All Forum Posts by: Rick Pozos

I started in 2002ish. I did not incorporate into a C-corp until 2019. I am not saying it's right or wrong, but I did not have anyone threatening to sue me. I always did have an umbrella policy on rentals that was $2mil. Very cheap insurance. You know why it's cheap?? Because people sueing you does not happen very often. To this day, a couple of people have threatened to sue, but no one has. 

As mentioned, it is more expensive. I have a bookkeeper that charges $250 a month. To do the tax return, my accountant charges over $1400. That is without any advice, just the tax return and franchise fees for Texas.

I mostly do rehabs so I have always been a buyer of distressed, cheaper notes where the buyer AND the property need help. 

What I have bought are non-performing notes where the seller needs cash and the homeowner is not paying. That tends to be cheaper, but like a rehab, takes some work to get purchased and paying again.

There are so many metrics that it would depend on what you want to focus on. Some people do 800 credit scores, expensive houses, big cities, etc. Some people dont need docs on the homeowner, rough neighborhoods, etc. And there is a whole bunch in between.

Hey @George Limen there are tons of meetings in Houston. There are plenty in San Antonio and we are a bit smaller than Houston. I even have a smaller group that meets monthly.

It sounds like your interest is built in. You are paying interest, just not in the usual way. You are basically paying all the interest into the price of the property (being 20k over market price).

I would rather buy a property 20k under market price and pay 8% or 10%. If I needed to sell in a hurry, I could still get my money out of it and then some.

It does NOT sound like a good deal.

I dont think it had a super duper impact, but I bet it influenced some ok deals into some pretty good deals. BUT when you take it away, then there are problems, like now. Through the late 20-teens and early 2020s, you could depreciate 100% in first year. This is very similar to 1981 Economic Tax Recovery Act. It gave lots of accelerated depreciation. THEN in 1986 took it away. There were other factors, of course, but this was a big one. If you know your history or lived through it, there was a BIG downturn in 86 that lasted into 90 and 91.

It is kinda like 3% interest rates. It kinda makes people want to really, really buy a house. When everyone feels this way, there will be a change of sentiment. When rates go to 7 or 8%, things change. 

When you have depreciation changing, AND interest rates up, it's kinda the perfect storm for a bad situation.

If you are going to be doing 4 properties per year that is about 200k per year. In 5 years total you will need $1mil. 

With that in mind, I would raise the money from other investors. This way you have the money on hand, right now. OR you could raise it individually from investors. 50k from one friend, 45k from another. You would give each investor their own deed of trust.

Borrow from friend's and family's retirement money. They will not ask you to put down 20%, maybe 5%, maybe nothing. Google-Self Directed IRA. I borrow from several friends and sister, brother in law.

Live well below your means. You would be surprised how much you can save by not buying a new car every few years, eating at home or taking your lunch to work, no Starbucks or whatever your normal vice. 

I take the more frugal approach. If you are making 20k per year plus tax benefits, keep it. THAT is your retirement account. Leave it there, take care of it and it will be $2mil when you retire and sell. 

STAY where you are at your home. Do you really NEED a bigger house and a bigger mortgage?? Probably NOT. Save that money and get ready to buy another property where you are locally.

Most people never prepare for the hard times. One or both spouses can lose a job, get in a car accident and can't work, hospital bills, cancer, slip and break a leg at home and cant work for a month. Lots can happen. Stay lean and put that 20k into another rental property locally. Does each kid really need their own bigger bedroom?? (the answer is NO)

Hey @Rudy Garcia III there are a bunch of meetups where you can meet some people in person. Maybe it's just me, but I like to be able to really meet people in person.

Most people on here are very willing to help others. My phone number is on my profile. I dont think you need to offer services for guidance, unless you are super clueless and want someone to hold your hand for everything. And if you do, it is going to cost WAY more than free property management.

Do you have a property that you own or rent that you are going to use for an STR?? What area of town are you looking to do your STR?? Who are you going to market to for your rental??

We have several, but we are more mid term instead of short term. We target 1 month to 3 month tenants. We have a couple units by Trinity University in Monte Vista and several units by the medical center.