All Forum Posts by: Kenneth LaVoie

With an excel IRR calculator, I'm getting 42% year over year return on our 15K investment. I realize I neglected to list "walk away" money vs. sales price. We would leave closing with approx 244,000 (being conservative)

I'm trying to determine my annual CAGR or IRR (not exactly the same but they'll be similar I think)

7 unit apartment building purchased june 2011, sold this coming august, calling it an 11 year holding period to keep it simple

purchase price 172,000 inc. closing costs

i lumped capex into expenses as most were updating kitchens, etc. and ended up being expensed vs. capitalized anyway. 

So, total profit over 11 years $152,000 ($16,888 per year avg.) although 5 of the past 6 years, cash flow has been 25K ish.

Our out of pocket, because we only needed to put down 10% was $15,450 (that doesn't jibe with 10% but looking at the HUD I can't figure out why, but inc. escrow that's what we put down)

$340,000 will be the sales price (350K minus a commission of 3%)

What is my annual "return on investment?" I like the IRR method if possible, but CAGR is good too. I just get confused...

I'm ready to learn about buying discounted notes. Can anyone tell me a great resource for learning? I am going to try to find a mentor locally. 

Per usual, it's very rare that any of the listed categories fit my questions so I hope this is at least close.

Anyone struggling with the decision on whether to sell your rental properties or not as you get near retirement? We have had some interest.

We've had our properties for about 10 years, and sales prices would give us around a 20% or more annual return on money invested, and leave us with 25% more in money than we need for "safe withdrawal rate" of 3.5%.

But the money we have in our buildings seemingly will always outperform the money we'd put in our investments, though nothing is for sure. (i.e. our $$$ staying in buildings gives us around 10% give or take, plain cash flow, not including depreciation benefits, mortgage paydown, possible appreciation, etc.) but when we sell and put that cash in our 60/40 ish investment porfolio,

I don't want to withdraw more than 3.5% (Based on the supposed SWR of 4% wiht a little cushion).

I just find myself really "hemming and hawing" and "on the fence". On one hand, if the MARKET says SELL, you SELL, but on the other hand, these buildings are solid, have ten years of us constantly upgrading, and represent only 50% of our net worth. In other words our eggs aren't all in this basket.

We also want to be free to travel. We can do that and still "manage from the road" but it's a little more scary and units might have to sit vacant from time to time. My wife would prefer to be done with them no later than age 62 (54 now). Lots of thoughts here.

Not looking for someone to tell me what to do, just looking for different ways to look at it. As many perspectives as possible. There's always the "hire a manager" but that's one of those things that sounds so simple and great on paper that's MUCH more difficult to pull off and still make money than it sounds.

Thank you!

I'm sure at my core that Representative Omar's bill would be unconstitutional beyond anything that's ever been suggested but still wanted to float it here for comments, if for nothing else, to hear something that makes me feel better! I mean it's like something a 19 year old liberal college student would suggest. Maybe she's "shooting for the stars, hoping to hit the moon?"

https://omar.house.gov/media/press-releases/rep-ilhan-omar-introduces-bill-cancel-all-rent-and-mortgage-payments-during

Imagine all tenants told "you don't have to pay anymore rent until WE say this thing is over", then telling landlords, "We'll pay everyone's rent, but you can't raise it for 5 years, and you have to give your tenants 10% of your equity." 

Mine: We would be glad to conduct an inspection with you present, before move out, but understand it will not be "official" and that a "post move out" inspection will be done within 3-4 days after move out, and things may be discovered that weren't discovered in the original inspection "pre moveout".  We do these inspections "as time permits" so scheduling this inspection so you can be present is not practical or possible. This will include inspections for cleaning, etc. and things we simply wouldn't be able to inspect pre move-out. once the inspection is done, we will send you an itemized list of anything found that we will need to deduct from security, and, if possible, give you a chance to rectify it before it's deducted. Your security deposit (less any deductions) will be refunded within 30 days of move out. 

I have since retired from the lawn care business so we set up a management LLC. My wife owns the management LLC and I own the LLC that owns the buildings. I then have a web design and hosting company as well, which I own (LLC). So to turn RE income into taxable income, the property LLC pays my wife's mgmt. company and the property LLC pays my web company for design, hosting and consultation. We have errors and ommissions and professional liability on both. I hope this helps. My wife handles all leasing and tenant placement via her mgmt. company.

Good Morning

Our source is not getting our favorite flooring right now due to the trade wars with China. We have been using engage essentials, metro floor, in two colors and really got used to having this one product. It's got an 11 mill wear layer vs. allure's 4-5 and is infinitely easier to install according to my guy. Does anyone have an LVP that their in love with? Our rentals are class B so although we want each floor we put in to be the LAST floor we put in, it doesn't have to be indestructible as long as it's waterproof and you can make repairs. Maybe allure has been updated and is easier to install??

How easy is it to self manage vacation rentals? I suppose just finding a handy person who's willing to take calls, or be "on call" from tenants, maybe for an additional "on call" fee, and a decent cleaner. Anyone have experience with this? 

... and keep in mind, you get the investment return on that extra 4-6% as well. So not only do you get 100% return INSTANTLY, but you get DOUBLE whatever return you're getting from the investments in the 401K itself. So if you invest 6K, then employer matches with 5K, and you are invested in a 60/40 portfolio of stocks and bonds and it returns 7% per year on average, YOUR return is actually closer to 12-13% on your investment (because you're getting 7% on 11K, not the 6K you put in yourself)