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All Forum Posts by: Carlos Garza

Carlos Garza has started 3 posts and replied 29 times.

Post: am i buying a headache?

Carlos GarzaPosted
  • Homeowner
  • Richlands, NC
  • Posts 29
  • Votes 4

That's exactly right. All people that have 7 people for a 2bed are drug dealers. Could be a multitude of reasons why. The only way to know is to look into it. Where I grew up, many guys lived 4-5 to a one bedroom. They would all work full time and send the money they made back home to their families. They all lived together because it was cheaper than each getting an apartment. They are generally good people just trying to support their family the best that they can.

Post: Investing in SF Real Estate - Why do renters rent?

Carlos GarzaPosted
  • Homeowner
  • Richlands, NC
  • Posts 29
  • Votes 4

I agree with Ali Boone completely. When I was starting off I did not own a house because I did not have the money to own a house. I was living paycheck to paycheck just like others are doing right now. I did not have a nest egg to spend.

And she is 100% correct when she says "Or my personal reason for renting.... owning a house is a liability, not an asset. "

How many times have we heard Rich Dad, Poor Dad on the podcast now?

Post: am i buying a headache?

Carlos GarzaPosted
  • Homeowner
  • Richlands, NC
  • Posts 29
  • Votes 4

Look at the residence. If they have been there for 5 years and the residence is clean and not damaged, why would anything change because of new ownership. Everyone is so negative about everything, but why would you evict someone that pays every month and is no issue. Ask why the rent is paid late every month. You might come to the realization that their paycheck is received on a different day or they receive some sort of payment (child support, alimony) on the 5th or something other than the 1st.

I would also explain to the tenants that you will be requiring a lease. It can be a month to month or any other time frame, but that will give you the ability to act if you need to.

Other than that, money talks. If everything is good, the numbers make sense and the tenants pay, then go for it.

Post: Allowing an early move-in?

Carlos GarzaPosted
  • Homeowner
  • Richlands, NC
  • Posts 29
  • Votes 4

I got the keys to my residence 3 days before closing. That was a Friday and gave me a chance to move stuff into the home over the weekend. There was no special contract or anything. The sellers being good people actually said I could start moving stuff in because it was going to suck trying to move my pregnant wife and our stuff during the week when all my help would be working. It is people helping people. Not everything has to be a fee or a contract. Once in a while it's fine to just help somebody because they need the help.

Post: Investing in a house for a newborn

Carlos GarzaPosted
  • Homeowner
  • Richlands, NC
  • Posts 29
  • Votes 4

I believe a 529 is not necessarily a good idea. The cost to earn education is very reasonable with grants and low interest loans. After researching this when my son was born, the greatest advice I received was to plan for your wealth and retirement. If you put yourself in a good situation then you have the ability to put your children in a good situation. Invest how you do, and later down the road, if you want to give one of your properties to your child then go ahead and do that. It does not help anyone though if when your child is going to school he has to help support you do to lack of investing for yourself. Kind of the olds airplane adage where you put on your own mask before your neighbors. Help yourself to help others.

Post: Importance of immediate cash flow when starting out

Carlos GarzaPosted
  • Homeowner
  • Richlands, NC
  • Posts 29
  • Votes 4

Deborah B.,
I do not see how my example does not account for the tenant paying down the mortgage. In both scenarios the tenant is paying down the mortgage. In the cash flow scenario and the break even scenario. I even state this at the beginning of my post.

"Breaking even still entitles you to owning a property that someone else is paying for. If you are gaining an asset (property) but someone else pays for you to own it (tenant) then theoretically you are coming out ahead."

How is raising your rent an affect of cash flow? If I have a annual cash flow of $0 and my rent is $800 monthly how does that affect raising my rent to $850 or $900 when I release the property? And how does my neighbor that cash flow's $1200 annually with a rent of $800 monthly have a better ability in raising his rent to $850 or $900?

My point is that the $1200 annual cash flow from a property does not protect you from market fluctuations or improperly purchased property. If someone told me that I could have a $100 for $20 I would take that. As long as I could verify the $100 was real. If someone told me that I could buy a $100,000 house, but my full investment would be $20,000 I would take that. It makes no deference if I buy it off the market for $20,000 cash, or if I buy it off the market for $100,000 and somebody else gives me $80,000 of the principle. I still am out $20,000 for the same value of home. Maybe I don't see hard cash right upfront, but neither do stock investors or CD investors. Gaining property and the land it sits on at a reduced rate is an investment in itself.

Post: Importance of immediate cash flow when starting out

Carlos GarzaPosted
  • Homeowner
  • Richlands, NC
  • Posts 29
  • Votes 4

Matt Andersen,
I do not agree 100% with cash flow is king. Breaking even still entitles you to owning a property that someone else is paying for. If you are gaining an asset (property) but someone else pays for you to own it (tenant) then theoretically you are coming out ahead. Say 5 years down the road you have 5 properties that you would like to sale to provide the money for your own residence then you have that option.

The important thing is to make sure you make good purchases.

For example
Inv. A purchases a property that cash flows $150 a month. This equates to $1800 a year. Not a lot but it is profitable. 5 years later if the property does not appreciate or depreciate, Inv A. has made $9000. Not awesome, but still profitable. The greatest factor in this purchase though is the market. The home could have appreciated or depreciated significantly causing a great resale or a losing resale.

Inv. B purchases a property that cash flows $0 a month. This equates to $0 a year. 5 years later if the property does not appreciate or depreciate, Inv B. has made $0. Not profitable. Again, the greatest factor in this purchase though is the market. The home could have appreciated or depreciated significantly causing a great resale or a losing resale.

What I am trying to prove is that the $9000 made over the 5 years is not a huge amount and a great factor is still in the appreciation or depreciation of the property. If Inv. A made a bad purchase then the profit earned through cash flow will not necessarily offset the depreciation of the property when it comes time to sale. The same can also be said for Inv. B.

While a cash flowing property is great and gives instant results, the importance is in buying good deals. A great deal is a great deal. When the time to exit comes and you want to sale, if the purchases were not good purchases you might not make out as well as you hoped for.

Just my 2cents.

Post: Should we sell our rental now or wait a few years?

Carlos GarzaPosted
  • Homeowner
  • Richlands, NC
  • Posts 29
  • Votes 4

$400 a month is good cashflow. Is there anyway to keep the property and gain more with your current income? How will it be paid off in 3-5 years? Are you paying extra on the mortgage? I do not understand how you do not know when it will be paid off? What is the mortgage rate? I ask because if you have a low rate and are paying extra on the mortgage you are wasting valuable market conditions right now. Instead you could utilize the extra by investing that in something else until you build enough for another property purchase. With interest rates where they are it costs literally nothing so I wouldn't be in a big hurry to pay it off at the expense of gaining a new property.

If you were to sale and profit 40k, how would that affect your taxes adding that to your income?

Post: Tenant claiming water damage

Carlos GarzaPosted
  • Homeowner
  • Richlands, NC
  • Posts 29
  • Votes 4

I think it might be a good idea for the lease to say it as well so that the renters are "informed". Maybe they actually do not know that they need renters insurance and you can prevent this happening in the future.

Post: Am I being scammed?

Carlos GarzaPosted
  • Homeowner
  • Richlands, NC
  • Posts 29
  • Votes 4

That would definitely make me leery. I don't understand why they would need your money to loan you money. I am not sure though. Hopefully some of the private money lenders or recipients here can chime in.

Carlos.