All Forum Posts by: David Barnett

@Aaron Hunt I think that there will be fundamental differences to SS.  Since you're in your 30's, I wouldn't be surprised if SS goes away or is fundamentally changed by the time you are set to retire  The other thing is that the income on the rentals will likely be offset by depreciation and other expenses.  At the very most, it's likely that you'll only report a small amount of the gross rents as income after depreciation, if at all. 

If you don't mind sharing, what was the cash purchase price, expected rehab costs and after repair value?  I'm curious what prices look like in the Madison WI area.

 If you're in a high tax bracket (which I'm assuming you are), it probably makes sense to contribute pre-tax to reduce your current AGI (Adjusted Gross Income).  It's likely that your AGI will go down after you retire, and will pay less in taxes since you'll pay taxes as you withdraw the pre-tax funds in 401k.

@Justin Hale You're welcome and glad I was able to help a bit.  Good to hear that you're a rockstar.  From an outsider's perspective, I appreciated your honesty in where you were in the process.  Being honest about where you are says a lot to any company or person you'd be working with (likely one of the things rockstars look for - it's something that I look for), and I'd encourage you to be 100% honest in any interaction like you were here.  Honesty and integrity are often times two traits or characteristics that rockstars look for in people that they work with (rockstars don't want to jeopardize their reputation in working with a slimeball).  

The tenant issue often comes from lack of appropriate screening.  Granted, items come up from time to time even with the most rigorous screening (for example, one of my tenants abandoned one of my properties mid lease without notice).  A professional property management firm that does leasing generally can read people pretty well and cut down on those chances of bad tenants (it's not foolproof though, and would recommend some reserves after you land a property in case there are issues).  It's actually in the best interest of the property management company to place tenants that are quality (less headaches).  Also, very smart to refer business to any of your rockstars.  I would make sure that you are comfortable standing behind them before referring business (don't want to jeopardize your reputation by referring prematurely).  

If I were in your shoes, I would google local property managers and start off with a phone screen.  For any property managers that you feel like has their act together, I would try to find a time to discuss a possible working relationship in person.  During the in-person meetings, you'll be able to show what you're all about and that you are a rockstar.  If the two meetings are handled properly, I'm sure you'll be able to land rockstar team members to build out your team.

Good luck!  

@Justin Hale Before answering your question, are you looking to invest in the Albany area, or are you looking to invest in another market?

I invest out of state (about a 2.5 hour flight away), and I've found that spending a few bucks to fly out to the market and meet people in person is a really great way to determine who will be on your team.  I agree that the phone is better than email or text.  The only thing better than the phone is in person - you can learn a lot from meeting with someone in person.  There are a lot of things that I can pick up in an in-person conversation.  As David has mentioned in his books and podcasts, really all you need is the first member of the team that's a rockstar.  I've always found that people that are really good and accomplished know other complementary service providers that are also rockstars.  Justin, are you a rockstar?  If you are a rockstar, you'll be able to attract other rockstars to want to work with you, even if you don't have the experience.  I've found that rockstars meet with a lot of people and have a general knack of being able to bucket people or read people very quickly.  They will be able to pick up on whether you are a rockstar or not.  Focus on becoming a rockstar to be able to attract rockstars.  There's a certain confidence (not cockiness) that rockstars have that is palpable.

@James Wise nails it.  If you have a good quality product with above average finishes at a fair price (in a decent location) you shouldn't have any trouble filling the property.  

I would also follow up fairly regularly with the leasing agent (say once or twice a week) for status updates if the rental hasn't been filled.  Being proactive is helpful and should ensure the property is filled quickly assuming quality, location and price are in line with the area.

@Ivan Palagniuk I wouldn't call the insurer directly, I'd go to an independent agent and ask them to shop multiple products for you.  They will have relationships with various insurers and will likely be able to secure better pricing than you would individually (due to volume).  They might also be able to negotiate price reductions based on the quotes that they receive back.  Let the professionals do the heavy lifting for you!

@Ivan Palagniuk I would strongly recommend going to an insurance broker/agent that isn't captive (independent).  It sounds like you went to an agent that was tied to Progressive, and they can only offer Progressive insurance products.  If you go to an independent agent, they will be able to shop multiple products from different carriers.  I invest in the Midwest, and my properties are insured by Foremost (three duplexes).  Foremost seems to be the most competitively priced in the area where I invest.  Good luck.

@Randy Bloch It's a very interesting strategy/possibly using two strategies together to achieve some powerful financial goals.  Also, once you're financially free, you'll be able to control your income easier and might be able to minimize taxes by being intentional on income, etc.

Sounds like a phishing scheme.  Hopefully the mortgage company didn't get hacked, especially if you provided social security numbers, etc.