All Forum Posts by: Kurt Hines

I've never bought anything there, but Royal Oak is probably considered one of thot most "happening" areas in metro Detroit. I have a very hard time seeing it as up and coming. I think the prices have already come. Maybe there are some areas at the periphery with more room to grow. You should be able to get some Metro Detroit investors to chime in.

Hi Nathan Krehbiel and welcome to BP! Here are a few random thoughts for you. -Check your insurance coverage. You likely just have normal homeowners on the house now, and if something happens, they may not cover it, since it is being used as a rental. Talk to your insurance agent about a landlord policy. Also tell your renters to get a renter policy for their stuff. They are cheap. -Screen your tenants! You don't want a bad one. There are plenty of articles on the BP blogs about how to do it. -Run your numbers! Make sure you are actually making money. You need to cover more than your mortgage payment. Taxes, insurance, maintenance, CAPEX, vacancy, etc. if you find that you are losing money every month, and you won't be back there to use the house yourself anytime soon, you might be better off selling, and taking the money to buy a rental that cash flows. Good luck!

I went with LG, because they had good reviews, good specs, priced well, and most importantly, my local supply house carried them. Downstate you'll have a lot more options. I remember from my research that Mitsubishi and Fujitsu were also good. Those are the three brands I focused on. You'll want to talk to your local heating and cooling companies, and get quotes. They will likely supply the minisplit and install. When comparing quotes, remember there are a lot of brands that make these, of varying quality, and Price. Be sure you are comparing Apples to Apples. (Make sure the split labor from the cost of the units. You can always buy the unit yourself and have them install it.) If you buy online, you'll get the best price, but make sure the warranty is still in effect. I had to use my warranty to replace a couple parts in one. (Warranty covered parts, not labor) Makes sure you buy the right size. There are BTU calculators online. Remember that even though each minisplit has a stated BTU, it actually works in a range. Check the spec documents. You don't want to overbuy. (Importantly, it can only work at some minimal BTU number. Some people buy an oversized unit, and that minimum BTU is too high.) Check with your power company, they might offer rebates. There may also be a tax credit, not sure if that is still in effect or not.

Keri Middaugh we used the mini splits in combination with the furnace. I set the furnace to 60, so if the mini splits couldn't keep up, it would kick on. But in reality, the furnace hardly ever kicked on. The mini splits worked great. I'm on Propane, so it made sense to use he minisplits for heat. If I was in natural gas, I'm not sure of the economics of it, since natural gas is so much cheaper. The minisplit you buy is key. Different models work down to different temperatures. My LG units work down to negative temps (with some loss of efficiency). Some units however will cut out when the outdoor temp gets to not much below freezing. If I was doing this in a rental, I would want the furnace disabled (if I paid for fuel), since the tenant could just decide to crank the furnace up. This is why buying the appropriate mini split is key. House layout is also important. If you have a lot of rooms, minisplits may not work. (You can get ducted models, where one minisplit is split between 2 or 3 rooms. Very minimal ducts). You're downstate, right? Low temps won't be as bad down there, so you should have an easier go of it. Happy to discuss further with you if you need more advice.

Your math isn't correct. In calculating you cost for each buy down, you have to start with the lender credit for the first option. Add that to your fee to get your total actual cost. So, to save $55/month, you are actually paying $890 + $1581 =$2471. If you divide $2471 by $55, you get a break even point of 45 months. It will actually be longer than that though, because you have to consider the time value of money. ( what that $2471 could have earned you if you had it to invest. (The additional interest paid would be tax deductible, but the points probably are too, so I'm not considering that.). I would probably put the break even point around 5 years then 5 years is pretty far out, but still within the potential limit where it might make sense. If you know for a fact you will keep the house longer then 5 years, I would consider buying down the rate. But if that is not certain, I would probably keep the money, and use it for another property. Good luck.

I added 2 mini-splits to my personal residence last summer. I love them. We already had ducts for the furnace, but installing two mini-splits (one for kitchen/dining/living room, one for master bedroom) was cheaper. Than adding central AC, and they are highly efficient, so cheap to run. Additionally, the zoned approach is awesome, as it saved me a ton in propane cost in the winter. I live in northern Michigan, so it gets cold. The furnace guzzles propane to hear our house, so only heating the rooms being used was very nice. Plus, my power company gave me a $500 rebate for each unit, as I got high efficiency units. I purchased two sets sets of indoor / outdoor units. It was similar price to one outdoor unit with two heads, and more efficient. The units are much cheaper online then through your local supply company, but when I brought the online price to my local supply company, they were able to go back to the manufacture (LG), and got a cheaper price, almost matching the online price. Be aware there can be warranty issues if you buy online. Good luck.

Cali Skier You can drop the up front holding fee and not lose time. Keep showing and accepting applications until you have a signed lease. Process application first come, first serve. Let people know that you will be accepting applications until a lease is signed. Applicants have a short window after acceptance to sign lease, and since you are still accepting applications, if they drop out, you move on to the next person. Another way to think about it is you have the holding fee because you are worried about losing time, but considering it has already been 7 weeks, you are losing plenty of time before you get it.

Christopher Reynolds A potentially different way to look at things. Currently your money is locked up in the 401k because you have been continuously employed as a W-2 employee at your company. In order to transfer that money to a self directed IRA/Solo 401k, you don't have to stop working with them, just terminate your W-2 employee status. What you could do is go to your employer, and ask to become and independent contractor. Essentially you resign as a W-2 employee, and get hired as a vendor. ( Ideally, for tax purposes, you would start a S Corp or LLC, and your current employer would pay you as a vendor). Obviously, you lose all W-2 benefits, but since you are happy to leave the job, that may not matter. Also, since they are no longer paying employment taxes/benefits, they could pay you more, and it would still cost them less. This could cover the additional tax burden you could potentially face. Depending on your employer, they may or may not go for this. But if they do, you get to keep that revenue stream, and access your 401k money. Talk to a tax professional/accountant who does this kind of thing, NOT a H&R Block type person. They'll be someone who works with small businesses. Be aware that if they don't understand what you are asking, they will likely just say "that's a bad idea", because they don't understand it. This adds complexity to life, but adds flexibility, and can lower your taxes. (If Trump's tax proposal goes through, lower them a lot.)

Charles Campbell with the one day a week showing, you'll get people who push back if that day is too far out (they contact you on Monday, but you do showings on Sat.). But with the rental period so far out, I imagine the timing isn't as big of a deal. I would post my ads every Weds or Thursday. So most people see them Thursday/Friday, and Sat is a perfect showing time. I also knew I would simply miss some people, who couldn't do the timing, but there are plenty of renters out there, and considering that most showings don't lead to a lease, it was well worth it for my sanity.

If you pay an individual more than $600 in a calendar year, you need to issue a 1099. But if you are paying a legal entirely other than a person (C or S corp, LLC), no 1099 is required, and you can expense it. As an example, do you issue a 1099 to your power company? The idea is if you are paying a person, that is akin to wages, and the person being paid has to pay self employment tax on it, so the IRS needs to know about it. If you are paying a company, they are expected to self report their revenue. Generally, if someone gives you a cash discount more than a couple percent, it is because they are not reporting it, and will not be happy with a 1099.