All Forum Posts by: Charles Moore

@Lane Kawaoka Lane, that's invaluable info! Now I don't have to wonder "what if I had tried investing here at that time?"

@Alex Chin, yeah, I could see some people doing that, but it's a hot seller's market right now in Seattle, so they're not exactly getting bargains. It's just like buying hot stocks when everyone else is when the price is high hoping it will go up more. Doesn't always go the way they think it will, and definetly not something value investors like Warren Buffet recommend.

@Taylor Horowitz, what is drawing you to look at Washington and Oregon markets? I'm in the Seattle area, and I'm actually looking back east to do my investing. Anything on the west coast is going to be more expensive than Midwest and Southern markets. On average, those markets are less expensive and cashflow better. Given that we have limited funds upfront to invest with, I would want to get the most bang for my buck (3-5 properties instead of one for the same amount) as well as diversification to lower the risk, with trusted property management in place of course. Kansas City, Memphis, Indianapolis, Cleveland, Dallas, Houston, and Birmingham are some of the places where turnkey companies have set up shop to provide ongoing service to out-out-state investors. None have chosen markets in the west coast, though, because cash flow is harder to attain there.

what about a home equity loan instead of a HELOC? That's a fixed rate with predictable payments the renters would cover. Also what about using the 2 acres of your primary to earn more for a downpayment? Use AirBnb to rent out any extra rooms in your house, or offer the land as a place for RV travelers to stop and camp? Or offer it as event space for groups looking for that? You could also resell stuff in Craigslist/eBayAmazon.

any idea how old the owner is and how much longer she will be around? Is this an unlisted property, and are you the only one she is talking to? I take it she doesn't want to be a landlord anymore, but likes where she lives. What would she use the money for?

@Joe Splitrockyou are right about things getting complicated if you rent out a space in your home more than 14 days out of the year. 14 days and under means you are not taxed on your earnings for those 14 days, no matter how much it is. Anything above that and including that though, is taxable. You also have to figure in the local hotel taxes for your county, and if there are any local laws or restrictions to it.

I'm curious to hear what their California situation looks like for this.

I think in terms of greater simplicity, Memphis scores higher than Indy or KC. Unlike Indiana and Missouri, Tennessee has no state income tax on earned or rental income (only interest and dividends), so you don't need to file and pay for a separate state income tax return like you would in those other states. Also, it seems there are fewer bad weather concerns there to damage your properties. Indy gets more snow, and KC can get more tornadoes.

did I read correctly that the military is paying your housing costs, and that you can rent out one side of the duplex while living in the other? Awesome setup! Great extra cashflow! You've got a great foundation to build your empire on. Echoing what's already been said, I think expanding your network by attending local investor groups there is important. At the same time, since you don't have a w-2 income right now, it might be hard to start financing anything, but with the spare time you can start accumulating funds for downpayments on more rentals for when you do get a job. Reselling stuff on Craigslist/eBay/Amazon works great, as would renting out a spare bedroom in your duplex unit on AirBnB, and doing freelance work on Elance or Taskrabbit.

hi, @Archana Bhat!

I'm in the Seattle area, too, and I agree with some other local investors that finding cash flowing deals in Seattle proper is very hard right because it's such a high priced seller's market right now. You have to look further north up in snohomish or skagit counties, or further south in Tacoma or Olympia. Or look at other states in the Midwest or South, where you can purchase much more with the same dollar.

The great thing about buying a rental property before buying your primary residence is that you won't have a primary residence mortgage dragging down your debt-to-income ratio when you apply for financing. To get the funds for your downpayment: 1) resell stuff on Craigslist/eBay/Amazon, 2) sell any crafty stuff you make or find on etsy 3) perform freelance jobs in Elance or  Taskrabbit 4) borrow or receive as a gift from family the money for a downpayment  5) set up an automatic deduction from your paycheck into a savings account.