All Forum Posts by: Buddy Holmes

I am new to BP and have been listening to the old pod-casts from the beginning (I'm up to #84 now) as well as the new ones. One thing that has hit me is that most of the discussions are about younger folk working to be able to live off their REI income. This is great and I can say, "Wow I wish I had started early as well". However, as a retired Aerospace Engineer, I can say I have had a great time as a W2 earner as well.

     I did make a couple of RE deals in my younger years, one a purchase of 25 Acres just North of Atlanta, is having significant payoff now after 58 years of paying taxes on it.

     When I retired 12 years ago, I had the land investment and a would-have-been retirement home a 1000 yards off the ocean in Ormond Beach, FL. In retirement, I was introduced to REI by a new Brother-in-law in Orange County, CA. I bought a couple of SFR’s there for the great appreciation seen as the California bubble was growing before the bust. They worked out fine in the end and although not much cash flow, they lead me to other Cash flow positive investments in St Simons Island, GA and Charleston, SC. Recently we sold one SFR in CA and moved the proceeds via 1031 to three SFR’s in Charleston, SC. Having learned for experience, these were selected for their ability to return a good cash flow.

As a retiree I have learned that IRA's and 401K are good for collecting some wealth, but are not good vehicles for bypassing Uncle Sam's greedy cut at tax time. I have learned about self directed IRA's and DST (Delaware Statutory Trusts) and how they can provide added cash flow along with significant tax shelter.

My point is that it is never too late to learn and grow into a REI!

So any Grey-beard couch potatoes out there, get up, tune into BP and get back to work!

Cheers, Buddy

@Wade G.,  10k is 10k!  For the 1031, I assume you know the rules of using a QI, +1) buying for the same or more than the sale or the old; 2) all cash out reinvested in the new; and 3) new mortgage equal or more than the old.  That said if you are looking for just one to replace the relinquished property you might be able to negotiate you closing on the old property until you find the replacement.  The 10k you seem willing to pay Uncle Sam will go a long way in buying you extension of the first closing date.  And remember it is the closing date of the relinquished property that starts the 45 day and 180 day clocks.  Good Luck.

Cheers, Buddy

@Manny Rivero, I found the tax book by @Amanda Han very good.

The sellers insurance could pay for new shingles less deductable if the hail storm was fairly recent.

The deductable might be 3% or insured value however, so seller may not want to do that.

If you think the new roof worth the $ you might ask if they use their insurance and negotiate the difference for a new roof.

The plumbing vet pipe boots should be replaced in that they can leak and mess up ceiling, create mold etc.

Cheers

@Matthew Thorp Well by normal calcs using your Rent of $2800 /mo and expenses (I assume this is PITI, principal, interest, taxes and insurance) of $1800... You are left with $1000/mo to cover an 5-8% rent vacancyreserve: say $200, a 5% repair reserve: say $150, and a Cap X reserve of 5-10%: say $250. So after total reserves you are still clearing 1000-600=$400 /mo of cash on cash or cash flow. You haven't said how much cash and closing cost you paid for this rental unit but say it was $30000 down and $4000 closing cost your ROI would be $400/34000 or just under 12% and $200 /door/mo

By most folks measure that is a good return. So unless you know of some reason that something bad is going to happen to the rental or the neighborhood, I'd say hold on to it.  You will gain additional $'s from principal pay down, tax write off and any appreciation over the years you own it.

Cheers, Buddy

@Account Closed, I would be very worried about resale or rental prospects.  That seems so unusual, that I would look for a reason that they are so low. Is it a 2 story? Was the second floor added later? is there a hidden space between stories? Maybe a treasure in there!  Just thinking.  How would yau at 6'3" consider renting this home yourself?

Cheers,

Buddy

Yes I'm an engineer.

Thanks @Alexander Holmes,  Ben can point you to a good mortgage broker as well in SD.

The Gator Nation is well and diverse!

@Alexander Holmes,  BTW I forgot to mention, Jax in my hometown. Born and breed there. A UofF grad.  Cheers

Hello @Alexander Holmes, Welcome to BP. I have a grandson in San Diego who is just starting him REI venture. @Ben Biggs is a REI savy Agent who is helping him (not a Holmes).

Give Ben a try, I think he can help you.

Cherrs, Buddy Holmes

Welcome to BP and a growing number of BP in Charleston.  @Mark Mattison and I have started to try to form a group to met up for discussions and networking.  Drop us a line if interested and good luk with your new rentals!