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All Forum Posts by: Jay Dean

Jay Dean has started 17 posts and replied 131 times.

Post: Multi unit or single family strategy

Jay DeanPosted
  • Investor
  • Manvel, TX
  • Posts 133
  • Votes 54

@Mike Dymski has the right idea in my opinion.  You said yourself these are easier and you are more skilled in this area.

Post: Private Money Contract

Jay DeanPosted
  • Investor
  • Manvel, TX
  • Posts 133
  • Votes 54

I would use a real estate attorney.  They should be able to do this in a few hours.

Post: Buy 2nd Rental or Pay off 1st?

Jay DeanPosted
  • Investor
  • Manvel, TX
  • Posts 133
  • Votes 54

@Chris McDonald - You are currently leveraged about 65% ($49,000 / $75,000). 

My personal goal is to never be leveraged by more than 50%.  This is conservative and means I don't stand to make money as quickly but gives me a little breathing room if something does not go as planned.

I am also not a big believer in paying down a mortgage.  Once you do this, your cash is tied up unless you can do a cash out refinance or sell the property.

Cash money in your pocket is more useful.  The down side is that it won't earn you much money.  This frustrates investors, so they move quickly into another property and increase their leverage.  If things go south and they don't have any liquid assets, they will be forced to make decisions like selling units (potentially in a down market).

In your shoes, I would establish my rainy day fund reserves and save up for the next down payment.

Security come with patience, but increased potential comes with risk and leverage.  You have to decide how to proceed.

Post: Buying house with FHA loan and putting it under a business

Jay DeanPosted
  • Investor
  • Manvel, TX
  • Posts 133
  • Votes 54

@Curtis Crawley - I am not sure what you are trying to achieve by moving the home to the LLC. I assume you are primarily interested in asset protection. Generally, when just starting out it isn't necessary to have an LLC right away since most people just starting out don't have much in the way of assets to protect. Remember, a rental home isn't really much of an asset if you still have 29 years of payments to make on it.

Your other reason for having the LLC might be for keeping business and personal books separately. If so, you can always use your LLC as a property management company so that all the money flows through your LLC. Remember to pass all legitimate business expenses through the LLC. Mileage, computers, supplies, business meals, etc that are for business purposes.

When your LLC spends one dollar it has the buying power of about 1.3 dollars since you are spending pre-tax money. The typical person pays around 30% in taxes.

Consult with a Tax Advisor if you haven't already done so.

Post: New Real Estate Investor

Jay DeanPosted
  • Investor
  • Manvel, TX
  • Posts 133
  • Votes 54

@Traveon Prater - Welcome to the community.

Post: Finding good partners

Jay DeanPosted
  • Investor
  • Manvel, TX
  • Posts 133
  • Votes 54

I am not going to be partners with anyone in a deal where I have less than 50.1% of the ownership and complete control over the deal.

It does not matter how trustworthy they might seem, I am just not going to do it.

Post: Deeply discounted college degree

Jay DeanPosted
  • Investor
  • Manvel, TX
  • Posts 133
  • Votes 54

@Chris Chesser

Take a closer look at the time component when analyzing the school option.

Most students spend about 15 hours per week in class.  To get the good grades (and qualify for tuition reimbursement) you will spend another 10 hours per week studying.  These are all hours in addition to your crummy job.  You won't have time to do much more than work your job and go to school.

I don't know how you value your time, but I will assume your crappy job pays $10 / hour.  This means that you could have made another $250 / week working instead of studying and going to school.  That is $13,000.00 per year.

Not to mention, at the end of the 4 or 5 year exercise you might end up in another career you hate that only pays you better.  People thrive and succeed in careers that they have passion for.

Take a close at other options to pick up a trade - For example get a realtor license.  In my state, this can easily be done in about 6 weeks on nights or weekends and costs less than $1,500.00.

I am not pushing you toward that specific path.  This is just an example of an easy career switch with potential to earn much more.

Remember - You don't have to be a lawyer or doctor to become wealthy.

I highly recommend that you read Set for Life by Scott Trench.  This book was written for people like you.

Post: Keep renting or Owner finance

Jay DeanPosted
  • Investor
  • Manvel, TX
  • Posts 133
  • Votes 54

@Ben Wilkins

I keep track in QuickBooks.  The net number is accurate for the past year.  I won't bother to list out all the specific expenses here.

I think the condo is worth $65K.

As stated in my post to @Ryan Detig I am not looking to sell because I no longer wish to buy and hold.  I am looking at selling because it will generate a higher level of return with less work.

When I find another good deal in my market, I plan to buy and hold. This time possibly a SFR since the HOA fees in a condo are a killer.

Post: Keep renting or Owner finance

Jay DeanPosted
  • Investor
  • Manvel, TX
  • Posts 133
  • Votes 54

@Ryan Detig

My goal is financial freedom in the form of passive income that exceeds my monthly expenses.

There are investments that pay better than 10% in the Houston market if you hustle and look long enough.  My way of thinking is that I would get 10% for doing absolutely nothing.  In other words, collecting on a note is even more passive than collecting rent, making repairs, finding tenants, etc.

Also, I expect that my market is near the high point.  Selling in a few years is not going to get me full price.

Post: Thoughts on Condos as Rentals

Jay DeanPosted
  • Investor
  • Manvel, TX
  • Posts 133
  • Votes 54

@Jaime Brame

Watch the HOA fees but also look into special assessments. Special assessments are when the association decides to spend a big chunk of money for upkeep which gets billed to all the home owners. In my case, I just got hit for $1,800.00.