All Forum Posts by: Anna Shaver

@David White  Welcome.  This site is awesome it has a huge amount of information for you to learn the business and expedite your learning curve.  I too wanted real estate to be my full time job at one point and learned that my job provides the stability and income for me to continue to invest.

Along your journey you will determine the right path for you but it doesn't have to be full time or not at all.  There are lots of degrees of involvement along the way.

I enjoyed this post which had other articles to check out as well as some good podcasts to start with.

http://www.biggerpockets.com/renewsblog/2014/05/25/getting-started-in-real-estate/

Enjoy the journey.

@Matt Smith   Don't do it.. Based on my criteria he wouldn't work.  If he has had a prior eviction, you don't want to go there.  Theft, sounds like he has had some issues, you don't want him to be your issue.  It is easier to make the decision now and pass, than to have to evict him and start the process over.  It will cost you less money in the long run to find a stronger tenant now.

@Shante Harris  Even if you are not using a Real Estate agent in a transaction you will still want to use a title company or a closing attorney.  Different states have different processes.  California uses title companies.  It sounds like you may have not had personal experiences with real estate transactions.  It is good to understand the process.  This can be as simple as picking up a Escrow Principals and Practice book to read over it and understand what takes place.  This would apply to California, you can see what would apply to your area.  

@Loren Thomas  Wow, it looks great, never would have realized you could do this.  Good call on the resin, it will make it last and wear much better.

@Johnson H.   When we bought our first property in Pleasanton CA (San Fransicso Bay Area).  I bought the condo in aprox. 1992 from a friend who had it for a year or two.  She lost money, we bought it lower than she got it for.   We moved a couple of years later and bought a house from a couple who also owned their home for a couple of years, they lost some money on the sale but needed a larger home.  We kept it for 2.5 years and made money on our sale which we used towards our down payment in our current home.  

Real estate is cyclical and the cycles are not always well defined and happen more frequently sometimes than I think people will admit.  We still have the condo and have watched the value change sometimes going in the right direction and then losing ground.  Over time it has been a good investment and we are happy with it.  As long as people who own real estate can own for long term if needed and buy with some skin in the game it usually turns out ok.   I wonder if we are also at the top of a mini bubble in some markets and may lose value once again.

@Will Wu   She may also be feeling overwhelmed because she just lost her father and this is outside of her knowledge and comfort zone.  It depends on her life experiences.

@Tammy Wise  As someone who has one and has had it for more than 15 years, I have been lazy and should have gotten rid of it long time ago.  It has not performed very well, I should have just invested in a S&P 500 fund instead, it would have done a lot better.  Even after paying taxes on my returns.

Maybe it is my fault for not seeing if we could switch ours into something with a better return within the policy.  We were really young and someone we trusted encouraged us to get it and setup what it was invested in.  The good news is that it does have a cash value and we will be cashing it out to help pay for my daughters college education.  We made very little, maybe $2000 - $2500 for each policy (on top of the value we will receive back).  The cash value is really the cost basis or what we have put into it.  Ironically there will be very little taxes on the surrender because we made no money.. LOL ;)

We could have increased the life insurance policy payout over time to increase what we could put into it but we didn't.  The investment portion is tied to the size of the policy so to increase the investment, we would need to also increase the life insurance, which at the time wasn't something we were interested in.

We will now just get a standard 20 year life insurance policy and call it a day.  I am actually doing this in the next month, getting the new policy set up and surrendering the old.  Because we have had it for so long there will be no surrender fee.  Other people on this board may have had a better experience.  The company offering it got a good deal.  They have $40K on top of the cost of the life insurance fees that they had without paying hardly any return.  We will be getting it back and I will write it off to a lesson learned, although it took me a long time to take action.

If you are considering it for an alternative to a 401k there was also mention on one of the podcasts or blog posts of using HSA medical account contributions which can grow tax free for medical expenses later in life when these costs will be higher, downside might be that the companies you have them with might not offer many investment options so the return might not be as good as your options in a standard investment account even taking the taxes into consideration.  It sounded like this option would be after you maxed out your 401K.  I think the individual yearly contribution is around $3000 and is around $6500 for a couple.  If you are interested you would need to confirm. For me I have an old HSA account from when my employer switched back to standard benefits so it sparked my interest because it already has some money in it that I have been slowly utilizing.

If you are self employed the Sole 401K as a self directed account sounds very interesting.  You may want to check it out.

@Michael Jobe   Your broker should have a team leader or person within your office you can talk to who can assist you with the proper language to use.  Because it is going through your broker they have a benefit and should be happy to assist you.

@Emily B. I guess I should also clarify older neighborhood, in our area it would be built in the 60's or 70's.  The newer homes are much larger and a lot more expensive.  In many parts of the US, older would be a very old home and I wouldn't recommend that because you could have other challenges.  Each area has a typical decent entry level home with certain expectations that is easier to rent.  In our area that would be a 3/2/2 that is 1200-1400 sq ft.  In some areas in TN this would not have a garage but a carport and that would be ok.  It depends on what the expectations are where you buy.

The sweet spot for rentals for me is a home that is in a safe area, may not be the best, but isn't bad, where a family would feel comfortable and could become a long term tenant.  With a long term tenant you don't have the turn over cost of possibly new carpet and paint and costs to get the property ready which would also include some vacancy.  This would be a lower cost home than the best areas but still command decent rent for its cost.

@Emily B.   You can look on craigslist to see what property managers in your area come up a lot.  Check out their website, if they look professional and have good properties (look at their listings page), give them a call.   Let them know you are looking at buying some rental properties.  Find out what their rates are (the percentage they charge).  Ask which older working class neighborhoods rent well for them and see where they recommend you look.  They can tell you the range in rents and what to expect.

Not everyone will be willing to help but if you let them know you are just looking for some basic feedback and are respectful of their time often you will get feedback.  If they don't know, you can also ask is their someone in their office who you should talk to.  It might not be they are unwilling to help but the person you are talking to hasn't really thought about it or worked with that side of it.

You can also check out http://www.rentrange.com/for-rent-housing or rentometer.com