All Forum Posts by: Margie Pierce

I’ll supply more info: cash flow from rentals (duplexes, 5-8 of them) that are still being deprecated (all bought within the past three years) some total of $1.5mm in total value for the houses together so I suppose $1mm for the value of just the houses and not the land for sake of argument. 

I’ve been an investor for two years. I’ve used a buyers agent and I’ve let the sellers agent get a dual agency. Anyone who tells you that you don’t have an advantage doing a dual agency is lying to you. Also, it’s soooo cumbersome getting hold of your buyers agent, having them get hold of the sellers agent, then they get hold of the seller. Yuck. If someone brings me a deal I’ll use them as a buyers agent. Otherwise I’ll hunt alone and beat competition because I’m faster and the agent can give me a percent or two. 

Thanks Jay Hinrichs! Now those owner occupied loans could they be used for duplexes triplexs and quads? We’re they offering loans for 5-15% down? 

I unfortunately didn’t have any money to invest with during and immediately after the great recession.  Therefore I don’t really have any first-hand experience. However I hear people saying things like “ the banks didn’t give out any mortgages in 2009 and 2010!!!” 

Can you folks please speak as to what extent to which the above statement is true?

 I have a line of credit worth around $100,000, abs I would assume that even in dire financial situations 1) my line of credit would still exist albeit pitentially at a higher interest rate and 2) banks would give me a mortgage if I put down 25%. However, maybe I’m wrong? I’m looking for people who actually were obtaining mortgages and using lines of credit in those dark years rather than conjecture. Thanks!

I am someone who currently works on a W-2 basis and plans to transition to living off of my cash flow but in the next couple of years.

 I am interested to hear about peoples first hand experience with earning $100,000 on a W-2 basis for an employer versus living off of $100,000 per year of cash flow. 

Clearly there are more write offs with the cash flow scenario but can anyone comment as to the actual difference between the two scenarios? Thanks in advance!

 Somehow I came to understand that in this life there are four major equities: they are money, time, health and love. In order of value from low to high the rank with money being the lowest value, then time, then health, and finally love. essentially you can trade down the food chain easily (  don’t believe me? Well believe this: If you are well loved and your mind and your body are healthy and you have time you will have confidence and strength and you most likely will succeed financially). However you have to pay dearly in order to move up the food chain. Money can buy you time if you are able to quit your job but do you have to put forth more money if you’re going to buy health and really there are parts of health you cannot buy.  finally when it comes to love it’s a very poor exchange rate and essentially money cannot buy you love.  Or, better sad, the quality of love it will buy you is very poor.   This is why working a 9-to-5 job is trading time for money and you better get paid well because you’re trading down the food chain and not up.  To me the real value of money is that it really is the easiest to come by compared to time, health, and love. One of the most beautiful things about this life experience is the love is limitless  One of the most beautiful things about this life experience is that love is limitless. 

Seeing opportunities where other don’t (I can add a bedroom over there, those hundred year old boilers will live another 75 years)   Being willing to do things that scare a lot of people. What are people afraid of? Well, both the mundane (paperwork, bureaucracy, waiting), and the unknown (is that pipe burst in that wall? How much will it cost to move that electric panel? Can I find a reliable section 8 tenant). 

How do you get these skills?  You act. You gain insight and risk tolerance with each purchase and every person you meet who is more experienced than you are. 

I often wonder this too. All of my homes will break even if either half full or if rents fall by 50%. I own on average 20% of all of my properties value and that’s not taking into account improvements, appreciation, and a square footage expansion here and there. Considering those factors I own maybe 40%. Admittedly I don’t have huge cash reserves at the moment but it’s a top priority for me especially in light of recent stock market plunges. I figure the worst thing that can happen is that I don’t cash flow. Oh well, I’ll just have to keep a job then. 

My questions are:

1) what happens to your mortgage if the bank holding the mortgage goes belly up?

2) I am in the process of pulling equity to the tune of $125k. They assure me this will never be cancelled/nixed. Yes the rate fluctuates. I’m now thinking of waiting to use this. I’d like to score a little duplex around cocoa beach (I’m a rocket, beach, and theme park enthusiast). Thoughts? 

What if I purchased a  property using a 50/50 non-recourse mortgage where in I put down $150,000 and borrowed $150,000 and then let’s say I generated $1000 per month cash flow and withdrew it out of the account on a monthly basis knowing I would effectively only receive $500 per month because it would be taxed at a higher rate with a 10% penalty?

Congrats!  Now, I for one will say hey you got this!  I have nine units while working a full time job that requires travel, and have an active family and social life.  That proximity makes a big difference!  My recommendation is to find an excellent plumber, electrician, locksmith, and handyman, and then a great backup for each one.  Then you know who to call!  Also I recommend preparing yourself for the emotional burdon of feeling as though you've failed when problems arise.  This is B or C level housing and things will go awry 1-3 times per year in each unit.  Your tenants need to understand that.  I also think it is great to make a list of when to call you and when to not call you and when to email you, for example seeing a few ants in November in Minnesota - don't call it is normal they will go away in a week!  Dropped your sunglasses in the toilet and flushed?  No need to call it is called a plunger and they will re-emerge with ease!  Dripping ceiling?  Call!  No heat? Call!  Cabinet door breaks?  Email!

Finally if you are a big type A personality (I am as well) I recommend keeping that emotional distance, just make a plan for when a tenant doesn't perform or the house has an issue, and then execute it.  Know that you are probably one of the best landlords in town given your level of committment, and feel free to tell your tenants that!  Anyone who diagrees can go pay A level prices or get a real doofus of a landlord who duct tapes things together if they don't believe you!

Good luck!