All Forum Posts by: John Pate

You may not be able to turn off the electricity but what about the cable, broadband, and phone? I'd consult the lawyer but try to make less pleasant for the deadbeat.

I bought the lot behind my house last year because my yard was bit cramped. And, I really wanted it because, well, it is the only lot behind my house. They wanted ~$110k. I offered $60k and they said no. A few months went by and the weeds were high so I called the city to get the owner to mow. The yard guys came out and then the next day their realtor called me asking if I was still interested. I offered $70k, take it or leave it and closed.

The point is, you cannot want any asset too much. Offer what you are willing and then they will either say yes or no. Better to pass up a deal than to end up with something that loses money or just breaks even. In my case I may have paid a little too much but I really wanted that lot for my kids so it wasn't exactly a business decision but you get my point.

I would check for the state laws in terms of values. And, the values of the neighboring homes in case there is some sort of issue with a single home. In Texas, you can protest the values but typically the purchase price is the value. 

I also use a local company that specializes in property tax appraisal protests. You only pay a percentage of what they save you. If they don't lower the value, you pay nothing. They seem to have better luck than me when I go in a protest myself.

I'm from Houston. Everyone I know that was flooded got in and pulled the sheet rock and flooring. Mold, of course is the enemy. I'd be very nervous about purchasing a mold house unless I had someone who really knows their stuff about remediation.

I agree to be careful. We posted on a tenant of ours refusing to pay and took a picture. Then went to court and they required a receipt requested letter. Not legally called for but that is what the judge wanted. Tried cash for keys but no luck there. Then, she actually showed on the court date and they ruled against her. No kidding. 

Once we got in the place was trashed. Roaches everywhere. Even a dead mouse. About 40 large garbage bags of stuff -- we couldn't keep anything. A bunch got taken away from the curb. But ended up paying to have the rest of the junk hauled away. The good news, if there is any, is that with the remodeling (~$7k) we will get an additional $275 a month. Landlording isn't always as easy or glamorous as they make it out on TV. 

The state of Texas is better than most, but all governmental agencies will never limit their spending appetites. The highest tax states like IL are broke due to out of control spending. If you think an income tax would help, I disagree. They would lower property taxes for a few years, but then creep back up to their current levels while keeping the income tax in place. 

I don't understand how property taxes could double in a year unless they are rentals. But a homestead exemption should limit increases to 10% a year. Personally, we left Austin 3 years ago in large part to excessive property taxes. But now Georgetown is also getting very high. I've had good luck using a tax protest company here in Austin. You only pay they reduce the taxes below the current ssesment. 

If you are relocating I would suggest going to Austin, Dallas, maybe Houston since they are going to have a larger number of higher-end markets. Smaller unit complexes are tough to make sense for most larger property management companies since they don't generate much revenue. If you are going to do them, try for the higher-end units because you will likely spend no more time on those. 

If your money is in a 401k the first question you need to answer is does your employer match money going into it? My company matches dollar for dollar up to a certain point. And, it would be foolish for me to close out my 401k and miss out on 100% return on my money. 

The other thing is you cannot co-mingle money in an IRA with additional funds. So, let's say that you do well and have $40k in your IRA after rolling over your 401k in a couple of years. You find a deal that requires $50k and you wish to put after tax $ in to make the purchase. That could expose your IRA to income tax and/or penalties.

Just be careful and find a CPA to help you out to insure you stay on the up and up with the tax man.

I think your decision should be based at large part on what type of real estate investing you want to do. If you are buy and hold, and only will purchase a couple of homes a year, probably not. There is a cost in time and $ to obtain and hold a real estate license, get MLS, and keep up with training.

On the other hand flipping means a lot of transactions. And, each one means you will save on the purchase and sale. Finding deals should be somewhat easier in both cases since you have access to all the information. At least in Texas, you will have to identify yourself as a realtor and that should also be considered.

I was having problems collecting on time from one of my renters. He told me that rent was literally the only check he writes. We agreed to let him pay via Venmo instead.