All Forum Posts by: Greg Meech

So let me ask your opinion. Is it all just about the money? I’m not trying to sound like Mr. Wonderful on the Shark Tank, but why do we do real estate? I like it, I’m pretty good at it, and I make money at it, but if I won the lottery would you still do it, and why?

1. So I can be a financial free – About the money.

2. So I can use my time to help others – About the money.

3. So I will have retirement money to live off of – About the money.

4. So I can’t ever get fired – About the money.

5. So I can take the time off I want to do what I want – About the money.

6. Spend time with my family, ETC!!!

Now I am not saying this is bad, even in today’s political environment about the evil capitalist mentality. But let’s be honest. Is it really about the money? Or do you do it for another reason? What’s your thoughts?

If you claimed that house as your primary residence 2 of the last 5 years, IE is was your primary home more than 3 to 5 years ago your profit for selling it is completely tax free. Don't pass that up, it can be big if you have equity which sounds like you do. Sell it and take the tax free funds and reinvest in another local rental property. SELL before its too late.

>>>>>>I was thinking that it would be best to be transfer to an LLC to separate myself from the REI business, plus it would provide my startup business with a potential asset. If I sell the property the asset would then be liquid cash for the business, assuming ownership is transferred>>>>>

Seperate yourself - Good idea but kinda vague. Not sure what you mean seperate.

Sell for liquid cash - regardless when you sell it, the liquid cash can be given to the business anyway. No advantage in having and LLC for that.

You said business - The IRS doesn't consider rental properties a business. If it's another business just start a DBA to start with. Or an LLC, but the property doesn't have to be in the LLC of your business. Matter of fact you likely won't want to put your property in the name of your business. Not sure transfering to an LLC will give you the results you listed because I don't know what busienss you intent.

People have made a lot of money doing what your considering, but many more have lost more money. Real estate is local in nature and you have to be pretty good at what you do to be successful buying properties around the country. Maybe try one first and see how that goes.

Or take on less risk and invest your money in -out of state real estate as the bank. You collect the loan payment (like rent), but take on much, much less risk as your money is tied to real property with a first lien. Tenant, taxes, vacancies, evictions, managment companies, insurance increase, all not your problem. You get paid or you get a property worth more than you paid for it. Of course you could make less money by not owning the property but being out of state can be difficult. This is a less risky way to be in real estate and it doesn't matter if your local. I wouldn't want to be an out of state landlord.

I have 9 properties in Texas (where I live) and one in FL. Wish I could get rid of my property in FL but I owe too much even though it is cash flowing. But it's a pain to deal with. Think I would sell all my Texas properties if I moved.

More details will get you better answers. What state are you in? What state is the property in? Has this home been your primary residence 2 of the last 5 years? Big reason if so! Yes you can transfer it into an LLC, no bid deal. Well maybe based on questions above. But why do you want to transfer it into and LLC?

Lets start there.

I am the opposite. I like to tie the tenant to not move. Turn over cost are always my biggest cost. Run the numbers. A vacancy cost after 2 years could take away all your gains for the last 2 years. I always use incentives to get another year lease.

But your questions is a local question. Different areas have different answers. For this I would start a new thread and ask specifically. Here in Texas the summer is a little better because everyone likes to move in the summer, so you can find a tenant easier, which means you can loose a tenant easier too. I don't think there is a good or bad time. My last house was on the market for 4 days in December and the family moved in Jan 1st.

Agreed with the above comments. If it is section 8, your options are limited as you can't just raise the rent if you want to, but section 8 has to approve it. If you want to keep with section 8 then follow the local procedures for dealing with rent increases at the section 8 offices. I heard it's not very easy to do.

So I think your first question is do you want to stop renting to section 8 tenants? If you decide NO, well that is your direction. If you do want to stop renting to section 8 then this will cause a vacancy and a fresh start.

Look at the pros and cons and make that decision first. But if your not getting market rent for your rental then you are essentially loosing profit. This in general is a bad idea unless there is a good reason.

@Shane Woods

Hey Shane, thanks for sharing. You have a marketing company? Can you explain more about that exacly, if you don't mind. Why wouldn't you just print them on your own printer? What does the marketing company do that you can't on a tight budget?

Also, you said you created you're mailing list yourself, and thanks for sharing your criteria, but "How" did you find these homes more specificaly.

Thanks Again,

OK I'm there. Well unless that pesky day job of mine keeps me out of town.

But you forgot to calculate your principal pay down each month. Unless your getting a interest only loan part of that mortgage payment is income. That money is not appreciation or speculation it's real money that your tenant is giving you. If the home value never goes up or never goes down you still get the money. You can home equity it out or when you sell its there.

Monthly principal payments should be added to your ROI or just get interest only loans.

Where to find a home to buy for $75k that needs repairs of $25k that would then be worth $150k?

Well that's the secret. And it's not easy. Matter of fact I think finding deals is the hardest part of real estate.

1. Find an investor friendly realtor to find you deals.

2. Network with other real estate investors.

3. Drive around and find ugly houses and find the owner and get them to sell.

4. Do a direct mail campaign.

5. Hang up illegal bandit signs on the road ways.

6. Pay cash at the auction.

7. Get on the buyer's list of wholesalers. They will find the deals for you and Mark up the price to you.

I'm sure there are more.

8. Find bankruptcy houses or foreclosure homes.

9. Try to go FSBO homes

Buying right really is the most important part of real estate. If you do everything else wrong but buy right you still got a chance to be successful.

But that's also the hardest part.