All Forum Posts by: Clayton Barnes

If he is okay with 1 rental property a year it doesn't sound like he isn't on board. There is certainly risk in real estate investing, and it is a lot higher when you're new to it. If he's okay with 1 a year do that for a while. Once you've got 2 or 3 properties cash flowing and it's not proving to be a huge chore to manage, then I'm sure he would be less hesitant.

If you're just expecting him to empty the 401k, HELOC the house, and dump the savings into rentals immediately that is a huge commitment for something that doesn't yet have a proven track record. It seems like almost everyone who is on the podcasts has some stories of early properties they got into that were GREAT deals only due to their inexperience in evaluating deals. I feel like it is a perfectly reasonable plan to start slowly and learn the ropes.

 Reading comprehension is key! I was thinking Valpo was some sort of insane market or something for a minute there.

What sort of houses are you getting $3500/mth rent out of? Are they in Valpo?

You could install leak detectors and actuated shut off valves to handle the flooding. Any water that completes the circuit would cause the valve to close on the feed line. I've never seen one on a toilet, but they are really common in the aquarium hobby. I'm not sure how you could stop a toilet from just running all the time.

If you're having this much trouble at the property have you considered changing the toilet internals if they are old or upgrading to some harder to clog toilets?

I'm in a similar situation. We're looking at moving and I'm trying to figure out what the best plan for the current home is.

What is the property worth if you sell?

What is your cash flow if you rent it?

What is your ARV and Rehab costs if you fix it and sell it?

If it sells for say $100k how much of a return can you get for that money elsewhere? If you rent it does it beat those returns? If you flip it does the additional value added compared to the rehab costs beat the other options you have for getting returns on your money?

If there is a current mortgage on the property, then the bank gets paid before the owner. So if you're buying the house for $100k and they owe $70k on the property, then at closing the mortgage will be paid off and any additional amount will go to the seller after things like agent fees and any closing costs they might be responsible for.

If instead you want to pay them $70k and they owe $100k on the property, then either the seller will have to pay the additional balance of the mortgage somehow or the bank will have to approve a short sale. I've never done one, so I can't give specifics. However, basically the note holder has to be willing to accept less money than they are entitled to on the loan.

 I believe it has been $14,000 for a handful of years now for tax purposes. I believe after that it is taxable. There isn't a limit to a gift amount as far as I know, but Uncle Sam wants his piece after a certain point. Sadly, I'm not in the business of gifting people tens of thousands of dollars,so I've never studied the specifics. You should consult a qualified tax adviser as I'm sure local taxes could add their own wrinkles. 

There may be some sort of a partnership or other legal agreement that would make your family able to provide a down payment, satisfy the bank, not require fraud, and not run afoul of the tax man. I'm definitely not qualified to give any sort of advice relating to that, but it might be an idea you can pursue.

How much did he charge you for the additional removal? Was it $300 for the 6 squares of roof on the flat area?

 Wow, I don't blame them. That sounds like a movie plot. Maybe you could market it to horror buffs.

This is a good point to bring up. My first home down payment included a gift from my family. The bank required a signed document from my family stating that the money was in fact a gift and I was under no obligation to repay it. If you're talking about a 20-25% down payment amount you're probably beyond the gift limit for tax purposes as well.