All Forum Posts by: Tyler Mullen

What's wrong with adjusting the rent schedule such that 12 months of rent is due during 8 months, March through October, similar to how teachers were once paid during the school year and not the summer months?

Eastside FIRE Club Personal Finance & Investing will host a meetup focusing on Real Estate Investing and its contribution to FIRE, on December 23rd at 7pm at the Capital One Cafe on Bellevue Way, DT Bellevue Washington.

Topics:

-Meet other real estate investors active in this area.

-Common hurdles to getting that first rental onto your balance sheet and producing returns.

-Get guidance, advice & the motivation you need to buy a property & move towards FIRE ASAP!!

-Pitfalls to avoid and advantages to look for in order to save yourself cash & grief!

-What other avenues within REI are people using besides rentals?

Share with the group... what you are working on now & what, or who, are you looking for next.
Parking in Lincoln Square; it has been free thus far.

We look forward to seeing you, come say hello!

Have you considered partnering with this person but from a debt perspective instead?

You should be able to record something against title for a loan to him at x% for y months... then you can see what it's like to work with him, if he really works the same no matter whos money it is.  Finding the right people to work with, people that live up to their commitments and live the morals that they preach, that's the key.  Integrity is everything.

If the loans go properly a few times, you get your interest, paid back in full on time at the end... don't end up foreclosing... then try partnering with equity instead of debt &/or try bigger deals.

In the P&S contracts that I'm familiar with there is a requirement for EM to be delivered within 24 hours of mutual agreement. So when a buyer doesn't meet this commitment they are sent a written notice they failed to meet that term of the contract and then I sell to someone else.

afaik without a promissory note or EM deposit, technically there is no contract as they have not given any "consideration".

https://www.law.cornell.edu/we...

If I were selling I would want to know that the buyer could close, whether or not they plan to "flip it". 

What if your plan fails, is plan B to back out and do you expect the refund of your EM?

Also, not an attorney, not legal advice, but...

To make sure I understand, are you describing a plan to cut the listing agent out and facilitate a resale/sale/assignment of your contract prior to your closing?  That could be tortious interference with a contract, the selling agent will very likely still be expecting their commission.  A listing contract that doesn't include something like, "... Broker has the complete and exclusive right to market the property for sale..." is quite rare.  You're not party to the listing contract, are you?

@Filipp Laptev Or you could be looking for help, services, expertise from companies like Blanton Turner or Century Pacific LLP, not so much a mentor specifically. Sometimes it's better to contract to acquire the info you're looking for rather than trying to find a mentor and/or teach yourself how to do it on your own.

Do a little market research around the neighborhood to find out rental rates for various properties and how rents differ based on age, condition, parking, neighbors, amenities, view, etc.  There are probably more rentals around than you might imagine.

My advice is don't go all in on one thing without a fallback position. You could initially plan to sell your new house in 2-5 yrs, maybe that depends on how much/little it grows in value. You might change plans if you find out you can build an ADU... build some flexibility into your plans which should always include giving yourself extra room on your financials. The flexibility is what lets you take best advantage of whatever situation presents itself in your 2-5 year time frame.

I suppose it depends on how much REI one is talking about, who needs/wants a mentor and what makes a good one. I worked for years in various roles for what's known as a "Family Office" that ran their own portfolio with lots of help from employees and contractors. They started long ago acquiring and gradually transitioned to consolidating in a couple geographies and then managing their holdings for about 30-40 years before selling out for $140 Million. When they started, the patriarch of this family did everything, as they grew they had to take on employees to help manage, CPA, legal, administration, accounting, payroll, for maintenance & repairs, landscaping...

I don't know but would assume they used agents during their purchases.  How that agent factored into the overall success, probably not that much.  I believe the gentleman I'm referring to would say, "I am my own mentor, for better or worse."

There are strong opinions in this area, what's right for you might not be preferred by others so you have to find your own fit.  I personally don't elect to go all in on any one thing so the amount that I have allocated to what is currently "off limits until age 59.5" is not enough that it hinders my ability to participate in REI opportunities, yet it is enough to satisfy some personal asset allocation goals by taking advantage of the relative easy with which these funds can be invested abroad.

A couple other points to consider:

No one can guarantee the rules, tax rates & tax treatment of "pre-tax" (or ROTH) assets/income, nor REI, 20 30 40 years into the future so in another sense it may be wise to diversify there too.  You're also not required to take RMD from these "off limits until age 59.5" accounts iirc until 12.31 of the year in which you turn 70.5.  (No RMD for ROTH until after death)  Also, you are not required to take the RMD in cash, you can transfer assets out of the account if you don't want to sell.  If you sell and take RMD in cash there's no requirement that you spend it on consumption either.  You can save it or invest it in something else.

A pitfall I have seen some fall into is waiting too long into retirement to liquidate REI.  I've had clients with $5M or more in REI but no cash and their properties have become dilapidated because the income produced went towards ever increasing costs of personal & spousal care... over the years it went up to $3k, $5k, $9k, $15k per month.  Once this goes on too long you start to spiral into lower income from your REI caused by deferred maintenance.  Push that even longer and the asset value could start to plummet.  You would not believe some of the properties I have been involved with selling... the discounts and what they are worth just 5-10 years later.  This problem tends to creep in at first and then a major event typically kicks cash consumption into high gear and then poof, the client is all REI in just months!

I've also found that a lot more people are around to assist those in their twilight years with finances that are more liquid than REI.  Part of how clients got into trouble was they had no one to help them once they couldn't manage the properties anymore.  Another thing to consider when planning.  It's quite easy to schedule with a FA to transfer cash to your account as needed for you care costs, they just sell a little more and wire the money.

Remember not to do just a numbers comparison, try to think through the entire process, down to the rubber meeting the road, how will things actually work for you by that time?

Happy investing!

Tyler Mullen, CFE

I believe Cozy allows CC payments and the tenant pays the fee, maybe worth a look?