All Forum Posts by: Nick Barlow

@Wesley Mullen,

TL:DR- look at some differing viewpoints and make a decision that is best for and your family.

Soap box ensues.

I’ll give you what appears to be the sole dissenting view-the money in your 401(k) gets taxed as ordinary income when you withdraw it in retirement.

I have never found a person that thinks taxes will be LOWER in the future- DECADES from now (for people actively working and pondering this question). The amount you receive from ordinary income (401k distributions) is combined with your social security (after you start collecting) and due to its ordinary income status, can cause you to pay taxes on SSI....reducing your available income at the whim of the government....in retirement when you don’t have many options to generate income in a typical retirement situation.

If you’re working a W2 for a while, and investing in your 401(k) at the same time-getting the match-you’ll be contributing to social security taxes today, and will be “entitled” (ie, forced to take) them later.

Also, a lot of 401(k)s have 1.5%+ fees in the generic options...enriching Wall Street to almost as much as yourself with “free money”.

I recommend you read “The Power of Zero” by David McKnight and “401(k)aos” by Andy Tanner.

I have a 401(k) from W2 and stopped investing for company match after reading those.

Personally, I'm saving what I would put in my and my wife's Roth IRA until the market drops (my opinion-sometime this year...just me?).

It doesn’t make sense to me that people who want control of their investments (a lot of us on BP investing in RE) will simultaneously invests in a plan that benefits the government and diminishes your own control (no personal control on tax rates) when you are the least able to “go back to work” to cover differences and have the least amount of tax deductions: no kids, no Mortgage deduction, no 529, etc.

I hope this helps, and congrats on getting a rental!

@Jennifer T. There is an emotional toll on situations like this to factor in, and two separate evictions. One may go through while the other is delayed for something beyond your control.

If you’re eager for a deal and can carry this for 6-8 months in your own, do what makes you comfortable.

Personally, I would keep searching at the moment...but there was a time I wouldn’t have :)

Good luck in your decision!

@Joshua Bailey you can find regional lenders to give you a commercial loan in the 2-4 plex range.

I didn't start with both, but have the LLC, and commercial umbrella policy, and am considering a personal umbrella as we still own one rental in our personal name.

The commercial policy is $22/month for an additional million or so in coverage-I find it to be a very low cost for a substantial coverage (that I hope to never need) for me.

@Annie R. I’m surprised leverage hasn’t come up yet as a topic. Sure, you can buy stocks/options on margin, but you don’t get margin calls in RE when bad news happens overnight. That is true for W2 or DIY.

Plus, the tax advantages in RE are now-not when you reach a magical age that may be decades away, so the present value of money comes in to play.

I look at the financial landscape of the US, I only see higher taxes coming, and I don’t want to defer taxes until then 🙂. Great forum topic.

@Cathy Song go to a national guru RE camp-for networking. You will find more bird dogs and established mom/pop folks that have access to deals but-ran-out-of-money than you can afford, even at 10k$/month and $75k properties.

You’ll meet dozens-you only need to find one that you trust 🙂.

@Merritt S. Did you read the article? The lady OPENED FIRE AT THE COPS.

I don’t want to sound snarky, but to answer your question, that’s the messed up part.

@Scott Mac the police department will compensate the owner or hire a contractor to repair.

At least, that’s what happened when my father had a situation where the police forcibly entered one of his rentals a decade or so ago to make an arrest in the Midwest.

@Rafael Martinez don’t miss the forest for the trees my friend. This can’t go on forever, and with endless supply of money printing-when inflation hits or the dollar collapses you’ll still have a real tangible asset to convert into crypto or new dollars or gold or whatever means governments use for value transfer.

If you’re not saving your stimulus checks to keep as reserves for your primary and/or rentals I hope it’s for unsecured loans like credit card debts.

I don’t want to sound judgmental, because I’m not trying to be, but I am in survival mode right now-with the goal to have all my properties after the pandemic that I had when it started.

@Gerardo Hernandez permits aside (which vary widely market to market), DEFINITELY separate utilities.

I am hesitant to even suggest considering a shared washer dryer area (if there is an available common area) because then you’ll have one tenant getting w/d for free while the other pays for electric/hot water usage of both.

In my area, my lawyer confirmed that buildings zone for one family are legal to convert into a duplex. I would recommend a knowledgeable RE attorney to confirm for your area.

Keep up the good work.

@Jamie Lynch “success stories” are more harm than good in my opinion...they give unrealistic expectations. It’s the investor equivalent of “keeping up with the Jones”

Unless you are willing to do as much work, or more, than those writing them, it’s been my experience they’ll leave you envious.

It takes some serious hustle in this market to find deals-more than I have the time to do with a W2, spouse, kids, rentals, and the thought of occasional non productive free time.

To your question-there are times a cash flow nuetral is acceptable. In my opinion, it’s definitely not the first 2-3 deals or the first 2-3 years. After that, you’ll know the criteria for you. Good luck!