All Forum Posts by: Corey G.

Posted in another area with better title. Not meaning to post duplicates but I can't delete this one

I posted this in another area and the title was probably misleading. I think this is a better place for it and the title is better. 

I've been renting properties in Phoenix AZ for about 6 years. I've had a maintenance person that will usually get in and clean, repair, paint, and do everything needed to rehab an empty apartment into one that is rentable when a tenant vacates the property. Lately this person has become less reliable and more expensive. I have started hiring separate companies to clean, paint, etc. and that is getting old fast. I need a reliable (and not too expensive) person/company who does all in one maintenance for tenant flips. I need suggestions on what type of companies I should be looking into for these types of services or what type of searches I should be conducting to find companies that do these all in one services. Or should I just try to find another jack of all trades maintenance person? Any advice is appreciated.

Hello Everybody, 

I've been renting properties in Phoenix AZ for about 6 years. I've had a maintenance person that will usually get in and clean, repair, paint, and do everything needed to flip an empty apartment into one that is rentable when a tenant vacates the property. Lately this person has become less reliable and more expensive. I have started hiring separate companies to clean, paint, etc. and that is getting old fast. I need a reliable (and not too expensive) person/company who does all in one rent ready flips. I need suggestions on what type of companies I should be looking into for these types of services or what type of searches I should be conducting to find companies that do these all in one services. Or should I just try to find another jack of all trades maintenance person? Any advice is appreciated. 

Hi Jake

Recently I bought a new unit from a company that I've used before locally. Not sure if I can mention the name here or not. The company that was doing refurbished jacked up the prices so it wasn't even worth considering anymore. I've got a 2 ton packaged heat pump unit (single) for 3000 installed with stand. It is an off brand but it's brand new. I can get 2 ton packaged heat pump trane units from another company for around 3700. I bet if you buy multiple, either company would give you a small break on them. I wouldn't pay much more than that for the 2 ton however. 

Thanks for all the replies. My friend didn't really know if it would be a good idea but I asked him if his properties were in an standard IRA or a Roth and told him I've often thought about converting my 401K into a Self Directed Roth IRA and then purchasing properties within it. That got the conversation started. So it sounds like you are telling me that you pay taxes on the equity amount of each property you own within the IRA, but that you can do conversions on one property at a time?

So Let's say for example sake, he owns a property appraised at 300,000, has a loan for 150,000 and makes about 7000 dollars net profit a year. Assuming he is 50, will have the same 25% tax rate after retirement, and wants to start taking distributions at 60 lets say. 

150,000 equity x 25% = 37,500 taxes due now to convert this property to Roth and have tax free 7000 dollars growing from now until retirement and potentially 7000 dollars tax free income after age 60. Or keep the 37,500 in regular IRA making lets say 8% for the next 10 years or so and being taxed 25% on 7000 dollar distributions for every year he lives after 60.

Am I correct in my assumptions? Obviously there are a lot of variables but I want to just make sure I have got the gist of it down.

Hello Everybody, 

I've often wondered about this but I've recently talked to a friend of mine who is in this situation. He owns several rental properties that he bought through his IRA with non conforming loans. He's put about 35% or so down on them and was loaned the rest. Would it be possible or even a smart idea for him to convert his IRA to a Roth IRA at this point? What would be required? Would taxes have to be paid on the equity, full value of the properties, or what? From what I understand, having rentals in a Roth IRA would be smart because all rental profit at retirement would essentially be tax free. However, I've only heard of people buying properties in full through their Roth IRA, and don't know what it would take to do a conversion with loans. Any advice would be appreciated.

Thanks for the posts everybody. So I'm getting mostly recommendations to be proactive in replacements. (I agree with this as I've had a couple units die on me and it wasn't very convenient for me or my tenants), go with new installations over refurbished, and try working out deals with the installation company (I've had luck with this). Has anybody tried any of those online wholesale companies where they ship the unit local and you get a local installer? Also, do you guys feel that the brand matters much for reliability? Most new units seem to come with a 10 year parts warranty and a 2 year labor warranty around here. 

Hello Everybody, 

I own several 4plexs and each of them has rooftop packaged heat pump AC units. I bought most of the buildings with older AC units that I've slowly been working my way through replacing. I've used several different companies and tried everything from New units to refurbished ones. Refurbished units are cheaper but the question is on how long they will last. My question is when it comes to replacing AC units, what is the strategy that you employ? My thought is trying not to spend a whole lot of cash but getting the best I can for what I do spend. No sense in buying an AC unit from one company for 5 grand, when I can get the same unit installed by someone else for 3,500. Really what I want to know is how does everybody go about shopping for units and finding the best prices? 

Thanks for the advice and sorry about the slow response. I think Tyler may be right and I should save that money and keep it invested. That way I keep my maximum options open. I currently have it in an account making 1% interest. Any better returns you would recommend for short term investments besides the stock market that would allow quick access to cash should the need arise?

Hello Everyone, Let me give you the setup real quick. Over the past 5 years I have purchased 4 multifamily properties. I bought them all a little distressed and fixed them up and have mortgages on all 4. They are all cash flowing. I was looking to purchase another 4 plex property and keep going with reinvesting but I feel the market is a little higher than what I want to pay right now and the deals don't seem to be coming as often. I thought I might switch to paying off the properties I have (at least until the market improves some.) So these are my options:

1. I could save the extra cash from my rentals and invest it in something else until the market improves and then buy another property. Another property would be more cash flow but also more debt and I eventually will need to pay these mortgages off anyways. 

2. I own a house and I was considering paying down my personal property mortgage before paying off the rentals. I owe more on my personal property than the rentals but this property is not cash flowing and is just a liability.

3. Instead of my home, I could start paying down the lowest mortgage balance on one of my rentals and then when paid off, use that extra cash to pay off the second, then third, etc.

Whether I pay off one of my rentals or my house, the extra cash would go towards paying off the other properties. Any thoughts on these choices? I know there are more options but I didn't want to list them all. What do you think? Smart to pay off a rental first or my house? Investing in something else might be the smartest move but I need to start cutting into some of this debt I feel. Any advice is appreciated.