All Forum Posts by: Peter M.

Texas is a very attractive tax deed investing state. The 180 day redemption period applies to non-residential property, for residential property it is 2 years but if redeemed in the 2nd year 50% is owed back. Most people investing in tax deeds in Texas want the property but you cannot get a title policy until the redemption period expires so you would have to live in it or use it as a rental, no flipping.   Struck off properties are a little tougher because nobody buys them at the auctions so they are truly the bottom of the barrel. Plus you have to usually put up a deposit to make a bid (10%ish) and the county will hold that money until the bidding is closed. If you don't win the bid they have something ridiculous like 2 months to give you the money back. 

Repairs made to make and keep it habitable are included in the redemption which is why it is a good idea to get an inspection so you have proof. Rent it out for 2 years then make the nice upgrades for higher rent or to sell/refinance. 

I am part of an investing group that invests in tax deed properties and helps out of state investors acquire them. Shoot me a message and I can give you more details. 

@Eric C. If @Domenick Cava has a real estate investing LLC and he travels somewhere to work on that business, then it can be classified as a business expense. He can meet with potential clients, contractors, agents, loan officers, etc. You are right that it is not a rental expense as it would not go on a schedule E for a property already owned but it would be a deductible business expense on his tax return because it would (most likely) be set up to be a pass through entity.

Welcome to Texas where taxes and insurance make you want to pull your hair out. And you don't even live here to get the benefit of not paying income tax. Car insurance is even worse. My only suggestion is to shop around. If its in a flood plain you don't have much choice. Caveat emptor. What interest rate are you getting for your loan? At least you are a few bucks cash flow positive as long as it is under 7%. Might want to see if you can get better insurance rates but if not, it might be worth selling after a year. 

Do all 4 pay you separately? I would just do a contract amendment to remove her as long as the other roommates agree and require one payment be made for rent. That way they have to figure it out among themselves. I have a lease break fee written into my leases as well. If the other tenants can't afford the house without the 4th roommate then she is out of luck. If they agree to let her leave and get a new girl, I would make them sign a new lease with those changes in it to deter this from happening again. 

It may be cost prohibitive as other have said but you can expense transportation and some meals if your trip has a business purpose. My CPA tells me in order it to count in the eyes of the IRS a day of business has to be at least 4 hours. The trip also needs to be less than 1 week to get the full transportation costs. But you could just view potential investments with a realtor which would count as business, you don't actually have to own property there. You could also do your annual meeting but would have to justify why a single member LLC annual meeting took 4 hours when you are the only attendee...

Good post. I am reading a book about 6 Sigma right now and literally 15 minutes ago read a section about the difference between being interested and committed. It is a little tongue in cheek but I like it:

"If you are cooking eggs and bacon, the hen is interested but the pig is committed" The point the book was making and I believe you are making is the same-you have to be the pig in business if you want to succeed (maybe just not to the point of having to sacrifice you life for it).

You can't force her to be interested. You would be falling into the same trap as women who marry a man thinking they can change him. At best she dislikes it more, at worse she starts to resent it and you. Not healthy. 

Just be passionate about it and let it happen organically. Don't stuff it down her throat but talk about your goals and plans with her. If you both like playing games, play monopoly or Cashflow those games consciously and subconsciously will make her think about real-real estate especially if she is competitive. 

When I met my wife she outright disagreed with me about it. She didn't understand why I wanted to waste my time with these annoying tenants and deal with gross problems like toilets and drain lines. As time wore on though, she saw benefits here and there, then when she started seeing appraisals and how much stuff was worth she started believing. I taught her how to win at monopoly, a game she always hated but now loves because she understands the underlying principles. One day she came home from running errands and says with a very serious tone "We have to start buying rent properties around here, have you seen the construction and what they are building?" After I picked my jaw up off the floor and asked who she was and what she did with my wife, I was happy to admit that her transformation was complete. Bwahahaha. Now she still isn't going to start knocking on doors or collect rent from tenants but we go to look at potential properties together and she is more than just supportive now. It only took 5 years...

One thing you can think about in the future as the "nuclear option" is to go after the seller for violating Dodd Frank or the Safe Act. There are a lot of disclosures required for seller financing and if he didn't do it exactly right he could be liable as predatory or worse, fraudulent. I would not enter into something like this lightly though because it gets lawyers involved, can be subjective in a court of law, and can be very expensive but if he tries to foreclose later if you are not able to refinance it may be a last resort. 

Lawsuits should be viewed as an investment. If you do not expect a return even if you win the suit, all you will have are more expenses. Every case is different though so you have to decide for yourself. In this case I would send the required notice to vacate in case they don't actually move out on the 31st. Once they are gone and you have possession back, send them a certified letter with detailed list of all outstanding expenses minus their deposit. Make it as mean and threatening as you can but most likely they won't pay and you will just end up taking the loss on your taxes. You could file in small claims court and would most likely win and you would only be out the filing fee and the time to go to court but you have to decide if it is worth it. 

If you don't have capital I would say you are missing the most important resource. Private money, hard money lenders, lines of credit, credit cards.