All Forum Posts by: John Myers

@Quentin Jivery

Quite frankly I overpaid on my first sfr rental property.  It was at the beginning of the 2008 real estate collapse.  I should have waited about 1 year and purchased a home then.  Got a little too anxious to buy something.

@Shane Dolinski

Congratulations from a fellow Albuquerque real estate agent and real estate investor. Sounds like a great deal as it is almost impossible to find anything under $200k. Especially downtown Albuquerque, great find!

@Steven Foster Wilson

The numbers are great becasue the home was purchased for cash.  The annual fees for the plan are less than $3000 per year.  This investment makes sense because of the amount of cash is the S corp.  I did not feel there were many good options for the S coporation to invest.  Holding real estate in an S corp is not usually a good idea.  But the defined benefits plan works fine.   Very unique and probably not for most people.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $225,000
Cash invested: $225,000

This is a long term buy and hold investment. This is a single family home and is used as a long term rental property.

I own a real estate brokerage and it is set up as an S corporation. One benefit of an S corporation is the ability to create a Defined Benefits Plan (Retirement Plan). The plan was created by a company that specializes in retirement plans.

Creating the plan was a bit costly and there are annual costs to prepare documentation for the Federal Government. 

What made you interested in investing in this type of deal?

There was cash in the S corporations accounts. My accountant discussed creating a defined benefits program through the S corp. It made sense from a financial perspective.

How did you find this deal and how did you negotiate it?

A sales rep with the builder called me and said they need to sell this house fast.

How did you finance this deal?

This was a cash deal paid from the defined benefits plan.

How did you add value to the deal?

This was a new home and the Plan hired a landscaper to landscape the backyard. It was a new home and needed no repairs.

What was the outcome?

The home is still held the Plan.

@InYoung Choung

Thanks and good luck.

@tomekawray

I used to have the locks re-keyed.  It was $35 per lock.  If you have a handle and a deadbolt on a door, that was $70.  I am here in Albuquerque, not sure about Baltimore.  But that sounds like too much.

I just started buying the Kwiksets smartkey from Lowes and Home Depot.  You can re-key yourself in less than one minute

@Louis Martinez

Thanks, sounds like you have a lot going on.  I am not familiar with ROBS.  Real estate investing offers so many opportunities and there is sooooo much to learn.

I have purchased several bank owned homes and short sales for rentals and as fix and flips.  I will post more in the near future.  I want to spread out my posts in the near future.  I have had a good response with questions and comments.  I would get overwhelmed if I post too many in a short period of time.  Overall it has been great from a financial perspective.

Purchasing bank owned homes can be a challenge. They set their rules and they are not willing to bend. They respond when they want to respond. Deadlines in a contract mean nothing to them. Most of the time, they will not respond on weekends or holidays. We have a tendency to lump all bank owned homes into a homogenous group. They are not. It depends on who owns the homes, ie Veterans Administration, HUD, Fannie Mae, Freddie Mac, any number of banks. Each has their own set of policies, processes and procedures. In most cases, you must use a real estate agent to purchase them. Your real estate agent needs a lot of experience with each of these different entities. It can be a pain to deal with them. However, there are times when you can get a great deal!!! Not all bank owned homes are a great deal. I got my real estate license because I could not find an agent willing to put up with their rules. I got a license and learned the ropes and it was very profitable for me and other investors that I helped purchase REOs.
With all the challenges, I will keep pursuing great deals with REOs!!!

@Brian Eastman

Thanks Brian for your input, you are correct in your explanation.  You obviously understand all the details, legalities, and IRS issues.  I leave that to the professionals.  I make the money and they give me options, I make the big decisions, and they handle all of the legal and IRS issues and filings.