All Forum Posts by: Jeff Takle

You may want to consider another alternative. I bought decent washers/dryers for $750 and put them in secured spaces, then rented access to each unit at $20-$25/month. Even with utilities, on a multi-unit building, I'll pay for the washer/dryer in about 2.5 years and expect them to last much longer.

In addition, I'm getting the depreciation benefit which is small, but not insignificant.

I'm in the minority on this one and old-timers insist that I will lose money, but I'm pretty good with numbers and over the past 2 years, it's worked without a hitch. Tenants like not having to bring a big roll of quarters or deal with a coin card. Plus, I find they aren't using pantyhose or other techniques to rip off my coin laundry.

Doing it this way, I get appliances paid for and the project cash flows every month.

On reselling utilities like cable...

Easiest method is to become an affiliate with WhiteFence and then funnel your tenants through there. They'll pay between $5-$17 per utility that's signed up and there isn't any work on your part other than getting the landing URL.

Also, accelerated depreciation...

When you consider the added time and expense to set it up, accounting/tax cost of tracking 50+ extra items, and the real net impact, I couldn't get the numbers to justify the expense for anything under about $500k in value.

-Jeff

[i][b]I just returned from three weeks in India yesterday morning. I'll tell you why not to invest in real estate in India if you're sitting on your couch in the US...
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1) prices are very hard to gauge properly if you're an American. Current exchange rate is about 41 Rupees / USD, but prices have been escalating quickly in India, the rupee has been appreciating, and the legal system is much less reliable than in the US.

2) Most tenants in India don't work off a lease; it's primarily via verbal agreement. While most tenants stay for a long time (low turnover), I have no idea what the case law looks like for landlord/tenant issues. You can't easily peruse case law in India online; it's just not that sophisticated -- or consistent -- of a system. If you're thinking rentals, then think long and hard.

3) If you're looking to buy/flip, then use caution. The only reason a Delhi-based agent would advertise to sell a Delhi property to a US-based investor/crowd is because they believe (correctly) that they can extort a higher selling price (aka a lower investment return) with an ignorant buyer, and that the capital markets in the US will support an overseas investment into Delhi easier (might not be true). Getting India-based investment capital for residential condos is much harder than in the US, even in today's climate.

There is also a strong possibility that there are no good buyers in India for that property at that price + 30% (your investment return minimum for example), in which case the US-based investor will have difficulty unloading.

I'm not against investing in India on principle, but if you're a US-based investor, please don't start that conversation with a salesperson located in Delhi. Start by buying an airline ticket to India and spending a few weeks there. As in most fast-growing economies, there are great investment opportunities, but there are also fewer regulations and recourse if you get screwed so you need to do your own due diligence and CERTAINLY don't rely on a salesperson to fill in the gaps for you.

Just one man's opinion. - Jeff

I have a solo 401(k) with T. Rowe Price. Easy to set up and has high contribution limits. I don't believe you have to have an LLC or Corp either...can probably do one as a sole proprietorship. Since you're clearly a real estate investor, you're running a sole proprietorship and likely qualify.

As far as I know, there are typically no fees to rollover into another retirement-type account; think of it this way...Fidelity would love to have you bring your retirement money to them so they won't put any fees on the process.

You can get his book "Landlord's Handbook" at the library. It's really a good book, certainly one of the best for individual landlords. I do think that some of his ideas would be dificult to do -- may be more theoretical than real, but still worth reading.

A great stimulus and customer-focused approach. Well worth buying the book too.

Not to be a wet blanket -- I know everybody loves Craigslist -- but the metric really shouldn't be how many responses you gte from an ad; it's how many qualified tenants you get from an advertising channel. In my opinion, the "flake" factor is through the roof on craigslist.

Most tenants on craigslist fire off 20+ emails in rapid succession to landlords and often don't remember which property was yours when you respond. So, if you're going to use it, make sure you do your due diligence on tenant screening.

Also, the $20 may seem well worth it, but the tradeoff for cheap forms is that they're likely to err on the side of "applies to everyone" and have large gaps in coverage. A better (and even cheaper) alternative is to approach a seasoned landlord in your area and ask for a copy of their lease -- it's free and it will be 10+ pages long with lots of protection.

...every time you watch the nightly news' "disaster of the day", instead of shedding a tear you wonder what the implications on the real estate are...

It's just my hunch but I think you'd be exposing yourself to a discrimination suit. Can't point to a specific clause, but it's a measure that's likely to tick off tenants who don't "qualify".

In theory, I agree, a risk-based pricing scheme would allow us to use what's called "first degree price discrimination". But, I think you'd be asking for trouble to try and use it.

This most likely won't trigger anything. If you move out within a few days or weeks of occupancy, and somehow (I can't imagine how, if you're paying the mortgage on time) the mortgage holder finds out, they'll ask why you moved out. If your job required it, family illness, etc. (legit reason) then you're fine.

If you got the loan under false pretenses, though, and they become aware of it, it's mortgage fraud. That's a bad thing.

Generally, the rule is 2 years between "owner occupied" loans without raising any eyebrows. I did 3 owner occupied homes in 2 years when I was in the Marines because my job moved me each time. I just showed them the military orders and they were satisfied.

Thanks! Good resource. Have you used the pay version of the guide? Is it worth it?