All Forum Posts by: Charles Perkins

Quote from @Kevin Polite:

BP has been great over the years for newcomers, those still acquiring, but very little to none on the "R" word...retirement. Questions like do you really want to still be a landlord at 70? Do you want to still own but use a property manager and how does that work in retirement? How and when you should start to liquidate your portfolio? What are the tax consequences? How does it affect Social Security? How does IRMAA (Income-related monthly adjustment amount) affect Medicare when you're liquidating? Etc.

You have brought up excellent questions that should be considered at some point.  For some it makes sense to leave the properties in some form to future descendants.  Some like my wife and I will be strategically exiting one property at a time as it makes sense.  How one exits makes a difference and I would love to hear thoughts on the topic.

My current answer is no, the headaches and joys along the way have been well worth it.  My wife and I can fully retire any time now.  My wife is retired and I'm "semiretired" heavy emphasis on the quotes.  We have more than enough equity and reserves to live a comfortable retirement now.

Nothing insane about coming to the exit time.  Now it is about working on exit strategies, managing taxable events and making full use of built up tax credits.

The beginning is the hardest time especially when you work through the learning experiences.  I also discovered early on that some strategies are more stressful than others.  Some ways of doing business are also more stressful.

Quote from @Daniel Myers:

I'm new to real estate but happy to be joining this community. I'm currently researching long term rentals in the Nashville area.

Welcome to BP.  

As a long time investor in buy and hold SFRs.  I highly stress education. 

Education Includes determing your best investment strategy, real estate strength & weaknesses, current and projected real estate market, and coming to understand what you don't know.

Bigger Pockets is a great place to learn through blogs, posts and contacts here.  REI groups are good ways to learn as well.  Finding a mentor can also be helpful. The school of hard knocks works, but can be costly, time-consuming and discouraging.

Ultimately one has to get started.  It is a great way to build a retirement and risks can be reduced.

I've been investing in real estate for over 30 years, brought and sold a dozen or more properties, and in the last 10 years been semiretired as a real estate professional.

Much of what my wife and I have learned has been through the school of hard knocks. Currently all properties are fully paid for SFRs.  

We will be doing a short plat soon and bringing sewer to a property in the next couple of years.  The short plat process can be quite time consuming.

We have worked with many real estate professionals over the years some great and others that were one offs.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $190,000
Cash invested: $190,000

SFR purchased as residence and converted to rental after 5 years. Property has a nice view in a middle income suburban area. Home can very easily be converted to duplex.

What made you interested in investing in this type of deal?

Location near freeways without the noise. Near SeaTac International airport. Nice view, walking distance to bus, schools, shopping. Close to Seattle & Eastside providing good location for those working in those areas

How did you find this deal and how did you negotiate it?

Diligent search over several months and word of mouth.

How did you finance this deal?

Bank loan. That was refinanced later to very low fixed interest rate and is now fully paid.

How did you add value to the deal?

Fully finished the basement area as mother-in-law unit. Upgraded windows, landscape work and made two separate dwelling units.

What was the outcome?

Property cash flows very well and has become an excellent tax shield with my other properties.

Lessons learned? Challenges?

Good screening processes are a must.

Your tax lady is probably right.  The income from rental investments is the rent minus allowable expenses.  

Quote from @April Smalls:

When considering investment in a project, what ROI appeals to you? I assure a return of 30% or more. Any thoughts?

Investment decisions are highly dependent on each individual's assessment factors, period of time assessed, investment financing, etc.

My current ROI is far far greater now than when first purchased. I also look at capital appreciation, tax savings, cash flow and cash flow appreciation.

Where you invest, investment support structure for each property, and additional factors important to your individual decisions all make a difference as well.  For me I also look for any upside to an investment.  

I purchased a foreclosure that sat on a suburban lot that was flat, needed repairs, cleaning and most of all the lot was large enough for as many as three homes.  Money had to be invested upfront, but the return has been great.

For me an investment is required to meet several criteria. First it must cash flow in the first year.  The property must have an upside - appreciation waiting for a little effort.  The property must be located within a reasonable radius of my home so that I can manage it.  I also avoid highly regulated cities like Seattle.