All Forum Posts by: Tim Hoffman

In my opinion always go for cash flow. Appreciation is NEVER guaranteed and betting on it is a like playing a lottery ticket. Sometimes you win and sometimes you lose. Cash flow is also never guaranteed but if you initial figures show positive cash, it is unlikely to take money out of your pocket.

Iif you are deciding between deal 1 that is break even cash flow but is likely to appreciate and deal 2 that is likely to make $200/mo but not appreciate, go with deal 2. What if taxes go up by $50/mo in both circumstances? Deal 1 takes money out of your pocket and deal 2 still puts money in your pocket. What if the market tanks again (remember nobody thought it would happen in '07 / '08 but it did)?

Point is cash is spendable now and appreciation is a what if.

Good luck and if you are ever in Rockford give me a call.

Welcome. If you are ever in the Rockford area give me a call. Investing for 15 yrs and still loving it.

I bought an ozone machine a couple years ago and it has worked wonders. Dog smells, grease smell, smoke, you name it the ozone machine can help neutralize it. You need to put the ozone machine on a timer and shut the house / apt up, turn the furnace fan on (but flame OFF). Time using the ozone machine depends on size of unit and once the machine is off you have to wait 8 hrs before you enter.

For the carpets, a good carpet cleaner can put down an odor neutralizer. My fear would be that if they were that heavy a smoker there would be nicotine built up on the walls and ceiling. That you will have to either wash off (time consuming) or repaint. If it is REALLY BAD, you may have to prime with Kilz or some other primer before you paint.

Get an Ozone machine now if you plan on being in this business for a while. Good luck

I was a CPA in a prior life before Real Estate (15 yrs in the RE business and loving it). Any tax info I offer here is based on my out of date knowledge and should not be considered advice. I offer my experience based on MY 1031 exchanges for discussion and thought provoking only.

Most people do not use a 1031 exchange for many of their transactions for a variety of reasons. 1) There is a cost of doing a 1031 xchng that you do not have with other transactions. Part of the 1031 is you are NOT ALLOWED to take possession of the proceeds of your sale so you have to hire a company to act on your behalf, $$$ 2) You have a limited amount of time to identify and then close on the replacement property or else the initial sale becomes a taxable transaction. 3) Finding a replacement property in that timeframe may force you to overspend $$$ :-( on the next property(s) just to get in done. 4) The tax paid now is less then the associated costs of completing a 1031 and the possible cash out refi. 5) Fear of the unknown.

If you want to create wealth for multi-generations you could 1031 all your small investments into one real large one (SFR and duplexes into an apartment complex) then when you pass your heirs will get the asset at its stepped up value (value on the date of your death) and could sell it at that price with no tax owed. (That is assuming you fall within the estate limits for asset value and the title to the property is held correctly.)

I have used a 1031 to move from 1 building (sale) into 2 (purchases) when I sold a building that I had improved and then bought 2 run down properties.

I used a 1031 to move from an appreciated SFR (sale due to fire) with a mtg into a less expensive free and clear SFR.

I sold (am selling) on contract a property that was purchased using a 1031 exchange and now I am recording the capital gains via an installment sale. This was I spread the tax affect of the sale over many years into bite sized chunks. A bit more complicated but not anything your local CPA cant handle. (Do not really recommend going to a chain tax preparer with a 1031 or installment sale transaction to be accounted for.)

If you are planning on doing this again (and again and again.....) try and work a relationship that will get you the best price and the best delivery options if you stick with one dumpster vendor. I also have a "scrapper" that has a stake side truck with a dump. He will pick up smaller project debris and his crew loads it from the drive or garage. One job he even took out of the basement. It is all about relationships. Good luck.

Welcome to BP you little sponge. Read, read, read then ACT. No deal is perfect but one thing is for sure. You will not learn or make money just thinking about real estate.

Good luck.

Reading a book about raising chickens in the backyard that I got for Christmas. I love to garden (flowers and vegetables) and raising my own eggs and roasters sounded like a logical extension. There is more to life than making money and real estate. You have to relax somehow.

To find a realtor who specializes in investment property you need to do a few things.

1) Attend the local REIA or Investor group. There are usually realtors there and if they are there, they are looking to work with investors.

2) Go to the local Realtors Association and ask for the top 3-5 realtors that work with and close investment properties. If they are not able to help you then start calling the local agencies and ask to speak to the managing broker and explain your situation to him/her.

3) Once you find a realtor that you like to work with, STICK WITH THAT REALTOR. You will build a relationship that will pay dividends long into the future.

Good luck.

First, I find it interesting that so many IL members have responded. Maybe a result of the world we live in here.

I have been an investor for 15 yrs, own 65 SFH and the first chance I got to pay off my primary residence, I DID IT. Nothing beats the feeling of going to bed every night knowing your castle is yours. Could I have made a few extra $$ by using that money on another rental, sure but money is not everything. You have the cash now, are managing a rental from long distance and that home will be there when you get back and you can then get a HELOC and start / continue on your RE investing career.

Good luck and stay Safe.

Try small community banks that will hold the property in house (as opposed to sell it to Fannie or some other buyer). I use a small community bank (4 total branches over 3 communities reaching a total close to 400k-500k people.) They are down to 70% LTV but no real hassles and since I have been with them my entire RE career, I basically have no limit on how much they will give me. I wouldn't use a Big bank unless you put a gun to my head.