All Forum Posts by: Rion Redinger

Another thing I noticed with the financials is that the utilities is part of your expense. Is this normal for your area? Most places I have rented have required me to pay for the utilities, and have had their own meter for power and water. If this is not the case with your property you should consider on new leases adding a monthly utility charge. One apartment I lived in for a while did that - $150 per month for utilities, $25 per month for garbage, and if I wanted a designated parking space that was another $25 a month. 

Just a few thoughts I had

@Michael Henry - I'm curious to know the age / remaining life of the HVAC system(s), Plumbing fixtures, cabinets, and flooring. If they are now sitting at a place where your extimated remaining life is a few years or more then I would think the profitability would start to come up and the net income should remain in the black. 

The other thing I would be looking at is how to cut costs. Does it pay to have the best manager handling them for you? Could it be beneficial to revamp the contract with them to minimize the expense? In any case I would consult with them on why the property is underperforming, maybe they have a few good ideas of how to turn it around.

@Ryan Stover

The only way I see to take advantage of both environments (TX tax freedom and CA beach and weather) is to move to Texas and frequently travel to CA to vacation / business trip, but make sure to make Texas your home in all ways. All these other folks have the authority to give you the legal ways you could get in trouble, this is just my way of looking at it from a different point of view.

@George Blower

I’m in a similar situation to the OP but with a little twist.

I am getting my ducks in a row and the paperwork is started for me to start my contracting business later this month. I’ve been looking into different entity types for ownership of the business and since I will be leaving my w2 job (hopefully) later this year and will have a 401k rollover to do and was planning on a self directed ira that I plan on having invest in the contracting company.

Is this a good plan?

What entity type should I use? LLC or S-Corp?

What is a good percentage of profits to pay to the self directed ira?

I imagine these would be questions that should be answered before anyone tries to invest in their own business with a self directed ira.

Thanks!

@Ross Olson

Hey Ross, it’s been a while but I’m overdue for a trip back there and will certainly have to look you up when I get there!

Is it ever a good idea to have your real estate business (LLC) purchase the property you intend to make your residence?

Details:

We are looking at purchasing some acreage to build our personal residence on and now am considering the idea of having an LLC own the property and manage the tree farm that we would make out of a portion of the acreage. The house and yard I know I couldn't count as tree farm acreage due to county zoning. It seems like the rest could be owned and managed by an LLC without much trouble, but when the house is on the same tax lot as the tree farm property it seems like that would complicate things a good bit more.

I know I’m missing something as a downside to that plan, I just don’t know what I don’t know. Any insight is greatly appreciated!

@Michael Fundaro

Why do I chase financial freedom?

Taillights.

Taillights in the morning, taillights in the evening, I seem to be just another set of taillights on the road back and forth to and from my job.

I’m sick of taillights!

How do I get away from the taillight snake as I call it?

Well, I can start a business. A real estate business. I’ll buy, fix, and flip my way to taillight freedom!

See, it all really boils down to time freedom, I think that’s what we are all actually wanting. We may call it different things but in the end, we all want to be able to spend more time doing the things we gain happiness from.

@Ley Nezifort

As a tenant for 17 years, I wish I had a landlord that had given me something other than the bill and a hard time.

Not all the landlords I’ve had over the years have been bad but a few have been, I’m just thankful that my family has had a place to live and stay warm all winter every year. I did have one landlord that had one of his maintenance guys come by and chop up a tree for firewood for us, and another one dropped a box of food when they knew times were tough, it’s the little things that show you DO care that make the biggest impact.

I’ll remember these people for the rest of my life and if I ever bump into them again I might just give them a hug! As I transition into being the landlord I want to be able to retain my sense of humanity and goodwill during the Christmas season and give my future tenants a little more than just a roof over their head.

That being said - a gift card I think is too easily thought of as your “extra” and can send the wrong message, a thoughtful gift hand delivered is probably the most impactful.

@Azita Shahgaldi

Here’s a thought from another newbie, have you considered combining the ideas of a vacation rental and the AZ pm? I mean buy a property in AZ that you would like to vacation at (it seems folks from the NW like to vacay down there in the winter months) and see if the PM in AZ is willing to manage that one as well?

Or another thought is that if you vacation in AZ you can check up on the investments there from time to time.

In any case I wouldn’t be in too big of a hurry unless you need to 1031 the cash.

@Seth Galligan

I looked into doing a 203k loan for a fixer upper early this year, in my area it seems that lenders don’t like to do them because they take a lot of time and paperwork that other options don’t require.

Hope you the best and want to hear how it goes if you choose this route!