All Forum Posts by: Troy P.

Like mentioned previously, the returns will be almost identical.  Where RE really shines is in the tax benefits.  I suggest reading Tom Wheelwright's Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes.

There are a lot of variables here.. how long have you been contributing, what is your employer match, what are your investment options, etc.  I personally contribute enough to get the max employer match and not a penny more, and choose market performing funds with very low ERs (expense ratios).  In the book mentioned above, Tom explains how government sponsored retirement funds are not the best place to grow your money tax-free, but he doesn't mention all of the "free" money given by most employers.  Chances are, you will get a 50-100% return just for participating, and that to me is a no-brainer.

A better option, like mentioned above, is a self-directed Roth IRA.  The goal is to retire richer than you are now, right?  This is Tom's reasoning for tax-deferred plans not having your best interest in mind.  Why defer taxes for when you will be making MORE and in a higher bracket??  If you meet the requirements, a self-directed Roth IRA is a great option for "staying in the game".  

Quote from @Dan Kennerson:

Quote from @Tony Severance:

Quote from @Dan Kennerson:

Quote from @Tony Severance:

You can use an FHA loan with only 3.5% down to buy a 2, 3, or 4-Plex if you occupy one of the units as your primary residence for at least 1 year.

 Very curious, do they actually check on the occupancy part? not that I would ever break the terms of a contract, just curious. 

Yes, they do.  And you do NOT want to be caught committing mortgage fraud by not living in the property.  Saving a few bucks is not worth the jail time.  

Wow, wouldn't have thought it was considered fraud. good to know, thanks. 

 There's a very specific document you sign at closing that states your intentions of occupancy.  Yes, it is considered fraud with very stiff penalties and is not worth the risk.

Quote from @Christina Yoon:

Quote from @Eliott Elias:

They're asking if they should do a half assed job or not. 

Lol. I thought it was the other way.  It's code for how much can I charge you?  RENT=LOWEST PRICE POSSIBLE, OWN = YOU WILL PAY MORE FOOLISHLY DUE TO EMOTIONAL ATTACHMENT.

Does that work for the utility company too?  I'll be calling them first thing in the morning to let them know I'm not emotionally attached to my home! Lol

Depends on the terms and depends on if it's worth it to you to finance that 25K to keep it in your pocket.  The general consensus is to use OPM but not be over-leveraged.  Is 544K the expected appraised value or is it more or less?  Primary residence or investment?  What is the estimated gross rent?  Too many unknowns to provide a good answer.

If rent is not at or above 1% of sales price, I don't usually consider it.  Judging by the numbers given, I don't see how this would ever make sense, but would love to be proven wrong.

Asing for legal advice on BP is like asking to lose a lawsuit.  Your best (only) course of action would be to contact the title company or your agent.  Who knows what laws they could throw at you if the tenant decides to sue you.  Regardless, talk to an attorney in your state.

I was just in a similar situation, but I was the buyer.  A property is for sale with a problem tenant that doesn't want to renew a lease and is paying way under market value in rent.  My first move, like anyone else, would be to raise rent, and potenantially have a disgruntled tenant who will eventually show themselves out leaving potentially thousands of dollars in damages.  I understnad what they're trying to do, but like Nathan mentioned, it's probably not legal.

If older home, no HOA, other chainlink fences nearby, and you don't want to justify a higher rent or property value, then chainlink would be fine. If you'll be the oddball in the neighborhood, I'd say cough up the extra funds. A good (expensive) treated wood will last you several years with little to no maintenance, even down here in South Louisiana.

Hello BP Community,

I'm looking to purchase a buy and hold property in a small townhome community that was build around 1984, has a CC&R document from 1983, but no current active HOA dues and enforcement. After perusing the document, the majority of the other townhomes appear to be abiding by the restrictions and seem to be well kept. My question is, is a CC&R document alone enforceable? Would it be wise to invest in an area that could quickly take a bad turn and have homes slowly depreciating in value? I'm assuming the HOA has been inactive for quite some time, but cannot be sure. TIA!

I would add anything broken by a tenant due to abuse or negligence to a list of items to deduct from the deposit once the tenant vacates.  In other words, I was just "paid back" immediately.

Edit: I believe this may be a state-specific law regarding how this can be done, so be sure to check your lease and your local laws.

Rent should not be based on an area's income.  It's based on market comps and history of current rent prices in the area.  You never know who is going to show up wanting to rent your property.  If you have that # and it's not attractive as an investment, then it may not be a great area for receiving the most cash flow (profit).  Some people have a minimum $ in cash flow as a goal for any one property while others see $1 or more as a win.  Only you can decide what is best for you.

Rent - principal - interest - taxes - insurance - expense reserve - management fees = profit (cash flow)