All Forum Posts by: Lee G.

Does anyone else have any thoughts on HVAC "strategies"?  I am meeting with my HVAC contant today and I feel like this is an area of weakness for me which I need to correct going forward in my real estate investing career. 

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Alex - I appreciate your post.  $700 for an AC unit sounds too low. How could they make money at those prices? 

Can you elaborate on "gently used"?  I feel like this could be a game changer.    Also, my property was built in the 60s and the HVAC tech is telling me I ened the replace the duct work which they estimated will cost an additional $2500-3000.  Does that sounds right to you?   

I keep getting burned with the hefty price tag of new HVACs in the first couple of years after purchasing a property.    In my opinion, this is not discussed enough in the various real estate investing resources/outlets I have utilized over the years.  I would love to hear others thoughts on their investment strategies and considerations with HVAC.

I consider myself a buy and hold investor so in some ways I have looked at HVAC over the long term as something that would have to be purchased one way or another.  If you replace it early on then you can plan on having fewer costs for several years. 

Does anyone time their investing based on HVAC...example, buy a property with a new HVAC and then dump in a few years before it needs to be replaced?  That seems like there could be some merit to that strategy or am I completely off base.  

I am currently living in a property I plan on renting in the future.  Before purchasing the property, my opinion on the many large trees on and around the property was very positive.  I enjoy the shade, the beauty, and privacy which I believe someone else would also find attractive whether I decide to rent or sale in the future. 

Now that fall has arrived and I am in a constant battle with falling leaves and pine straw.  Being a new buyer, I have been eager to get out there and take on this challenge.   I've been pondering the topic of how to refine my buying criteria for rental properties in the future in regards to a property with many trees and potential yard maintenance.  I would love other people's thoughts on the topic.

It is my belief that most people lack long term perspective.  Yes, real estate can be a pain in the butt as these naysayers say.  What they fail to realize is that One bad year every say 5 years in a 30 year time horizon isn't significant, at least when you have it in a long term perspective.  Time is everything in investing.  Most people don't look at the big picture and what short term sacrifices can create. 

Also having your net worth in mind, I think is key.  If one of my properties needs significant repairs during the year,  I know that a few thousand dollars in the scheme of long term investing amounts to peanuts.  

Good comments.   I agree about not paying down debt.  For some reason, the idea of having those mortgages paid off appeals to me and my mind continuously goes back to that in a never-ending loop.   However, I agree that is not the best way to build wealth.  

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Nuhan, I appreciate your response.  I do not plan to quit my job.  I enjoy investing and do not see it as a chore.  My overall strategy is to build net worth, which I calculate twice a month.  My stocks have performed at a satisfactory level so I do not think that allocating funds in low-cost index funds is a ignorant way to allocate money.  

I guess (as an accountant)  I am hesitant about over leveraging.  Debt carries risk.  I would like to find a way to mitigate that risk and find the silver lining.  

I've done a lot of reading on the subject and I don't think paying down debt is the worst idea.  It's the historically low interest rates that make it nearly impossible to feel comfortable with that strategy.  The flaw with the statement, "deploying the cash for higher returns", is that it is almost arrogant and assuming that you will hit a home run or out perform the track record of index funds.  I do have confidence in my abilities but with something as important as building long-term wealth, I think it is important to revisit and consider all scenarios.  

Summary question:  How would you allocate by extra money saved from my paycheck by percentage between 1) stock piling cash for a 3rd rental property 2) paying down existing mortgages ( I currently own 2 mortgages that have low interest rates) or 3) investing in traditional retirement accounts including ROTH IRAs, etc.

Brief Background:

I own 2 properties which both have low interest rates.  I live in one property, but I plan to rent the property in the next 1-2 years which would be my second rental property.  I am now 9 years into my career and continue to see good pay increases and expect this to continue. 

Part of me really wants to pay those mortgages off, but I know statistically I could do better investing in the stock market/real estate.  I am interesting in continuing to expand to a 3rd investment property but I am having trouble seeing how the best way to go about it.  Leveraging up does not appeal to me especially considering my income.  I do not see any reason to take on unnecessary risks but then again I do not consider myself a chicken little.

Thoughts?

If your employer doesn't match I would not contribute .  I think maxing your ROTH which is only is only around $5,500 a year and then the saving the rest for real estate investing is a good strategy.  At least some element of diversification in your mix is prudent.  

 I have talked to many financial advisers about where to allocate money.  There is really no one answer.  The key takeaway is that you are saving and investing for the future which puts you ahead of most people.   Same goes for the question should I pay down debt or save for additional down payment for new properties.

At the end of the day, it's your money. Go with what you feel comfortable with.  If you want to go 100% real estate and you have the energy and right mind set to pull it off, by all means go for it.  The advice here applies to general population which means you have a few winners, losers, and lots of average out there.  

Patience.    When I was younger I felt that I would never save up the money to buy real estate.  Now 10 years later I see everything differently.  It takes time, but at the same time it's amazing how quickly your circumstances can change.

The best thing you can do is take it one day at a time and do not get discouraged.  Be discipline over time and learn as much as you can and talk to smart people.  I would caution not to go around begging but have a spirit of learning.  It's like the guy wanting to sleep with a girl on the first date.  It could happen on the first date but you need to plan to put the work in to get to know her first.