All Forum Posts by: Ralph R.

Jack B. I could care less about how many dollars somebody has. Wealth isn't measured in dollars it is measured in time. How long a person can live at his current standard without working is his measure of wealth. This guys measure of wealth today is how long can he live before the money is gone. Somebody that spends foolishly will always be poor. If you spends wisely and invest wisely you can live indefinitely without working. this provides the freedom to do as you please when you please. That is true wealth. It's not about dollars. It's about time. RR.

Warren Halstrom At 55 I moved to alaska I had a dog 3 bags of belongings and a 3 month job. I also had an underwater house that rented about 100 dollars a month below the payment. I've been here 10 years. Check my profile to see what I have today. Here's my .02 worth. You are not making any money on a 2/3 paid for rental that doesn't cash flow. You will not build true wealth on cash flow either. Sell the rental and reinvest it somehow. Equity in a house is a double edge sword. It provides security but it limits opportunity. 2/3 equity in a house is a little like stuffing money in a mattress. The longer it's there the less you can buy with it. At 55 you need to utalize every opportunity. You said something in your post that scares me. The first step is to learn to live within your means. Since you are talking about selling to help with household finances that tells me you want to sell to pay the bills. Selling in this case won't help. Get those bills paid, learn to live below your means so you can sell and reinvest your money. If you just sell it and spend the money in a couple years you will be right back where you are today. Remember if you want a different result you need to change what you are doing. This type of change takes a long time and is not easy to make. Also you need to be aware that while real estate is a very powerful way to build wealth it's also very very slow. I would recommend reading kiyosaki's book rich dad poor dad. It should help. RR

Karen S. I don't know your local laws but in Colorado it's cheaper to use an attorney. In my case I was the seller. The lawyer drew up the offer to purchase ( around 500 dollars). Buyer paid for the appraisal, and we split closing costs at the tittle company. It was painless and easy. RR

Brian Whitney Sounds like you have a good head on your shoulders. Your on the right track here. You need more than 10% capEx though. The reason being you need to fix both big expenses the roof and the furnace. You didn't say how old it is but older buildings need more repair and things like lead base paint, fuse boxes,etc add to repair cost big time. It's bad enough to open a wall up to fix electrical but that's worse if you have to do lead abatement to put the wall back. There is an upside here. Your seller wants out. There is a chance he might take enough down payment to cover sales cost and depreciation recapture and then do a seller carry to spread out his Capitol gains tax. The other poster is correct. The realtor represents you but it's your money. Do not offer more than you are comfortable with. It's also poor practice to buy properties that won't support a PM. If it won't carry a PM than you will be managing it for less than a PM makes. Why would you do that? Also you limit your growth size and location by self managing. Both hamper you in the long run. RR

@Joe Villeneuve exactly. And remember if the REI has to self manage to get cash flow he is managing for a reduced rate or even free. If the property won't flow right with a PM he paid too much or something. RR

Brian Schriedel I'm not sure if I would term this as a "short sale". I would be more inclined to term it as an "out of court settlement" and I would not do anything until I talked to a lawyer. What if he has a loan against it? If he has 20% equity and you have to pay the loan and repair your unit too he's not making you "whole" again. You would be getting 20% of his unit and repairing 100% of yours. You see my drift here?? RR

@Joe Villeneuve absolutely!!  I can also put on a pretty good rant about how wealth is measured in time not money. RR

Andrew Bertram I'm with Joe Villeneuve Why?? I too have 9 units. 2 different PM company's. Property's in 4 towns all 3000 plus miles away. I go to Thailand on vacation how would I mange them myself from there?? Oh yeah I just added a small self storage facility 3000 miles away. Again I outsourced the management. I couldn't have bought this if I didn't know how to find and manage people. If it's freedom and unlimited growth you want learn to manage the people that manage your business. By self managing you limit your growth to whatever size you can manage yourself. If you want to own your own job that's different. I never could see the difference between self managing and owning a Restraunt or motel or something like that. Also knowing how to vet, hire, and manage the PM's allows me the freedom to invest anyplace I want close or far away. I'll take my horizontal pay check any day of the week whether I'm spending time with my wife, we are in Thailand, or at home on the couch. If I want more money to spend I won't be afraid to increase my portfolio to get it. RR

Grant Ancelet Grant. I would buy the whole lot and pick the rougher ones for the financing. Then I would sell off the bad ones right away and use that money to pay the note(s) down. What was left I would own free and clear and they would be the more desirable rentals. This would work assuming the houses appraised for more than the $220 purchase price. Even if you only ended up with a couple free an clear "good" properties and a couple "good" ones with a smaller amount of leverage. RR

Richard Moro I invest entirely out of state. I have one hard fast rule. I never invest or offer on a property until I have vetted and found a PM. If you wait until after you own the thing you will have enormous pressure to take whomever you can find. I avoid this situation like the plague. It's far better to line out the PM first and just call when you close and tell them it's ready. Everything works smoother this way. Also remember you are talking about a 80+ year old property. Your cash flow will be hugely affected by maintenance and cap ex expense as well as prolonged vacancy's both as you suggested in your post and as a result of repairs due to deferred maintenance, if there is any. Judging from your post about the current owner there will be deferred maintenance. I would be sure I had a plan to deal with this. Just my thoughts. RR