All Forum Posts by: Jesse Hodges

@Richard Prillerman

One of this big things to keep in mind (which was alluded to above) is that if the service member gets put on PCS orders, they can exit a lease with no penalty. There might be a few that try to take advantage of you on that but I can speak from personal experience that sometimes PCS orders can be as much of a surprise to the service member as it would be to you as the landlord.

I would also be mindful of those that have not been in the military long because most junior service members (but definitely not all) will have gone straight to living in barracks after graduating high school, and have never had a house of their own to take care of, potentially bringing you similar issues as college students. NCOs and Officers usually have been around long enough to know better.

One of the big Pros of a military tenant is they always have a guaranteed paycheck coming. You can google how much Basic allowance for housing (BAH) a service member will get paid in a zip code depending on their rank and if they have dependants. This gives you a great starting point for how much they can afford to pay for rent.

Overall, most service members are great tenants that will do the right thing and not destroy your place or leave unexpectedly.

@Basit Siddiqi

Thanks for the feedback. I apparently had a very limited understanding of how depreciation works with real estate and now I really know that I know nothing. Having CPA's such as yourself on the BP forums is a huge help which I sincerely appreciate. Also great point about the time value of money. It can be easily forgotten a dollar today is worth more than a dollar tomorrow. 

@Kyle J. 

Thanks for the great article! Very informative and useful. I clearly have a lot to learn on this front. 

@David M. @Bill B.. @Joe Splitrock

Thanks for the great feedback. I didn’t realize the depreciation recapture tax would be taken by IRS wether I took took the depreciation or not. Very interesting and good to know. 

@Marc Winter This is an interesting read. I’m curious how you think this could affect the Scranton real estate market short/long term. One of the pros/cons (depending on if you’re buying or selling) I’ve heard from investors in the area is low appreciation of property value. This makes it relatively easy to buy into the Scranton market but makes it hard to sell for a profit without significant rehab.  Do you think a renewed interest/focus of outside companies entering Scranton would shake up this dynamic? 

@Dave Spooner

@Allan Smith

Thanks for the feedback. It makes sense that the ROI is definitely higher for the rentals but also comes at the the price of time/sweat equity.

Ive been maxing IRA contribution but also put money aside for future down payments on a properties. I've looked at it as diversification up till now but I'm less and less impressed/interested in stock market/IRA investing due to the issues you both have raised. I'm also realizing how much more I could do if I wasn't locking up that capital in my IRA. Are you both still putting something in IRAs or have you stopped altogether to focus on RPs?

 Also any thoughts on using SDIRAs to purchase rentals? 

For the last few years, I have been maxing out both my wife's and my annual roth IRA contributions with savings from work. I am in my late twenties and think of our IRA as more of a bonus later in life then what I am relying on for our retirement. My goals is to have enough rentals to provide me with cash flow so that an IRA is not really even needed. Should I stop contributing to my IRA and direct that cash into properties? It seems that the main party line in the personal finance world is to max IRA first, then invest in other things with whats left over. I know its a case by case opinion based question but I'm curious what others would think/say about that.

Is is always a good idea to claim depreciation on your rental property for tax purposes? I recently learned that if you sell the property for more than its depreciated value, you'll owe tax on that gain through the depreciation recapture tax. That seems like that defeats the purpose of doing it in the first place.

 

My wife and I want to create a real estate LLC . What are the pros and cons of creating it as equal partners verses one of us as the sole prioritor and the other being an employee?

@Boris Suchkov and @Chris K Awesome analysis of Scranton and PA - really interesting. Do you think that the city will default in the near future? If so, would that put it into a warzone/Detroit area category or help it to restructure and turn the corner for positive growth/appreciation? Also, in reference to having a team built around your clustered properties, would you consider Scranton/Wilkes-Barre the same cluster area or two different markets requiring two different teams? I really appreciate the feed back on this thread. Super helpful.

I’m am active duty Army stationed in Korea. I am having trouble securing conventional financing due to the fact that I only have an APO address here. My “official army residence” is Pennsylvania but that is not linked to any specific address. My question is: Could it be considered fraud to list a parent’s address as my own for a loan even though I do not live there?