All Forum Posts by: Fred Cannon

@Gary Abner. You are using a ratio of 1 to 10. Don't thing you can find very many mortgage companies giving out 10% loans on rentals . Also every dollar you depreciate come back to you as a tax liability when you sell the property unless you do a 1031 but sooner or later the tax man cometh.

There is a big difference between an asset and a debt.  A mortgage on a house is a debt.  A mortgage on 10 houses is not a bunch of assets, it's a pile of debt 

@Samantha P. Why not hire out lawn care and increase the rent. Early on I tried to let tenants care for the lawn. It just does work out well. That is no longer an option I offer.

@Patrick M. In 2008 thru 2012 I bought some nice investment properties from people who were oblivious to carrying debt. Actually I bought the properties from the bank. Enjoy those tax breaks that mortgage brings you.

@Wade G. We have had 2 economic meltdowns in 12 short years. People with short memories will carry a lot of debt. I'm not saying cash is king but I will say debt is the devil. If you don't believe that then give me a call when you are short selling your investment property.

Now that we have once again experienced an economic hardship ( 2 in just a matter of 12 short years). Do you think it's better to partner with a bank, via a mortgage, or partner with a couple of investors like yourself, pay cash and have no mortgage). I have always partnered with a couple of like minded investors to spread the risk and spread the reward. For me it's less stressful to worry about collecting the rent than to worry about paying the mortgage. Of course all is dependent on making a good investment in the beginning and having the cash to move forward.

@Clint G. I just did this with a recent purchase and had a tenant move in the day after the closing. It was a cash deal so I wasn't that concerned. However I would not take a deposit or rent until after the closing took place and I would be upfront with the tenant

@Renata Johnson

Before you buy or escape the deal get the house appraised by a professional and also inspected by a professional. You really don't know for sure if it's a good deal or not. I do know that 8% interest is about twice what the bank or mortgage company will charge you but they would need an appraisal and inspection as well. Early on in the game you need to have a team to work with. I have a mortgage broker and appraiser and a home inspector plus maintenance people that I always deal with. They know I am a repeat customer so they are looking out for my best interest as well as their own I also research recent sales and current rent for the area. Don't get too discouraged. You make have a diamond in the rough. Just do you due diligence. I think the owner sounds a bit suspicious but can't really tell with the unknowns.

@Jim Paulson hey Jim I guess you have never lived in Florida. We golf, fish, go to the beach, dine out at great restaurants, have a night life. Not much bingo going on here. Our retirees in Florida have a very active lifestyle without the tax burden

@Katie Miller I will

Retire this year so not sure of the future. I have eight properties and I clear around $800 a month on each one after all expenses, plus I will have social security a company retirement check and 401K. I paid cash for all my rentals so not to worried. But my present salary is @ $150k annually with great benefits so will definitely miss that. I got divorced 10 years ago so basically had to restart my life on a shoe string. Luckily for me the divorce came during the housing crash. I bought 4 homes with the money left after the divorce and have been buying ever since by saving and paying cash not much of a story but landlords never retire. Not sure I understand why rental income is call passive income. Never played the game of "using other people's money to invest in RE". That's why the current crisis or any other crisis does not really bother me financially.