All Forum Posts by: Justin Trudell

Thanks everyone! I keep reading about the self directed 401k which I'll take a closer look at. I would want to make sure my company would still match me if it's not in the company fund at Vanguard.

Along the lines of the IRAs...I'm assuming the income limits that are in place which have kept me from being able to contribute to IRAs for the past couple years would make this avenue unavailable to me (unless I can cut my AGI with enough mortgage interest to get below the income thresholds). Am I missing something, or are there different income limts on SDIRA, etc?

On a side note, the 401k balance is sure making it easy to get approved for financing and will also come in handy when I have to show 6 months of PITI reserves on all my properties when I surpass 4 mortgages.

I think I might be blowing my own mind right now..."conventional" wisdom says max out your 401k contribution to lower your tax burden. 2013 was a good year for my 401k balance as the stock market was red hot (i have a 90% stock ratio because i'm still young), so I saw good returns on my investment. The more I'm reading about real estate investing, the more I'm thinking about reducing my 401k contributions to meet my employer match (reducing completely seems to be leaving money on the table) and diverting those funds to buy rental properties. If I can continue to get financing at 4-5% and see realistic returns of 12-15% cash on cash, I'm still getting a decent return and I'm still reducing my taxable income with the mortgage interest being a solid deduction.

It seems like this is a solid plan while I can still get conventional financing with only 20-30% down. May have to reconsider after the bank financing dries up.

Has anyone else been through this mental loop and come to the same or different conclusions?

You could start by googling his name...if he's as famous as he says he is, something will pop up.

Being new to this, I'm doing a ton of modeling and calculations, etc. If you are looking for positive cash flow, don't try to convince yourelf you're getting 17% by adding in appreciation. Your numbers give you ~8% (using 50% rule). I suggest making your decision on that number and if that's acceptable, then the appreciation is just icing on the cake. I'm trying to be as conservative as possible in my modeling so that any deviation from model is (hopefully) positive. You can do a lot worse with your 28k in capital than 8%...but you may also be able to do better with a different deal. And I'm almost positive I haven't said anything you haven't heard before.

Having spent 18 months sitting with a house on the market, I feel your pain! My situation was a little bit different in that I relocated accross country and then 7 months later moved right back into my unsold house, but I was still on the market for 18 months. It sounds like we made the same initial decision/mistake. Namely - when you first listed your house, it was priced as a "make me move" number. I'm guessing it covered your entire mortgage, commission, maybe some moving expenses to put you in your new home, etc. The price was too high and now all people see when they check out the MLS is a house with a huge Days On Market number which turns people off from even considering your place. If you want to keep the price up, have you considered taking it off the market for 90 days in order to get a NEW MLS number? (typically, if you don't wait long enough when delisting, you are assigned the same MLS number when re-listing and your history follows you.) The only other advice I have is to do what everyone else is saying and either bite the bullet and pay at closing, or try to short sale. I even put an additional 10K into refinishing hardwood floors and new interior paint in my only three year old house to try and sell it while it sat vacant. What a waste!

Thanks for all the good commentary. Definitely the right place to ask these types of questions and get good guidance.

I've heard several comments about how "pro tennant" Massachusetts is and that it might turn off investors. I've been reading the laws governing the tennant/LL relationship and it seems to me that the most sticky topic is surrounding security deposits. Is it just "easier" to do without a security deposit and leave yourself open to that risk rather than the potential for a lawsuit if you don't follow one of the many, many, many rules around the deposit? Thoughts?

@Steve Babiak seems to work on the iPad, but still no dice when using internet explorer 8 from work...thanks. Thanks also to @Raymond B.

Thanks Ali (and i'm very wary of making something look too good to be true)...have already reached out to listing agent to get utilities, water, sewer, etc. and have researched taxes on the town treasury website. Also have pre-approval for financing at 20% down from conventional bank as it's only my second active mortgage.

Nothing shows up under the post when I type the @ symbol (peoples names should show up under the post for me to choose from). Could it be my outdated corporate browser? (ie 8)