All Forum Posts by: Chris Masons

This could be a blessing in disguise, especially if you want to increase rent immediately after taking over the building....

If they had year leases and rents were under market you would need to wait and basically be stuck until lease expiration.

Chris

Great thread, I thoroughly enjoyed it and can relate as I can be extremely lazy (after all why do you think I love passive income so much!! :)

Starting to build your Real Estate empire when you are young and not tied down to anything or anyone is HUGE IMO. I started at 22 with a 4 family (I was single living at home) and am almost 45 and hopefully closing on my 16th rental (28 doors) I self manage, am married with 2 kids work a full time job as a Sys Admin in NYC and have over an hour commute each way to work from NJ!  OK maybe I am not so lazy after all  :)

Back to my point as you get older, get married have kids things get harder to do, more expenses, kids, 529 plans, 401k savings Etc...  Best advice I can give is get started young so that you have time on your side and can work in your favor.

While it is never too late to get started in Real Estate starting younger really can give you a big advantage!

You can do anything if you want it bad enough and put your mind to it!

Chris

With historic low rates currently doing an ARM would only make sense if you 100% knew you were selling in the 5, 7 or 10 year period prior to ARM adjustment..

Rates aren't going down but just the opposite - up!

thx,

Chris

Keep in mind with only one person on the loan it will become more difficult to qualify as you acquire multiple properties.. Remember bank will see these properties as liabilities as well as assets and you cannot use 100% of rental income.. Typically 75% of rental income is used.

Chris

ahhh, @Greg Scott  I stand corrected... Seems if you are still employed with the firm that sponsors the 401k then you actually ARE restricted..

IF you left that firm and went elsewhere you would have the full right to take a distribution with penalty Etc....   So, it seems you would have to leave this company and work elsewhere in  order to take the distribution....  

thx,

Chris

Would like to follow this thread and see how this process works..

Definitely enlist the services of a CPA. DO you have all your receipts and records readily available?

Also, how may rentals do you own and were you aggressive with write offs/deductions on your tax return? I am wondering if this was random or there was a red flag on your return? Did you prepare your return or have it prepared?

thx and keep us informed.

Chris

@Greg Scott I don't think any firm can prevent you from withdrawing your own money. As mentioned you will be taxed and 10% penalty assessed but money is yours...

Sometimes firms make you stay for a specified time period (vested) in order to get the company match they provide and if you leave before time period specified they can take back the company match but yours own contributions are yours and nobody else's should you want them at any given moment in time. While this is discouraged with penalties ETC. you can still do it.

I max out my company 401k yearly as I have good cash flow from my rentals to allow me to do this. I feel being diversified in some securities gives me another passive income stream in addition to real estate...

The other big plus for me is I get a 17,500 tax deduction every year which is huge for me as I am still allowed the 25k passive loss with my rentals. Without the 17,500 deduction I probably wouldn't qualify for the full 25k passive loss allowance (it gets phased out as your income grows and at 150k you lose it all, well I shouldn't say lose it but it is disallowed and can be carried forward to be used in a future year...

thx,

Chris

Question.....  Where do they currently live and why are they moving? I would inquire with current landlord as to their track record with paying rent on time Etc.....

Although I believe in second chances, an eviction is a big deal and you would really have to dig and do your due diligence and be satisfied that they would pay their rent on time before renting to them....

good luck,

Chris

Congrats Abraham!!

Pulling off a deal like this at such a young age is FANTASTIC! I bought my first 4 family at 23 and having that property at such a young age made it a lot easier to build on that, get experience and allow time to do it's thing.....

Keep up the good work Abraham you have a very bright future ahead!!

regards,

Chris

Hi Louis,

Check out Union, Somerset Middlesex and Essex county. I invest in Union and Somerset because they are close to me but there are plenty of good towns with multi families, and SF homes that would make good rentals.

good luck,

Chris