All Forum Posts by: Jeff Ronningen

Sell. Sounds he’s not interested in going through the rent up stage and being an operator. But he learned a lot and he can ring the cash register.  He’s only 55, he can enjoy his retirement, golf, etc for a few years and buy back in when he sees a good opportunity. This party won’t last forever, no one tells you when to get out, sometimes you realize too late. 

@Douglas Curtiss. My initial reaction was to pile on and say the naysayers are fools who lack vision. However after further consideration I conclude the following:

1) you’re not a youngster just coming out of college, you’re a seasoned successful physician, you should be beyond worrying about their negative comments

2) it’s understandable that people who presumably care about your welfare are concerned when you tell them you’re going to leave medical practice, that profession is considered among the most desirable to attain

3) they’ll come around when they see it’s working

4) change the topic if you don’t like where the conversation’s going, your convictions are your convictions and not everyone will understand

@William Mitchell

Don’t use your 401K. Keep contributing to 401K. Max out match if you have one.

Get a revolving HELOC to pay off credit cards and reduce interest rate. Pay off as quickly as possible.

Find ways to spend less and make more. Eliminate car payment if you have one. Pay off student loans.

For REI you'll not only need down payment, your debt to income ratio will be scrutinized, at least early on. You need to work on building cash, reducing your expenses/obligations, and improving your personal financial statement.

@Joshua Steven Ferrell

Hire a mold inspector

Refi and take cash out

@Richard Shara. If your mother is elderly and her health is waning, I'm surprised she owes $200K on a house that's not worth much more than that as is. Does she have income to make payments even if she lives with you? Does she have a will, living will, POA, and healthcare POA?

My opinion, don’t consider this for your first rental. The cash flow is marginal, it needs improvements to be rent ready, and you would be an inexperienced long distance landlord. That’s a formula for a nightmare. Hard pass.

Focus on caring for your mother. Consult a real estate agent to determine prospects to sell as is versus with improvements. If the difference is small sell as is ASAP.

If you want to pursue REI, develop a strategy that fits your goals and resources and stick to it. Don't fall into it and have a property choose you. You decide.

Best of luck. I hope your mother enjoys many more quality years.

@Lorraine Patterson. Why don’t you read your contract or better yet have your attorney review to see what the builder can do? They may be able to adjust the sale price based on increased materials costs such as lumber.

@Eric Weldon-Schilling

Q: Why would a landlord evict a good tenant, who respects the neighbors, the property, and the property manager....who communicates, informs the property manager when unable to pay on time, makes best efforts to make payments, honors payment plans to catch up, follows rules as specified in the lease contract, and in general operates in good faith as a partner with the propery manager?

A: They wouldn’t

@Jay Hinrichs

Seattle essentially doesn’t allow landlords to screen criminal records and places restrictions on screening for sex offenders. See link. But sure, force the landlord to take the first qualified applicant excepting those things. The public, elected officials, and a few on this thread care little about law-abiding, ethical, un-bigoted landlords who might get screwed out of a year’s rent, legal fees, and property damage by those bad apples who take advantage of the system.

https://washingtonlandlordtenant.info/seattle-landlord-tenant-local-laws/

@Ronnie Williams. First break the deal apart and do some due diligence. How much is the land worth? Research other sales. What do you know about the mobile homes such as age, condition, needed repairs, current value. If land value and mobile home value don’t add up to $127k that tells you something.

Second, get a financial analysis model (such as available on BP), do due diligence on operating expenses, market rents, etc. Populate the model with real, verified numbers including possibly factoring for utilities cost increase, property tax increases, maintenance/repairs, vacancy, etc. the model should tell you cash-on-cash return and other metrics. This will help you determine if the return on your cash out of pocket (down payment, closing costs, escrows, etc.) are worth it. Then you can answer the question “Is this a good investment”. No one else can decide for you.

@Tyler Tacy. You don’t know if they can afford it until you talk to them about it. If they’re using walkers and have oxygen tanks they’re probably not able to live independently much longer and they’re probably older than 65. I know at 23 you probably think 65 is ancient but it’s really not.

Some things you can talk to them about, some not. I’m not an expert on that so do your own homework. I think you can ask who their emergency contact is and if they have senior service providers who visit to bring groceries, medications, etc. what you want to find out is if a senior services organization and/or family member is engaged to help evaluate if they’re safe. If so, then there’s an exit strategy. If not they may be hanging on as long as possible whether they’re safety is at risk or not. If they have no family support and no exit plan for life beyond living on their own, that’s a tougher situation.

Some people would say forget all that, you’re running a business. But these are people’s lives. You can be compassionate and a good investor.