All Forum Posts by: Joe Szymczyk

@Joe Szymczyk Plenty others will chime in on this but a multi-family is a truly wonderful thing. I was very fortunate- and because he carried the note I did not have to deal with a bank and all of the requirements.

Bottom line is my buildings cash flow in a way that a dozen sfh could not. Any one or 2 or 3 or...tenant(s) will never have me by the balls. I feel, especially with this new tax law, that my buildings are pretty much bullet proof to market forces. Antidotally I get the sense that there is a lot more hands on with sfh, potential problems with the "owning" neighbors and the town- but I am sure others would dispute this.

If you could get your hands on a 3+ unit I would say jump on it and pass up 3 sfh to do so... all things being equal. (which they are not)

@Joe Szymczyk "So if you have a 300k property paid off" ...

That $300K in my account would have averaged a return of 11% over the past 10 years in a moderate income fund. That's $2750/month (average) and I never lift a finger, answer the phone or make any decisions.

I am 65 and have enough hobbies to keep me busy all day long 7 days a week if I choose. I still work at my rentals and it takes me away from what I want to be doing. At 65 my clock is winding down, my days are numbered and I have things in life I still want to do besides work. My money should be working for me.

Real estate will never be passive and I can almost guarantee every investor will want out eventually. I am hopeful I can escape in the next 3-5 years if I live that long.

I pay my mortgages to the guy who sold me his properties. When I retire I will definitely hold the note on my 5 unit because I think you can maximize the selling price while offering a fixed loan which is far better than the commercial loan one is forced into at 5 units. I would be very happy at 1% below the commercial rate at that time.

Guy who sold me his properties held onto his newest building after unloading 6 others. He "retired" and manages the other from out of state. Called me up a couple of months ago wanting to know what my tax assessment came in at, he was upset because his was valued at over a million and he was waiting for the other shoe to drop. Called me up two weeks ago after one of the nor'easters because a tenant was screaming about a leaking ceiling in his "new" building and he needed a roofer- he was calling from vacation in Hawaii.

Heed @Thomas S. words of insight.

Father sold most of his properties off in retirement but kept one rental till he died at 95.  Cash flowing property with low value.  Income from this house paid all of his personal housing expenses. He self managed and handled most repairs himself. 

@Joe Szymczyk, If you 1031 properties throughout your life you will have accumulated a lot of deferred tax.  You've used that tax to grow your investing portfolio.  The end game is fluid but generally involves increase of free time and reduction of risk as @Chris Masons said. Reduction of risk involves a lower ROI as debt decreases. So rate of return becomes secondary to net cash. The time when that is appropriate is fluid and individual. But there are ways to keep the tax deferred for life while providing enough net cash for a good retirement without management time suck. It's all in transitional defensive investing. And it can leave your heirs with assets to enjoy after your death without leaving them a business to worry about as @Cara Lonsdale said.

@Thomas S. While some retire at 70+ years of age I would somewhat tend to agree with you on this. However, there are plenty of people who for various reasons may be able to retire in the 50s and 60s which to me is still young enough to manage and take care of some rental property. I plan to be one of those people. I have a nice portfolio of single family, multi family and condos. Out of this portfolio I have a couple single family properties that perhaps I will pass on to my kids to either A. live in or B. rent out and continue to generate income if they so desire OR  it can be sold after I die and they will receive a STEP UP in cost basis potentially saving them ALOT of money in Cap. gain taxes which can be very beneficial...

As far as never being retired owning rentals you can always hand it off to a management company to ease the stress giving you freedom to do other things.

Best,

Chris