All Forum Posts by: Vik C.

Take a look at this thread.

http://www.biggerpockets.com/forums/22/topics/9188...

Hi Bill,

Can you elaborate a bit on liability and losing everything? I was under the impression that a good umbrella/landlord insurance policy would protect  you from personal liability against bad things happening? What kinds of things can happen and NOT be covered under a good comprehensive policy?

Wow this is quite a sobering story. 

What kind of background check did you do when they applied for the apartment? Are there steps that landlords can take to minimize the change of this happening to them? Is it reasonable to never allow any tenants with prior evictions/legal issues?

William,

Thank you for the fantastic summary and beginner-friendly approach you took to explaining that. It makes a lot of sense. It sounds like from what I am hearing that the PM does not have much incentive to not put in the best quality / most-likely-to-pay / least-likely-to-wreck tenants. I was more worried originally that turnkey companies (defined as those who buy, rehab, market, sell, manage) would get more benefit from the sale than from the PM and therefore may not have the exact same alignment of interests as the new owner. I think I was wrong in that concern, but I am glad I asked since these were very educational answers.

Cheers,

Vik

I am trying to get to $60K in "passive income" (usnig PM) within the next 6 years. I even put a calendar entry in Outlook to remind me to retire that day. You know, just in case I forget.

Will be harder to do since I will have to do out-of-state investing exclusively. Basically that assumes a 10% ROI on each dollar invested and $600,000 invested by the end of the 6 years. That's hard, but not impossible, I think...

Hi Dean,

I have a few follow-up questions since I am new to this. You mention the idea is hugely flawed, but aren't there landlords who do a lot of the rehab/tenant-screening themselves but who still use a PM just for maintenance, etc.? What is the key difference between those situations and this one? Do TK companies typically take on some kind of liability for the in-place tenant, and if so, what are they on the hook for as compared to the owner? I was not clear on what guarantees/risk-sharing TKs typically provide to the buyer.

Thanks

True, but perhaps 600 with no evictions or criminal history is doable.

Thanks for all the feedback. I suppose the right approach here is to speak to each TK company and understand their screening process and ask to see the credit report/application of the tenant already renting the property. At some point you have to bite the bullet and trust your partners, but not before you do as much due diligence as possible. I've heard horror stories about TK investments out-of-state, so I'd like to take as much precaution as possible to ensure a good credit history. At the very least no evictions etc. Would even prefer to speak to their former landlords for reference. While a TK may also have the same interests as me in mind, their money-at-risk is so much lower than mine and their portfolio so much more diversified that there is no way they would have the same standards and risk concerns as I would. It wouldn't make sense for them to.

I hope no one takes offense to my stance on the matter. I love the idea of turnkey investing and still plan on using TK to venture out-of-state. At the end of the day though, best to do my HW and be safe rather than be sorry because I trusted a stranger and didn't take every precaution.

The best daily spenders are the Barclays Arrival Card and the Fidelity Amex. Both are 2% cash back, unlimited, all categories. Fidelity Amex has no annual fee, but it is an Amex which is not accepted everywhere. Barclays has a fee, but is MC/Visa, forget which one.

These are bar none the best cards out there for big spenders. 

I do not think there are any 5% cash back cards for home improvement that do not have really low caps for max spend.

If you want to play the "sign-up bonus game" for amassing tons of miles, that is a different story and the answer is "get all the cards you can and cancel them responsibly". But I think you are asking which single card is best for overall spending.

BTW, FlyerTalk is a much better place to ask this question than this forum.

Most people on this forum will tell you to avoid the 401K because it definitely sucks up capital that could be used for REI.

That said, for the average person who is not involved in RE or who wants to maintain a balanced asset allocation and be involved in equities/fixed income, a 401K is a no-brainer, particularly if you get employer-matching which is literally free money.

Moreover, if you are interested in retiring early, you can always do a 72t to get your income a lot sooner and penalty-free. You can also use IRAs to invest in real estate.

If you are completely focused on real estate, and if your employer offers no match, the 401k is less attractive.