All Forum Posts by: Josh Platko

I purchased a home in September of 2018.  The previous homeowner had bought the house 10 years prior for a value of $40k, so the taxes on the property were extremely low ($1,500).  I bought the house for a little over $190k and the taxes were assessed based on the new valuation and came out where I expected ($3,900).  

However the tax credit I received from the seller for the first half of 2018 was $750, but I need to cover $1,850.  How is this fair?  I am now covering the taxes gap during a time I didn't own the house!  The title company said they have to make the purchase agreement based on the latest taxes, which were at the very low amount.  Anyone dealt with this before?  Anyway to work around??

This isn't a post dedicated to excuses per se, but rather its about barriers (both mental and financial) that I need to overcome in order to expand my real estate portfolio. 

I'm 6 months into my real estate investor career - and for the most parts the process has been smooth. Few house fixes here and there, but given a 100+ year old house, its been smooth sailing. Went through the LLC battle in my head several hundred times, and ultimately landed on an umbrella insurance policy as the band aid to hold over my liability anxiety. The first house was no doubt the biggest hurdle in getting into real estate, but the current dilemma is "now what"?

I've calculated my number - how many units I want to get to where I feel financially secure and content with my real estate career.  At this point its never something I would forgo my day job for, but nonetheless is a nice retirement plan. As I look at my timeline for securing additional properties, I start to ponder how will I get this next house?  Easily my biggest hurdle is more lending:

• I just did a $200k deal, so how reluctant will banks be to loan more to me? 
  • If they are hesitant for the second house, they surely will be hesitant for number 3, 4, and so on
  • How do you find lenders willing enough to let you become so leveraged?  I can only imagine investors with 10+ properties are closing in on a 7 figure liability - Is the rental income enough to justify that magnitude of debt
  • On top of that, I will want to get a personal home soon as well (currently house hacking a duplex), I wouldn't want real estate investment debt to be a burden on me missing out on a dream home
  • Then of course I'm cash stricken after putting down the 20%, so it will take some time before my current property generates enough to where I'm ready to afford another down payment (also it should be noted I'm not thrilled about the idea of raising capital through others)

How do you manage your debt as you scale your portfolio? Do you struggle to find lending? I can't say I'd be thrilled about having that much debt under my personal name. Put it under an LLC? I would imagine commercial lending will just be way more expensive, but perhaps thats the price you have to pay for that "very very limited" protection.

Thank you all, this what I needed. You have successfully talked me out if it! :). The theory makes it seem way too easy, but a lack of understanding when it comes to the fine lines and technicalities is something that I am certainly not ready to chance.

I need to hear some nightmare stories on subperforming notes.  Just recently began studying them, and not seeing the immediate risk.  Long foreclosure process?  State loan laws tough to understand? Loanee difficult to work with?  It seems that if you get the note at a discount (i.e., less than property value), worst case scenario you get the said property, and the equity (assuming there is some) in the property.  

Here are three questions I would consider asking yourself.  

1.  Would I buy this house with the sole purpose of renting it out?  (when you bought the house you were looking for a place to live, you didn't care about metrics such as how it cash flowed, etc)  

2.  Lets say you weren't planning on moving, but someone came up to you and said they are willing to give you $116k for you to leave your current house.  Would you take it?

3.  If I "LOVE" my house, why am I moving?

@Danet De Leon Touche, and well explained.  Certainly changed my perspective.  Damn WSJ headlines set me up for failure :P

Glad you figured it out. Any landlord that trades rent or security deposit for work scares me. While I'm sure there are situations where this "works", more than likely it's a loss to the owner.

Miami condos are in a huge surplus right now. I'm sure you have studied the market quite a bit, but the high rises are on the fritz of a huge bust. With that being said I know this has nothing to do with your post, just my initial thoughts when reading the post. Im sure you are much more qualified than I, and I hope you the best in the Miami market!

Jacob - Interesting deal, you are certainly going for it with this size of deal (especially for your first one). Most people can't say that, so you are off to a good start, with strong motivation. I suggest the you do not get caught up in the high NOI for this deal, you are going to be extremely leveraged, especially with only $20k down. Look at the location more in depth, don't be so quick to jump ship to a new location because someone questions your cap rate. Have you seen this property in person? Do you have ties to the area?

While I believe the above post makes a good point in terms of refinancing. $5,500 over 30 years does not seem worth it to me. You are one bad tenant or large cap ex improvement away from being negative over the 30 years. It sounds like the property has poor cash flow and has only given you nightmares. I'm sure deep down you want to get rid of it. Take the equity out and put it somewhere else.