All Forum Posts by: Andy D.

Would this be your first (investment) property?

As you are local you should have witnessed what the market has done in the last 10-18 months, and longer. 18 months ago a 3/2 Townhome in the price range of $160-170k is now easily some $190k+. New builds - if you can buy one to begin with - will be some $220k+. SFH will obviously be much more expensive.

As a given, anything older, especially requiring some sweat equity, will be cheaper. However, competition is fierce, and those properties will go to all-cash buyers as they can close quickly.

I'm saying this as you said that you are worried about getting financing. This is of course a must to have. No point in trying to get into the game without having the ability to get financing! Get this sorted first.

St. George is growing very fast. Great place to invest. But I'm not at all convinced that it's the right time and place for someone starting fresh. Hurricane and Cedar City will be cheaper, but then again so will be rent, with a less diverse (and possibly desirable) tenant pool. In addition, that would be borderline long distant landlording. Not the best thing to do if starting from 0.

In all good honesty, I would see that I get (real!) financing (ability) sorted first by having a good local lender be willing to work with you guys. Maybe in combination with financially strong partners co-signing (parents?). Then talk to a reputable local real estate agent to see what's available within your means. And then see whether that would be a suitable investment. Which, in most likely 90% of all cases, will not be the case...

Why? You're trying to get into the game at a late point. It's like investing in the stock market at its peak. Stupid, but way too many people do so! Not saying you shouldn't start, but be smart about it. Showing that you got basic smarts is that you posted here! Kudos for that.

Depending on what you are looking for: give Rod at LYNX Properties a call. You can google him (can't post links or phone number). Smaller setup, family style, but doing a good job. He is also a broker. I've used him for both, transactions and PM (and still do). Maybe not entirely suitable for large-scale setups, though.

Wouldn't lender want to see an appraisal? And if so, why would they lend on more than what the appraisal has turned out to be? And should appraisal be indeed higher: why would seller agree to that particular approach, especially if the property hasn't been on the market for a long(er) time? I don't see how and why at least a second party of the three parties involved would agree to this (the first party - buyer - obviously has no problem with that ;-) ).

As a caveat it should be pointed out that this is a legal matter. They are, per se, typically fairly complex and therefore only an expert should be consulted and not some forum. The worst advice one can get is one that is based on not knowing everything related to the matter at hand. Worse: not knowing the details of the subject matter.

Unless someone here is an actual expert in Land Trusts and knows the specifics of your situation, I would not take any action on what you read here. I'm not saying that the fine members of BP don't know what they are talking about. I'm saying that no one knows your situation; how could they through a mere forum post.

Having said that, I would like to point out that a "land trust" will not provide any asset protection. That's not its purpose. Only legal entities can provide that - if and when they are set up and run properly (and most aren't). Nor is insurance asset protection. However, it will help in protecting your assets (some might understand the subtle difference here), and therefore it should be part of your asset protection plan which you are - rightly so - trying to set up.

Soooo, you're asking - what does all this blaablaa mean? It means: consult a lawyer that is knowledgeable in these matters, i.e. especially in relation to real estate. Setting up an LLC will not help you unless it's done right. Nor will a land trust unless you understand the proper setup and purpose such a vehicle which will involve legal entities. Insurance is a good starting point. No one should be without it unless they do not care about risking everything they are doing. Sometimes one should just go with the KISS principle. Insurance is simple. Just saying.

Start small, although I would consider "house hacking" to be included in that. $30-40k sounds about right, depending on the region, though, quite a bit more. Test the waters. Multi-family is not "testing the waters"...

Although you can start with less and get yourself a "pig" I would not recommend that as you are a novice and will run into problems with those. Which of course doesn't mean that you will not with other, "non-piggys". ;-)

Also, expect 25-30% down and don't forget about closing costs etc. In addition, many banks do not like to lend less than $100k. You do the math what that means.

Finally: you need cash reserves prior to buying a rental.

Therefore my suggestion is: keep saving more and wait for the market to cool off a bit. By then you should have more money (and have read even more) and be better suited to hop on the bandwagon, making it a less risky ride. Jm5c.

@Paul Winka As you basically already said and as Jim has said (and I before ;-) ): get the details of the billed items and make it clear that this is way beyond what was agreed upon. She is billing you. She needs to provide proof of what exactly she is billing you for.

And yes, find a different CPA. Even if you get to common ground on the bill, the overall picture is wrong and the trust is gone.

I'm currently in the process of trying LVP, luxury vinyl planks. While not exactly cheap (compared to some fairly decent laminate, say) it is extremely forgiving as regards moisture (spills etc) and hopefully abbrasion resitant and possibly even fairly scratch resistant. We shall see. I'm slowly replacing carpet in high traffic areas as it very quickly becomes (very) ugly to look at. I will do this with LVP. The other benefit there is that you can get it in a variety of thicknesses and, especially, looks.

In essence you are asking whether you should quit your current (military) FT job to take the plunge into "real estate business" as your new FT. Many, many others have asked this before. None of them that I have read here, however, were an officer in the military. Interesting. From what you're writing you're probably O-3? Maybe even O-4. So I reckon the big question is if you can get O-4/5 soon (and especially O-6 later...) AND if you feel comfortable in that military environment for the next decade (or so). While offering many opportunities, it's still the military, being extremely regulated and certainly limiting what you can do. Not to mention possibly deploying you to god knows where. And apparently you seem to feel somewhat limited or you wouldn't be asking this questions to being with. ;-)

While I'm all about freedom (of choice), diving into something as a new FT job where you so far have no experience whatsoever is something I personally consider a fairly high risk. Especially since you are not leaving a crappy job where you feel like being extorted and chronically underpaid (well, maybe the later LOL) while working way too much and at the same time being totally unhappy about everything in that job (at least you didn't say so). Your job is safe and probably somewhat fulfilling. Not something the majority of other people can say about their jobs in all likelihood.

Is plunging into RE going to be able to substitute that? No one can answer that question for you, I'm afraid. Will it offer many opportunities? Hell yes! Will it be safe sailing? Hell no! Will it lead to success and a happy life? Hell... maybe.

On a final note: the market isn't exactly at the best point to get into the game as a newbie... Ten years earlier: sure. Ten years down the road: who knows...

@Paul Winka The invoice you received should show what amount was billed for what work. While it's never nice to get billed more than what was quoted beforehand, this happens. Then again, it's - as always - a matter of communication which here, apparently, was bad. We cannot gauge the validity of the bill as we do not have all the relevant information. But it does seem high indeed. You should contact your CPA (obviously!) and inquire how that figure came about.

Do not give up on CPAs, though. They will be of big help to you. If they know what they are doing. Many don't, especially in relation to real estate matters. There are good ones out there, depending on what exactly you are looking for. You may want to reach out to some of them to inquire about how they would serve you. There are some quite active here. ;-) Serving you as client is what they are supposed to do as service providers. For a fee. Good service justifies higher fees, but then again it's a matter of trust. Starting out a business relationship with little output, yet a high bill is not going to be a sustainable one as far as I am concerned...

 Totally agree!