All Forum Posts by: Stan Butler

When you owner financed these properties, what were the terms??  Most people I know that owner finance do a 20 year amortization with a 35-month term (balloon).  Their goal is to get cashed out within 3 years.

Confirming what @Paul Ewing said about HUD deals. I used to buy a couple per year and got some very nice returns on flipping them. For the last 2 years, I have not seen any great deals available. If you notice, HUD has removed the published Appraisal Value and now just lists them close to retail. Sadly, people are paying near these prices in a lot of cases.

You need to have additional channels because its going to be tough sledding trying to make your living off HUD homes.

Welcome @Don Mayer we actually have a rental up in Lindale due to a failed partnership many years ago.  Fortunately, it was not an expensive education and motivated us to become successful on our own and to never partner again.

As a co-borrower, you are equally liable for the mortgage, so if you partner bails on you they will come after you for all of it.  Your partnership agreement may specify what share each member is entitled to for rent and other income, but you signed Individually for this mortgage.

In my areas, I typically see 1/2 month to a full month for tenant placement to cover your marketing and screening costs.  For ongoing management the fee ranges from 7-10%.

You may also want to research if you are required to hold a realtors license in order to manage properties for other people.

I have the same opinion as @JScott in that I put them in every house, regardless of price point, in the bedrooms and family room.  The only difference is the brand and finish of the fan that we install.

Just a thought, but could you ask for a copy of the sellers Schedule E (or other filed tax forms) that could substantiate the income and profit/loss from the property??

 Sorry @Brian Eastman, but I still dont see it and here is why:

* The income from long-term real estate is mostly passive and the expenses associated with owning it are deductible, including depreciation.

* Selling a long-term real estate holding is subject to the lowest form of taxable income (long-term gains).

* I can see holding Notes or Option Agreements in the IRA to shield what is most likely going to be active income, which is taxed at high levels.

* As far as stocks go, I would hold dividend paying stocks and bonds in an IRA to again shield the highly taxed forms of income. But purely growth stocks would be more of a candidate for taxable accounts (since they dont create taxable events themselves)

I am by no means a tax expert, but here is something I have never understood about using IRAs for real estate.

Why would you want to put a tax-preferred asset (real estate) into a tax sheltered account (IRA)? Aren't you losing the tax benefits of the investment all together??