All Forum Posts by: Jeremy H.

I was actually surprised on the take of the article - expected it to come off extremely liberal like most media these days. 

Unreal how many people are on government assistance. I believe it - tons of "waste, fraud, and abuse" in the social welfare system

Interesting, very cool. What's your equity position like in the properties?

The thing I particularly like here is that you were able to use cashflow to supplement your income and be a great backup for getting laid off. Getting laid off can be a reality for anyone. 

Seems like you'll have really good tax deductions too - I'm guessing you self manage so qualify as a REP - so you can pretty much take all the deductions. 

I personally wouldn't quit working if I was you - there's a opportunity cost to "retiring" now. And there's a lot of benefits that an employer provides that I don't think you'll get being self employed. 401k (and employer matching), healthcare plans (likely an HSA too), any kind of employee stock purchase program (we can purchase at a 10% discount, and I usually sell yearly). Employment is generally stable too - banks like it for getting additional loans. Do you contribute to a retirement account? Do you do anything for your kids futures (retirement accounts, college account etc)? 

That's my hiccup with being "financially free". I feel like I'm just leaving too much on the table right now. Financially free is a really subjective matter though, it can be different for everyone. 

What's your plan going forward look like? 5 year goal? 10-20 year goal?

Let me first say - good job on your research while incarcerated. Sounds like you've used your time wisely in a way that will benefit you when you are released. 

Let me ask a question - what have you done to prepare for retirement? I like RE and think there can be successful investments, but you need time (a long time) and money when it comes to RE. Do not let yourself get sold the dream that you will retire on cashflow (this is highly unlikely). 160k is great - but at the same time it's not going to get you THAT far (You've invested ~60k, so you have about 100k left). This is a few down payments and some reserve capital. 

Do you have any sort of IRA? Roth? HSA? Do you have kids? What's your age?

I think you need recurring income - what I would honestly do, if I was you, is start a trades business. Use your cash to start the business - plumbing, electrician, lawn/landscaping - something in the blue collar trades that is specialized, that you can grow, and even better if it has a recurring revenue. From here you can hire others relatively easily and grow your business. Eventually you may sell it or become a sort of contractor w/ laborers. 

I personally would do RE on the side - buy at a discount, rehab, then either rent or sell. And use this as secondary income. 

Not sure what your support system is like on the outside but consider a house hack, live in flip or starting with an affordable starting home. 

Read about taxes - I think you can save yourself a lot of $ w/ a business. 

Quote from @Hunter Jordan:

However he is selling the note for $163,500 plus $2500 for earnest money. So $166k total. I will be financing the $163,500 as I will pay him directly for the earnest money. The 20 year refi is for $173k (163,500 plus closing and one year of property insurance) 

$199k (current note) - $173k (refinancing 20 year term note) equals 26k in gained equity.

^^ This makes the OP make sense. it threw me for a loop there for a sec 

Why not do a 30 year conventional?

If you can't do a 30 year, I'd do the 20 year - this gives you the option to pay down faster but leave a little extra money in your pocket each month for expenses. 

Mortgage interest is deductible anyway - I'd take the extra $189/month over a negligibly lower rate 

What is your goal? Cashflow for retirement? Do you like RE and want to stay in it? Wealth growth or preservation? A cash out refi isn't going to solve your maintenance problem - seems like this would result in less cashflow and having the same amount of maintenance. Could do a cash-out refi, live off that for a few years, then do another, live off that for a few years and repeat to minimize your taxes. It's a strategy, but it still keeps you in all the houses. 

When you start getting several mm (like you have), I think it may be a good time to look into commercial investments - they can be a lot more hands off and still see great returns. Less maintenance for the landlord, longer leases etc. This should allow you to still do a 1031 exchange. This would be my first choice - good returns and would allow you to minimize your tax liability.

I'm personally getting into self-storage/parking - it is a business, not a passive investment, so there's a lot more to it than meets the eye - but I think you have less maintenance long term, easier "tenants" to deal with. Potential to expand and sell. BUT you have to get the location - location cannot be preached enough. 

I'm assuming you max out 401k, IRA/Backdoor Roth IRA (consider starting one for your kids), HSA, 529 all that kind of stuff. I don't think you can go wrong with the stock market either - lots of opportunity there, long history, average 8-10% returns - then put a portion in a less volatile stock for actual retirement money like SCHD or something. Just fewer tax benefits.

Nothing like a good online spanking. Might be better than an in person spanking - it depends I suppose...

I will say there are some very knowledgeable posters on here - real professionals that have walked the walk. Tons of good/free advice that you can get in real time, with real people, with real scenarios. Not a hypothetical. 

I do expect to see a certain level of education from new posters - some of them come on here and haven't the slightest clue. Look, I get you're new and don't know a lot - but at least make a attempt to learn prior to posting - read a book, look at listings, educate yourself on loan types, watch YouTube videos, learn about RE in general. The extremely surface level questions show that they have done zero research themselves. 

I think a lot of them either 1) aren't that serious 2) aren't prepared to invest. They had someone on here recently - no money, bad credit, no experience - like they just woke up one day and decided they wanted to do an OOS BRRRR. I can't even start to make that make sense. There couldn't have been much realistic thought put into that endeavor.

I think it's a pretty positive forum for the most part (100x better than most other online forums) - I do like seeing those with experience go back and forth. A little drama is fun every now and then, especially when it's between people who have been there and done that. 

If you have an operating agreement that isn't signed by anyone...then you don't have an operating agreement. 

You have 2 options the way I see it - stop contributing and let the place go into foreclosure (this is sure to burn a relationship but it may force a sale one way or the other) or sell your half. 

What would the cost to buy you out be? Is buying you out a good money making opportunity? May make sense to sell to friends/family or even creatively finance your half to your "partner" so she can afford it. 

Quote from @Nicholas R Facciano:

@Marc Walowitz Hey Marc, I've been looking into Columbus Ohio

 Time to get out the popcorn and sit back for a show 

Now I don't mean to sound negative - but you're brand new with zero experience, no track record, no money, bad credit, no team in place, no rehab experience and you want to do a long distance BRRRR in Columbus Ohio. This is an absolute trainwreck waiting to happen.

You need to build a foundation - this means credit, capital, networking (other realtors, lenders, property managers, general contractors or laborers etc) for a few years - then attempt what you're planning to do. 

Go complete a local rehab first - estimate costs, hire subs, inspect their work. Build up some money - sell some houses as a realtor, invest in the stock market, go wholesale, learn to market and advertise. Network - meet potential partners and start scoping out the best for your eventual team. Maybe even find a partner(s) so do a local BRRRR. Attend meet-ups. Make a rental calculator to calculate your income/expenses/profit (and by that I mean create one yourself, don't use someone elses).

I like the enthusiasm, but you have to learn to swim at least a little before you jump in. At least give yourself the best chance you can. 

What kind of other investments do you have? If this is simply diversification to your other investments, I think it's ok. Not great, but ok. If you don't have any other investments, I'd probably consider something else. 

This is one thing that irks me when I hear "rent goes up, but monthly payment stays the same" from various gurus. The total, PITI, most certainly does go up over time. I do realize this is location dependent - some rents will outpace the increase in PITI massively, some rents won't change much, some locations will have massive PITI (Taxes and insurance primarily) increases due to storms/weather etc, while others won't change much.

Doesn't hurt anything to put it on the market and see what you could get for it either. 

One thing is this is a long-distance rental. Have you seen the property? Did it get rehabbed? It's a cheap property which leads me to believe the location may not be great. What's the future outlook for Lansing? What kind of CapEx is coming in the future? Why not invest in Florida?

Quote from @Jill F.:

A lease is not executed until both parties sign the lease. Did YOU sign and give the tenant a copy? if not, the lease is not in force. If you gave the tenant a copy with your signature, it's a little shakier. Did you give him the keys? 

I always sign last and never ever sign until I have the money (in cash or a cashiers check from a local bank). I keep showing my units until I have money in my hot little hand. It's not a deal until you have money.

This is perfect - I'd add in proof of utilities in the tenants name as well. Need proof of utilities prior to getting the keys (or some sort of verbiage that says the tenant will be responsible for all utilities plus some sort of late utility fee).