All Forum Posts by: Account Closed

Cap rates are inappropriate to use for SFH's.

Investors look for rent growth and appreciation. Also, you'll rarely hear of a unit sitting vacant for any period of time like in the Midwest. Also the milder climate results in less maintenance. Wall furnaces are common and air conditioners not needed so you're not replacing multi-thousand HVAC's. You are getting higher rent per square foot/toilet. Think of all the expenses based on sf.

I don't work for the IRS. And neither does my money. If keeping cash in your house didn't throw away the TIME VALUE OF MONEY & LEVERAGE then I could agree with you. You want to point out one aspect of financing real property and ignore ALL the benefits. It's a package deal. As I said the tax deductibility is just an added benefit on TOP of all the sound financial reasons. But if you want you can stick all your cash in your sugar jar for all I care. It's about informed choices.

Guide dogs & service animals are covered under Federal ADA. You are basically limited to two questions. 1. Is this a service animal? 2. What does the animal do for you? More than that and you're looking at a lawsuit. ESA, emotional support animals may be covered under state law. My understanding is that Hawaii passed a state law that gives them the same protections as service animals. In either case bad behavior is not protected.

Cap rates are the result of an open market sale. You would look at recent actual sales of similar property types in your market.

So you'd rather have say $100,000 sitting in your house than out earning 4%. Fine.

And you'll give me $28,000 and I'll pay you back $100,000 in equal payments over the next 50 years? I think we have a deal!

Grandpa died two years ago and Grandma should have received a 100% step up and has only been out of the property for 8 months and only needs 2 of 5 years.

I'd like to see your numbers but your document won't come up. But just using your numbers with the 11% annual appreciation you have an increase in equity of about $163,000. Your calculations say there is a negative cash flow of $100 a month so 48 months times $100 is only $4,800 against the $163,000 so you're up $158,000 in four years without counting rent increases.

Most people don't borrow to get a tax deduction. That's just a happy by product of utilizing leverage and the time value of money. I'll take all the money you have at 3-4% over 30 years.

And this is why you have to know the market when you are investing in an unfamiliar market. Prop 13 is the reason the taxes are low and the assessed value will increase a maximum of 2% a year. Plenty of multi million dollar houses pay less than $1000 annually. Pretty good deal when you can also probably count on rent growth of 5-8% and appreciation of 7-11%. Plus generally vacancy is much lower than flyover states.

This is why investors are willing to purchase properties that don't initially cash flow.