All Forum Posts by: George Pauley

Phoenix is big.  It takes about an hour to drive across it.  :)  Property managers tend to service specific parts of Phoenix.  So until you have a location, it's kind of hard to make a recommendation.

Also, I'd like to echo Warren's question:  What are you looking at in Phoenix?  Avg house price is around $300k.  Avg rent is about $0.80 a square foot.  There are always exceptions, but for the most part, cash flowing is tough around here.  Appreciation is pretty darn good though.

Sorry to do this but... Saw the title and thought "What, he's going to make a nicer meth house?"  :P

@Amy Hu I am in the same boat as you, no passive losses because my income is too high.  I discovered this AFTER I bought my first rental, and was emotionally crushed.  :)  But after a decade of being an investor (and learning the hard way) I can offer some solace.  It's not all bad.  

First, I find that, usually, profits on a property increase with time.  Rents go up, refinances bring payments down, etc.  Some of my earliest properties are now showing positive income, even with depreciation.  All of of those passive losses that I accrued in earlier years are now keeping me from paying taxes, at least for a few more years.

Moreover, while I thought I was missing a great tax shelter against my high W2 income in the early years, the truth is, like most people, I'm making a lot more W2 income today than I was 10 years ago.  In retrospect, I'd rather the passive losses be used the today than 10 years ago.

Second, passive losses on one property can be applied to another property that doesn't have losses to zero out it's income.  (I'm not a tax professional, but I'm about 95% sure on this.  Still double check.)  So now I am using the losses on my newer properties to offset income on my earlier properties.  As long as I keep buying more properties... :)

There are some tax implications when I sell after using the above strategy.  But 1031 exchanges fix that issue.  (If I sell and keep the cash I could take a big hit.)

Not being able to take passive losses do to too high income sucks.  But hopefully I made you see that the situation may not be quite as bad as you thought?

I'm really confused.  Seems to me, from the OP, that there is $159/month positive cash flow.  Why does everyone keep talking about negative cash flow?  I'd much rather collect $159/month, 1% appreciation, depreciation tax benefit, and mortgage pay-down via renting the property out, than write a check for $20k+ when selling it.

Kiyosaki laments about this issue at length in Rich Dad.  I actually think about how and why most people are so financially niave.  Asside from feeling sorry for them, the situation scares me a bit.  Hungry people have historically proven to be violent and irrational (e.g. French Revolution).  And most of the world is one financial disaster away from being very hungry.  So, I think basic financial education is probably in everyone's best interest!

I too worry about the security of my financial information being in the cloud.  But I'm actually more worried about the future availability of my data.  Besides mint going bankrupt and shutting it's doors (and my access to my data), an inopportune DNS attack on mint could be mighty inconvenient.

I use Quicken and keep my data local (and backed up) and resist Quicken's pleas for me to move my data to the cloud.

I live in Arizona and have 3 properties in Phoenix, 3 in Memphis, 2 in Davenport Iowa.  All out of state properties are turnkey.  I LOVE my turnkey properties, they cash flow well, were easy to buy, and easy to maintain. 

One thing I did for the out of state properties was to fly out and spend a day with each provider exploring their operation, seeing their renovation process, talking to their property managers, etc.  I learned a lot, made face-to-face contacts so I know who I'm dealing with from AZ, and gained confidence that the providers were legitimate and competent.  (And had nice little mini-vacations expensed against my investment company as a bonus!)

I was looking for a "mentor" for years.  I eventually figured out that no one knows every aspect of real-estate investing.  In addition, individual investors have different goals, resources (time, money, etc.), risk comfort levels, etc.  IMO, these two things make finding a mentor that's "just right" for a given person almost impossible.

Talk to many people, read, listen etc.  I think eventually you can find a path that works for you.

A similar question came up in the AZ REIA meeting recently. One thing that was suggested was a highly connected house. High speed internet, nest thermostat, ring doorbell, etc.

Yes through Easy Street, though I know them as Relocation Reps:  http://www.relocationrepspm.com/ via a recommendation from another turnkey company in Memphis that I've done a lot of business with.  I'm actually in the process of buying my second property from Relocation Reps, so I guess my experience with them wasn't too bad!  ;)