All Forum Posts by: Jeff Ronningen

@Lucas Hammer. Network with people you know and trust. Ask people for referrals on social media like Nextdoor. Use Thumbtack or HomeAdvisor.

@Eric Weber. What you describe is more commonly called a self directed IRA. Search for that term on BP and you'll find tons of info. I believe you can buy additional properties after the initial one if you follow the rules. Don't go it alone, you need to seek the services of a professional to do this.

@CL Tumlin. Many people, including me on occasion, are guilty of offering advice or commentary on topics which they know little about. Your friend may fall in this camp. A person in their 50’s has a life expectancy of close to 80, more for females. So the investment horizon is potentially more than 20 years. Real estate investing can generate a good return in year one. Determine your reasons for investing and goals, then develop your strategy from that. Also read Rich Dad Poor Dad to help you put advice from friends in perspective.

@Susan Tan. Who knows? It’s accurate for some properties but not for others. Never rely on just Trulia or Zillow. The county auditor has a good website which will help you do research.

@Russell Mills. Call your 401K plan administrator. You can probably borrow 50% of your balance or $50K, whichever is less. Your payments will probably be based on a 60 month amortization @3% and automatically deducted from payroll. If you leave your balance will be due in full. This is an odd request and probably a bad idea.

@Michael Acheampong. If it’s worth $230K, enter into a contract giving you exclusive right to purchase at $200K, then find a buyer at $230K. Pocket $30K.

@Dennis Hajan. Easy decision. Sell. Even if you have to pay capital gain and depreciation recapture. Currently you pay down about $10K principal per year and cash flow about $1K per year on about $290K equity, a return of less than 4%. You could do that well applying the funds toward your current mortgage and eliminate risk of repairs, vacancy, and management headaches. Or you could park that money on the sideline and wait for a buyer’s market.

@Ronald Starusnak. First off I’m sure you knew about this before entering into a contract to purchase, so it should be factored in. I’ve had situations which were somewhat similar. It seems that you’re assuming these tenants cannot pay more, do you really know that until you talk to them? Do you know if they qualify for section 8? I would either stair step them up or keep rents the same for a few months if they agree to move out. Charity is important but I generally keep giving separate from business. If you decide to continue to give these tenants a $400-500 break on their rent that’s your choice.

@Steven Hershey. Unless I missed it somewhere in this thread, there's a big issue which may be getting overlooked. I believe you're talking about buying an investment property. If so, are you assuming you can put down less than 20% and pay PMI like you would on your primary residence?

If so, this is a flawed assumption. Without seller financing or some wildly expensive financial product, you cannot put down less than 20% on non-owner occupied investment property. If that's the case, I recommend going "Dave Ramsey" on your debt first. It sounds like you're pretty leveraged with the student debt on the HELOC. Not a good thing if you're buying at the top of a real estate market which has had a long run up. Consider reducing your 401k contribution to the minimum which maxes out your employer match or suspend contributions altogether for a while if you want to be more aggressive. If you have car payments consider downsizing to cheaper. It will take you longer but you'll do REI better and smarter.

@Michael Ealy. It doesn’t get much better than that!