All Forum Posts by: Kevin S.

The first question I ask myself when considering this subject is "what is the point of UBI?" The answer that most proponents seem to believe (or at least pretend to believe) is that UBI will provide people, especially low-income individuals, with greater economic freedom. But let's think through this for a second. How are we going to pay for it? The answer is most likely 1) an increased tax on those above a certain income level (I won't say "the rich" because we all know it will also hit middle class) 2) increased taxes on business and other entities, and 3) by the country going deeper into debt. The biggest issue with 1 & 2 is that, because the UBI doesn't do anything to increase production or decrease the production costs of goods, most individuals/businesses are going to pass those tax costs down to their consumers. So if low income individuals get $1,000/month but their expenses across the board increase, are they really any better off? UBI doesn't work, it's just a way for politicians to buy votes by offering a cash incentive without truly telling people the costs. And for those who are promoting that it needs to be tried to see the effects, Finland did a 2 year test of UBI that ended in early 2015 and it failed.

@Michael Masterson If you feel the need to, or just want to do an inspection to see if there's been any damage or anything to your property then you can give them the proper notice and do an inspection, however if it were me I wouldn't focus on the dog (especially since it's a service animal). Also, just as an aside, a strict "no pet policy" isn't going to be a reason you can give notice since a service animal is not a pet. Just give notice due to the extra person living there in violation of the lease, do a final inspection to make sure they don't trash the place, and move on.

@Michael Masterson give both the tenant AND the non-tenant who moved in 30 days notice and get them out, especially if you believe you can fill the unit quickly at a higher rate. This tenant has already proved they are willing to ignore the rules outlined in their current lease, so why bother with the future headaches?

@Michelle McGinty the tax benefits of putting money in a 401k or other retirement vehicle are there to help people save for future retirement. Because of this, you cannot benefit from this money in the present or at any time up until the retirement age of your Plan without incurring the tax penalty. So no, there is not a way to access and use your retirement funds before retirement age without incurring the penalty (unless you are just taking a loan from the 401k, but that requires it to be repaid typically within 5 years).

@Brian H. if you just want to keep it simple, Ally Bank has a pretty good rate on their savings accounts, and their website is very user friendly. Their online savings rate is currently 1.90%, and I know I've seen a few other online banks that hover around the 1.9%-2% range.

@James De Stefano in my opinion, as long as you are addressing issues as quickly as you can when reported to you, then there's no reason to give them a credit, unless you think it highly likely that they will leave without said credit. If they were renting from an apartment complex or if they owned their own place, there would still be time delays in getting someone out to do repairs and getting said repairs finished. That being said, if these really are stellar renters and your gut tells you this will help retain them, well $50-$100 is a small price to pay for renter retention. 

@Taylor Holden if you aren't already, I would get in touch with @Deren Huang and get on his email of Oklahoma multifamily listings. Additionally for off-market, outside of talking to wholesalers you might try identifying specific neighborhoods in the city(s) you're looking at, then using things like the Tulsa County Assessors website to look up the properties. This will give you the owner and the owner's main address. You can then send do a targeted letter/postcard campaign to these property owners to see if they're interested in selling. Good luck!

@Ethan Grier, I'm definitely not as well versed in self-directed 401ks as I am in corporate 401ks, but my guess (based on all the audits of 401k plans I've done) is that a rollover from your employer's 401k to a self-directed 401k is similar to any other rollover out of a Plan, you can't do it unless you've met one of the milestones I mentioned in my first post, such as leaving the employer, attaining age 59.5, reach retirement age, death, etc (unless it's money you rolled over from a previous employer's plan into this employer's plan). If you haven't met one of those milestones spelled out in your plan, then you cannot (to my knowledge) have a distribution, even a rollover. I'd check with other's more familiar with the self-directed 401k's chime in though, I'm interested myself to hear if it's possible or not.

@Ethan Grier, based on what you said, I'm assuming this 401k account is with your current employer, not a former employer (if you've left the employer, you have a few additional options on making 401k withdrawals that are not available to you if you are currently employed there).

Really there are two main options on using your 401k from your current employer, BUT they depend on your 401k Plan specifically allowing these options. If you aren't sure if they are allowed by your plan, contact your HR and they can tell you. The two options are:

1) 401k loan: If your plan allows it, you can take up to 50% or $50,000 (whichever is the smaller amount) in a loan from your 401k. Typically these loans must be repaid over a period not to exceed 5 years, however if used to buy a owner-occupied property you may (depending on how the plan is written) have up to 10 years to pay it off. The nice thing here is that, while you are paying interest on the loan, you are paying it to yourself. One thing to be careful of is if taking a loan from your 401k disallows you from contributing and potentially missing out on employer contributions. You don't see that on most plans that allow loans, but it is a possibility. I would make sure you get the full scoop from HR on all the in's and out's of your Plan related to loans.

2) Hardship distribution: Normally in a 401k plan, you aren't allowed to withdraw money until you hit certain milestones (leave the employer, reach retirement age, death, etc.) However some plans allow for hardship distributions, where you have to have a specific set of needs (and documented proof of such needs) that allow you to withdraw money early from the plan. Downpayment for an owner-occupied main home purchase is one type of need that is allowed for hardship distributions. The biggest downside is you have to pay a 10% tax penalty PLUS the regular taxes on the withdrawal, so you end up losing a good chunk of the money withdrawn to taxes.

Hope that helps, good luck!

@Michael Vu I agree with @Tim Herman that your expenses for vacancy and CapX are understated (I also use 8% for vacancy, because 1/12 = 8.333%, and 10% for CapX, though these are just estimates). I also think you should look into if you can/should pass the cost of heat and water on to your tenants. But at the end of the day, when you live there you'll be negatively cashflowing ($470.50) if you use the %'s I mentioned. Could you live anywhere else in your town paying only $470.50 in rent? If not, then you're saving money every month even while living there. And if you can pass on the cost of heat/water that gets you a bit extra, but based on these numbers you're not going to make even close to $200/door, even if fully rented. Good luck!