All Forum Posts by: Albert Hasson

I strongly disagree with those that raise rents yearly just on principle. ( I am not talking about 100 unit apartment houses but rather SFR's. ) In my experience, if I have a good tenant that pays on time and doesn't make unreasonable demands then I renew their lease at the same rent. I end up getting multi year tenants that way and very, very few maintenance requests. I think the tenants figure they are getting a good deal so why rock the boat with BS complaints.

One thing that has not been mentioned is the cost or value of one's time.  I self manage so dealing with just one tenant turn over takes time away from my family, my full time job, golf, etc.   I am happy to forgo a rent increase if it means another year of steady monthly rent checks, zero turn over costs, zero turn over time, and zero hours away from things I find enjoyable!

The economic fundamentals nationally now vs. the 2008-2012 time frame are vastly different. Unemployment 5.1%, economy growing at a 2-3% pace, low inflation, etc. but the major difference between now and then is the absence of no-doc or "liar loans".  Strict underwriting in the single family market since 2008 or so has made the housing market much more stable.  

What makes the list suspect in my mind is that Nevada is on there but Arizona is not.  The market fundamentals are so similar between the two and Arizona is currently in the bottom 20th percentile for delinquent loans.  

I would never say never but it's highly doubtful we will ever see a housing crisis like the last one in our lifetimes.

Welcome Ben!  I was born and raised in Seattle and am a proud UW grad ('89, '93)

My family and I have been here 12 years now and absolutely love it. Good luck with your real estate adventures!

I am also building a spec home, actually should be breaking ground next week, fingers crossed!

IMO, the deal looks way too skinny for me.  You can EASILY go over budget by more than 10%, there are LIKELY going to be delays increasing holding costs, etc.

I am not a tax expert but here in AZ unless you hold the property for more than one year after completion you are subject to ordinary income tax. 

Unless you are in a very low tax bracket,  capital gains tax would be less than ordinary income tax.

I am 99.9% certain that the 5 year period to avoid capital gains starts once you declare the home your primary residence, that is, once you move in.

Honestly, the difference between ordinary income and capital gains, dollar wise, isn't that much on 130k. I would definitely re-evaluate your numbers.  In my case, I expect to invest about 800k ALL IN and expect a 1.25-1.35M sales price.  I think my deal is even a little thin but I enjoy the process and every project is a learning experience.

Hate to jump in late to this thread but my experience with @Account Closed is that not only is he unteachable but he likes to pontificate on subjects that he CLEARLY knows nothing about.  My advice would be to ignore him.

Roy, IMO, take the free money! No guarantee that REI will be a money maker for you and then you will feel really bad that you gave up your employers match. I would scrimp and save and come up with $$ for a down payment on RE after you maxed out the 401k.

 Plus, if it's a choice between a 401k match and a down payment you might be underestimating the costs/risks of a RE investment.  You will need adequate reserves in order to be a successful landlord.  Trust me, things will break, tenants will leave unexpectedly, taxes will go up, etc.

Currently re-transitioning to a sellers market after several years of "buyers market" conditions.

Interestingly, inventory of rentals are at historic lows and rents are up 6-7% vs. last year at this time.

Zero evidence that the large institutional investors are selling.  I am sure they are biding their time, enjoying both appreciation and increasing rents.

This is just more sensationalistic nonsense from RealtyTrac.  I recently learned that RealtyTrac counts foreclosures when they are entered into THEIR database, not when the foreclosure actually took place.  This makes their month to month comparisons nearly meaningless but makes for good headlines.  

With the economy humming along nicely, I expect foreclosures to remain at a stable LOW level for the forseeable future.  

@Ron Averill I would not spend 5K on new carpet, paint and appliances to get an extra 50-100/mo.

By the time you recoup your investment (4-8yrs), it would be time for new carpet, paint, appliances, etc.

I would try to figure out by looking at rental comps if upgrading the property will bring in more rent, and if so, by how much.

Obviously, if you spend 5K upgrading the property and you only get an extra $50-100/mo. then its not worth it.  If you can get more than than then it might be worth it.

Of course, if you have a history of tenants trashing the place then I'm thinking its a C or D property and if so I would do only what is necessary to get it rent ready.