All Forum Posts by: Mark Holencik

Thanks, @Andrew Johnson. We actually bought our first rental for cash ($46K from a HELOC on our primary residence,) but we're in the process of pulling as much of that money out of the rental as possible through a 30-yr fixed-rate mortgage in order to allow us to make a down-payment on a second property. Our cash flow will drop by about $100/mo when we do this.

When thinking about a hedge against "un-sellability" in the future we have decidded to only purchase 3+ BR homes. Although they don't appreciate much in this area, they do sell quickly, whereas 2BR sit and SIT.

I buy in a depressed area. I buy so that if they never appreciate or sell I am okay. I do not like to buy above 3 bedroom, to many people in the house. LOL I just bought 2-5 bedroom homes. Just could not pass up the deals. Paid the same price I would for a 3 bedroom and needing less work. Will get an extra $200 a month.

Learn more about the market buy driving the neighborhoods and studying Zillow and Craigslist and For Sale By Owner signs. As you learn your market you will find that what you are paying now is probably a high price. Since I did this I have found a lot of homes for 1/3 the price.

If the 2 bedrooms are hard to sell I would research that market for rents and

tenants. Your biggest profit will be here.

0 Votes

Originally posted by @Joshua D.:

Is your money in general better in real estate then in the bank?

Yes, if you know what you are doing. I buy properties from people who sell at a loss, because it was more time, work, and aggravation then they thought it would be.

If you are looking for passive investing, you still need to know what you are doing. Unless you really trust the person, because of their track record.

I have people that invest with me. They have money sitting in the bank and do not have the time or knowledge to do what I do. They earn between 6-8% for holding the mortgage on my properties. I do 1-15 year notes. Depends on their needs. There are lots of people that could use money for their investments. All you have to do is find them.

There are a lot of ways to invest your money that will pay better then the bank. Just do your homework, otherwise the bank is the best and safest investment.

1 Vote

Originally posted by @Keith Robinson:

Happy New Year!

I have been driving around the Palmdale, Lancaster, and Quartz Hill CA area looking for abandoned/neglected looking houses. I have found some and am struggling to get information to take the next step in trying to purchase them.

Other than talking to the neighbors, what strategies do you use to find/contact the owner of an abandoned house?

Have you talked to the neighbors?

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If you buy the LLC, the property is not sold, just the LLC is sold. Thus you save on not having to buy/sell the property.

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I must be missing something.

What difference does it make to you? It comes out of the sale price on the seller's end.

2 Votes

Seattle, Washington

Do what you said and call another plumber.

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Originally posted by @Eric DeVito:

@Dave Foster and @Hunter L. and @Erick Hernandez is it possible to setup a trust or put my net profits into a trust to avoid paying capital gains tax ? My RE agent is telling me we still have some options to avoid paying captain gain taxes.

Do not use your Real Estate Agent for tax advice.

1 Vote

Yes, they are normal business expenses. Your accountant will tell you how you should classify them. I would have entered as an expense associated with that property even though I did not buy the property.

It is no different then when I go give a price on a job and do not get the job. It is factored in to the cost of overhead. This way I know how much I need to make every day just to keep the doors open.

1 Vote

Another benefit of gas is if it gets shut off, they do not call you to start the furnace. The gas company will not turn the gas on with out starting all the appliances.

If the oil was separate the oil man would just deliver the oil and leave. The tenant will call and tell you they had oil delivered but there is something wrong with the furnace because it will not run.

1 Vote

Originally posted by @Mark F.:

@Scott Trench Respectfully, you're obviously entitled to your opinion, but I think you missed the broader point I was trying to make here. I wasn't implying that your "latte is keeping you poor" or that buying coffee will lead to a destitute retirement. I also wasn't minimizing the importance of cutting back on big ticket expenses like housing or taxes where possible.

The point I WAS making is this: overindulgence in seemingly small expenses could have a big impact on your future financial security. The whole point of my post was that a little extra financial discipline can pay off in a big way down the line. That's all. I don't know see how that point would seem "ridiculous".

I thought the point I was making was a very positive one. Just very small adjustments now in your financial life can payoff huge in the future.

The small changes you wrote about are the changes that lead to the big expense changes. Most people are not going to change the big expenses before the little changes in spending, unless the bank or bankruptcy steps in.

1 Vote

All Forum Posts by: Mark Holencik

Mark Holencik has started 2 posts and replied 393 times.

Post: Who Cares about Appreciation and Equity in a Depressed Market?

Post: Is your money better in real estate then the bank

Post: How do you find the owner of an abandoned property?

Post: Buying a property owned by an LLC

Post: What's the going rate/rebate for buyer agent in Seattle now?

Post: Nightmare with plumber: He threatens call authorities.

Post: How to avoid Capital gains tax?

Post: Expenses for homes that did not close

Post: Oil heating vs Gas Heating

Post: How much does that Starbucks habit REALLY cost you?