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This is kind of off topic but...

This might be unethical or you can just consider it a psychological play but don't you think a $50 late fee or a $50 discount is simply the individual's interpretation and is hugely dependent on the way you frame it?

For example, you want to collect 700 dollar rent. This is your goal.

You can say:

1. 700 per month and 750 if you pay late.

or.

2. 750 per month but only 700 if you pay on time.

IMO, positive reinforcements tend to work better with people. the only risk is that the +$50 might immediately turn away a potential renter from the get-go if they are comparing it with other rents.

I'm still new to REI but I would imagine you would want to keep it if your cashflow is seriously 400/mo. As the housing market slumps, generally you would think rental market gets stronger since less people can afford to buy.

Also, once you hold a property for over 2 years as a primary residence I believe you won't have to pay capital gains tax up to 250k, even if you start renting it after the 2 years---someone please confirm.

I think a more important question is what your strategy is going forward. What would you do with your 150k? Would you be able to move it into another rental property---or multiple properties--- that will allow you to cashflow 400+/mo?

Would you do a flip within a year that can net more than the 4800 you could have cashflowed by keeping ur current setup?

For me personally, I look at everything as opportunity costs and holding all things constant, am I better off staying put, or doing something different with my money. If you can't make/save money by doing something different, you mind as well keep doing what you are doing until you find something that does.

all cash,

hey i'm one of those noobs that did it for the experience despite having razor thin profit potentials! and i don't regret it at all. sure it's nice to have made a great profit on my first transaction but i viewed the situation as:

1) i can continue to rent...

2) ...or own a property paying the same amount of rent and expenses while gaining experience.

in both instances my cash flow (i'm going to include the income from my job) would have stayed relatively the same---granted i pay about 200 more due to taxes and insurance. but 200 extra a month was not as important to me as it might be for some one else who has a tighter budget.

but since i made the leap definitely feel more confident navigating the entire process over again and also learned how to do some rehabbing on my own (tiling, staining, flooring, light plumbing..etc...)

I also now have realistic timelines as to when certain jobs can be completed----at one time i thought I could gut and fix my kitchen and two bathrooms by myself in under 2 weeks only working weekends. LOL. how wrong i was!

on the other hand i can definitely see someone new just going in for one of those 3 reasons and screwing themselves over so badly they need a few years just to recover from it.

this whole post seems fishy.

andrew, you came off originally as a naive person looking for some feedback--which is fine.

now it's looking more and more like you knew what you were doing. Your latest post, which is only a week after your initial post, dripping with a sense of arrogance, is a complete 180 from your initial portrayal of yourself.

now i'm thinking you might have wrote it purely to generate some buzz for your company and maybe in the course of discussion bring in some customers.

that's just my opinion. :D

Can someone explain to me the pros and cons of trying to rehab HUDs for resales or rentals as opposed to the traditional means of searching for distressed sellers to get you a discount?

These are listed and open to most bidders like it would on MLS except it's a HUD database of houses. So the competition for these houses in my mind should be the same.

Am I missing something here?

if i try to unload it, and roll it into a new property, do i need to pay any taxes if i sell it a year after the purchase date?

Hi all,

I took the plunge about a year ago and bought my first condo 2BR/2BA. I figured I would buy it for below market value, do most of my own repairs, and then sell after 2 years so i don't have to pay capital gains tax. I am living with a roommate and assume we pay equal rent.

Lately i've been reading some other threads and started doing the math using some of MikeOH's calculations and realized i might be losing money, especially now that my assessments went up and they levied another 3 years of special assessments.

basically gross rents are about 18,000 (1500 per month)
expenses: 9,000
NOI: 9,000

Debt Service: 9600 (800 per month)

So if I used these calculations just to analyze the deal, I should have known right away I was going to negative cashflow. But I was okay with negative cashflow if I planned on flipping in 2 years ---as long as the negative cashflow was small.

But now after they raised assessments + added special assessments, I think my expenses are ridiculous. I pay 780 a month for Assessments! O_o

If you add all up my other expenses, it is around 13k-14k annually which means I'm losing like 5k a year!

So my question is: do you just accept another 5k year loss and sell it hopefully for enough profit to make up your loses, or do you try to get the hell out of it now? Correct me if I'm wrong, but i believe you can sell and roll your profits tax free into a more expensive property only after 1 yr.

In Oct it will be 1 year.

Thoughts?

Can you explain the Debt Service? How that is calculated and what is the significance of this?

awesome. thanks guys.

I just read another topic about finding good contractors and being wary of people asking for money up front.

I'm about to order around 30-40 ft of granite countertop with install and the guy says he will need a 50% deposit with a quoted price of around 2k.

I just wanted to know if it's normal for them to ask for such a large deposit before they begin work (e.g. getting the slab for fabrication etc..)