All Forum Posts by: Todd Richmond

A few things to consider:

1) Rents are generally higher in Fort Collins for the same house.

2) Your brother already has a loan on the Fort Collins house at owner rates.  Not sure what rate he got 5 years ago, but my guess is it is probably lower than what he can get now as an investor.

3) If he sells his Fort Collins house, he will need to pay realtor fees, perhaps as much as 6%, which can significantly impact his purchasing and leveraging power going forward.

4) He might try renting out his Fort Collins home first and see what he can reliably get for it.  He could rent for a while in Loveland before he makes a final decision on whether to sell in Fort Collins, and what to buy in Loveland.

Personally, I would go the route others suggested and keep the Fort Collins house as the rental, and use a HELOC or other assets to buy his new home in Loveland. One thing to be aware of though is that rental income from the Fort Collins house will not show up until the following year's tax return, so that may cause issues in qualifying, depending on the lender. The advice to start with a lender and determine the possibilities first is good.

Good Luck!

Hmm.  A half joke.  My point is that with real estate I have some control over what happens to my investment, and therefore I can use that control to mitigate my risk.  With stocks and many other investment vehicles, I have no control whatsoever over how those investments are perceived by the market.  An analyst can downgrade my stock.  A CEO/CFO may have been lying all along about the real financial state of a company.  A central bank may make statements or pursue policies that adversely affect my investment.  A company may be sued, whether justly or unjustly, that may cause my investment to tank.  The list goes on and on.

You may make the argument that you can diversify to the extent that the risk is mitigated, and to some extent that is true.  But there are sometimes overarching events that can affect the entire market, and I have absolutely no control over that. 

In addition, the market is a very fickly lady, and much of the supposed value of any given stock is based on perception.  If something is perceived as valuable, then that is almost a self-fulfilling prophecy, until suddenly it isn't, merely because the powers that be tell us that it is no longer as desirable as it once was.  On a daily basis literally billions of dollars are won or lost merely on perception.  So yes, to some extent I see those types of investments as funny money. 

@Robert Herrera, @Brian Eastman

Ah yes, the self-directed IRA thing. I have read an entire book on that topic, and I still feel the need for more enlightenment. I have decided that it is just one of those things that you need to experience firsthand before coming to grips with it.

The way I understand it, it is advantageous to set up an LLC as the controlling entity for each property you purchase through your IRA. Does that not protect you from someone getting at the rest of your IRA?

Also, do you recommend an LLC for each property regardless of whether it is in an IRA or not? I have been considering doing that, but am a little unclear about how to move money between the different LLCs I would have. For example, I might want to use cash flow from a number of LLC properties to pile on and pay off one particular property. Just wondering what the consequences of doing that might be with LLCs might be, if any. Thanks for any insights you might have!

Howdy @Dave Visaya, thanks for the moral support.  Glad to be here!

Hey @Brandon Turner, thanks for the warm welcome and great advice.  I've got my Keyword Alerts all set up.  I see that you are quite a prolific poster here at BP, and I will be taking the time to read your book. 

Just curious, but you mentioned as one of your goals to own 100 units cash flowing $100/month each.  Is your market difficult to cash flow?  I only have 3 properties at the moment, but I try to target $500/month cash flow.  In that respect our goals are similar in that I am trying to get to 20 properties, i.e., $10,000/month cash flow.  Obviously, I have a long way to go,  but I am excited about the journey!

To me, it is called Real Estate, because it is REAL.  You can drive by it.  You can look at it.  You can touch it.  You can go inside.  Barring catastrophe, it will always be there.

I also have stocks, 401Ks, and IRAs, which I call Funny Money.  It is just a number in a computer somewhere, and there is not really anything real behind it at all.  Someone can say the wrong thing in China, and I can wake up the next day to 25% less than what I had the day before.  Or worse. 

Even more commonly, I have been hit numerous times with stocks by fraud.  Everything is painted rosy, until one day someone finds out that it isn't.  Just ask the folks who invested in VW.  40% drop in just a few days.  I'll take the REAL asset every time.

Good for you Jeff!  Congrats on moving from a sideliner to an investor!  

It takes courage to make the jump, but keep it up and soon you'll be an expert at it.  As I have talked to people about real estate investing, I find that the biggest hurdle that most people have is fear.  But, the fact that others cannot get beyond their fear puts you in a position to succeed where others can only dream!

I will second (or third) the Harbor Freight option.  For tools that I need to depend on often, or need to have a high degree of accuracy with, I will go ahead and buy the more expensive options.  But if I am just going to be using the tool a few times, then I will get the HF tool 9 times out of 10. 

That said, I now need to buy a different house that has a huge workshop for me to store all my tools!  Yes, eventually storage does become a problem.  My 3 car garage fits exactly 0 cars in it right now!   ;)

Thought I would introduce myself to the great members of BP!  

I have been investing off and on for about 8 years now, buying and selling, doing rentals, lease options, fix-n-flips and whatever comes along.  With the housing market being so hot in Fort Collins and NoCo, I am looking more at the buy and hold strategy.

I love the passive income from rentals, and have done well with appreciation. In March, I completed a 1031 exchange out of a mountain property into two SFH rentals in Loveland (new construction). I am hoping to purchase at least that many more before the end of the year through a self-directed IRA and other means. My long term goal is a minimum of 20 rentals, which should enable me to fully replace my income as an electrical engineer.

I have a large and busy family with 8 children that are ultimately my greatest success in life, irregardless of how well I do or do not do in real estate.

I have 3 sfh that I manage myself.  Hoping to double that this year.