All Forum Posts by: Dean-Ross Schessler

I was raised and educated in Lincoln, NE.  That said, I am very familiar with the city.  It is my intent to return there very soon to semi-retire.  Because of that objective, I have been paying intense attention to the market in Lincoln in the $130,000-$170,000 range.  It is my observation that the market inventory in this range is scant.  Properties have gone from listed to pending in as little as 24 hours.  Because of this condition, my first question, is your assumptive ability to get this owner to leave ~$70,000 of his asking price on the table, considering he has obviously already taken into consideration the parity between the selling price of the house across the street by decrementing that price with your exact amount for repairs and rehab of $40,000.  My last thought is were within the city is this property located in that location has a great deal to do with the up or down direction of the gentrification of the neighborhood where it is located.  

@Nick Wilkinson sorry for any ambiguity @Sudhanshu Singha did an excellent clarification.  I would add that $283 should be per unit ($566).  My father referred to the 2x rule as his comfort buffer, when he was initially analyzing a deal in the conventional 20% down arena.  Can't lose sight of how one calculates their own risk tolerance.  Investors vary in the amount they maintain as cash-at-hand to compensates for vacancies, repairs, pandemics, etc.  If one has a large nest egg they can afford to be more aggressive.  I tend to be tight with my prebuying calculations to keep stress down and so I don't have to 'feed' a property, especially now that I'm older and find myself more conservative and will less recovery time.  Your banking arrangement is indeed fortunate!  Be cautious however in that I see the US economy as an over-inflated balloon.  I personally don't think doing much before the election is especially prudent.  I think the election will have an impact of some sort on the economy.  Some of the economic pundits are rattling about the 'coming crash' will make 2007-08 look like an old joke and you're old enough to know many homeowners and investors were flipped upside down during that plummet.  

Give strong consideration to the backlash from Covid-19.  Underleveraged real estate investors are becoming victims in CA because state and local governments have put moratoriums on rent payments during the pandemic and landlords that aren't liquid are finding themselves looking at possible foreclosures on their rentals.  If you were in CA instead of NE you might already be up to your waist in alligators.  I would proceed with caution considering the cash flows you shared.  I have always followed the rule of the thumb that a property should cash flow pretty close to two times its monthly gross rent revenue each month.  It is much more joyful to cry over money you could have made as opposed to crying over money you have lost.  Best of luck!

Lincoln and McCook are about 225 miles apart.

There is a Facebook page = Lincoln Real Estate Investors.  If you copy your question there, you will get some very on-point, worthwhile answers for consideration.  Very friendly, sharing group of people all trying to get better at all things real estate.  I have been looking for multiple units I could owner/occupy, but it has been tough in that my criteria are restrictive at this point.  

I did something I will not classify as a mistake, but I will never do it again.  Beware!  I leased a new car for 42 months.  My research showed this is the most profitable term for the leasee.  My plan was to buy the car at the end of the lease so I opted for the lowest mileage allowance knowing there would be no penalty with me buying the car.  All of that was just fine, until it came time to finding financing for the buy.  I learned the older the car, the higher the interest rate and the shorter the term.  My finance payments were a bit more that my lease payments! 
You mentioned a 10 year term, that is rare, and usually requires a car of $100,000+.  Terms of 3 or 4 years are most common, 5, 6 and 7 years are possible for newer cars, again older is shorter.  For some years I had both a leased car and one on purchase.  At that time I was easily able to fully deduct the lease for business.  Rare are the people who can fully deduct all lease costs of a car that is not solely for business, the difference is lost.  If you have two cars you can pay for less miles on your lease.  Don't be too afraid of the mileage allowance, you can calculate the cost of adding 10,000 miles before you sign the lease and the number will not stop you heart. 
My current plan is like a lease in a way.  I keep and drive my cars for +/-10+ years.  I usually buy +/- 5 year old luxury cars.  If you shop well you can find good deals at the luxury car dealers who know who will be bringing in what off of a lease.  They will work with you as they know you're looking to buy.  If you credit good you can get a low percentage and payment for 5 years and drive for 5+ years paymentless.  I just bought a 2010 Lexus with 56,000 miles in near mint condition; which was a wife's car from a couple who have been buying Lexus from the dealership for 25 years, full service records, 37 mpg and no wear or tear.  In closing, most people who are leasing shouldn't be.  Buying is better for most people, unless you are flipping 20+ properties per year and have a large enough cash flow to make a lease make good sense.  Do not leave your accountant and tax man out of the decision, they are ones who have to grind the numbers and will be best able to tell you your best deal.  Good luck its a question with no answer!  LOL!  

I am contemplating moving to Las Vegas.  I would like to be able to have a knowledgeable realtor that would be willing to work with a transplant client that is looking for a basic condo in move in condition.  3 bd 2 ba garage (not too much needing to be done to make it livable).  

They are equivalent to typical weather ... depends upon where you are!

700K ... I would have lost that bet ... very expensive for a basic 3bed 2bath 2garage

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