All Forum Posts by: Account Closed

I bought the house in early 2016. It was a pre-foreclosure. The owners (original) allowed the house to get extremely run down. I had to redo the kitchen, swimming pool, outdoor patio, bathrooms, and much much more. I now see all the Capex in front of me, and I've finally have had enough. These "modern" houses out West are money pits--it really never ends.

I guess I'm spoiled, I grew up in a brick home back East, and I'm kind of biased. My parents really never had to do anything to our old house, and when they sold it, they made a decent chunk of change. 

Well, if you have to know, the roof was replaced 6 months before I bought it, and the water heater and AC are brand new! The woman who owned it before me had a son that took really good care of the house for her. The vacancy rate in Towson is not an issue. It's a three bedroom right in the heart of Towson, if I can't get the ideal family in there, then students are a quick fix, but I haven't had to worry about that because I have a single mother in there with a really good job who loves Towson's public schools.

As to your "profitability" statement, the house is paid for, value is up, and I have a bank account that is growing. In what world is that not profitable? If I sold the house this year, I'd have better 2 year returns overall than many hedge funds and mutual funds out there. Could I have gotten a better ROI in some other property, investment vehicle, or asset class out there? Of course! But I'm not a glass-is-half-empty type person.

Asking me to predict the future on past results pretty much breaks every disclaimer in finance--basic 101 stuff!

Hi Matt,

Net is net. This is my 2-year average after all my deductions/expenses (gross: $1800/month).

I never said it made a "better investment." I said it's cash flowing, counter to your statement that it wasn't.

If you read my original post, I'm not planning to sell the Baltimore rental. I'm planning to sell my Phoenix primary and buy more rentals with the sale. My original question was basically how to do it without being raped on taxes. I think Sam might have answered it, but I'll talk to a CPA to make sure.

Thanks Sam.

As for Phoenix, beyond the crappy built houses, everything else is very good! We have a business-minded governor, and corporations are moving here on a pretty regular basis. Intel is almost finished their facility in Chandler, and supposedly Phoenix metro is to see somewhere close to 500K California residents moving here to fill open employment positions. Moreover, California is such a basket-case politically, we should enjoy the fruits of California's idiocracy for years to come. 

Alternatively, something cosmic could happen, and Phoenix could become the place to be in the next few years:

https://www.express.co.uk/news/science/1010638/cold-weather-forecast-big-freeze-solar-minimum-maximum-space-news

Hi Matt. It's free and clear so by nature it is cash flowing. The value is slightly up, and I'm netting $1500/month. It is, so far, my favorite piggybank.

I'm very familiar with the county, grew up in Perry Hall. Outside of Towson, maybe White Marsh, there doesn't seem like much hope anywhere else. Parkville has been dying for decades and so has Loch Raven. I believe the West side is similar, with Owings Mills as the exception, but maybe I'm wrong. Towson is getting a breath of fresh air with the redevelopment of downtown Towson, and I personally believe that Towson will become the center of the entire Baltimore region in the future, simply because Baltimore City will never not be a crime infested hellhole.

Anyhow, enlighten me, what say you?

Matt, thanks, but you don't quite understand Baltimore. Baltimore is like Phoenix, as in you don't look at just the downtown area. Moreover, Baltimore City is surrounded by Baltimore County. Inside Baltimore County you have nearly a million people, and a variety of different income classes.

The cap-rates in Baltimore County are some of the best in the country. Towson is always in the top 10, thanks to the public schools, colleges, and hospitals there.

As to living in Baltimore, I haven't lived there since 1995 and I'm never going back. It's a hellhole, but one with great food. I personally love Arizona, but just dislike these cheaply built wood-framed stucco houses. The interesting thing about Phoenix, because all the houses look the same, you can't tell the difference between lower income and the middle classes. It's the oddest city I've ever seen in my life. I guess that's good and bad depending on which side of the table you sit on.

Anyway, I'm more than likely going to sell the Phoenix home, rent here, and invest in Baltimore. It just makes more sense to me.

Thanks for the advice guys! Really appreciate it. Yes, PHX scares me as a home owner/investor, will probably sell asap.

Hello everyone,

My name is Brian and I need advice. I've been playing tennis in my head about what I should do for the past few months and now I'm even more confused than when I started to think about everything. I would love to hear different opinions/advice just to see if my thinking is somewhat correct.

I'll keep it short and on point:

I own two homes free and clear.

1. My residence in the Phoenix metro area - I bought a short-sale, fixer-upper. I had originally planned to fix it and settle down here, but the quality of homes in this area has really made me think otherwise. In my mind, Phoenix homes are not assets, just future liabilities and money suckers. In 50 years, I think Phoenix will look like a shanty town with all these wood-framed stucco track homes decaying underneath the blazing sun. But, of course, this is just my opinion.

2. My investment property in Baltimore - It's doing well, in a great neighborhood, solidly built (brick), never sits more than a month without a renter. I bought it for $230K, my average rent is around *net $1500.00 a month. I'm not looking to do anything with it, other than expand in this area.

My question is, what do I do with the Phoenix home? Do I sell it outright and expand into other RE opportunities? Do I keep the home, live in it, and leverage it somehow? Do I keep it, rent it out (cap-rates are not that great here), and leverage it?

In my mind, keeping it and leveraging it is just asking for future problems. The house is only 20 years old, but it's already falling apart. I've done a lot to it already, but I see all its future problems staring at me everyday. It still needs an exterior paint job, updated master bathroom, possibly a roof, at least one AC unit replaced, landscaping, and potentially all new windows within a couple years. In order to sell it, all I need to finish is the paint job, bathroom, and landscaping. I could easily walk away with 100K in profit afterwards.

My issue is, if I sell it, I'm going to get hit with a tax bill unless I dump the money into a new home, correct? I've been living in the home for over two years, but that matters little, right? I still need to use the money on a new home.

I guess my question is, can I sell the home, and use the money to finance new rental units without being hit with a tax bill? Or should I not sell it, but leverage it to finance new rental homes?

This is where I'm confused.

I want to use these two homes to start walking my way towards financial freedom, but don't know which path to take. I know I have a pretty solid foundation to build on, but I need advice on how to start building.

Anyhow, any help would be greatly appreciated.

(I'm not looking for a professional consultant so don't bother to solicit me.)

Thanks in advance!

I'm surprised nobody mentions Austin property taxes. They're insane!