All Forum Posts by: Leigh Ann Smith

We have a quote for dwelling insurance for a SFR on which we are about to make an offer. It's with the insurer of last resort in Texas. I'm not sure that's the proper terminology; my husband is handling that part of it. This insurer does not offer liability insurance, so I am looking into umbrella policies or other liability insurance.

What will the rate for umbrella insurance be based on, and will it be linked specifically to this SFR? If we acquire more properties, will our premium increase? Thanks!

@Joshua Morris , to tag someone in a post, type the @ sign and then start typing their name.  After you've typed 3-4 letters, look down below the "Post a Reply" box and that person's name and picture will pop up.  Click on the name and then it will show up in blue in your message and that person will be notified that he or she was tagged in a post.

It took me FOREVER to figure that out. 

Ahhhh, I think I get it now!  That's a very good explanation, @Dmitriy Fomichenko   , thank you.  I guess we'll just pony up the 20% and deal with it.  :-)  

The good news is that we are 57 years old. It won't be long before we can get our hands on that IRA property!

@Joshua Morris , we've been looking in the Houston suburbs too, but we're looking south of town (near where we live).  With our property tax rates here, the "magic number" I have come up with is 1.3%.  So, if a house would rent for $1,500, we'd have to be able to be all in at about $115K.  And that's if we don't have to pay for flood insurance.  I am pretty sure that if flood insurance is required, we wouldn't even be able to make it work at that price.  I do understand that depreciation and building equity are also factors, but we are trying to focus on cash flow only, leaving the rest to be (hopefully) icing on the cake.

@Hattie Dizmond , you said that rents will adjust.  What I am concerned about is that instead of rents adjusting, home prices will adjust....downward.  It doesn't seem like most renters would have a lot of room in their budget to go up on what they can pay.  Since we haven't purchased our first property yet, I wonder if it's a danger that we would be buying when home prices are inflated, then rents could end up dropping.  What do you think?

Hi @Dmitriy Fomichenko, I am confused. In the first message, you said that the property cannot be used as collateral, but in the next one you said there are banks who are offering non-recourse financing for properties in an IRA. In the latter post, are you talking about something like refinancing a property in an IRA to take out equity?

Just to clarify, @Terry Lewis , our home is not on the IRA property. The IRA is undeveloped pasture land that is adjacent to the property on which our home is located. It is on a separate deed and is held by an IRA trust.

Just trying to think of ways to get out of paying a down payment on our first investment property.  Our home is almost paid off, and we just want to own it free and clear, so we are not going to borrow against it.

Glad you like my signature line, Dmitriy!

We have some undeveloped land (adjacent to the property on which we live) that is in a self-directed IRA. Is there a way to use this property as collateral on a bank loan, or is it not possible since it is in a trust?

A friend of mine owns the home at 1808 Hickory Glen Rd, Knoxville, TN 37932.  It's been on the market for a very long time (well over a year, I think), and I don't believe they've ever even had an offer. I told her I would check here to see if anyone had some insight to share. My guess is that the problem is just that it's a high end house (listed at around $500K), and there are only so many buyers for a house like that.

If you are familiar with the Knoxville market, perhaps you could share your opinion.  Is it overpriced?  Is the market bad there?

Just a note...these people want to sell, but they are not what you'd consider "motivated sellers".  

I found this flood map tool today online and thought others in the Houston area might find it useful.  You can enter an address and see what flood zone a property is in to help determine whether you'll likely need to purchase flood insurance.

http://www.harriscountyfemt.org/

Hi @Mark Ferguson , I don't think one is better than the other, just that diversity is a good thing.  Our 401K is mostly in stocks, and it returned 11% over the past year.  I'll be happy if we can acquire a rental property that returns that much (even though I would be happiER if it returned 15%).  

The rental property will require time and effort, and the stocks are truly passive.  BUT, we don't expect to see 11% gains every year with the stock market, and we could even see a large loss.  I think it would be unlikely to lose that much on a rental property (I hope).  So, we hope to have some buy and hold real estate, some indexed mutual funds, some bonds, and some government securities.  

We are approaching retirement and are probably more conservative than many of the younger BPers!

@Lee Arnold , that's great!  I hope it works that way for Blayne, too.  Programs run by the government are not known for their efficiency anyway.  :-)