All Forum Posts by: Jonathan R McLaughlin

I would consider spreading some partial payments over time tied to some metrics…not to mention looking back at least 3 preferably 5 years.

Facts as stated sound heavily in your favor. I would push the insurance company on this…you really aren’t the lawyers client the insurance company is. If you settle i would understand the consequences of that on your insurance. Make them work for you to the extent feasible.

Thoughtful answers, cool!

1) are you counting the pay down as part of your return though? Want clear

2) hmm…I’d have to think about that,  not sure that’s true. Most black swan events to your property are insurable and within your influence if not control. Not much you can do about the Japanese yen being devalued or some such thing

5) short answer is no, though there are some exceptions which are convoluted and not worth going into at low volume. 

Depreciation is a benefit though, it can be recaptured at 25% but lots of ways to defer

cover this in your lease, and many municipalities will send you the bills as well as the tenant. 

A few things:

1) sounds like you aren't counting loan paydown as part of your ROI...thats a big deal

2) careful of the S&P number. Long term average or even recent returns can be a misleading baseline, lots of external reasons that number can be much less than 8% for any given time. You aren't pricing in that risk

3) Capex is a thing, even on a condo

4) 3.5% mortgage seems quite unlikely right now. More like 7-8%.

5) Taxes--expenses, including interest are deductible

good chance the guy you were talking to was trying to say focus on value vs. price. If he makes money at the price he offered what does he care what the listing price is? That is just the sellers estimate of value. He is valuing the property at what it's worth to him and making sure he gets the deal. 

But the classic way to make LESS money as a seller is to price too high to begin with and ride the market down.

Go to Craigslist “rooms wanted” and “rooms for rent”. You’ll quickly come up with a pretty accurate magic in between number. 

@Bob S. is right (of course) about the big picture. If you are buying HOA it depends on what the money is going to. A relatively high fee can be fine if it means the association is financial sound, spends money on needed maintenance when it's needed and adds value.

The more common trap is not analyzing a low number and finding out you will be on the hook for special assessments, emergency repairs and general decline/disinterest

Keep in mind that places that are “tenant friendly” are usually that way because people have been making a lot of money in real estate for a long time

Double check that the prepayment penalty applies for a sale. For our commercial  loans it’s only a refi with another bank.