All Forum Posts by: Tom Wallace

Keith, fyi, you have described my situation accurately in your post above...

ie. I have lived in the home for the past 17 years. I have never rented the home out before. I plan to rent it out within the next 2 months. I plan to sell the home within the next 3 years...

Jimmy, not sure about South Carolina but in New York State, the amount you pay for property tax has no relationship to whether the property is owner occupied or investor owned and rented out. It is based on the market value of the property. In terms of insurance, a landlord's insurance policy is slightly more expensive than a homeowners policy. In my experience, maybe 1 1/2 times more expensive but not 3 times.

Anyone have a good source for an insurance company offering good rates on Landlord's policies and /or blanket liability insurance policies? Maybe somebody that specializes in these products?

Thanks Dave and Steve. Very informative.

Tom

On a buy and hold investment strategy, what percentage of positive cash flow/profit do you look for on any given deal? Taking the gross rents received on any given property and then deducting your expenses associated with that property, (cost of any financing, real estate taxes, insurance, maintenance), what is considered a good percentage to have. What would be a minimum percentage?

Thanks,

Hi all. Want first to say how much I appreciate Bigger Pockets and the wonderful advice I have received here..

I own 3 rental properties at this point. My wife and I have lived in our personal residence for the past 15 years. I bought the house for $80000 and now it is worth about $170000. I have put probably $15000 into the house. I am the only one listed on the deed for the house.

As part of our plan to accumulate enough rental property to generate sufficient monthly cash flow to in order to retire (we also have other non real estate investments), we are planning on renting out our personal residence and moving into our next project property...This will allow us to keep the owner occupied financing that I have had in place on the house (I have checked my mortgage documents and I am in the clear to do this), intact and provide some nice cash flow that we can put to use in renovating our next project house.

I do not want to lose my one time capital gains tax exemption on my principal residence. In order to keep that, will I need to either sell that house within the next 3 years or move back into it again and live there for 2 years before I sell?

Any other advice/thoughts relating to this plan would be appreciated.

Thanks,

Tom

George, what I have done successfully on the last couple of houses that I have done is to watch Craigslist for kitchen cabinets. Many times when a homeowner is remodeling their kitchen, they will sell their existing kitchen for very little. I have been able to purchase complete kitchens, - cabinets, sink, faucet, counter tops, and all appliances for very little money. I have had to relocate a window or two to make it work but on a complete renovation, I plan on doing that anyway. If the cabinets have not been removed yet, make sure you tell the homeowner that your offer is contingent upon the contractor carefully removing the cabinets. They are usually focused on the new stuff and might be too concerned about keeping your cabinets pristine.

David, I would rather not mortgage the rentals because the rate would be so much higher. Also, my goal is to move out of debt as quickly as possible...

I currently have 3 single family homes completely renovated and rented out. I own these free and clear. I have a low interest first mortgage and home equity loan on my personal residence. I use the home equity loan for cash when renovating properties. I am thinking about renting out my personal residence in order to more aggressively purchase additional properties to rehab and rent. My goal is to have 6 or 7 properties total within the next 4-5 years. I plan to move into my next project house while the rent from my personal residence is paying the mortgage. I have checked my mortgage documents and they state that I must live within my personal residence within 6 months of signing getting the mortgage and for at least 1 year after that - both of which I have done. I don't want to lose the one time income tax exemption on my principal residence so I will probably sell it within 2 years.

Looking for opinions/thinking as to whether or not this is a reasonable strategy to pursue in order to "fast track" my real estate investment strategy...

Ok, so if I form a single LLC, do I need to transfer title of the properties to the LLC?