All Forum Posts by: John Kunick

IMO, since it is only one property, you are better off selling it unless you are making a LOT of cash flow OR you are thinking you may be moving back in near future.  It would be different if you had several properties to help spread out the risk, but just one makes it risky and probably not worth the headache.

All, I have had this exact situation a couple of times while building my portfolio.  To me, there is both a legal way to handle it and also a "professional courtesy" way to do so..  Since the legal way to handle it varies by state, I won't address it here other than to say all of my properties are in Oklahoma where I live.  The law would typically favor the landlord and compel the tenant to fulfill the lease commitment and "follow the land".  HOWEVER, I would never want it to get to that point, so this is what I've done in EVERY situation and it has always worked.  First, before agreeing to purchase the property, I meet with the tenant(s) in person.  I explain what is happening and review their lease with them.  I let them know my intentions are to honor their lease with no changes until such time as the lease is up for renewal.  I ask them if they fully understand their obligations under the lease and review those with them.  I then get their personal agreement to fulfill their commitment.  This has ALWAYS worked and led to a longer-term trustful relationship built on mutual agreement and professional courtesy.  My desire is to never let this type of situation end up in court.  IMO, that is a lose/lose.

Hi Nick, great meeting you the other night at the investors dinner.  Best of luck!

Welcome, Kevin.  This is a great site with lots of useful information.  Let me know if I can help since I also live in Tulsa.

I can not make it as I have a church meeting, but please keep me informed of future meetings.

Wade, if you want current cash flow, then take the $600,000 and either pay cash for 5-6 properties - or put 20% down on ten properties (the max # of mortgages currently allowed).  I've done both at various times and there are pros/cons.  Feel free to contact me and I can meet with you and show you what we've done.

Wade, I totally agree with @Derek Dombeck said. I am a REI in Tulsa (in your backyard) that was fortunate enough to get into SFH using my cash flow from my primary job to build a large portfolio of SFH. But, I was also frustrated with the performance of my stocks, mutual funds and especially my 401k. So, I rolled the 401k into a self-directed IRA and now have a much larger portfolio of properties earning ~16% cash flow. I also sold a bunch of my stocks and bought both SFH and minority interests in MFH - just to get some diversification within the REI. I still have some stocks, but I no longer have ALL stocks.

Just wondering if you could use a SDIRA to avoid paying the taxes?  That would give you a lot of extra $ to build long-term cash flow.

BTW, I just retired at age 55 using the cash flow strategy you mention. I now just focus on the REI and collecting checks! You can do it!

Hi Eric, not sure how they are not related. Financing will drive PITI and therefore cash flow. True, the ideal 1% is if you buy a $100,000 property you need to approximate $1,000 per month rent (just to use round #'s) in order to make the 15-20% ROI. But, if the financing is too high, then your cash flow goes down and the 1% rule may not work. Hope that helps explain it better.

Lloyd, have you been investing in Real Estate?

Tulsa is a great market if you know what you are looking for and the school districts are very important.  The 1% rule is easily obtainable if the financing is right.  With rates going up, you got to be able to buy right