All Forum Posts by: Tamara R.

I often hear that you need to pay social security taxes on your profits from flipping. What if you already pay the max social security tax on your income from your regular job? Would the flip profits still be subject to additional tax? Thanks for answering.

My last turnover was about 20 e-mails followed up with 10 phone calls. I think that's because I started advertising 3 months before my tenant moved out and I advertised only on a "military" ad site. When I have had to advertise on Craigslist, zillow, and others in the past, I tend to get a lot more inquiries which are often dead ends. I don't have a huge number of properties to compare between, but I have never had a large number of phone calls or inquiries for my units like you describe.

To cut down on the calls, make sure your ad is clear and that you include as many details as you can in your ads--including your rental criteria (worded nicely so as not to scare off prospects), lots of pictures and a video tour of the property posted on you tube to cut down on the amount of calls that go nowhere.

People who call and ask questions that are answered in the ad are just sending out the same e-mail to anyone and everyone. If they are calling from the ad and asking these questions (while looking at it), then they have pretty much screened themselves out as far as I am concerned. Most of my potential tenants contact me by e-mai, and if they ask the obvious questions, I just refer them back to the ad then ask them to contact me again if they are interested based on the info. I also try to include room sizes in the ad as well. One thing I do that has helped me a lot in my screening is include a video tour of the property on you tube (me walking through the property, pointing out the features). That way they can be absolutely sure they like the property (and it answers most obvious questions) and the layout before contacting me. Make sure you prescreen over the phone before taking the time to show it. I usually ask:

when do you need a place?
Why are you moving?
how much is your current rent?
Who wil be living with you?
What kind of animals do you have?
Any inside or outside smokers in the group? (I don't take smokers, but this tricks them into thinking you might if they say they smoke outside).
I screen for criminal, evictions and credit. Any issues there?
Do you have enough money currently to pay the security deposit and first months rent?
you need to make $_______ a month to afford this place, any issues there?

One more benefit of staying in (full time or as a reservist)--the 10% discount you get at Lowes, Home Depot and lots of other places really benefits you as an investor:)

Speaking as a Navy wife--you can always get out and serve as a reservist. My husband got out after 10 years and has served as a reservist for almost 10. He will retire in December 2014. You do get a decent pension and cheap medical at age 60. Also, since my husband served full time during the "Global War on Terror," we can give the GI bill benefits to one of our kids. IMHO, that makes it all worth the time. Plus the extra $20K a year he earned as a reservist has come in handy.

Read "Mr. Money Mustache's" blog: http://www.mrmoneymustache.com/. His whole premise is saving enough to retire early (for him the magic ages was 30), but he has some interesting ideas on saving money.

David Krulac: To clarify, we are saving up our cash (not adding more to each mortgage payment) so we can pay off in one lump sum if we so desire--or pay for more properties if the market goes down again (which it could--houses are selling with multiple bids the day they hit the market and its starting to look like 2005 again around here).

I live in an expensive area, so buying all cash is almost impossible. Our strategy was to buy several houses (using 25% down on each to get the best possible interest rate) during the down real estate cycle. We made sure the houses would cash flow well, though. Now that the market is on the way up, you can't really buy cash flowing properties any more in my farm area. Now we are concentrating on paying them off as quickly as possible to get rid of the debt and to maximize cash flow (or to buy more houses when the market tanks again). At our current savings rate, we will have four properties paid off within five years. In my case, I am glad we did it the way we did. We have gained about $300k in total equity in those properties in 2-3 years, which we wouldn't have been able to do if we had paid cash. In fact, we would have missed the whole real estate down cycle. I think the best idea to manage risk is to buy rental properties in area with high/increasing demand, with good stable tenants (near several military bases for us), that cash flow well (even if we didn't have the appreciating equity). We weren't really counting on the appreciation, that is just icing on the cake. Without taking some risk, this wouldn't have turned out well for us.

Tell him your policy is to screen each tenant over 18 years. Be sure to run a background check on the cousin.

Depends on how long they were tenants and how good of tenants they were. Maybe you could tell them you will accept that as long as they help you out in getting the property rented ASAP by cooperating with showings and keeping the place neat and clean and leave the place spotless and undamaged when they leave. Perhaps you could even get them to do some showings for you (if they would have positive things to say about you as a landlord and the property).