All Forum Posts by: Dave G.

@Lorraine Martin There more experienced people on BP on this than me, but I did do a commercial loan once. My experience was there was no liability mitigation for me as they also made me sign personally even though is was for our LLC. Maybe this is different for other lenders. The most noteworthy thing for me with my commercial loan was it was quite expensive with points and fees. A conventional loan was by comparison a fraction of the cost but was not an option for me.

@Cory Melious

Sounds like the OfferUp version of tenant solicitation. A bunch of worthless responses from idiots that must get a dopamine hit from it.

Why do you feel the need to pre-screen tenants so THEY don't waste money. That is exactly what you need to do to eliminate all the stupidness. This is what my PMs do. I don't know in detail what they use and how automated the initial screening is before it lands on their desk, but I know that any heartbeat that wants a human to contact them about an available property must first pony up a non-refundable $35 (might be more now) for an application.

@Joseph Wright well if it's not a scam, it sounds like some sort of seller wrap you'd be offering to the buyer. They would be paying you a premium for your risk of them essentially piggybacking off your mortgage loan/credit. 

Some on BP may be willing to do this. But it is something I would absolutely never do unless there were some very unique business relationship/personal circumstances. So I would ignore it. If you're really looking to sell, I would do a legitimate market-listed transaction. 

I initially used Allstate for my rentals since, like you, I had all my personal stuff with Allstate. Then a few years ago I learned about the policies State Farm issues for rental properties and switched my investment props to them. I like it segregated from my personal stuff and the coverage was better tailored to rental property than what Allstate offered. 

I should note that I do not have an umbrella with State Farm, just individual policies for each property. I do have an umbrella with Allstate but never did try to put any of my rentals on it. So not sure this is answering your question specific to umbrella coverage.

@Mary Jay what you're talking about is capital gains and this applies to equity investments (and probably art, rare cars, etc) as well. There are short-term capital gains and long-term capital gains. If you sell the house you bought in 2009 your liability will be long-term capital 15-20% gains tax (property owned for more than a year) if you have other income that pushes you from the 0% bracket. If your ownership period is one year or less, then you will pay ordinary income tax (30% for you) on the gain. Just Google "capital gains" and there is tons of info on this stuff. 

And don't forget about depreciation recapture. You will only have ~1 year of that for the 2021 property. But you'll have ~13 years of it for the 2009 and it will also be a considerable component to your tax liability for that one. Google that one too. 

@Michael Salamone Yes on cash reserves. Yes on not overleveraged. You also need to have the will power and calmness to not freak out as your stock and real estate portfolio value gets cut by half or more. And you need to select your information sources carefully. You need to not watch the stupid dramatized financial news all day long talking about how bad the market is and how stocks and real estate are too risky and people should just buy CDs. And then you need to be actually able to pull the trigger on purchases in that environment. Remember the Buffet quote - "Be fearful when others are greedy and greedy when others are fearful."

@Kyle Wagner

I think it is quite presumptuous, at age 25 or maybe any age, to think you'll be at the same company in 25 years. Or even the same career. Regardless, that's great that you're happy with where you work now.

My wife and I did a remodel while we lived in it. BP Mindy does this with her husband I think. It can be a pain, but it makes it very "convenient" to work every night and day off on the property since you're in it. It will also seriously motivate you to keep on task with things. Ever have to do kitchen dishes in a bathroom sink or tub because your kitchen is torn up? You will not waste time in that environment.

Or do house hack and remodel one side while living in the other, then switch. 

I read a book a long time ago in the 1900s called "The Positive Workaholic". Not sure it is around anymore, even in used form. But it was an eye-opener as the author argued that most people could work 2 - 40 hr/week jobs in a sustained fashion if you live healthy, stay focused and don't waste time or let others waste your time. I never accomplished that, but it was enlightening to consider and strive for.

Figure out how to not sleep. Ok, sounds flippant I know. But I've always envied people that sleep very little. I've always despised sleeping since it seems like such a waste of time....you're just lying there getting nothing done. The best I ever did was only sleep 5 hours a night during the week then a bit of catch up over the weekend (6.5 - 7 hours). Even still, that's 19 hours a day I was busting it. That's 3 more than someone who sleeps 8 hours a night, everything else equal. It adds up.

@Scott Mac I don't have an answer to your poll (my wife probably does), but thumbs up for the question alone being entertaining!

Dude, you're 23 years old. Sounds like you're doing great, so what is the huge rush? 

To me your next step is to focus on the rehab, get a good tenant in place and let the dust settle. Be a landlord for 12 months. Accrue some actuals, both financial and managerial and get smarter on reality versus theory & concept. Save money for the next acquisition during this time. If you do one househack like this a year you'll have at least 20 doors at 33 years old. But you'd probably accelerate after a couple years and have a lot more since you'll be much smarter on everything, and have systems, vendors and partners in place. Rushing things can be very, very expensive.

@Andrew Freed

I would say The Big Short for me. 

And not so much a real estate movie, but in Wallstreet I do like the very quick part where Gordan Gecko tells the story to Bud about making $800k on his first deal.

As for response by @Nathan Gesner on Pacific Heights, I remember not liking it so much. But I suppose that could be because I was just starting with my first rentals about that time and everyone I knew kept telling me I was crazy because they saw that movie. 

In general, my opinion is entertainment (Hollywood/movies) and practical learning don't intersect much.