All Forum Posts by: Priscilla Davenport

Typo I have 5 rentals now

I own 4 paid off properties, a paid off primary residence and one rental with a 50 grand balance. The appraisal on all properties is a little over 500 grand. Ive bought mostly 30-50 grand properties in cash but paid my primary of in 15 years. I would like to retire from my govt job in about 2-3 years. My properties gross about 4,000 monthly and I expect half of that after expenses to supplement my pension and small 401K. Ive been getting advice to leverage properties to buy more to help further my retirement plans with more additional cash flow. Is this something to consider just before retirement? Or should I just stay the course Im on with paid off properties and retire as planned?

Thank you all for your responses. I notified her I will be coming over on the weekend to do an inspection as well as bring a new lease. I will find out exactly WHO resides there and tell her they need to move or be included in the new rent/lease agreement. She will be informed that I want a 6 month lease or she will need to move within 30 days. I will follow up with a courthouse 30 day to quit form early next week if she refuses.

I have a tenant who moved from CA back to MI to care for a sister in with cancer and more recently an ill parent. She could not find anyone to rent her a home because she was a stay at home Mom with no verifiable income/job (left job to move home). She offered to pay 6 months in advance and we went to her bank branch and verified that she had well over 100,000 in her account. My property is paid off also. She asked for a monthly $25 discount for paying 3 months-6 months in full in advance which I agreed to. She renewed her second year lease. She always pays 3-6 months in advance in full and has completed 2 full years. She told me via text in July that she was NOT renewing her lease after Sept 30th (after a disagreement on discounted rent). I asked her was she moving back to CA or would need a letter of recommendation here in MI. She was very vague as if she didnt want me to know so I didnt pry. I noticed several additional people beside herself, 2 kids, mother and sister have moved in. She said it was because she needed help which sounded reasonable so I didnt increase her rent as stated in the lease. She told me a month ago that her sister was in hospice and her mother had a slight stroke. She also found that she has cancer too. 

I feel bad for but she told me yesterday that she is too ill to move by October 1st after all. I offered her a one month extension til October 31st. She said she needs two months, I then told her I cant do a  2 month lease because it is too hard to rent out a house in MI in the winter.  She has been a good tenant.  What should I do? I know that NO one wants to move in December because of the weather and Xmas. She hinted for a month to month scenario.  I offered her a 6 month lease and am waiting for a reply.  Should I only extend the lease if she pays again in full at least 3 month out? Should I send her a 30 day notice October 1st? Im afraid that she will pay month to month then leave in the middle of holiday season/bad weather otherwise. Im sensitive to her situation but also leery about a winter vacancy complete with heating bills to pay. What should I do?

@David Krulac Wow! I want to be like you when I grow up! I pretty much winged this real estate stuff. No one I knew thought it was a good idea. I would have loved to have you and others as mentors a dozen or so years ago. Im sure I wouldnt have made as many mistakes and have more rentals to show for it. I am definitely going to look into buying a few more rentals, possibly even with leveraging. Biggerpockets is a great site. Thanks again

@Michael Lee Great advice. There is no reason I cant both save and buy. Im sorry to hear about your health and hope that the quality of your life improves. Both of my parents have had major health scares. My Mom especially has been my biggest supporter, advisor and cheerleader. At 52 I am literally the only person I know who still has both parents. I know that I am blessed beyond measure. I talk to Mom daily and we try to vacation together at least every couple of years. We even used our mutual timeshare to take the whole extended family to Disney a couple of Xmas's ago. My real estate aspirations are to leave a real estate trust and not medical/funeral bills to my child. Take care and thanks for the reminder of whats important.

@Robert Leonard Thanks for the compliment. I have seen too many good people in my family and also friends work all their lives with little to show for it financially. Many have made bad financial decisions or lived for today. I made up my mind in my 30's to pass on instant gratification, instead embracing delayed gratification. I also didnt give in to lifestyle inflation. I decided to buy houses on 15 year mortgages as a way to catch up before retirement. I worked 2 jobs for 7 days a week for two years to come up with each house down payment while my friends partied, bought expensive cars and vacationed. Some of those say people say how I am "lucky." I tell them that luck has nothing to do with it; sacrifice and hard work  combined with Gods grace does. I tried to get a few in on the rental house band wagon but no one listened besides my Mom. She and I bought a few houses but sold just before the bust for profit because of her health. She kept one paid rental so she can have "play money" now that she and my Dad are retired. 

I will find out more about about LOC's at both my bank and credit union. I have always played it safe but could handle a little risk I believe. I will weigh the virtues of peace of mind vs lost opportunity costs to increase my income. Thanks for the great advice.

Thanks for the response. Yes I have a good tax person and will take that into account. I vaguely remember an article on BRRRR and will look it up. I also looked up home sales and like the rest of the country there is low inventory and prices are up again. My price range is now 40-50 grand which is still relatively low.

Im a single parent and investor with 4 rental properties. Three have been paid off in the last few years and the last payment on the 4th home will be February 2017. House #1 appraises at $94,000 with $1,000 rent, #2 $76,000/$900 rent, #3 $66,000/$1,000 rent and #4 $80,000 rent $900 (Im currently living in it temporarily til next summer while I rebuild my paid off primary residence $143,000 that had a fire).  I also was injured a couple of years ago in a car accident and have had a few minor surgeries with possibly more extensive ones to come. Id planned on working until 60 at my state government job but I can retire in 3 years at 55 (36 years) with a full pension of about $1,700.  Im currently on an intermittent work schedule because of flareups and may need to retire between 55-57. 

My rents next year will total $3,800 monthly but after taxes, insurance, repairs etc it will cash flow  about half off that. My expenses will be about $2,000 monthly conservatively or $2,500 if I travel as Ive planned. Decent 3 bedroom rentals can be purchased in my town for about $35,000 to $40,000 then I usually do minor rehab for $5,000 to $10,000 more to get better rents.

My question is whether I should hustle to buy another rental or two with future cash in the next couple of years? Put down 20% and finance 2-3 more in retirement? Possibly down size and sell my 4 bedroom 2 bath primary residence (since I only have one 17 year old still at home) to finance them? I dont want to be house rich and cash poor in retirement either. I was of work for almost a year and depleted most of my 401K down to about $50,000. To cut down future costs Ive also replaced windows and roofs on all houses and installed 3 new furnaces with two more furnaces that may need replacing eventually. Ive lost sleep on many nights about a plan. Any suggestions on future rental purchases? 

NOOOOOOOO... Not unless they throw in a free cash flowing house