All Forum Posts by: Henry T.
Henry T. has started 21 posts and replied 1587 times.
Post: Don't buy real estate in Detroit...
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I love single family and marvel at the old craftsman construction. I'd look at those Detroit houses at $40k and want to buy them all. I could leave them vacant and just sit and look at those beauties. (but hey, snap out of it!) My paranoia tells me they'd be torched within a month. Rented out, forget it, no thanks, I don't have the stomach. You do, but I'd guess you're also half my age. I think you're doing it right, especially being that you're local. It may take a while but you'll get your Lambo. For what it's worth I'd bet more on appreciation than rising rent. Seems rent is being squeezed everywhere.
Post: HUD Regulations and Tenant Home Mod requests -- reasonable or not?
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Find a good eviction attorney, call a few and get their prices. Start eviction proceedings at the first opportunity within the law and your lease terms. Maybe your son needs a place?
Post: What’s the Minimum Amount Where a 1031 Exchange Makes Sense?
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Quote from @Marcus Auerbach:
Quote from @Bill B.:
@Marcus Auerbach post about getting out of a city proper brought up another thought. Doing a 1031 to get out of a state with state income tax in to a state without. Or a state that decides it hates landlords. You could be escaping Florida’s escalating insurance, or Texas’ property tax. The neighborhood is doing whatever the opposite of “up and coming” is. Or the it has “up and come” and your ROE is ridiculously low because the value’s have skyrockets. Maybe it’s time to try the USVI? I THINK California is the only one that will chase you down for their cut of your eventual sale.
Yes, that makes sense. I would probably leave a State that is landlord-unfriendly faster than one with State income tax, as the potential pain inflicted by the legal system would trouble me more than reasonable taxes. Fortunately, an issue I don't have, so we optimize for max revenue with the lowest possible number of tenants. The trade-off in my case is lower ROE and lower CoC.
I just sold a million dollar rental in Seattle that was all capital gain. Seattle is the most anti-landlord place in the nation. Yes, I could've re-invested in outer districts but I've got enough to do and a long way to go, and it's insane having all of that equity in a rental. The tax bite hurt 23.8% , but it's one of the better decisions I've made for me. Big relief. If I was younger I'd be long gone and in a more friendly business climate. So there ya go, it's not always all about money.
Post: Solution for not being able to pay mortgage and very low selling price.
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The house looks very nice and it looks like a good area. You have a lot of competition. I think your rent is too high. $1800 is more like it. AND you may need better screening.
Post: What to do with rental equity
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I consider the tenant friendly west coast highly risky for landlords. Depending on only one tenant puts you in a danger zone. If you had an eviction it could take you a year. Either reinvest in a multi and spread your tenant risk, or pay off your house and enjoy the opportunities as a mortgage free investor. In addition to capital gains you would probably also have to pay the Obama 3.8% Net Investment Income Tax (NIIT). Take that capitol gain advantage now. If I were starting out as a landlord I would invest in Arizona or Idaho where the landlord has more control.(just my 2 cents). Congrats on your appreciation and good luck!
Post: Effect of tenant payments on late notices and eviction complaints
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Quote from @Wesley W.:
This is one of those times where term leases limit your options. I only offer MTM leases, so in this case I would just terminate the tenancy, then evict the tenant as a holdover if he doesn't move out. I would also seek to gain a money judgement for back rent.
Can I move to the vampire state too? Where the landlord has some control? Lease renewals a mandatory in Seattle. In Seattle, you have grounds to terminate if the tenant is late 4 times in one year. We can't evict during winter. We can't evict during school year if they have children in school. Tenants can move in anybody they want to. Here there is no difference between MTM or lease, you're stuck with them. Im lucky, my tenants are all ok, so far. Where is this vampire state?
Post: Smokies: The juice still isn't worth the squeeze
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Quote from @Jay Hinrichs:
Quote from @Henry T.:
Quote from @Jay Hinrichs:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
wow Property tax's only 2k a year on a 500k asset thats really really low..
6k prop taxes in Seattle.
OK where do you find 500k props in Seattle proper ??? :) I get it for Tacoma or Olympia.
True, you might find a 750sf war box for $600k White center??. Recently though there is a slow downward creep. We may be seeing a couple 500k pretty soon, but I'll guarantee those prop taxes aint coming down. The county adjusts accordingly.
Post: Effect of tenant payments on late notices and eviction complaints
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Each state will be different. You have to know your local laws. Even if tenant pays up he would have to pay my costs of serving notice. Right off the bat my eviction attorney is $300 to serve the proper notice (btw, the rules change almost monthly in Seattle). Tenant is responsible for that cost. Should be in your contract.
Post: Smokies: The juice still isn't worth the squeeze
- Posts 1,602
- Votes 1,074
Quote from @Jay Hinrichs:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
wow Property tax's only 2k a year on a 500k asset thats really really low..
6k prop taxes in Seattle.
Post: Posting and Filling Out a Notice to Quit
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- Votes 1,074
You rent by the month not by the day. You should have an eviction attorney do this for you. Call them and get some prices. If you mess up one little thing you will have to start all over.