All Forum Posts by: Jeremy Komer

@Steve Sayler

It seems like a bad idea to inject the uncertainty that the government might retroactively change the tax status of any investment at anytime.

Seems like a great way to get people hoarding cash or investing in other countries.

As for only listed investments in an SDIRA that can make sense but not sure how to make it work for real estate. They could also just cap the tax free value at something like $10M and the rest is taxed when you sell just like capital gains instead of income like a 401k.

They are watching people like peter thiel and mitt Romney abuse the SDIRA and want to find a way to make it less advantageous for the super wealthy to hide hundreds of millions from taxes.

Also for budget reconciliation they only get to count tax revenues in the next 10 years which is why some want to tax unrealized gains so they have enough money to reconcile a massive spend on infrastructure and the social safety net

@Peter Morgan

Behr premium plus (mid tier) has always been mostly 1 coat for me. I had to paint over dark purple once with white and that did take me 3 coats for perfection but for a rental I probably could have gotten away with 2.

$150 or so for 5 gallon buckets with a pro account discount.

Allot of people will bag on Behr because they used them years ago when they were terrible but they've come a long way and are pretty good now.

I've used their exterior enamel, cabinet and trim paint, and just plain old wall paint to good results.

@Laura Guy

Really we just need to educate people that by pushing all the risk and responsibility onto the property owners and no responsibility on tennants only increases the cost of housing and further pushes it into the hands of institutions that will never have an incentive to work with tennants or be responsive to them.

The states with the most regulations have highest costs for those respective goods.

The government's job is to setup the sandbox then let the kids play.

The moratorium wouldn't have been so bad for landlords had the government distributed the billions in aid it promised to pay rents. But unfortunately those funds only 10% got distributed.

We can do mortariums and social safety nets if we are willing to do the leg work BEFORE you actually have to use it.

@Paul Smythe

Nope small landlords are dead!

DM me and I'll buy all your properties 😜

What rates are you seeing in your local markets for things like plumbers, electrician, general or handyman work and painting?

Just curious how Covid has impacted prices.

Lead times for work have exploded but prices haven't gone up at the same rate.

In Cincinnati

General labor is probably 40-50/hr

Plumbing is 125

And electricians can charge 200+/hr

This represents the cost of everything except materials. Out of this come taxes/benefits and overhead costs.

Personally I don't see these costs as outrageous but I don't have allot of context and want to do an informal survey of what you see for rates in your area?

@Sarah Bridges

The 1% rule is really just a quick sorting method if you have allot of options. it's not an end all be all for REI.

If I was relocating and needed to find a deal I would try to understand the market first. Is it growing or shrinking? What are the vacancy rates? Is LTR or STR a better option? What does maintenance costs look like? Are houses new or old?

This dictates what is a deal more than anything.

For example in Ohio if I was using the 1% rule

Columbus: 1% rule doesn't exist, more like 0.5% rule and good cash flow is hard to come by. But the market is growing and values are likely to increase at an above average rate so as long as you can break even your probably ok. But I would never invest in the market because of the 1% rule potentially missing some great deals that might hit 5-10% appreciation per year for the next few years.

In Cincinnati, 1% rule isn't on the market but you can spot hidden value and negotiate your way into and above the 1% rule. You can find cash flow and with patience find a double digit cocroi.

But again looking at Zillow or the MLS nothing looks good according to the 1% rule. You can only find value by knowing the market and the neighborhoods well. Going to see houses and spotting the value the owner doesn't see.

In both these markets, the 1% rule would dictate that I don't invest. But because I understand the local market I can find opportunities.

Go talk to realtors, analyze 100 deals off the MLS,talk to PMs about maintenance costs you can definitely get upto speed quickly and find a decent deal if your determined. But hard and fast rules like 1% don't work well as the main reason to invest.

@Casey Mayton

Pull out excel and run an analysis on using $50k to buy rentals with leverage over the next 10 years. 60k in cash flow (500 a month) ~37k in principal paydown and $69k in appreciation (3% per year)

Total = 166k with enough cash to buy another

You also have tax benefits not included here.

Compare that with about 8% returns on your 50k in a basket of stocks or index funds over the next 10 years. 108k not bad either but you'll get it with a 20% tax bill on your 58k gain if you sell.

Assuming you reinvest your cash flow rentals snow ball and overtake stocks within 5-10 years

Stocks are very passive however, set it and forget it. Dollar cost average as you go and you'll have a very nice return that is in liquid assets without much work.

If you did rentals however you did allot of work, finding the deal, negotiation, closing process, managing the rental, etc. But in the end you'll have achieved over twice the return of stocks in the long term.

It really come down to how much work you want to do and what sacrifices your willing make and what your other obligations are on your time and money.

@Jaquette Green

Unless you have allot of construction experience and can recognize termites, previous water damage, what wiring is ok vs bad, etc I would get an inspection.

I've seen hundreds of houses and I still get inspections because they always find things I miss even if it's minor.

For Instance, I recently learned not all knob and tube is bad and it was used in some cities into the 1980s!

The more you know!

@Brittany Baker

I'm on track to do 100k a year in profit by 2030.

Currently about a 1/3 of the way there.

For me it takes saving 60-80% of my take home pay to do this but the finances work out long term as long as I'm selective about finding rentals that fit the strategy.

$500+ mo in profit

10% coc ROI

2-4 family (risk management)

Local so I can self manage

I've seen hundreds of houses over the past three years probably made 10 or so offers and got 3 places under contract with a total of 9 units.

It's not easy, it can definitely be stressful, and I'm trying to get out of the stage of still doing allot of my own basic repair labor.

I have had a plumber steal a small sum from me, I've had plenty of contractors ghost me. I've been yelled at a couple of times and told I'm going to make it a couple of times.

But at the end of the day, I own these units and I'm proud of them. I carefully place tenants and have very few issues, some even fix basic stuff on their own!

The road to financial self sufficiency is hard, to quote a mentor "if it were easy we'd all have 1000 doors and be fabulously wealthy, but it isn't and we aren't"

@Joanne Tsai

It's hot compared to pre pandemic market but not as hot as several months ago.

Now some good properties sit for a couple weeks, overpriced properties have to cut prices to reality, etc

But SFH that are in good condition and in good neighborhoods still sell within a few days to a week.

Eventually the crazy train had to slow down, you crammed two years if demand into 6-8 months.

The market is going to remain a sellers market for the foreseeable future though, just not enough supply to satisfy the demand and that will take years or a recession to fix.

Builders in Cincinnati can sell anything new for 600k+, where this money is coming from I don't know, but if there is no motivation to build smaller affordable homes so at least in my area it's going to be a sellers market for a while.