All Forum Posts by: Alan Hicks

Words of Wisdom = require it, put it in the lease AND make sure you are added to the policy.

I had great tenants for 2 years. I always asked to see the policy during contact signing.

They signed their 3rd year contract on Jan 2. I didn't ask to see.

February 20... they put a rubber backed floormat in the dryer... caught fire and caused $140k in smoke damage. Guess what? They didn't renew their policy.

I had this happen to me.
My Rental #1 is a 3/1, 900sqft.
2 adults and 2 kids... just enough space.

Septic tank backed up clogged up and I was outside meeting with plumber.

Same time, I had a 3rd and 4th adult ( thinking I was the plumber ) if they could go back inside the house. I asked do they live there and both said yes since Day 1 lol.
Suprise... 

Also interested. I have a paid off 3/2, Valued at $225k.

Would like to tap into it without selling it.

I have $42k in passive losses over the last 3 years and this year will be $52k.

So I will have $100k in passive losses to offset the tax burden if I sell.

My W2 income exceeds the passive loss max.

So, with this house.. it's cash flow, sell and pay of Rental #1, but no appreciation and definitely no tax benefit.

I am in the middle of a whole house... drywall replacement for a 3/1, 900sqft after a dryer fire.

No fire damage.. only smoke.. but you can't paint/Kilz over it. Just replace the drywall.

I have a 3/1, rental house. Purchase price was $125k ( mortgaged ) and has been fully rented for 4 years.

My only cost was the $25k down.

In February, tenants had a house fire. No fire damage. Only smoke.

I am 1/2 way through the renovation.

Insurance, 3rd party contractor, fire/smoke mediator assessed $125k in damage. I have a contractor walking me through the renovations and will be re-inspected and new COA issued after repairs. Again, no fire damage, just light smoke.

I took that cash and paid the mortgage off ($80k) and will use $45k for the repairs.

ARV is $225k. Rent is $1500/month. Taxes/insurance are $300/month. So I would clear around $1200/month.

Big ticket items are new (roof, water heater, hvac, septic was pumped in January before fire ).
I also have 6-month emergency fund (based on the old mortgage ($962*12 = $11,544).

Of all of the podcasts, YouTube pro's, DR, etc, etc etc.. it's a dream to have a paid off house.
Now that I have one, seems strange.

Keep or Sell?

Keep = Net Income = $14,400 per year

Sell. Invest at 5% = $11,250 per year

Sell. Pay off Rental #2 and some debt = cash flow increases by $760/month ($9120 per year ) and I have 0 debt other than primary house.

I do not think this house will appreciate any further. It's a 3/1, 900sqft.

Thoughts ?

Thanks Nathan.
Yes, the mortgage $941 includes the taxes and insurance.

The house is almost new (1 year old roof, HVAC, driveway, water heater, septic, interior/exterior paint, 1 year old window, etc.. ).
Plus I have 3m of rent in my reserves/savings account.

Knock on wood.. not much more can break ( fingers crossed ).

Thanks for the insight.

Alright. Previous tenants have moved out of my rental. Was paying $1150 vs. a mortgage of $941. So not much meat there.

I had 2 options..
1. Double my cash flow by raising the rent to $1350/m

2. Just sell the house

I created my free Zillow listing, had a 3 hour open house and received 8 applications on the first day.

I selected the best applicant and got the lease agreement signed and security deposit on the same day... ALSO.. they signed a 2 year lease.. even better..

Looks like I am keeping it for awhile longer !

So instead of paying $941/ and I paying $1350/m to chop down the balance.

its a 3/1.. I would say $140k...

rent is fair for the size.

I have a 3/1 I paid $127k 2 years ago.

Current tenant is not going to extend lease.

Mortgage + escrow = $941.. rent was $1150.Rate is 5.75%.

Sell? Keep?

Basically not making any $ each month, no tax break (income >$150k).Seems I am carrying all the risk with no benefit.Thoughts ?

3 options:

1. Let it ride.. don't need the tax break, nor cash flow.

2. Sell it...

3. Just pay the house off and have good cash flow..