All Forum Posts by: Tom C.

Good properties get good renters (if you require it). Bad properties get bad renters and you have little ability to require much better.

I think it's mindset/discipline/expectations. You need to be able to walk away from a deal or go full bore into a deal. Your smarts tell you which to do. Successful people treat the deal as a business transaction to maximize profit. They understand the cost of tying up capital and the value of of a quick exit. Finally, the really successful really set a higher bar for the deals they pursue. In short, some are swinging for the fence and others swing for single/doubles and some sit in the cheap seats. Both swinging probably achieve their goals, but the one hitting homers gets the deals that people like to talk about. Which is more successful? That's hard to say, I tend to think the only one who fails is the one sitting in the cheap seats wishing they were able to play. Although, I do think some get duped into REI to make easy money and don't really learn how to win in the game.

I wouldn't be surprised if we saw 5 years of deflation. Q1 will start a national recession caused by the fiscal cliff aka broad tax increase. I also see some fiscal discipline creeping into congress, so spending should drop from their all-time highs. So in short, the private sector will have less to spend (taxed away) and the public sector will be shamed into spending less (although still too much). It seems odd to assume that assets values can rise much with a net negative to revenue across the economy. Unlike in 2007, the fed has fired all their bullets and the effect has been greatly blunted, recently. The only positive I see is that home building picked up through 2012. If that continues in spite of the economic malaise, I would be surprised. I am no economist, but I am an informed market observer who recently stayed in a Holiday Inn Express.

Zillow data isn't a comp. If I had to put a name on it, it would be "garbage."

You may want to explore what protection/benefits you actually get by having your personal residence in an LLC?

To expound, you can get the gain excluded for a personal residence for reasons of health (presume if you had to sell your house to go into an assisted living situation), relocation, and "unforeseen circumstances." The 250k (or 500k) exemption is prorated based on how long you lived there.

I would consider keeping it in your name for the duration. Depending on your facts, you can exempt the gains as a personal residence.

Seeing you are in the military, you will want to familiarize how an employer-required move impacts the required holding of the property. It may be a benefit to you and rarely is well understood.

Marc. Lock it in. The rates can't go much lower. They can get much higher.

I didn't dismiss your position in the least bit. Just your thought process as it seems flawed in my view. Shorter tenor debt is cheaper, so the deal's return would be higher. You probably value cash flow more than raw returns ( as most do ). If you weren't concerned about making your payment out of your current cash flow you would be better off with a shorter loan term. This makes even more sense in a portfolio as you can manage cash among properties.

As I said earlier, I prefer longer term financing, but I recognize there is an incremental cost to that financing. Your view of the future seems to support either viewpoint.

I would encourage you to talk to a professional on the matter. This is a good problem to have though.