All Forum Posts by: Nuhan Demirkan

turnover

I recently sold a house to a young couple who used a state sponsored program for down payment assistance. $78 was all they had to come out of pocket. It was $260K purchase. A good agent and a loan officer will find you those types of programs.

Another option would be owner financing from a tired landlord who would like to sell the property but not necessarily wants to list it. 

Good luck,

you can access the tax records of the property, you can see the disclosures, you can build a mailing list at no cost, you can find out what the rehabbers are paying for properties in the areas you are interested, you can get market analysis thru the apps...

There is a big difference,

Lee, that's why I started with "Depends on your plan". If you want to build wealth slowly and not planning on quitting your job, paying off the mortgage (even though it will slow down your acquisition) is a good strategy.

The way to mitigate the risk of debt is education, buying right and having multiple exit strategies. Having leverage on a cash flowing rental property in a good location is not a bad debt. If you are an experienced landlord (education), you have plenty of equity in the property (buying it right), and you can rent, wholesale or retail the property if need be (multiple exit strategies) you're covered. The leverage on real estate is going to build your wealth. How many people became millionaires via stock market vs real estate? I have been in the stock market for years and have not experienced the returns I get from real estate currently. I still have money in the market but that's not my focus.

You sound like you have a good head on your shoulders. Delve more into real estate. Learn how to do it well and you will see what I'm talking about. 100% cash on cash return is not unheard of. You can't do that in the stock market.

Here is why I like real estate over stocks.

The monthly Income - cash flow (taxed at the lowest level)

Annual depreciation - can't do that with stocks

Equity build - as tenants pay off your mortgage,

Appreciation - initial forced appreciation, then annual appreciation

Leverage - you can borrow against it. Can you borrow money from a bank to buy stocks?

Plus you can insure it - can't do that with stocks.

Income, Depreciation, Equity, Appreciation, Leverage makes it IDEAL.

Take care,

Depends on your plan. Are you planning on quitting your job and being a landlord at some point in the future? If so you need to get to the number of rentals first. If you decide to pay off mortgages along the way it would be very difficult to buy new rentals to get to the magical number for financial independence. If that is not your plan then pay them off. You can always tap into the equity later if you change your mind. Ask yourself, as an accountant, would you recommend paying off a low interest loan instead of deploying the cash for higher returns - especially when somebody else making the payments? 

I personally think IRA's are for undisciplined financial illiterates.

Chris, the most important aspect of being a landlord is tenant screening. Having the right tenant makes this business much more pleasurable and profitable. Next time do not skip any of the screening steps. Do the complete credit, criminal checks, call past landlords, talk to current employers, ask for pay stubs and references. Once everything checks out than you can offer the property. In addition, I always have a come to Jesus meeting with the tenant upfront. I explain that this is a business and I expect the rent on the first, a late fee of 5% is added after the fifth and I will file for eviction if I haven't received the rent by the 15th.

As for the utilities, check with your utility companies. They may have landlord accounts, the accounts revert back to you once the tenant leaves the property and goes back into the new tenant's name once they move in. 

Sounds like you are a conscientious person and want to do the right thing by your tenants. Sometimes they don't work out. Move on...

Good luck

Alb, it has been said that "before you invest in any real estate deal you must first invest in the 8 inches of real estate located between your ears."

I would like to read about financial management. How much to reinvest, hold for reserves, borrow, and pay back. I have cash and cash flow from 19 units. I would like to take it to 35 units. What is too much, too fast or too slow and conservative?

Suppose an underwater SFH was left to an heir. Can the heir negotiate with the bank to purchase the property in a short sale?

Have you considered selling with seller financing. Usually in seller financing deals the seller can ask for a little more than market price due to the financing. When will your interest only loans reset? And what will be your new payments? Consider those when you are setting up the new loan for the purchaser. Also be aware of the new regulations taking effect Oct. 1