All Forum Posts by: Raquel D.

Matt Mason nails it with the AMT explanation. I live in the Bay Area and this is the primary gripe I hear about from colleagues.

* cash flow instead of /appreciation/, not appreciate. (Sorry, on my mobile!)

By fix mortgage, do you mean a fixed rate mortgage? If that’s the case, nothing changes because the interest rate is fixed regardless of any changes to property values, interest or the economy in general. This is a big reason many investors will tell you to look for cash flow instead of appreciate. Regardless of what happens to the FMV of the property, you’ll continue to cash flow positive. If you buy a property for $100,000, rent it for $2,000/month, and pay $1,000/mo in expenses (including the mortgage), you earn $1,000/month in profit. If the real estate market crashes and suddenly your property is only worth $50,000, and you can still rent it for $2,000/month, and pay $1,000/mo in expenses — then the value doesn’t matter (as long as you don’t want to sell it). Even if your mortgage I was for $70k and now you have a $70k mortgage on a property worth $50k, it’s okay because you’re still getting that cash flow, and after a few years pass, history has taught us that property values will rise again. And even if the market dips, the property is now only worth $50k, and you can only collect $1,500 in rent, you’ll still be able to cover the $1,000/mo expenses and collect a profit. Your mortgage payment won’t change unless you refinance.

I tend to prefer books that are narrated by the author — they’re more impassioned! I honestly tend to listen to business/self-improvement type books on audible and read real estate books (although I listen to tons of real estate podcasts). My real estate audible recs would be: -ABCs of Real Estate Investing by Ken McElroy (not narrated by him but SO good and not too long) -E-Myth Real Estate Investor by Paul Esajian, Than Merrill and Michael Gerber For non real estate books I really like: -anything by Grant Cardone — plus he narrates his own stuff and adlibs/adds more content. I’d go for Be Obsessed or Be Average and 10X Rule -Millionaire Fast Lane by MJ DeMarco -4 Hour Work Week by Tim Ferriss (although it’s not narrated by him and by the end there’s a lot of web addresses so it’s a little odd as audio) Currently I’m listen to A Complaint Free World, written and narrated by Will Bowen (yesss I was super inspired by the current Afford anything episode lol). So far I like it!

Yes, I worked immediately after graduating high school and all through college, about 25-30 hours a week with a full time course load. Honestly having the work experience helped me way more than the BA ever did! (Personally I think everyone would benefit from 1-2 years food service — or at least retail. It’s invaluable experience!)

There should be no reason to be worried about the attorney preparing the correction deed to transfer title to himself, but if you are, keep in mind that your dad gets to SEE the deed he’s signing. Although there’s some legalese in any deed, it will say something like “Richard Doe, who acquired title as Dick Doe, hereby transfers said property to Richard Doe and John Doe.” And keep in mind an attorney is putting their bar card on the line if they did something like prepare a fraudulent deed.

Congratulations!! There are a ton of different strategies for accomplishing this and talking to an estate planning attorney would be a good idea. I’m not a lawyer but a few initial questions that popped into my head are: - what happens if you have more grandchildren? Would you feel obligated to get another property for each grandchild you have? If so, what’s a way to maintain this strategy so it will be equitable in the future? - do you need to limit the value of the gift because of your prior lifetime gifts or the size of your estate? This is re estate tax planning. Lifetime gift exemption doesn’t matter a lot to most people because the gift and estate tax exemption is so high, but if you need to get the biggest bang for your buck, putting the property in an entity like an LLC and giving small percentages each year would mean you could give discounted gifts. - what if the grandkid can’t handle the responsibility of owning a property at that age? UTMAs transfer upon adulthood, but an irrevocable trust could limit access until the grandkid is a certain age, or even make distributions or termination discretionary. My intention isn’t to make the list seem daunting — there is definitely a way to accomplish this and this is a very kind thing you’re looking to do for your grandchild! One thing to note is that if you buy the property now, there’s no rush to give it away immediately upon the grandchild being born. You have plenty of time to give the property away in a structure that works best for everybody. Good luck!!

I’m guessing there are a lot of details missing here, but this sounds more like FOMO based on the described fact pattern. If you analyzed the deal and ran the numbers based on your goals/objectives, and the deal didn’t seem good, it doesn’t suddenly become good for you because your realtor wants it. Of course some deals are objectively bad/good, but many deals that work for some investors wouldn’t be acceptable for others. There will be more properties to analyze in the future that you won’t want to pass on.

To add to Kyle M. ‘s rec list, I’d suggest -Rod Khlief’s podcast... he’s apartment and multi family focused but he’s great at getting to the point and keeping his podcast guests on point for adding value to listeners. -Paula Pant’s Afford Anthony podcast/blog... her stuff isn’t all real estate based, but she herself invests in SFHs (and one triplex), so her input may be very relevant for your. There are TONS of awesome books, but I find podcasts to be an easier barrier of entry. (I also tend to “read” most books in audio format because I spend a lot of time commuting or out, so it lets me consume more content even if I don’t have time to sit and read, or even read over BP forum posts). On California property taxes, if you inherited the properties from a parent there’s a chance they didn’t get reassessed because of Prop 13, which means you would get the value of the property tax base from the time they were purchased. For example, if one was your parent’s primary residence, or if your parent owned less that $1M in assessed value (as in, value on their property tax bill, NOT fair market value) and hadn’t made prior gifts of CA real estate, then the assessed value should only be able to go up a small % per year. If that’s not the case, then the assessed value would be stepped up to FMV and you could be getting a supplemental property tax bill as of the date of death. (Although considering how long it usually takes to administer estates, that could have already happened. Just something to consider as you figure out how to calculate your expenses!) That is fantastic that you’re going to use the properties you’ve inherited to grow your own portfolio and further your own financial success. A lot of people don’t appreciate what they inherit, so I’m sure whoever you got them from would be proud of what you’re planning to do.

@Ryan Kunzmann I missed that detail, you're right!  Then I would imagine making him  feel like it's quid pro quo could go even further, since he's obligated to pay the lease until the end of the term.