All Forum Posts by: Red Peterson

@Joe Villeneuve thanks! You are right its a mistake to look at my properties separately. I cant compartmentalize it.

In my mind, business is separate than my home property but it does make sense to look at all properties connected to each other..

Oh man.. I have A LOT to learn!

@Jacob Pereira thank you! Im so glad you pointed out s&p500! Actually looking at that to compare on where to put money on (REI or Investing).

I am still wrapping my head around the math here.. I discovered BP in 2017/18 and was decent with terms and concepts. But I took a pause and concentrated on accumulating income and paying off debt.. so I’m due for brush up.

Fast forward to now, I have a property, I have a small amt of cash and debt free (I have the cash to pay off the bal today if i want to and will still have cash), and feel that im in a good place to make moves.

Im going to look at your equation again, simple as it is, for a noob like me its still complex. Its hard to understand why interest paid on the loan is immaterial. It was mentioned considering cost/total cost so it gets a lil confusing when i look at it that way..

I feel if i sell, having already paid the property off i wont make money even if its gone up in price. But if i rent, it will take long to recoup but i have the property and can still sell later on (risk is if the market dives).

Anyways…so thankful for the inputs! 😊

@Joe Villeneuve being noob; I had to read your input multiple times. And im still gonna keep doing that bec I havent quite grasped it yet. (i know, im slow with numbers unfortunately).

I will have to call my bank and find out how much is the total payment (principal + interest amt) we paid for this property. I feel, its gonna be more than what the selling price will be if i put it up in the market.. but you are right, i probably am better off buying a different property. For one, i'd like one that does not have HOA fees and hopefully a comparable tax.

Im probably going to sell but a part of me is scared i will end up just buying another house to live in instead of a condo and not buy a property to rent out. At the start of my journey. I wanted to accumulate RE for PI. Then somewhere down the line, i switched to concentrating on being debt free. Now that im there (bec i can drop the bal to zero tomorrow if pandemic is not happening right now so im keeping my cash), im in a battle between just enjoying being debt free or taking on another loan to have a single home and a rental property… another topic for a different time. Thanks for your input. It helps me really think harder on this decision. 🙂

@Bruce Woodruff agreed; i might loose by not taking advantage of the market. On first 12mos, i wont make money at all renting it for around &1350/&1400. The following year, annual will be around &4k. Expenses include 8% vacancy, tax, HOA fees, garbage, $1000/yr repairs (I made up this amount), 10% property mgt.

Orig price of property: $124k; got an &8k govt credit so we paid $116k. If I sell it now, I’ll need abt 10-15k to update and potentialluy sell it for $140k/$135k.

have a 3BR, 3ba partially fin basement almost paid off. Ready to purchase a new home.. i feel if I sell, I’ll get a good equity but I also feel that in the long run, its best to hold. I feel like the real math in my equation is not the price tag i paid but that and all the interest i paid in 12ys so im not sold to just sell the property… hold and get another loan for higher balance and rent out current condo or sell current condo so my loan principal will be lower? If i rent it out, i’ll need to spend 10k to update necessary things.. what woukd you recommend? Noob here…

@Scott M. Thanks! I will avoid carpet then. I will go for the updates that will matter much and not do the windows yet.. 🙂

@Curt Davis good idea, i like the distress suggestion particularly as it will age well. Thanks!!

I have a condo thats almost paid off that i wan to rent out; 3BR 3Ba. Our area is well sought for rent/purchase. The property needs:

New carpet (or should i do laminate?)

Windows can use upgrading (not airtight)

Bathroom is dated (plan to replace toilet and sink, and paint walls)

Has a small rip in one of the screendoors

Kitchen sink needs to be replaced

Counter has water damage (raised on some areas instead of flat)

I was thinking do minimal update only the flooring, sink, and toilet and rent slightly lower than the going rate for rental properties in our area. Like $150-200 less. Is this a good idea? First time to rent out a property.

Thanks!

@Matt Ference, how did this go? Im interested to meet up going forward, so keep me in the loop.

Youre right; definitely agree in attempting to lock numbers down so I dont get uncomfortable surprises. I am thinking of consulting with property managers & do comparisons. I usually give myself some padding when estimating costs by pricing them higher and I understimate income. For example, I use the MLS numbers for loan, tax, home insurance with additional 10-15% padding. Once I get a better grasp of how really numbers come together, I will play with lesser padding to give me a more realistic figures. I just want to narrow down the properties i will bet on by creating a spreadsheet. Awesome advise, thanks a lot Alex!