All Forum Posts by: Account Closed

There is an initial breaking in period when you buy a new property or get a new tenant. It should level off after a while. But there are some PMs who find it easier to just send out repair men every time and charge you rather than deal with the tenants. Its a common problem with OOS investing. Just wait until your first turn quote!!

I am certainly not anti real estate. But I do question giving up being a doctor to be a full time real estate investor. You spent a lot of time, energy and money to become an MD. Why do you want to give that up now? You can certainly be an investor and doctor at the same time. I have a cousin who is a MD and on the side has bought up a number of assisted living homes. He buys SFRs and converts them to assisted living, leases them out to a partner who runs the care facility. Its been hugely lucrative for him and he is still a doctor. Thats just one example. Or you can take your high income and invest in rentals, syndications, development projects etc etc. All will be much easier for you with a high predictable stable income and access to lots of credit. You certainly dont want to join the ranks of broke wholesalers and people trying eke out $100 per door do you?

I think the time for turnkeys is over. The market is too hot and if you add on TK premiums there is very little  chance for you to turn a profit. Back in 2010-2015 the prices allowed TK companies to acquire, rehab and mark up properties and still leave enough meat on the bone for a buyer. Now I see absurd things like less than 1% rent ratios on midwest C class properties, even duplexes! There is NO WAY you can turn a profit on those properties at those prices. At best you will eke out a 4% return with tons of stress along the way. Better buy some index funds and forget about it.

60K in rent over 14 months works out to $4285/month! Thats an A class property in any market. Wouldn't any reasonable person expect high income, high credit and clean background check to rent that out? I mean this isn't some D class property in the hood right? Something doesnt smell right in this story. 

Its hard to say without knowing your total financial picture. How much risk do you want to take? How much liquidity do you need? Whats the time frame of the investment? I know people hate taxes but if you are clearing $150 to $200K , that's probably not even all profit. Even on $100K of profit capital gains is $15K. Not peanuts but not worth getting into a marginal investment to save $15K and lose $50K! 

Why are you selling the rental? If its appreciated that's good right? What would it cash flow if you paid off the loan? How long more to payoff? What if you take your excess cash and pay it off faster? Or do you just not want to be a landlord anymore? In that case why buy another rental at all?

Lots of questions for you to think about..

EXACTLY! The legal agreement between you and the bank is different. Why do you think that is? Out of the goodness of their hearts? Or because government stepped in and protected you as a borrower, not to mention took the loan off the banks books in the first place? Yet when governments step in to interfere in LL/Tenant contracts via things like eviction bans (which BTW I think is a bad idea) people on BP are up in arms! But I do believe tenants deserve protection from arbitrary eviction based on "potential future problems". Non payment is another issue. Just like banks can foreclose, landlords can evict. In this case the tenant is paying the agreed upon rent and repairs and adhering to the contract. 

Now the legal agreement is a lease and it only lasts one year. So in principle the LL can non renew. The better analogy there is how insurance companies screw you by cancelling your policy for arbitrary reasons even though you have paid all the premiums. Thats pretty crappy behavior also but there is no law against it. Doesn't make it right though. 

Ok. Lets put this in terms that might resonate with you. You borrow money from a bank. When you do you show your income etc. You start making payments on the loan. Now you lose your job. Nevertheless you continue to pay the mortgage. The bank, being a business, decides that you are now a risk and calls the loan. So even though you never missed a payment or did anything wrong you now lose the house because you cant raise the cash to pay it back. Just business right? Banks avoiding a future problem..right? 

'Its a business' is just rationalization that allows you to be a jerk. In this case there is no current problem. It is anticipation of future problems that may or may not happen.  

#5!