All Forum Posts by: Royce Talbo

@David Kirk always use a lease. google honolulu board of realtors lease agreements. free forms that have all the basic stuff. you can then add an addendum for house rules that you want. 
 mysmartmove.com by transunion was recommended to me recently. I havent used it yet but will try it out on the next turnover.

@Jasper Zimmerman why do you need new paint? you stated it will cost $3k but is only 3 years old. it should only be touch ups if its only 3 years old. if you are going for a whole new look with the new flooring then you arent looking at a $12000 turn over you are looking at a $12000 cosmetic rehab.

@Michael E. most of the advice given are good advice to cut your loses to play another day. rehab and selling it at market you will also have to pay closing cost vs off market you wont. having said that i understand what you are trying to do. its not that this is an investment(its a bad choice money wise) but more so an opportunity to learn and be hands on. there are other ways to learn(cheaper) but to some you just have to be hands on and get into it. my dad is an automotive instructor and some of his students are book smart and can ace test but actually doing the work they fail and some are the opposite. 

if you dont plan on becoming a gc, then getting your license will only help in learning the building codes, not really how to do the work. though its good to learn the building codes so you dont get sued or insurance doesnt pay out because of illegal work. 

I have been fixing houses over 25 years. same reason you are, my family didnt have a lot of money and we werent heavy into rei. now i do a lot of my work myself if its small quick jobs because i hate paying someone else to do a shittier job than i can just because it meets minimum standards. I pay for the big jobs because i am a 1 man crew(time vs money). this is the reason that some have pointed out that you wont bring much value as a partner by just having a gc license and rehabing yourself or with helpers might take 3 time as long than hiring a gc with a full crew. holding cost on pm and loss rent can kill deals.

we started our rei journey differently paying for our lessons in one form or another and some more than others. good luck and just keep at it.

@Phil Cecere hawaii doesnt cashflow unless you have a large down payment or you hold for a while and refi, but it does appreciate nicely and rent growth is also good. you will have a very hard time to do the brrrr strategy here as most of the value is in the land at least 2/3 or more. you would have to find a really rundown place, but that will take $100k+ to make rent ready. after you refi to get your money out chances of you cashflowing is slim. only place numbers work would be in d areas. b areas dont have mfh unless it is cut up or has an adu, but those the sellers know what its worth and sell for high. if its a deal then there are tons of local buyers who will beat you to it and bid it up. best bet is to buy sfh and add an adu, but again that will cost $$$, so you wont cashflow. which comes back to holding for a period then refi.

thanks for the input guys. it seems like it just depends on the type of partnerships. 

I see a lot on the forums and on fb people are so gung ho to partner with others that they have never met before just to close a deal. some say its all about the numbers and its not a competition its a collaboration. but what happens when you partner with the wrong people?  

I remember in college my professors would say partnering is a huge liability and its not worth it unless you really know the person and even then you have to write out the contract for every scenario that could arise and how to deal with it. am i being too cautious not partnering with people unless i really know them? is having a llc sufficient enough to protect me from their mistakes as in if they get a huge law suit the only thing i would lose is what is in the llc?

@Anna Flores its not worth it to fight to replace all the blinds. just eat the cost and let that be a lesson dont put blinds in a rental. they will always get ruined. I just have curtain rods and if the tenant wants to put their own curtains then thats up to them. the more you provide the more they can damage. rentals should be durable, clean, nice and simple. anything extra is just another thing you have to fix and doesnt increase your rental income.

this lady i met is 76 years old has a condo rental she bought in the 80s. she said she doesnt want to sell because of the huge capital gains tax she will have to pay. (bought for $110k, my offer price is $550k.) instead she said she is just going to rent it out till she dies and her brother will get the property and he can sell it or continue renting it out. 

I want to offer her seller finance deal so that she can still get monthly income and not have to deal with taxes. from what i understand taxes involved are recapture tax from depreciation, capital gains from monthly installments and regular income tax for interest. 

I would tell her to use part of the down payment to cover the recapture tax, keep the monthly installments and down payment to under $41k/year to keep her in the 0% bracket for capital gains and what ever we decide on interest for the regular income tax. does everything sound correct so far?

Now the main question when she passes away, I want to write in the note that the brother can continue with installments or I have the option to refinance and payoff the mortgage. is this possible to have her brother involved or is this something that she has to write into her will/trust or whatever?  remember she doesnt want to pay a huge capital gains tax so a balloon payment after several years is not an option. so how should i write it so that i have the option to refi after her passing?

also how does it work for his taxes if i do refinance after her passing? does he have to pay capital gains on the remaining amount? 

@Daniel Fitzroy its up to you. how many people house hack and become friends with the people they live with? what about all those landlords that rent to friends or family? I made friends with couple tenants, so did my grandma with her tenant of 15 years, so did my sister with her tenants, as well as my aunty who was a onsite property manager. 

If you screen right and get a highly qualified tenant then the odds of you having to evict them or running into a problem is very low. if you just did minimum screening like a property manager and did first come first serve then you are taking a risk. 

On the flip side if your tenants become your friend they will likely take better care of your place. some good tenants will fix the small stuff on their own and not bother calling you for every little thing. some will even not accept a reimbursement from you. think about it this way if you borrowed a car from a friend vs renting it from a rent a car place, which one would you feel more obligated to take care of?

bottom line is if your screen well and get a good feeling about them on top of their qualifications then you should not have a problem, if you dont screen well then you could run into problems.

@Jay Thomas if you are talking about the article i am unable to read it. I was talking about in general. yes there can be bias like in everything else people will go out of their way to hurt others but for the most part some people just dont understand how things work and jump to conclusions that it was bias racist etc. just trying to clarify what people assume to be bias in general isnt if they just understood how things work.