All Forum Posts by: Steve Moody

I suppose it depends on the situation. I'd most definitely find out why (other than the PR thing) she wants to do this, and vet her out just as any other renter. Maybe she gets an annuity and likes to just take care of rent for a year and be done with it?

Also, why does she want to move two houses away from her existing house? If she's payed a full year there why is she moving (unless your listing is perfectly coincidentally coming up just as her year is ending at the old house, and there's some compelling reason for changing homes) 

This is a really interesting subject. I've never thought about that as a rude or tacky question and would pretty much expect it to be asked if someone said they are a real estate investor. I also don't think it's rude to be a little illusive in your answer. I suppose it really depends on the person asking, and the situation. 

Maybe if you don't want people to ask about the specifics of your career you should be vague up front. When they ask what do you do say "just some real estate", or "this and that", or "STOP TRYING TO VIOLATE MY PRIVACY" LOL

@Motu Lemafa Check out the RareBird REIA meetings held monthly in Portland (second Thursday of the month) They have a good turnout and there's great information at these meetings.

Setting aside the question of legality or ethics, I think this strategy just plain wouldn't work. Who's going to fall for that trick? If the property is on the open market, and they've only received two offers (one in actuality) maybe it's not the deal you think it is. 

@Dave Garlick, that is exactly what we did when we moved out of state. We knew that we wanted to buy a place, but not right away. We were up-front with the PM and he was fine as long as we gave him 60-days notice. It was our plan all along to stay in a rental for 30 days after closing anyway, to do painting/repairs before we moved in so it worked out great. 

I think being up-front in the first place is key, it sounds like @Dustin Beam's tenant was being up-front and it'll probably work out well for both of them. If he forced the lease she might bail on the lease with little to no notice, which is bad for both parties. 

@Jay DeCima how would her keeping the property, and paying someone else to PM, help her *increase* her monthly income? It might sound like nice "pajama money" but when it doesn't pay the bills... 

It sounds like that's the deal here. Grandma needs more income and has equity in her current rental. She can't raise rent, but by selling she could be giving up a lot in potential appreciation, and property tax. Could the other solution be pulling equity out of this house in order to buy another cash flowing property out of state? Interest rates are low, so she could no doubt buy something with cash and have more cash flow coming in, while still keeping her SD property. 

@Adrian Grauer don't follow any ONE person's advice, pick and choose bits of knowledge. The fact that you're even thinking about this at 15 puts you years ahead of most people (and a lifetime ahead of many). As for college vs no college, it's really something that's up to you. If you have a specific goal that includes needing a college degree, then go for it. But as others have stated, don't go to college just to go and expect anything at the end (other than life altering debt). I didn't go to college, and I'm not doing too bad. Every job I've gotten in the last 15 years had a bachelor degree "requirement", funny how that works. That said, I'd probably have had more opportunities and better pay (at least initially) if I had an education, but it's hard to weigh that against losing 4 years of work experience and starting out in debt. If someone else if paying (parents, military, scholarships), then by all means go for it. 

Some advise that I haven't seen mentioned (I didn't read all comments though), is getting yourself involved with a local REIA. Go to some meetings, talk to some people who are living it. Instead of getting a job flipping burgers for $7/hr maybe try to do some work for local real estate brokers, or other investors. Even if you do it for free, you'll likely earn more in education then some mundane part time job.

Finally, come up with a big goal, and some small goals that will get you close to the big goal. Then write down a PLAN to get to each small goal. A goal without a plan is just a wish. You have to have a plan. Even if you find out in 5 years that the plan wasn't perfect, and needs to be changed, having no plan will make you spin your wheels. 

You have time on your side. The older you get the less risk you can take, so be bold (but not stupid!). Take educated risks, if you lose learn from it and go at it again. 

I don't see Portland as a bubble really. Sure, there might be some flattening or slight correction here and there, but over the long haul if you buy right you'll be ok. The trouble comes when you're upside down in you and suddenly need to sell (or refi). If you have a conventional 30 year loan you know how much your mortgage will me next month and in 20 years. Rents might level off but unless there's some catastrophic event, people aren't going to be leaving so rents that pay the mortgage today will continue to pay. 

One thing that I think a lot of people are doing now that might get them into trouble is buying negative cash flowing property in the thought that rents will rise enough to eventually pay off, and the property will gain value enough to sell for a big profit. It's a gamble IMO and goes against the notion that you should make your money in real estate when you buy. 

@Gunnar F.

I'd like you to report back in 6 months to find out how much that extra rent income ended up costing you. It sounds like both parties know that you're not actually going to do anything and they're both trying to take as much advantage as they can. Once the house sells it will be out of your hair (unless there's still a pending civil lawsuit). As for "can someone sue me for XYZ" sure, you can sue anyone for anything, whether or not it's a valid case is an entirely different conversation. Either way the two parties attorneys will make money, you'll probably both lose some money (hopefully less than your rental income). 

@Andre M. if I was in your situation I'd look for a multi-family (2-4 plex). Live in one unit and rent the other(s). You could slowly fix up the one you're living in, then when there's a vacancy, move into it, finish off any reno you couldn't do while living there (bathroom/kitchen), and rent the updated one for more. Rinse and repeat. The biggest thing you will need to do is make sure that the numbers make sense whether or not you're living there. You wouldn't want to be paying more per month AND be a landlord at the same time. Run the numbers, and make sure it works. 

FWIW, if your employer is matching any amount of the 401k I'd keep putting in at least the minimum amount for the match. There's no reason to pass up on free money.