All Forum Posts by: Douglas Pollock

@Ian Bautista if you do buy and rent it, then set the lease for however many months it takes for it to get it back into prime rental season. Let the tenants know they’ll be able to sign the 12 or 24 month lease in the spring/summer. That way, your future leases will be set to renew in the prime moving season. I tend to do renew mine in April. I do not do month to month. The cycle begins before the kids get out of school. And if the tenant moves out, I have a couple weeks to spruce up the property before prime renting/buying season. My tenants tend to stay for 3 years.

@Matthew Paul Is title insurance automatically part of the title company’s function? A real estate attorney was my first thought too. Is the attorney going to go to the title company? Can the investor lower costs by contacting a title company instead of paying the lawyer to do so? (Assuming the lawyer will search via a title company). And while we’re at it should be advise the investor to check for liens and tax liens?

@Brent Coombs at the time I was buying a home, and not considering or knowledgeable enough to discern a true deal. I also had some time constraints and family factors to consider.

@Jason Dillard Great point on maintaining tabs on current basis in the house instead of only at the time of acquisition. Why do some people hold at 100% equity, while others flip ASAP or 2,5,or10 years? Is there a rule of thumb for useful points to exit or tap equity? Dollar amount? Time frame? Etc?

@Daren H. Maybe they could use the CO costs to bring down the price, and fly in the Texans to do the work under a CO contractor. At a 90% discount 10 piers*$2000 vs @$200 it would save some money! God bless Texas!

@Steve Vaughan I accept that growth, at a fast pace will likely require leveraging by cashing out. And yes, I also accept that as equity builds my ROI goes down because it’s not just about how much money was used as a down payment. However, the devil’s advocate in me says that there is a switch that gets flipped after the bank cashes that final check. Then, the calculation says cash flow shifts from the bank to me as the owner. Before the final check, my net increase is $200 (-200 cashflow, +400 equity, is $200). After the final payment to the bank, I’m receiving $1,200 per month. The standard financial advice I hear is that for every $100,000 invested a person can use 4% ($4,000) without tapping into the investment. So, $1,000,000 translates to $40,000 annually. Now, with a little squeezing I can foresee netting $1,333.33 per month in cashflow by my final payment. If I repeated the process two more times, I’d have a greater annual income from a smaller investment. And the headache factor of three doors is very low compared to the planes, Mercedes, 1031, and other items mentioned in the thread. You’ll be wealthier for sure, but if all I want to do is stack $36,000 of rental income on top of my pension, then doesn’t fewer paid off doors give me less headaches than the countless hours it took to build what you currently have? I want to work less hours. Not because I’m lazy, but because I’d rather spend time with my kids.

@Ernesto Correa is this an attempt to get a home office tax benefit?

@Thomas S. I’m learning that too! For me, the CapEx made a difference due to having replaced the roof, HVAC, flooring, etc. based on my window of sale, I knew CapEx wouldn’t be eating into my cash flow plus I was able to live in a fixed up property for awhile. Timing also helped make a decision because the foreclosed property I bought in 2009 hadn’t rebounded yet in 2011. Near zero vacancy too.

@Sandor Bogdan. If cashout refi AND Heloc are options, what rules of thumb or strategies should be considered? I don’t want to divert from the original question, but it seems like a natural question to ask.

@James Derrick can you rent out the garages to increase income? Is there space for a shed or two? You could rent shed space. With a one one, there’s bound to be some desire for storage at some point.