All Forum Posts by: Nik Moushon

You also have to consider what you market is driving. Where I'm at housing is in such shortage that you could rent a cardboard box. Not really but you know what I'm getting at. Almost all MF have waiting lists and most SF never have to advertise to rent because someone the tenant knows is willing to move in before they even move out. 

I do agree though that you shouldnt just raise rent each year as a default solution. Consider the comps in your area and the market economy in general. I also agree with Jay. I'd rather loss a little each month to keep a solid good tenant than have turn over every year. That cost alone, especially if you have PM, could cut any gains you would've made by raising rent. 

I dont think its a deal breaker but they will need to be replaced eventually. Its metal so they will rust out eventually. Its not like lead pipes so you worry about a serious health risk. Just start taking it into consideration with your CapEx.

 Do you talk/yell at the TV screen during these HDTV shows like most people do while watching a sporting event? Because my wife and I do all the time. 

"Thats total bs!"

"Well that wasn't scripted...."

"That is NOT how you would do that in real life!"

"Thats against code...."

"Why would they spend $5,000 on an ugly *** ceiling light but then have to cut out the bathroom remodel because they are over budget?"

etc.

etc.

You are probably very limited as to what you can do in an industrial park. Check your local city codes as what the definition is and what are aloud building type/business types. Industrial is a lot different than business so depending on the city definition a storage facility might not work there or only under a special conditions permit. Also with a population that small you might be right that a S.S. might not be viable. You will need to figure out what your city is lacking and try to fill the holes or find something they didn't know they where lacking. Either way you either find or create a demand.

As for survey and stuff thats basically a waste of money until you are dead set on what you are going to do. It adds no value to the land and doubtful you would even break even with. Those types of things just come with dealing with developments. Bringing utilities in is basically the same thing. You might be able to up the sale price but you'd be lucky to break even, especially if utilities are not close by to begin with.

Oh and if you haven't thought about financing a new build you need to. It is not the same as financing a buy of a built building. 

For a SFH I dont see the point in paying for any of the utilities. This changes some what in MF but I wouldnt in SFH.

Its purely for entertainment like others have said. Scripted beyond belief (some worse than others). Thats said though you can get some interesting ideas, design wise, from them. Like paint colors and other material type stuff. Nothing REI worthy though in terms of numbers of making profit. They use WAY too many round numbers to be real.

I had an experience with the reality show "Extreme Home Makeover". A friend of a friend was actually a recipient of one of those house makeovers. The 4 hosts of the show where never there, except at the beginning and end. Theres houses are designed to be cool and flashy but not practical and actually poorly designed and usually poorly constructed (because of the extremely fast time frame). This house had a car lift in the garage because the dad worked on cars. I really nice really professional lift! They didn't take into account that the support pillars for the lift got in the way of the garage door opening......you literally couldn't use because you couldnt get a car in it. Stupid crap like this happens ALL the time. Not to mention that now they family that could barely afford their 1k/month mortgage has 2k/month in taxes and other bills because they have a $500k+ house with 4k sq ft. So many people on that show had to end up selling their new house because they couldnt afford it. But it had good ratings and had a "feel good" mentality about the intent and purpose of the show. But it was all about entertainment and money made for the production company at the end. Not the family. 

Good luck David! If you find out anything knew while your gone make sure to let us know.

 I would agree under a normal situation but the guy is overseas. Unless you are already set up for long distance rental practices its would be very tough to find your "Core 4" AND another property to 1031 into. By the time you have that all set up (and hopefully no bumps in the road) how long has passed? 6 - 12 months if your starting from scratch, IMO. So you really are only saving 12-18months of negative cash flow. If Dennis is planning on coming back and staying there then I would agree to just hold on to it. The continued appreciation will cover the losses at the end. 

I will say that I would try to find some way to cut into that negative cash flow. Can you up the rent? Make them pay for utilities if they aren't already. You're losing almost $10k/yr. Even if you can afford it try to cut it down somehow. 

Thanks. I think I'm just trying to find a loop hole and its just not worth it. Thanks again.

@Dmitriy Fomichenko You mentioned that "all transactions involving an IRA must be 'arms length' ". But doesnt being in an LLC that you have less than 50% investment in get around that rule? For example if me, my wife and one other person form a LLC that would bring my investment to 33.3%. Would that not work? Or is it that I can't use the IRA at all in this capacity?