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All Forum Posts by: Brian Schwarzkopf

Brian Schwarzkopf has started 1 posts and replied 2 times.

Post: 401k loan for real estate investing

Brian SchwarzkopfPosted
  • Rental Property Investor
  • Coral Springs, FL
  • Posts 2
  • Votes 1

@Eric Ferrer, I'm of the opinion that REI can perform better than a 401k and I hate the fact that you have to pay a penalty fee for withdrawing 401k money early. For people that can't control themselves enough to keep from spending their retirement before they retire, they probably need those legal guard rails but I'd rather take my chances. So maybe before you cash-out your 401k, see if you can control yourself enough to save up half of the down payment. If you can do that you're probably safe to play with your money as you see fit. I've also heard of something called a "solo 401k" where you can decide how and where to invest the money. It might be worth investigating.

All that being said, I also think that you should have a diverse portfolio, so keep some money in your 401k (or other, non-real estate market) to hedge your bets against another real estate market downturn. 

Hope that helps!

Post: Using Tenant's deposit to cover rent in early termination agrmnt

Brian SchwarzkopfPosted
  • Rental Property Investor
  • Coral Springs, FL
  • Posts 2
  • Votes 1

Hi Everybody!

My tenant asked to be let off of his lease 2 months early and I decided that I want to sell the property so I offered them the deal that if they paid 1 of those 2 months (~$1700) and allowed us to start making upgrades to the property, they could be let off of the lease early. He wasn't happy about this and said something to the effect of "Well you want to sell as soon as possible, don't you? And you can't come in and replace the carpet if I'm still in posession of the house." 

My real estate agent recommended trying to sweeten the deal by offerring him the same deal only worded slightly different. He'd pay half of 1 of the remaining months (~$850), vacate on the 15th and I'd take the other half of the month out of his deposit ($800). His deposit is 2 months rent (~$3800).

So my questions are:
1- Is it legal for me to make this kind of a deal with the deposit? It seems to me from my internet research that I can't touch the deposit unless he fails to pay rent or causes damage to the property.

2- Is it wise to touch the deposit before he leaves? My agent has walked through the house and it seems in good shape and in fact, all his stuff is already moved out. But a lot can happen between now and when I get the keys back.

I'm kinda worried that he's just gonna stop paying rent and I'm going to either have to wait until the lease ends to start making upgrades or take legal action and evict which is going to cost me more money. Is there a better move here?

Thanks in advance!