All Forum Posts by: Joel Allen

@Peter Wellman

Funny you mention @frommilitarytomillionaire...that's @David Pere who is also active here on BiggerPockets.  He teams with @Alexander Felice to host a good podcast called "The Military Millionaire Podcast" that you should check out.

@Michael Plaks

Great info, thanks for sharing.  I agree that there’s a fine line between aggressive but legal vs. reckless and punishable.

I saw this gem from Will Rogers:  “The income tax has made more liars out of the American people than golf has.”

@Michael Plaks

Great info, thanks for sharing.  I agree that there’s a fine line between aggressive but legal vs. reckless and punishable.

I saw this gem from Will Rogers:  “The income tax has made more liars out of the American people than golf has.”

@Peter Wellman

If I was in your shoes I'd utilize the VA loan to purchase a home and set aside the $25K for repairs/upgrades or to prepare for your next investment. Perhaps consider a house hack by purchasing a 2-4 unit property, living in one of the units, and renting out the remaining units. That arrangement meets the owner occupant requirements of the VA loan.

The reason I'd go this route, based on the data points you provided, is:

1. It sounds like your mutual funds are in a retirement account, so I'm wary of the fees and penalties of a loan or withdrawal.

2. It sounds like you're receiving disability pay from a service-connected disability, so you likely qualify for a waiver of the Funding Fee for a VA loan.

3. VA loans don't require PMI (Private Mortgage Insurance). Other loans require PMI if you put a down payment of less than 20%. Since you have $25,000 liquid cash, your purchase price would need to be $125,000 or less to avoid PMI. Based on your local housing market, that may not be a reasonable price point.

@Saemi Jung

You alluded to it in your question, but the VA loan is intended to purchase a primary residence.

VA Pamphlet 26-7 explains that homebuyers using the VA loan must certify that they intend to personally occupy the property as their primary residence. The general understanding is that the homebuyer must intend to occupy the home for at least a year.

The VA IRRRL (Interest Rate Reduction Refinance Loan) are used to refinance an existing VA loan at a lower interest rate. IRRRLs have fees, but they do have some advantages over other types of refinance since IRRRLs don't because require appraisal or underwriting.

The VA loan is a powerful benefit, especially considering your husband is a disabled veteran...he very well may qualify for the VA Funding Fee to be waived.

@Bronson Simmons

For #13, I’d be cautious about swinging the pendulum too far and removing items that you and I consider necessary in our own homes (window blinds, towel racks).  If we don’t provide the basics, don’t be surprised if our tenants put their creativity and problem-solving to work (think Batman bedsheets in the windows and a pull-up bar screwed into the bathroom wall).

@Jeffrey Naeger

In my experience, it's not worth it.  I had home warranties on two of my rental properties for two years but after running the numbers it didn't make sense to keep the home warranty.  It cost approx. $50/month per home (plus a $75 service fee each time they sent a contractor to the home).  My observations were:

1.  Read the fine print! There were a LOT of loopholes built into the contract of what the home warranty wouldn't cover.  Many home warranties require you to pay for upgraded coverage for items such as refrigerators and garage doors.  There are also annual coverage limits that cap the amount of repairs the warranty will cover on each system.

2.  The contractors that were utilized by the home warranty companies were (in general) not high-quality.  The home warranty company wants to repair the issue at the lowest cost, so they choose contractors they can get at the lowest price.  When they sent contractors to the homes, I'd look them up on Google Reviews, Yelp, etc and most times they were about 2 out of 5 stars.

3.  The turnaround times of the repairs were slow.  It often took several days for the home warranty company to get a contractor out to the home, even if the repair was for a critical system (e.g. HVAC stopped working in Maryland in January).

Bottom Line: Instead of paying for the home warranty, I'd rather set aside the $50 per month as part of my monthly repair/CapEx. I can coordinate higher-quality contractors and do it more quickly than the home warranty company does....and after totaling all the costs, I can do it for cheaper.

@Allen Wu

Congrats on purchasing the unit; thanks for keeping us updated on your progress.  I’m bullish on this area of San Antonio (good mix of tenant/economic stability, solid neighborhoods/schools, with both some cash flow and appreciation potential).  The price point has increased steadily the past couple years, but hoping for your continued success moving forward.

@Bronson Simmons

A few tips that I've picked up over the years:

1.  Minimize unnecessary landscaping - Too many bushes, shrubs, and specialty plants are unlikely to be fully maintained.  Depending on your location and climate, consider low-maintenance options such xeriscape, rubber mulch, etc.  In particular, remove all bushes around the outdoor HVAC condenser unit...they'll get overgrown, restrict airflow to the condenser, deposit debris into the condenser, and ultimately make it less efficient.

2.  One of my rentals has hardwood floors (was already installed when I purchased the home).  I installed a built-in shoe shelf/bench inside the front door to encourage the tenants to remove shoes when entering the home.  I also require all furniture placed on the hardwood floors to have felt pads placed under the legs.  Dirt/sand/pebbles on the bottoms of shoes and furniture legs sliding across the floor can both do significant damage to hardwoods.

3.  If the power gets knocked out, the tenant's first concern isn't going to be whether or not the sump pump is working.  So I had a sump pump battery backup installed.  It activates whenever the primary pump is not working (e.g. power outages) and continues to pump water preventing a flooded basement.  Make sure you choose a sealed battery (which is virtually maintenance-free) vs. wet battery (which require periodic refill of distilled water).  It's a few hundred dollar initial investment, but well worth it to prevent a multi-thousand dollar basement repair later.

@Neil Narayan

We all know the real reasons everyone's flocking to Texas...BBQ, Whataburger, and HEB : )

In all seriousness, I moved to Texas about 4 years ago and quickly came to understand why it's such a great place, for both real estate investing and raising a family.  I ran across some fun facts about Texas a few days ago, and I think they perfectly explain what Texas is all about:

1.  There's one Texas ranch (King Ranch in South Texas) that's bigger than the entire state of Rhode Island.

2.  In 2014, the town of Decatur, TX voted to reschedule Halloween because it conflicted with the local
 high school football game that evening.

3.  Texas has its own pledge of allegiance (and my kids recite it every day to start the school day).

4.  The U.S. has three power grids:  one for the eastern U.S., one for the western U.S., and one for Texas.

5.  The Texas State Capitol building is 15 feet taller than the U.S. Capitol building.

God Bless Texas!

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