All Forum Posts by: Leigh Ann Smith

Hi @Luke Andrew , I just listened to BiggerPockets podcast 83, and it has some really helpful info on profitable land lording.

http://www.biggerpockets.com/renewsblog/2014/08/14...

Also, if you click the Resources tab above, then FilePlace, there are some sample rental agreements there.

Property taxes run about 2.8% in the Houston TX area.    So, for a $100,000 house, that's $2800/year or $233/month.  Do you just throw out the 50% rule in areas like this?

And don't get me started on flood insurance....

@Jacob Lair , I'm a newbie, too.  Having a general contractor on call like they have on those flipping shows on t.v. sounds like a great idea, but I am getting the idea from reading on the forums that it is not easy for most people to find someone like that.  It seems that contractors come and they go.

Thanks, @Doreen Chaisson and @Loren Whitney !  Good answers to my question.

Doreen, we've done everything on the up and up with the 10 acres.  We bought it from the same person (unrelated) that we bought the rest of our property from, and it's just sitting back there growing grass, so we're fine on all that.  That's the reason we'd like to take distribution of it - so that we could actually use it for something.  On the bright side, my husband is now 56.5 years old, so we'll be able to do that soon enough....if we want to pay the taxes on it.  :-/

Loren, regarding the 20% rule, if we had the 10 acres surveyed into 2 acre parcels, could we take distribution of one of those parcels and use it, or would we have to wait until all 10 acres were distributed?

We live on 35 acres, and purchased 10 acres of it (unimproved pasture) with a self-directed IRA. If we wanted to put a rental property in that IRA, could we then pull the pasture land out without tax consequences?

@Bill Gulley , don't the wholesalers typically promise the seller a quick closing? With financing involved, it won't be very quick.

We are looking for our first buy and hold property, and we plan to use conventional financing.  Would wholesalers be able to work with us, or does the financing make it not practical?

@Chance Cooper , you can upload it to BiggerPockets Fileplace here:

http://www.biggerpockets.com/files

 @Jay S.  I agree with the others.  There's no way that tax is correct.  It's going to be close to 3%, so I'd plan on $3,750/year on a $125K building.  I'm not sure if multi-family rates are different than singles.  It would be good to find that out.

Making the 50% rule work in Texas is difficult due to the high property taxes.  If flood insurance is required, I don't think you'll get close.

As a newbie, it has taken me awhile to figure out that I can't just take the rental income, divide it in half and ASSUME that's what my expenses will be.  Rather, I need to look at it in reverse.  What will the monthly expenses be?  Can I get twice that much in rent?  If not, it might not be a good deal.  EXCEPT that in Texas, due to property taxes, the expenses will almost always come in at more than half of the rent.  It's starting to look to me like 60% for expenses might be a better target.  This doesn't mean the deal is not as good as one in another state, though.  We don't have income tax, so any cash flow you end up with will not have a state income tax applied to it.

@Quint Beniers , I'd suggest you listen to Podcast 77 with Michael Quarles. He talks about how he negotiates with prospective sellers when they call.

http://www.biggerpockets.com/renewsblog/2014/07/03/bp-podcast-077-negotiating-way-1000-wholetail-deals-michael-quarles/