All Forum Posts by: Steve Vaughan

Initially I lost some good renters to the 1st time homebuyer tax credit.  Shortly tho, demand for my affordable 2 bedroom apts went through the roof and rent rates shot up like crazy.  We had our normal small family and college-type renters plus a new influx of folks who overbought their houses and lost them.   I wasn't selling and I didn't buy a bunch of SFRs at the peak of the bubble, either.  Maybe the lesson is diversify a little.  SFRs are only worth what a comparable sale just brought.  An apt building's worth is a function of income.  

For years my own dad has shown nothing but disinterest really in what I am doing.  He worked for the government for 30 yrs.  Look at who the people are that are being negative about RE.  It's a broad subject and everyone has heard a horror story, especially in the wake of the recent 'great recession'.   They were my best years ever, by the way.  Rent rates were climbing, applicant quality was rising and, oh, it still is!

@Albert Bui Wow, I didn't know there were so many ways to calculate the value of the depreciable improvements. I just took my purchase price minus what the county assessor had for land value and divided by 27.5. The insurance replacement cost is much higher than FMV on most of my policies and that doesn't include the land. When market prices rise up to equal insurance replacement cost, that's my trigger to sell sell sell!

A landlord in the news for something good!  Great video.  Bet he would make an awesome podcast guest! 

I didn't need losses, so I went without depreciating my real property for a long time.  Then I realized  you will recapture all allowed or allowable depreciation at the time of sale anyway.   I depreciate now.  I used to think it made my income look low on my tax returns, too, but my lender said she is smart enough to add back the depreciation to calculate my actual income!  Good discussion.

I would also print up some simple fliers and give them to neighbors of the property.  They may have a family member or friend they would like to come into the neighborhood.

I would make sure the seller has my number and ask them to give me a call after time and events have brought them out of the price stratosphere!

A target renter market of Section 8 folks would change the need for job growth I would imagine. Factors for sustaining rent rates would be population trends and government funds (HUD) availability. HUD funding here has decreased a little over the last couple of years with the sequester and stuff. The percentage paid by HUD dropped a few % and they sent a letter to LLs requesting minimal/no rent increases. I don't see the funding dropping like a rock, just a little maybe. If you are buying with a cushion as @Christopher Gilbert  suggests, it won't hurt that much I wouldn't think.

Any partnership agreement/ operating agreement needs to cover the Ds.  What happens in the case of... death, divorce, disinterest, drug use, etc.  What happens if your partner gets divorced and the crazy ex is now your new partner?  

I have borrowed money from family before, from my father-in-law.  It worked out and is all paid off now, but Thanksgiving dinner tasted a little different for me while it was outstanding.  I wouldn't recommend it.  My wife and I have always purchased/borrowed separately to free up each other's credit lines as much as possible.  Then we recorded a simple 1 pg community property agreement.   8 (loans) is enough!   Now we seek the serenity of no debt and are aggressively paying everything off.

Wow! I hope you see a good ROI on all that work you are doing! I guess I would focus on the curb appeal. Get them inside to see all you have done. High ROI items would be exterior paint, fencing, shrubbery, etc. Please let us know how it goes!