All Forum Posts by: Evan Salvador

I'm in the process of buying my next rental.  I have a pre-approval letter so that I can show agents and brokers, I have every intention to make purchase and not be another California tire-kicker.  Is it faux pas, so to speak, to work with multiple RE agents in the same area?  My line of thinking is that working with more than one agent gives a shot at hearing about off market deals more often.  

@Phillip Kim IMHO, If you're going to start on e-commerce as a business and your primary source of income, you need to work on that with laser focus.  It's easy to get distracted by other opportunities, including real estate.  That said, if it's real estate that exciting to you, focus on building a business around that.  The key is to focus on something, master it, automate it(as much as possible), then move on to the next goal that excites you.  

@Andrew Johnson What makes you throw out a property with 50% rule?  Is there a threshold where you say, "ok I can go for this"  and certain number that tells you "no way!"  I use the BP calculator a lot and go off that factoring in cap ex, vacancy, and repairs but I see how that is time consuming.   I know there is a tab for 50% rule however, it is usually far lower than the positive cashflow I get from using the regular calculator.  

It really depends on your goals. Fix and flip is an operating income business. Buy and hold rental income is a passive income business. There's pros and cons to both. It's also important to realize what exactly you're excited to do. Not just about the money but the strategy that you feel motivated about working on. Then focus on that! I'm newer to real estate but not in business in general. A common mistake I see is that some people get so excited about all the opportunities out there, they spread themselves so thin. Focus on one strategy, stick to it, learn, improve, get knocked down a lot and learn a lot. Once you master it, then go for the next interest! It sucks to get knocked down a bunch when working on a strategy that doesn't interest you that much.

Brant Jones my attorney believes if you want to set up an LLC for your properties out of state, you would form the LLC in the state for those properties. I don't remember the reason exactly, but if my memory serves me correctly, it has to do with any legal issues with your properties held in an LLC would be regulated at the state level of which those properties are located. Oh and yeah CA kills us with the required $800/yr per LLC even if it's out of state.

Unfortunately, Kiyosaki licensed his brand to Tigrent learning company.  Tigrent sets up the seminars where they get people to raise their credit card limits to pay for the education.   The free seminar is to suck you in to the first purchase.  Then you show up to that "next level" seminar where they up-sell you to a longer seminar with direct coaching for somewhere in the neighborhood of $45000.  With that amount of money, you might as well purchase a property and learn as you go.   Not saying that the education isn't valuable.  However, $45,000 is enough to leverage to buy 1 property, make mistakes and still have enough to offset almost any costly mistakes.  

Originally posted by @Stephen Nava:

Do lenders count property tax and home insurance as debt even without an escrow account and no record on credit?

 They will count that towards your debt to income ratio.   Part of you credit score is determined by how many open credit accounts you have and how long they have been open.  Tax and insurance would not count towards towards those open accounts.  Only other times, you'd see tax on your credit report is if the government body files a lien against you or your property. 

@Stephen Nava I wouldn't consider property tax and home insurance a debt.  Those are expenses.    Some people use them interchangeably.   I consider debt, money you borrowed that you have to pay back.  You don't owe tax or home insurance unless you're late on the payments.  If you consider those debts, then no one on earth is ever debt free.  

Have you considered the tax benefits of owning rental properties? Especially if your income is all W2 income. If you're making well over six figures, you're just paying more and more in taxes with solely W2 income. Owning rental real estate gives a few ways to "write off" various expenses and don't forget about depreciation. Many times you can show a loss on paper but still would have made positive Cashflow. Obviously, consult your tax professional with the details but it's taking a look at. Can't really write off much with investing in an index fund. But it's definitely a solid strategy to grow over time and have far more liquidity than real estate. Why not do both?

@Devin Chaulk If it's a local bank probably not.  That's awesome though! Congrats! I like Indy a lot!