All Forum Posts by: Steven Chang

Thanks for the initiative!

@Robert Muzyka

I might suggest gauging a bit more interest first by creating a more specific topic (e.g. "Plano Shops at Legacy Meetup") in either the events or Dallas forum. Lots of people might be skipping this topic because the title doesn't immediately suggest what we're currently discussing.

Keeping tabs on this conversation. Would be interested in a Plano meetup.

Should I be concerned that opening accounts (credit card, checking, savings) for a business could affect my personal credit score? I have 700+, but it could lower my chances of approval or increase my interest rate for mortgages.

Hi Chai, I believe you had a similar post with a couple responses regarding the topic.

But to pitch in my experience living in DFW (not investing), you need to be careful about the HOA enforcements for the community. These can also change at any time and as an investor you really can't do anything about it. If that's the path you want to take, understand the community and HOA board well.

Yep, no prob. Looking at the hard numbers you provided, it's a decision based on risk-tolerance. I tend to be more conservative, and consider deals that work for me in both up and down markets. In the case of Austin, I don't see it suffering any downturn that won't be affecting the whole of America anyways (lots of tech growth and the university is expanding), so the risk would be low.

Chris has a valid point that this is an "accidental landlord" situation. While it would not be a deal that I'd  actively pursue, the fact that you're already in it could be a keep factor. But again, as with any investment, understand the risks and be willing to accept them.

Given the 4 methods of generating value in rental properties (appreciation, cashflow, loan pay down, tax benefits), you're correct that appreciation is usually avoided due to being speculation. Tax benefits are in the same category - it's great, but doesn't help in a down market (i.e. owners more likely to become unemployed, tenants more likely to break a lease).

Monthly equity is similar to cashflow. You're gaining equity by paying down your loan, but you're putting in more than you're getting out. Your equity only increases by your payments on the principle, which is initially low, so at least for the first 15 years it won't be much help. In long-term rental properties, cashflow is usually the primary focus. If cashflow works out, look at the rest, otherwise it's not a deal.

By the way, I'm only focusing on your current scenario (not whether the refi was a good idea, since I don't have much experience there).

If I understand correctly, $1745 less PM fees is $1614.13 income per month. That's already cashflow negative, but assuming you're also covering insurance/property taxes/repairs (but not utilities), on average you'd be losing a few hundred per month.

Sounds like it's not worth holding.

Thanks Todd! This definitely makes sense, and I also found some useful articles citing both strategies in case anyone else has the same questions.

https://www.biggerpockets.com/renewsblog/2014/03/1...

https://www.biggerpockets.com/renewsblog/2015/09/1...

This is probably a naive question since no-one even brings it up on Zillow/Realtor/Craigslist.

In the Dallas area, is electricity/water/sewer/garbage generally owner-paid or tenant-paid for SFH and small multi families? Owner-paid makes sense if there's no sub metering, but besides that is it tenant-paid?