All Forum Posts by: Chuck Bigham

Meh. Section 8 tenants ..got to take em one at a time like everyone else. 2 experiences..

1. PM asks me to take a sec 8 tenant. Old lady, ill. So infirm she needs constant nurse presence, her daughter to move in, has tubes attached to her, etc. (In CA you can get paid to take care of a relative) I agree. The daughter probably fits previously mentioned profile. Her kids (adults) begin to move in not on lease. A daughter (late 20's) with 2 babies, 2 different men...just there temporarily. (so they said) Then the "nurse's " son moved in who began to deal drugs. (Late 20's) Working to resolve that was fun. 

2. PM asks me on another bldg I just rehabbed if I would take sec 8 tenant. Had an ideal one. Cautious at first (my first sec 8) I agreed. She was a handicapped woman, 2 kids. During the course of rehabbing another unit, I stopped by to meet her unannounced late afternoon. I must have looked workmanlike. Rang the bell. . After some time door opens..no one there. I look down, there she is.  On floor with a skid where pants would be. No legs. Looked up, 2 kids were studying on table one I guess 6th grade, other 8th, 9th. We chatted a bit, told her who I was, asked if she needed anything? Nope. Thanked me for taking her in. House was immaculately clean. Story I got she lost her legs in a car accident, husband(?) lost his life.  Each time I stopped by was same calm, clean. 

Section 8! Never know whatchu gonna get.

Curious question..fluctuates. Rentals pay 3x w2 gig, and I live on less than the w2 gig..gonna hang that up this summer..part time may be cool. (Edjukashun biz) Healthcare is a factor. 

Real estate has been great here in CA. The equity if cashed and paying interest at a modest 5% pays what I'm getting now, without eating any corn seed . 

Thing is, I enjoy chasing a deal, rehabbing as needed, transforming my little corner into something better. Best times business wise I've had is taking over a blighted building, kicking out the dopers, gangsters,  rehabbing, bringing in decent families and watching them plant flowers outside,  kids playing.

Money...ironically, when I was younger I wanted more. Bigger house, bigger airplane,  rv, motorcycles,
more business. Now I want simple.  Less hassle, less to clean up, have a smaller, more maneuverable footprint. Amount of money I need changes as I do. 

The deals. .they come and go but it beats watching TV!

These scams pop up from time to time.  My spam box filled with Morris. Never got curious and bought.  There was a red door outfit screwimg people in AZ , the tenant in common scams of the 2000's. I doubt highly there's anything here to recover in assets or O&E insurance.

If you don't see it, touch it, smell it you shouldn't invest in it.-Gran_Jamon

My question would be what you want the title for? 

Be very careful with reg d or 506 ppm deals. Usually this is a TIC or tenant in common deal, DST or other limited partnership type deal where you give up control largely to a sponsor/manager for what seems like a very secure fixed income. This makes it very, very hard to correct things, coordinate with other owners, and the commissions are usually very high. I did this in the 2000's and lost bank. Big bank. You are also very limited in how you litigate , limiting recourse to the securities side, broker who sold it. That is very dicey, it's a FINRA product. If you've only got a million to play with, I'd grow it a bit or buy something you can control. Good luck.

What you really are looking for is a mentor who will tell you everything will work out on your first deal. Yes, experience helps. Just as well, you have no perspective if you're getting good advice or poor. I suggest you read, thoroughly,  and understand the math of "Real estate investments and how to make them " by Milt Tanzner. When you have looked at several deals, listings for suitability,  maybe have a real estate person proofread your numbers or a local club contact, you will be in a better place.

cant get the meetup app to work for me, never sends me lost passwd to email. U want to be me msg here? May be able to attend!

Thanks chuck

Tell me more please about this life insurance and borrowing from it. I have no need for life insurance but I do have a need for say 490k to 560k to earn high interest until I buy another property. What are the penalties if you withdraw from the policy when ready to buy, what are the tax consequences and how safe are these companies in a recession?

Seems pretty simple: only justified reason to finance money is to earn a higher return on that borrowed money. If your situation, risk tolerance or imagination prevents a higher return, then pay down the debt.

Am possibly interested in a charitable remainder trust as an exit strategy on some appreciated and high basis buildings. Have some I bought in 2002, depreciated, one was a 1031. Thinking to do the trust as an exit strategy, feed the proceeds thru a trust, annuity or some type of funds I can control, donate the remainder 10% to charity. I want to run this for 8 years or so, not life time and use this as sort of insurance income if and when things get rough. I will use the income from the trust to replace my job income and use it to qualify me to buy more rentals. 

I will continue to run rentals, buy, and maybe after 8 years or so rotate another into the same setup, guaranteeing some stable income. Trying to work out a strategy to quit my day gig and last well until pension. Rental profits will more than cover my needs but this is an insurance idea in case the market turns south.

Any particular things to watch out for? I know the trust needs be formed before the property sold. I am told the basis depreciation recapture isn't a factor in this. 

Thoughts?

Thanks,

Cb