All Forum Posts by: Charlie Moore

@Kimani Kironji Lenders often pay taxes on properties they intend to foreclose on. Thiis prevents loss of their entire interest in tax sale.

Nirzhar

Let me suggest that you pause a moment.

I like all kinds of real estate and have invested in most of them over my 50 years in this great real estate investing business.

Though I have done many flips, I learned after awhile that, for me, they did not lead to my financial success.

What I quickly learned:

• There are few tax benefits with flips
• You pay the highest rate of taxes (pretty much like a W-2 wage earner)
• Surprise..........you pay Social Security like you were a business
• (I found this the hard way). Your calculated profit figures of what you should get at the close of escrow are not the same as what you take home.  "Investment profit evaporation."
• If you are trying to make a living doing this you need to identify your next property almost before you close on the current one.  Too much work.

When I changed to buy and hold of Colony houses, my bank account grew quickly.  Colony houses are groups of older houses, duplex, conversions, etc. on a single parcel in older parts of towns (not war zones).  

At my "high water mark" I had 200+ monthly rental checks coming in from my Northern California rentals.

I also learned:

• By fixing up units when I bought them, I FORCED UP APPRECIATION that was not taxable today.
• In addition to forced appreciation, I enjoyed the market appreciation over the years.
• Tenants, that I never knew previous to renting to them, were paying my mortgages and ALL MY BILLS and my lifestyle.
• In later years, I sold by carrying the financing and collecting monthly checks from the buyer.  I call this Pajama Money.  I could pick up these checks on the first of each month by going out to my mail box in my PAJAMAS.
• Depreciation when you have many rentals is very good for keeping you taxes down.
• Many other tax benefits.....car, computer, tools, milage, software, etc.

Good luck.  Personal message me if I can be of help.

Take care.

Fixer Jay DeCima

 Google for email hosting & then Mail Chimp or Constant Contact for mass emails.

@Charlie Moore The issue I have with dealing directly with sellers is that most of them don’t know how to handle a deal, and/or are not knowledgeable on how to execute a property sales transaction. For me I always leverage a RE agent because I prefer not to deal with sellers directly who don’t know what they’re doing and who can potentially blow a good deal. I would much rather buy directly from a RE investor looking to sell rather than a regular homeowner who is not familiar with the trade.

@Charlie Moore

As an attorney and investor from Pennsylvania, my experience has been that any investor that has their stuff together uses an escrow account for security deposits. It takes minimal effort to set up and maintain. Most banks will have a product available to serve as an escrow account.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

Check your local laws. Some states (like California) don't allow non-refundable move-in fees. I agree with Nathan G.'s statement about how charging a security deposit gives tenants incentive to earn it back by taking good care of the property. A move-in fee is already non-refundable, so they may not be as careful. 

In 20+ years I had never heard of a "move-in fee" until joining BiggerPockets a couple of months ago.