All Forum Posts by: Ciprian L.

What is your mortgage rate? If is less than 7%, invest the money and when you decide to retire, pay the mortgage all at once with the money that you invested in the REIT.

@Robert Hooks I would suggest looking at the rate of return of your investments. Do you think that over next 25 years you can make on average more than 4.375% return on your investments?

If you refinance to 10 years, how much will be your monthly mortgage? Get the difference between 30 year mortgage and 10 year one  and run a calculation with a compound interest calculator and see how much money you will have in 10 years. 

I never look at how much I'm paying in interest over the duration of the mortgage, all I care about is the rate that I pay on the loan and the rate of return I think I can make from my investments . If I make $500k from investments and I have to pay $350k, I have a profit of $150k.

@Bob P. I would sell it and start over. 

Loosing money on a monthly bases on an out of state property it's not a good idea. You won't be up to date with the market conditions in San Diego, if a crash will come and you find out too late you can lose much more money.

@Tiffany Naka Are you looking to move in one of the units or just buy it as an investment property?

I have a duplex in the area an I used to live in one of the units until last year. It's easier to make the numbers work when is your primary residence.

@Gina Tavizon I agree that you don't have to be wealthy to invest in our market. But if you invest out of state, people will think that you are wealthy and you will pay the price.

I made the mistake of investing out of state before investing in our market.

Good luck!

@Jacob Brattain Thanks!

@Mike D'Arrigo 2-2.5 years doesn't sound bad. Your assessment is correct, it is a B property. 

How much should I expect the price/sf to be for a good laminate?

@Orr Kichin sounds like you have a much better PM than mine.

@Jay Hinrichs mine are from 06 and 07, no much cap ex expenses, Cap ex expenses are much lower than tenant damage in my case. At least you can budget for cap ex, tenant damage and maintenance it's much harder. 

All this rental calculators are misleading, you can not calculate maintenance relative to rent amount. A 3/2 SFR that rents for $1,000/month and is 2000 sf, it will have more maintenance cost than a 1/1 condo that rents for $2,000 and is 500-600 sf. If you use the calculator with 10% maintenance you will allocate $100/ month for 3/2 SFR and $200/month for the condo. That's why every new investor from expensive places like California, NY, ... start investing out of state because there seams like none of the local deals make sense. The numbers don't work because you use the wrong numbers for that area.

If you have a lot of money and can afford to buy a lot of out of state property and build a good local team probably it can be done, but if your plan is to buy 1 a year you have to rely on luck.

@Michael Noto these are not a low income rentals for Indy.

@Jack Gibson thanks for the advice.

The properties in the area are higher in price than what I paid for it. I'm thinking of doing a 1031 exchange, but I cannot find something local right now, and probably have to put some more money from my pocket for down payment, even if I find something that makes sense.

I'm thinking of a few options: 

1) buy 2 out of state properties for each one that I sell, doubling the number of rentals and find a better local team, maybe partnering with some local investor (not to happy about this option because I don't like OOS investing, but probably the only option if I don't want to pay the tax).

2) sell, pay the tax and invest in notes until I can find some rentals in my area.

Are there any other options that I didn't think about?

@Aron D."I have more stress over the lower cost out of state rental than the ones that I manage locally in CA", same for me, I have been thinking to sell the out of state properties one by one when they become vacant for the last 2 years but for some reason they always get vacant in the winter. 

Last year looked like a good year for my out of state properties after just braking even in the previous 3 years, then on January 2 I got the quote and I'm thinking of selling again. Probably I will rehab it and sell it.

@Jacob Brattain What do you think about 46239 area, what type or neighborhood it is? 

@Bettina F. It's much easier when you manage your own properties, you can talk with the tenant and see when he is not happy and maybe you can help him and make it stay longer. With PM you find out about maintenance issues only when you get a statement and see some charges, unless it something bigger than maybe 300-400 they don't ask for your opinion.

On this property, in November the PM sent me an email that we have to file for eviction because the tenant doesn't want to pay the rent, his lease was expiring on December 31. ( I already went thru 3 eviction over the years in Indy, one of them costing me over 20k, I didn't want to have another one especially around that time of the year). I called the PM to get more info. The tenant payed the rent on time but the check bounced back, so the PM charged him for bounce back fee and also late fee and the tenant refused to pay the rent and the feed. I told the PM to waive the late fee and the tenant payed the rent for November and December, and he moved out at the end of the lease. If we would have filed for eviction probably we would not have gotten the rent for the last 2 months and the property would be in much worst condition.

The PM doesn't care about your property the way you do, for them is just another property from the hundred that they manage.