All Forum Posts by: Steve Smith

Without a doubt, either the TValue (PC only) or 10bii for mac or pc. I use the 10bii because I'm a Mac guy. With either, you can do all kinds of performance problems, uneven cash flows, rate of return, amort, etc. Use them often.

Back in the day, we use do use a number of the HP calculators, mine has been in the drawer for years... not even sure of the model. But WAY back when, I used an HP41CV, quite the calculator of its time. 

Question... how is the deed titled now? Why don't you talk your partner to put in a trust and divide up via beneficial interests and an agreement (all of which is private and can't be disclosed other than court order in most states. And NO reporting, annual reports for a trust. I don't know CA law, so just food for thought.

Try to stay close to where you live, and close to the city, where the more expensive homes and/or the working commuters live and where you'll attract a better tenant. You might have to bite the bullet, but shop carefully, look for a low priced home in a higher priced neighborhood. 

Your lender is wrong. Get another, there's plenty that have it figured out. Real estate income is not in your personal debt/income ratio, and the rent from your GF is "income" (not taxable), that offsets the the rent so only half should show up in your ratio.

No, don't need an attorney for an LLC, but I could argue to hold your properties in a trust, not an LLC, and use some form of a business (LLC, SubS, Business Trust) to run your management through. However, could argue that you just don't need an LLC.

Whatever you decide, do some research, get some books, take a course and learn about them.

Nick,

True a duplex is not commercial by definition (usually city or county), but it acts like one.
It's hard to buy, harder to finance, harder to manage, harder to get good tenants, has much more maintenance, and harder to sell than a SFH.
Now, there's always someone that will come up with an exception. And, yes, they produce more cash flow... BUT you work much harder for it.

The only money I lost was with a bunch of duplexes and quads. Just a PITA, and they were new, good neighborhoods, and "looked good". That was back when I was young and stupid. My houses of the SAME value, make more over time, appreciate better and are MUCH easier to manage.

But, I have an aversion to work. Just don't like it. A hammer doesn't belong in my hand. And I don't want to re rent every year or two. I don't like tenants that talk to each other, or worse, want to talk to me.

And, when time to sell, I'm selling to a retail end user... a homeowner, not an investor. He's going to buy on emotion, not numbers, and that works for me.

BUT, to each his own. I've got friends that like their duplexes and apartments. They tell me all about them when I'm out boating and they are working on them.

Dieudonne,

If you're new, the absolute FIRST thing you need is to get educated. You need a course on real estate investing.

A duplex is NOT the best investment overall, however, it does produce better cash flow than a house. There's MANY reasons I don't like duplexes:

Generally, lower class tenants (and that's a deal killer)

You're dealing with a commerical property... harder to buy, sell, manage.

Your management and maintenance will TRIPLE over a SFH of the same value.

SFHs hold value better and you sell them to an end user, NOT and investor..... except typically new investor that are not skilled yet, try to buy duplexes.

Also, tenants talk to each other... last thing you want. But apartments are MUCH worse.

And, I've been there and made the mistakes. Still made a few buck but just not worth it.

My SFHs have out performed the duplexes over the years by 50% to double, and attract MUCH better tenants.

Just food for thought.

ABSOLUTELY roll it over to a Roth IRA, and you want a self directed Roth. Especially if your ordinary income is low this year. And spend a few more dollars on tax deductible stuff for your properties now if you're going to do it in the future anyway.

Clearly the self directed Roth is the way to preserve and grow your wealth tax free. If the wrong president gets in expect your taxes and expenses to significantly go up. Now, self employment helps.

Do a search for Self directed custodians. Most of them have a TON of info on their web site, and often webinars to help. They can help you roll it over. Not hard.

Here's a start:

http://selfdirectedira.nuwireinvestor.com/list-of-self-directed-ira-custodians/

Choose from the mid sized group, NOT the big ones, as a few of them are really bad.

Do your do diligence, and learn about this. Almost ALL of the successful investors I know have a self directed Roth.


Excellent choices:
questtrustcompany.com/quincy-long-of-quest-ira/
advantaira.com

It's ok... depending. Don't know your area, but sounds like a pretty cheap deal, and the numbers work, as you can get some of those expenses down.

I'm showing a bit better numbers:

PAYMENT	$324
tax	$140
insurance	43
vacansy	41.55	5%
repairs	41.55	5%
mangemnt	91.41
Total	$682
Rent	831
	$149	$1,793.88	11985	14.97%
	$241	$2,890.80	11985	24.12%

Why do you put a cap as an expense?
And you should manage this yourself, easy peasy.
And now you have a 24% cash on cash return.

Rent the other side and this goes up SIGNIFICANTLY.

BUT, this really has the smell of a slum property. It sure would be in my neighborhood, but I don't know your market.

First, I just don't do duplexes any more. BTDT, they have WAY too many negatives. But if you want cash flow and don't mind the hassle of selling, the numbers work. If you cannot attract a decent tenant with good credit, modest income of a skilled worker, white collar job... teacher, accountant, foreman, etc., with a stable income and longevity on the job, I'd pass. The tenant you attract will make ALL the difference in the world.

Wow, what an interesting thread. I'm not going to make predictions but we've had some unprecedented things happen that have never happened before.

For the first time, ever we have had:

Government totally take over personal activities.

Government totally shutting down businesses en mass.

Government totally disregarding contract law. (mortgages, tenant, etc)

Government handing out trillions of dollars to help out whomever, even if they didn't need it.

Oil at significant negative prices.

New mandatory laws regarding health, and what you can do about it.

Now, we also have:

Very high real estate prices

A shortage of housing and a tenants scrambling for housing.

Very high labor cost increases, materials costs, and difficult availability. 

Most every business that has reopened has raised their prices.

Now, we will most likely have:

A significant amount of foreclosures.

A significant amount of evictions.

Significant recovery from a REALLY low point in the economy. Even oil is coming back. (drill baby, drill). However, a long way to go.

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Now, history repeats itself. The banks and institutions are still repeating stupid things.

So, we will have a ridiculous amount debt and the only way we can lower it is to pay it back with inflated dollars.

People will always need a place to stay. As money gets tight, they might want to gang up in one unit. And you can always rent your property to a good tenant, if its a good one, without a ton of debt and expenses.

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Yes, I'm changing my profile somewhat. Just not exactly sure to what extent. I could argue to strive to be more private and invisible (as impossible as it is), to be able to hide assets and income (not promoting breaking any laws).

I'm just going to follow this thread......