All Forum Posts by: Bill B.

I love how they have the same apartment renting for $890 and $1,800. Too bad it’s not in a different state. 

Ps. Don’t forget. 2024 rent cap was 8.9% so you may never get “market rent”. (It could take 8 years to get to today’s market rent, if market rent didn’t increase $1 during those 8 years.  Not what you’re hoping for.)

You’ve probably got a few other problems. Most sellers are going to want 20-25% down as it’s going to cost them 10% to sell. Most people don’t want to sell a property and walk with zero dollars. Not to mention they’re going to want a balloon in 3-5 years. Nobody wants to make a deal with a stranger that they’re stuck with for 30 years. Lastly, they’re going to want a higher interest rate than they can get from the bank for taking the risk. So if they can get guaranteed 5% interest in an account they can get their money out of at any time they’ll want 8-10-12%. 

Ps. You can only target owners with paid off properties who don’t need the money right away. (EX: They aren’t doing 1031’s)

Pps. I accepted my first ever owner financing buyer and closed 2 weeks ago. Let me tell you how they got the “deal” from me. $150k down, 5 year balloon, 8% interest, no inspections, repairs, or appraisal, $20k over asking, and most importantly. I got no other offers in the 45 days it was listed. They EASILY paid $30k extra to get seller financing with $150k down. But they were selling an expensive house in California and had horrible credit. I was their best option. They were my only option. Now I spend 5 years hoping they make their payments and somehow refinance to pay off the balloon. 

Last ppps. I don’t think you’d slide the substitution of credit past the newest of new realtors. I know I wouldn’t have even considered it. I don’t want my property back, much less someone else’s. 

You really shouldn’t be running your business on a stranger googling answers for you but…

the google says:  

Depending on the rental agreement, Georgia landlords typically must provide a 60-day notice for lease renewals or terminations, while tenants generally need to give only a 30-day notice for lease termination.Jan 18, 2024

If a new lease is not signed, and the landlord continues to accept monthly rent, the terms of the original lease still apply, except the landlord is required to give sixty (60) days' notice before she can terminate the lease or change the terms, and you (the tenant) are required to give thirty (30) days' notice before leaving.

So you can’t non-renew until the end of April and you can’t even increase the rent until then. Next time just give 90 days notice. It doesn’t cost you anything and gives the tenant time to rearrange their entire life around your decision. 

Be prepared to lose that $80k if you don’t do an in state live in flip. Not saying you will, just saying be prepared to. If you expect to make more than 12% ($9k) as a first timer, ask yourself why everyone isn’t doing it? You can’t expect to make more doing zero work as a first timer than many people make in a a year. Ask yourself, if you lose $10-$20k are you going to consider it lesson learned and try again or move on to something else. How much more do you expect to make NET. Because it’s an out of state not live in flip taxed as the highest rates instead of tax free? Is that amount worth the extra risk? 

You MIGHT make much more money with much less risk if you house hacked a live in flip.  It’s literally less risky than just buying a home to live in. You’ll have extra income while the work is being done. You’ll be onsite to oversee the work. You’ll get better financing, pay less interest and insurance, won’t be under financial pressure to sell at a bad time, and won’t give 20-30% of your profits to the government. 

Don’t forget. Even if this works. You aren’t creating new deductions, you’re simply pulling them forward so you’ll have less deductions in the future. Every time you lower your tax bracket you are lowering the value of the deductions. So while deductions today are generally worth more than future deductions. That could be offset by having the deductions applied towards lower tax brackets. 

Imagine you make $100k and you are affected by 3 tax brackets.

0-33k =-33K 0%

33,001-66k 10%

66,001 - 100k 20%

You can take $100k in deductions this year and pay zero taxes, for one year and then $10,100 for for 2 years  ($20,200 total)

You can take 67k in deductions this year and pay zero taxes for a year, take 33k the second year and pay $6,800 year two and $10,100 year 3. ($16,900 total)

You can take 33k each year and pay $3,300 in taxes all 3 years. ($9,900 total)

Obviously this is simplified but unless you expect to make much less and be in a lower tax bracket in the future those deductions could come in handy. It’s pretty much a reversal of the Roth conversion strategy. 

But as mentioned. I don’t think the tiny house would get you there. You’d have to convert your LTRs to STRs. I could easily see you spending more than you save if you try it with a tiny house. 

Kevin did a great job explaining why you shouldn’t bother. 

I'll add that you aren't going to move the debt to the LLC, that's going to still be on you. You also aren't going to move the liability, that's still going to be on you. Anything that happens at your rental is going to be your fault. So they're going to sue you and the LLC. Just get an umbrella and keep the home in your name.

You are only adding complications and costs with the LLC with no upside

This is all assuming there’s been almost zero appreciation and you shouldn’t sell tax free while you have the chance. 

Send it to every address they give you including the current rental assuming it will be forwarded to the address they gave the post office. Keep the text from the “reliable” tenant that shows they provided the addresses you sent the letters to. 

Because you won’t owe anything, and because I ASSUME you aren’t going to bother trying to go after them legally. Send the letter ASAP, say Monday so there’s no time limit problems. Just show enough deductions to zero out their deposit. 

If you think you might go after them in the future send the pictures to a handyman and ask for a quote to fix all problems. That quote will be the basis for any additional damage request. 

Unless you are SURE of $10-15k plus annual appreciation you sell. 

You put $287k in the bank and earn $14k/yr. Sure you’ll be taxed on it. But nothing will break and the bank won’t fail to pay. 

Is it a paid off $100k home or $5M home? 

You can’t ask for a good cashflow amount, only a cashflow rate of return. 

And that number depends on you, your market, your property and your goals. If your market won’t appreciate you obviously need way more than the 5% you can get in the bank with no risk. If it’s a 1910 mansion you obviously need a boatload more to pay for maintenance/repairs than a 2025 condo. But if your goal is to earn tax deferred income and appreciation you can pass to your heirs tax free you can accept less. 

Why do people who say the only people doing well today are the people who bought long ago (10+ years)?  Do they think we were killing it day one 10 years ago? It just takes time for most investors to become “rich” off real estate. You can become free relatively quickly. (Compared to the usual 30-40 year path.) do they think people with a million or millions in stock just got there? Or did they spend 10-20 years investing?

Start investing today and in 10-20 years you to can be told, to your face. “Your success is only because you started back in 2025 when prices were lower, it was easier, etc etc. You couldn’t do it today…”. 
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