All Forum Posts by: Sandy Sawyer

@Cody L.

Hey Cody, I totally follow what you're saying. Which is why I guess at some point it's important to decide if it's a forever property or get an exit strategy going. I'm attracted to the "infinite returns" concept, where I figure how much of my own money has gone into the deal and after I've refied and got all my own money back out, it's all cream from there. (but by no means smooth sailing!)

I also like the "return on equity" strategy here too. I decided to calculate it all both ways. At the end of the day, you have to educate your mind, follow your gut and shoot from the hip.

@Chris Lopez

Thanks for the explanation Chris; I think I'll have to chew on this a while as well. I do see what you mean, a bird in the hand...and the best option is the one that leads to more options!

Thanks again

I've found more success by putting down 25% because it flows more nicely. But the downside is, your overall rate of return on cash invested goes down as you have sunk more of your own money into the deal. And the more leverage you use, the higher your breakeven point gets. It's a seesaw ride, so you have to strike a balance. Keep in mind too that rents in any market are pretty much dictated by wages in the area.

@Dan M.

Thanks for the explanation Dan; I think I see what you're saying. It's a way to compare apples to apples for the current situation; how to squeeze more juice from the investment. But I found that when I removed the line for depreciation from the equation, it was a real eye-opener for me! Maybe it's good to run the numbers both ways, because that depreciation not only gets recaptured upon selling. The actual wear & tear of the property has to get replenished as well.

I just recently discovered Chris Lopez & the equity analysis for deciding how to make my money work the most efficiently. Since I always kind of viewed depreciation as sort of a 2-edged sword, or a temporary blessing from the IRS, I’m still trying to wrap my mind around why this gets added in, since it gets recaptured upon selling the property. Can someone please clarify this for me? We’re small potatoes here in Houston but self-managing several SFRs. I have yet to experience selling one of our properties.

Thanks

I mean how to get around the due-on-sale clause while changing the title to the name of the buyer, while my lender's escrow company is paying my tax bill for me. I'm thinking of selling to my tenant without paying off my existing low-interest mortgage. Won't there be a big red flag when it comes time to pay property taxes and they see that it's in a different name?

Hi Andrew, thanks for your informative post on avoiding “due on sale”. I’m interested to know how to get around it when my taxes & insurance (including flood) are all paid through an escrow company. 
Thanks

I have a similar question..I set up both a series LLC and a regular LLC last year, one for holding properties and the other for managing. Do I really even need to file a tax return for the management company if there was no income? I did use the EIN to send 1099's since I paid contractors out of the management LLC. I don't have any employees or manage anybody else's properties.

TIA

@Ashish Acharya thanks that's what I was wanting to find out. Appreciate you!

OK thanks @Andrew B.