All Forum Posts by: Cheryl C.

Steve,

Those are some great questions, points and ideas. I had never heard of the 50% rule prior to joining BP. I self-manage, have a great handyman and contractor. I also screen for long-term tenants and stay a little under market. My average tenant is 6-8yrs. I think turnover (or, lack thereof) is key. I have about 20 rentals.

I agree with you Bryan. Just can't understand how someone puts out a blanket statement like that. I think it's a great time for buy and hold. I do flips as well, but my main strategy is "bread and butter" buy and hold rentals and has been for years.

Thanks Mitch - that's the one.

I just read a thread in the rehab and flipping forum about margins being squeezed due to "buy and hold" landlords. Some of the posters indicated that LL's will be creamed and more flip deals will be coming. I'm curious as to why they would think this. Any thoughts?

I will, with the caveat that you all know my level of expertise. It may have something to do whether this is considered a "business" by the IRS. When I was flipping foreclosures my cpa brother-in-law told me to watch out about how many I did as the IRS would tax as ordinary income.

Thanks for clarifying Jon. Without the issue of related parties, making/buying mortgages does seems that it would be good for a SDIRA. Back in the day, RE Agents were buying discounted notes for their keoughs left and right. This was when FHA/VA assumptions with OTB's were so common. Too bad investor's can't assume those things like in the past.

In any event, I was looking for a secure, stable return for my (then) 70yr mother. I knew I would never default. I'll have to further reseach "disqualified persons".

Just did some reading. Hopefully the company I was looking at would have caught this - we never got that far.

David you may be right (related parties and all) but I checked into it a number of years ago. I wanted my mother to use her IRA as a SDIRA to make mortgage loans to me. I'd rather pay her 5 or 6% than a bank. I got the impression that it would fly. Seems you should be allowed to pay her the interest and points a HML would charge and this would be her "profit". Just thinking out loud. I got all the detailes on companies/fee's, etc. but my mother decided to stick with equities....oh, that's really worked out for her!

Can the mother's IRA be the HML on these deals and get a tax-protected return from interest and points?

Bryan,

I've had some of those fights with Allstate..."we only need to replace half of the upstairs carpet" or "just the three kitchen cabinets that were damaged, we'll leave the other 30yr old ones in place". I thought that was part of the game with insurer's; ie. they will do whatever they can get away with. I can be a little forceful when necessary.

Thankfully, we don't have to worry about earthquakes on the East Coast...but don't get me going on the wind and flood on the Florida stuff!