All Forum Posts by: Alfred Litton

@Steve Kim  One thing others haven't raised here.  I'm afraid you are way off on the taxes here. I live in N. Texas and am familiar with a number of the cities and towns here, and there's no way a $300K rental property is going to come in at $4800/yr (1.6%) on property taxes.  More like $600/mo. (about 2.4% if you're lucky).  Once the sale is effective, they will revalue that property next assessment season (this spring), and you will see a WHOPPIN' big increase. And on an investment property, there is no cap on annual increases in tax and no homestead exemption. Believe me. They stick it to investors. That may be the tax your seller has been lucky enough to get, but you won't inherit it.  

Hate to say it, but I think you're monthly cashflow is overstated by at least $150-$200.  Take it from me. I've paid enough property tax to buy a middle school football stadium!  Be careful here.

@Zachary D Baldwin. Appreciation really is happening in the $90k and up properties.  The C class stuff isn't going up, and I'd avoid that anyway.  The university is merging with the Texas Tech system, and the "new management" will be promoting healthcare and tech programs and boosting the local community college's role in the area ad well.  This should result in drawing more employers to the area.  That said, if you are an appreciation investor there are clearly hotter markets.  I'm an income inve5who is happy with moderate appreciation.

Zachary, my rather ordinary sfh properties have appreciated about 9-10% per year the last 2 to 3 years. It's not stagnant at all.  Solid and steady more like.

Value wise it's not what it was 3 yes ago, but you can still find okay properties with decent cashflow.  Just stay away from the junk properties unless you're prepared to do rehab and even then avoid the "hood" areas.

Hi Folks,

Need some advice from those of you who have CPA or mortgage experience or just a lot of experience in REI. Two years ago, I took out a personal loan ($50K) to put with some other funds I had to buy a rental property in cash. I've since added to my investments and would like to get rid of that personal loan and thought, since it funded my investment, perhaps I could cash out on one of my properties that's paid off and eliminate that $50K personal loan and even have enough left over ($30K-$40K) to put down on another.

Two Questions:

1.  If I put a mortgage on a paid for property and pay off the personal loan, is that mortgage interest on the new loan deductible even if I used the money to pay off a personal loan?

2. Can I use the remaining funds from the cash out for a down payment on another property (financing it)?

Any help appreciated!

Alfred Litton

Steer clear of anything east of the interstate or in Floral Heights.  City View is okay but check for flood plain properties. Under $100k is tough unless you want a fixer or something in the hood that's c or d class.  Prices in WF have really shot up in the past few months.   Not the bargain it was.  Go slow and be careful.

I recommend George Foster as a handyman. We've had him work on our properties for a couple of years now.

I really recommend against Henrietta, Burkburnett, Iowa Park, Holiday, or the surrounding areas. Too hard to get and keep your properties filled. These are small towns that are, yes, cheaper, but there aren't any employers of much consequence in these areas, and people with good jobs almost all prefer to be in WF proper where shopping and such is located. You can get properties rented in these small towns, but it takes a while, and when you have a vacancy, they will sit there  a while. Also, when it's time to sell, these places are less liquid.

Bid just came in at $3360. That's to redirect the drain line exiting from the kitchen and laundry without replacing whole system of pipes running from bathrooms, so no jack hammering foundation. But I'm still suspicious that the rest of the drain lines under the foundation might be compromised too. Should I replace it all or just the section that's failed?  Replacing all would be costly and a hassle. But it prevents a future failure.  Hm.

We have a SFH that has been having a number of minor plumbing problems, and now we have uncovered that one of the major drain lines (cast iron) has deteriorated and will need to be repaired. It's a slab foundation. Currently tenant occupied. Looking for advice. Would you try to replace all the cast iron while replacing this section? Anyone have any advice/experience with replacing cast iron in slab? Thanks.

We have 4 SFHs in WF.  Sandra Wortham (Remax) manages them. Excellent group. They have about 200 properties under management last I checked. I highly recommend them. Been with them since I started.  There are a couple out there that I would not trust. DM me for those guys.