All Forum Posts by: Tracey Corea

I'm in Vegas and interested as well. Thanks for the info!

Consider the closing costs and pull a reasonable amount to justify those. BUT, also consider your risk tolerance and personal financial situation. If you have plenty of emergency cash, other assets and/or a high paying job, it’s one thing. If you need the rents paid in order to pay your mortgage, be cautious. Make sure your margins are large enough that rent will cover ALL expenses on the property, comfortably, no matter what the property value is. Have reserves in case you get a nightmare tenant or a large unexpected expense comes up. 
Every persons situation is unique.
Best wishes,
Tracey Corea

Google pay is another easy one. Many choices, as stated above. You just have to set them up to auto transfer to your bank account. The tenant usually just needs whatever App it is and your email address. 

Update: We decided to keep this one for the long haul. We replaced all carpet with LVP, did all maintenance needed and put a gentleman on section 8 (with his daughter as a live in caregiver) in it. We can sleep knowing the rent will be covered by the government for at least the next year. We increased the rent to $1650 mo. and will put a HELOC on it (through our local credit union) to pick up another property. We will still cashflow $500+ a mo on this one and recover all of our initial investment. Thank you for your responses. They were very helpful. Time to go shopping...

Sorry, but I am also in the self-manage camp and don’t appreciate the implication that people who self manage do it because they are control freaks, or cheap, or too dumb to recognize “time is money”.

My husband and I hired numerous bad PM’s in our rookie days. We were inexperienced, naive and assumed “professionals” in the RE industry knew more than we did. Sadly, that is often not the case. Out of necessity, we took over our problem properties and confronted the issues. It was stressful, but we figured it out, we grew, we became professional (without the designations) and it got easier!

That said, it totally depends on the property and what your personal situation is. There is nothing wrong with hiring a good management company, or any other service provider, if it is of value to you. When I retire, scale up, buy outside my city, get sick of landlording or decide it’s time to lower my (possibly unreasonable) expectations a bit, I will find strong property management partners and be happy to pay them well. I will likely appreciate and understand them more, because of my experience.

Best wishes. Take care of your investors and tenants and you will do well.

I'm still learning how to reply on BP. I don't think I tagged properly so @Bill B. and @Account Closed please see above for my responses. 

@Dave Foster- this is a meaty response. Many thanks! Yes, my mind has had been jumbled for a few days. Putting down my thoughts in writing for the post was helpful, but your advice to look at it from a more removed point of view is perfect. 

The rent is currently $1400 (under market). It's a nice fully remodeled home, but it's a B class neighborhood, not A. We need to raise it if we hold

I have been seriously contemplating pulling the money in our primary Heloc but my husband doesn't want to pay interest until we have an investment to put it into. I love that you validated me one that one :) We had our HELOC's closed overnight in 2008, so it's nice to hear I'm not the only one thinking our equity may not need accessible in a few months. I'll gladly refi into a 30 yr fixed (and pull more if I can) when we complete our kitchen remodel.

On our investment, I'll try to get a cash out refi if we hold it and pull out 60-70%. That would get my initial investment out, give me a little cushion to hold onto and allow me to pick up another whenever the timing is right. If we sell, I can 1031 into 2 SFR's or a small MF in a cash flow market, but I think better deals are coming further down the road.

I'm going to give you a call re: 1031 specifics. We have done a few very successfully, but they were over ten yrs ago. 

Thank you!

@Mark H. Porter -I love a decisive answer. Sell! While I'll be more inclined to go with less leverage and a nice 30 year fixed, I get your point. OPM is a great way to build wealth, but I also need peace of mind and security to offset some riskier investments we have. :)

Thanks for the huduser suggestion. I will check it out. 

@Steve S.. Thank you for sharing the link to your post. You made some good points! 

Don't you think OZ opportunities are in a similar boat in regards to analysis being extremely difficult right now? I think many OZ deals aren't going to perform well through this (like commercial office and MF's). Of course, it's a longer investment horizon.   Thanks for replying

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@Bill Brandt - We have been getting $1400 in rent (under market). In 89145-Charleston Heights, remodeled in 2005 when we purchased it, new A/C units.

Good point that we have very low maintenance, no state taxes, landlord friendly laws and we know Vegas. 

Long distance investing was not our favorite and we learned some hard lessons from unscrupulous and/or lazy property managers. Not to say they were all bad, but when we took over our tenant screening and self-managed our properties, it was a lot better. 

I will talk to our CU about refi’s and reach out to my loan broker. Re-fi's and Helocs are still out there today, but we know they could go poof! 

Thank you!

My current tenant is buying a home and vacating in 3 weeks. I'm weighing whether to sell and 1031 exchange into a different market, or stay the course and get a HELOC in place as soon as we turn it over (in preparation of buying more). I'm going back and forth and would love some of the seasoned investors to weigh in.

• -Purchased in 2015. We fully renovated. All in for $160k. CMV $300k
• -Location- Las Vegas NV
• -4 bed, 2 bath. We could add another bathroom to make a master suite and add a 5th bedroom if market appreciation was expected, but don't think now is the right time for that. 
• -We are in our 50's. We were heavily invested in the early 2000's (10+ properties-small MF and SFR's). We went through the 2008 crash and those scars and lessons learned have stuck with us. It made us extremely conservative with RE, though I wouldn't call us risk-adverse in our other investments. We currently have alternative investments and money in the stock market. So, with future RE investments preservation of capital is important factor. I thought this info might be helpful in understanding our mindset, especially for the seasoned investors on BP.

Keep or Sell? The arguments going on in my head...

• Keep: We own the property outright. I sleep better without the bank involved.
• Sell: Using NO leverage at a time when rates are historically low. We should be expanding our holdings and taking advantage of OPM.
• Sell: We believe Las Vegas will take a bigger hit than many other markets

• Keep: We already have capital to put to work, so we can ride this out.
• Sell: If we can put that capital to use in a more stable market or in a MF or a syndication deal, it could provide more safety, upside potential and passivity
• Sell: More cash to get into bigger deals

• Keep: Selling fees, tax consequence if we don’t find a replacement property in a 1031.
• Sell: We can 1031 exchange to avoid the tax consequences. But, we would only have 45 days to identify a new property. We think that puts us very early in the cycle for purchasing distressed properties.

• Keep: I hate to sell an income source
• Sell: “Buy and hold” is not always the best choice. There is nothing wrong with taking profits and redeploying it elsewhere. Do you want $1400 mo. in rent or $300k in cash
• Question: Can we turn that $300k into twice the rental income in a different market?

• Keep: Being an out of state landlord can be a PIA. We have more control in self managing in our own city
• Sell: We did it in the past and can do it again, from a much wiser position. We dealt with a death in one unit (hazmat is messy and expensive), a house fire, a criminal POA management team on a 4-plex development (legal fees are expensive), a swat team raid leading to a tenant getting thrown in jail for mail fraud, evictions and all the usual landlord issues. We had to fire numerous bad PM's as we learned the ropes, but we survived and we learned the value of good property management!
• Sell: We can get into a syndication or partnership deal and take self managing off our plate entirely

• Keep: There will likely be more renters in the next few years. We’ve had 3 great tenants in this property, which has made for easy passive income over the last 5 years.
• Sell: The policies rights now make finding a highly qualified tenant crucial. Permanent job loss in Vegas is very real and stimulus can’t go on indefinitely.

• Keep: Get a HELOC to buy when the deal is right and hold onto this property.
• Sell: Tight lending guidelines right now. Banks aren’t readily offering cash out refi’s. We are in the middle of a remodel on our primary and need to turn over rental in a few weeks, so we are at least a month away from applying. We don’t know what banks will be offering then.
• Sell: Banks can freeze HELOCS without notice. We dealt with that in the 2008 crash. Makes me wonder if we should we pull the cash out of the HELOC we currently have on our primary.

What would you advise in our situation?