All Forum Posts by: Kathy Henley

@Marco Batista There is an extra tax filing if one invests out of state: state income tax in the state in which we own property. 

I know nothing about FHA loan requirements. I do know that partnership agreements should iron out the responsibilities and finances of each partner before shaking hands on a deal. It is legal if everyone agrees (partners and the FHA Lender).

The lessons I learned is to trust the locals. My out of state team helped me avoid bad investments and false cost analysis. The easy part is to listen. The hard part is to hear what is being said, if I want to do it my way.

@David Eyal Note to self: run wash machine with a bit a bleach before new tenants move-in.

David, Some people avoid mold like the plague. You signed a lease with one and heard the alarm. Move the tainted appliance to another location and move in the tenants' washer. 

@Justin Anspach Sell it. Put your equity to work elsewhere. If you rent it and sell it years from now, you may loose the primary home income tax exemption, on the gain. 

Or make a plan to sell in within 5 years (before the home income tax exemption expires). Meanwhile, borrow the equity and invest in real estate out of state (a Heloc draw). When you sell the primary, pay off the equity loans and VOILA, you have a few investment properties. California collects income tax from you until you are done doing business (renting) and this needs studying. Talk with your CPA for a good map.

@Fili Aguirre No one applicant is perfect, one has to give points to a strong rental history, with the mid-range credit score with a middling LL recommendation, against the applicant with low credit score (bad decisions a few years ago) but who now has a solid employer but who's missed a car payment. We have to balance the person as a whole package and consider who is the best fit for the building and be a responsible tenant. Face to face interviews are very important to me, more that the numbers.  Therefore, I stand behind talking to a few people and choose the strongest candidate.

@Vince Mobilio  Sure, you are onto something. Have you built a team? Surround yourself with experienced people who will help you evaluate a deal:  real estate broker, property manager, real estate agent, lawyer, CPA, insurance broker, finance adviser and a steady diet of improving books. When you find a deal that makes sense, make an offer.

@Austin Sanders  That would be very kind.  LLs can gift anything they want to their tenants. It has nothing to do with the Housing Authority. I gift 9V batteries for the smoke detectors and door mats. Your idea is very generous. 

@Shawna Vicenti The applicants do not meet your income qualifications. They might in a few months when 2 of the 3 find employment. Save their application for when their situ changes. Maybe your place will still be available, but keep reviewing other applicants. 

Do you have other criteria for screening tenants? LLs need tenants with good rental history, credit worthiness, no past evections, pay their important bills on time and to be a good fit for your building. Review all applicants with the same criteria and be selective. Protect your asset and avoid vacancies.

@Tala Brunson If you buy an investment property with a bank loan, lenders like to see a tax return to verify borrower's income. So yes, a year out for you. There are other ways to invest - buying a property with owner financing, buying a fixer-upper with cash and living in it while making improvements and get a mortgage later, or pooling money with others. They all work with the right timing and the right deal. 

Why not focus on the career change? Live below your means to save a nest egg and be ready for a good deal when it arises. I took an admin job in the back office of a real estate company and my education blossomed. That was rich.

@Jessica W. I am not a life coach but a real estate investor. You describe yourself being in an emotional state, which clouds one's financial thinking. Do not rush into anything. Rent a home and adjust to your new situ. Get child support. Refresh yourself. Live below your means and keep your credit clean. When your money tells you it is time to buy, buy right (what YOU are comfortable paying out every month). Listen to motivational podcasts and take command of your life.

@Matthew Moore Yes, per our management agreement. It is considered income.