the torn carpet. 

Some of my lessons:

• Increased awareness on the cost of replacing depreciating items (like carpets and paint)
• Need for increased communication with tenant (and inspections ... though carpet damage occurred in the last month of tenancy)
• Charge a pet fee and not a pet security deposit

So can a landlord charge for installation while acknowledging that the carpet itself has no value?

Smart and simple. Thanks!

 I hear you.  I have learned... 

Thanks!

Our rental has hardwood floors. The tenant left some large black marks on the floors. As they are box-shaped we think they are some sort of radiator that partially burned the floors. The damage is in two rooms with approximately 350 square feet. We have about 600 sq ft. of hardwood.

Before they moved in, the floors were pretty well-worn, but clear of these stains. Even before tenant move-in, the floors could have used a resurfacing, but with the stain, it is a much bigger necessity.

I am not sure how to proceed. Here are some questions:

• Does hardwood floor surfacing "depreciate" like carpet?
• How can I charge my tenant when the floors were already worn and needing a resurface? I believe I need to charge something because this forges my hand to do something that did not need to be done.

Thanks for any counsel you have.