All Forum Posts by: Colin Carr

Great advice everyone! I feel much better now, I thought I was on an island. I'll take all this into consideration going forward. Thanks! Colin

Wow Matthew Olszak , 23 out of 25! Insanity. Thanks to everybody for the advice. I actually do have a prescreening technique, but I think I may have been over the top with some of the questions and think I could have driven potentially qualified tenants away because I came off as too picky. Does anybody have experience that this may be the case? This is only my second time having to lease my first rental out so I'm still learning the ropes and appreciate all your comments.

As of 1pm today I had 7 showings for the property I had listed, 6 hours later I had 5 cancellations, a no show and 1 person almost a half hour late. I have a couple ideas as to why this may have been, but wanted to throw this out to the community and see if this is common, or did I blow it as a advertiser? I'm sure there is a lesson in here somewhere and need your help to spoon feed it to me. Your input would be greatly appreciated. Thanks. 

Colin

Jim A couple of red flags in here. 1. "I think it's worth 400k." Like everybody above me says, it's up to you to understand as best you can what the place is worth. Get on red fin or Zillow and try to find comps. 2. Banking on appreciation is never a good idea unless you can see yourself floating vacancy and down turns in the market. 3. The speed at which you have to pull this together seems fast and furious. This isn't always a bad thing you just need to address 1 and 2 above with haste. I would be cautious about this. On the one hand, you're given an opportunity to get into the game with some potential. On the other, it sounds like you need a bit more confidence in your numbers and deal analysis. Ultimately the amount of risk you take is yours and yours alone. Welcome to BP and good luck.

Hey Austin, just to clear things up, do you currently own a primary residence? It sounded like you were saying you are going to be a first time home buyer, but a HELOC is for people who already own a home and have substantial (generally greater than 20%) equity in that house. Maybe I read your post wrong.

Hello Brad I agree with Dan. First and foremost you should make sure that your decisions are inline with what is best for your family. If they will be too stressed by any moves (financial or physical) than you're in for a world of hurt even though you may have some good cash flow or investments. If you all get to a place where you are all happy, then start looking at deals. I'm like you, I hated debt. I paid all my loans ahead of schedule. However, I would often wonder that because I had such good credit that I could get money for almost nothing, if it wasn't better to put extra money into an investment that made more than the interest in my loans. I now try to find a good balance between the two. Over leveraging your self can lead to higher risk, but by under leveraging you may be missing out on significant compounding interest. If you do decide to buy real estate (or get into the stock market), you should predicate all your decisions on good financial analysis. You seem like a financially minded guy, so just run the numbers and make sure that your decision is as solid as it can be. BP has all kinds of resources for analyzing real estate deals and investments in general. Now with that said there is always risk, but a little due diligence can reduce that risk significantly. Anyways, just some things to think about. Im in the Littleton area, if you ever want to chat, I always look for like minded people. PM me if your interested. Good luck! Colin

Great. Thanks for the advice!

I was watching the video Brandon Turner did for analyzing a deal recently and got to thinking. When you own a rental and are collecting money from it, I'm assuming the government sees that as income, and presumably wants a cut of it. However I never saw Brandon outline taxes (specifically for income, not property). I own a duplex, house hack and I take off about 15% assuming at the end of the year I will be taxed. Obviously this eats into my cash flow, but I haven't heard of it from anybody else.

Is anybody else doing this? If not, am I doing something wrong? Also note, I'm hoping that depreciation and mortgage deductions will eventually make wash out any extra income I'm making in which case I'll have a nice bonus come tax time. 

Mike Stephens I'm curious where you got your rent numbers from? Did you just comp houses in the neighborhood?

Okay, so I'm not totally crazy then (or a to terribly bad investor..)! This makes me feel a little better. I'm currently house hacking a duplex in Littleton and ran some theoretical numbers if I were to rent both sides. It would be a .87% deal which seems consistent with all your comments. However as @Jean Bolger pointed out, I could potentially cash flow $500 a door just due to a reasonable rental market, which isn't too bad. 

The only problem is I had to house hack to afford the place! Anyways, thanks for the feedback. I'll continue saving in hopes the market cools off a bit and I can get in on another duplex. Thanks as always to everybody for the conversation.