All Forum Posts by: Steve Smith

Jules, Well put. I hope the heck I've got more than a decade to go, but just have too many play things to do that are more important than buying another house. Some not so expensive, like a bike ride or a walk in the park. Yes, I'll certainly keep my hand in the real estate arena owning and renting property until the day I croak, but perhaps not so aggressively that it's a burden. As we progress thru the real estate game, the most valuable asset we have is time. Everything else is controllable and changeable. Easy to dump a lousy rental, but impossible to get back the time we wasted in managing it.

I'd be surprised that you couldn't find several HML with that record, assuming you haven't defaulted.

Back in the 2010 era, I was only doing 2 or 3 a year and all were financed with lenders at the same time.

With a bit of planning and good operations, one can easily manage 20 to 30 properties without an assistant, with less than a day or two a month.

There's lots of automated ways to check on rent, make deposits (my tenants deposit directly into a bank account), receive maintenance requests, have maintenance done, etc., etc.

One thing I could argue is to have your tenants ONLY email you, especially for maintenance requests, and that email goes directly to the vendor that you have set up to handle it. He is trained to determine if it's my expense or a tenant expense, get it done, email me back when done, either with a bill or confirmation that the tenant has taken care of it. (I have less than ONE request per tenant per year, some nothing in 5 years)

There's lots of was to manage your rentals, but being organized is paramount.

Ken,

Very good posts and I could certainly argue your points. Document, document, disclose, etc, but only to the right people, not necessarily the lender. I don't wave a red flag in front of the lender daring them to call the note. But absolutely be very clear with the seller as to what you're doing. However, I've NEVER had a note called on any properties and the vast majority were "subject too" and/or owner financing. However, don't have any of those loans anymore (most paid off).

The only thing I do that you don't, is use trusts, and love them and they have saved my bacon a number of times.

Jacob,

Good points, and I support your ideas about giving back. I've been a fan of TtoT and St. Jude for years, much longer for St Jude. Volunteering is very worthy and satisfying. 

Living off the grid is very appealing, but certainly challenging. Not going to happen in my life, as it would be a major change, which I'm not willing to go thru. Have friends that did that, especially with a second home and worked out well.... but a LOT of work!

I like your idea of an auto shop or auto body shop. They will be around forever, and could be a good cash flow source, if you can manage it well. But for now, not looking for a job.

As for concern for bank accounts vs tangible and pragmatic things, you make a good point. However, I'd bet that the goal for most folks on this forum is to be financially independent, and never have to worry about where the money is coming from ever again. It's freedom, and that is measured by assets and income. We work at real estate to create the assets and income we want and need to become financially free. Once we have that, then we can spend more time on living and philanthropic things.

So, the question is, how much is enough? We would certainly want to have our basic needs covered, and the occasional emergency, and be inflation proof. What else?

As our portfolios grow and we gain more properties, wealth and skills, at what point is enough? How much do we really need, or really want? How much complexity do we want in our lives and how much work do we want to do? I'm slowing down, but not stopping but not sure I need or want more. 

I could argue that, for the most of us 10 to 20mm is a good stopping point unless you want super yachts, jets, huge mansions or many personal homes in different locations, etc, etc. which most of us will never get to., or need. And all of those comes with another set of complexities.

If you stop at the 10 to 20mm range (or less) you can rent/hire most of the luxury items you  ever want, with no commitment, travel the world (if that's your thing). You can easily hire a maid and a butler that will do all your daily ******** stuff, shopping, etc. Why would you want more?

What say you?

Regina,

Maybe, but not necessary. I may us a "friend" that has an LLC, but will not create one just to be the trustee. I'll often use another trust to be the trustee. Also, there are services that will act as your trustee for property which is an excellent choice.

Well, trusts and LLCs make not be total asset protection, but they sure can help. With and LLC, the partners are not liable for anything personally.
With your rental houses, put a mortgage on them to the hilt and use the money for another investment.
Overall, houses are pretty bullet proof. The first thing in asset protection is to get great tenants. Next is a good insurance policy.

I like trusts better, much easier to "hide" behind, however, insurance is your first line of defense.
Also, doing simple, smaller deals where less can go wrong is not a bad idea.

Trusts won't stop a lawsuit, but it's often VERY hard to find out who the beneficiary is, and they are normally not liable for anything that they did not personally cause. The Trustee is protected by law. But the trust can be sued and be attached and sold to satisfy the judgment.

BUT, being sued, and loosing is extremely rare if you're reasonable careful. I've had a few over the year and the numerous properties I've had. Never lost a dime, even with one that was not insured!
You need to make it look like there's nothing to get an no lawyer will pursue it if there's no money in it for them.

Ask the seller to carry a note, but I'd buy a SFH instead of a duplex, especially if the duplex needs remodeling! You can remodel a nice home much cheaper that a duplex, get better tenants, better appreciation and MUCH less work. Granted the duplex will throw off more cash but you'll work your tail off for that.