Profile picture for JimSulli456

What is more important to you?

Every investor has different motivations behind their investing style.  Some want the tax advatage, while others just want the cash on cash.  How do you qualify your investments?  Do you run all of the numbers, or go on a hunch?  Do you have a system?  Most important, who is on your "team"?  Have you set up a team of Attornies, CPA's, tax advisors, Realtors, property managers?  I'd like to see where this goes.  We can always learn something from others.

 

 

  • February 11 2008 - US
  • 1
    1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (39)

Profile picture for 2 Big 2 Fail

Most investors today have a team of bankruptcy attorneys.  That is all they need.

  • February 11 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for JimSulli456

Oh GW...how bountiful your knowledge.  Good luck in all of your ventures.

  • February 11 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for benjaminbenjamin

GW.... seriously there are lots of things that people do that i disagree with, but i don't join a forum to just run around and make stupid comments that no one cares about.  Yes there are risks and everyone undertands that, but renting a house out with 30K equity for 950 per month when the loan is 700 per month hardly seems like i am headed towards bankruptcy.... Have you ever tried to do productive things with your time...

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I would not bother renting out for the extra $250 a month. With the extra insurance on the house because it is a rental and the extra cost to put the ad in the paper, repaint, or clean up keep track of a lease and any issues that may come up (and there are always issues) It would not be worth my time.

 

 It is never as simple as getting just above what the monthly mortgage is.

 

 

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

For now it would be better than selling though just thought I would clarify.

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for 2 Big 2 Fail

"but renting a house out with 30K equity for 950 per month when the loan is 700 per month hardly seems like i am headed towards bankruptcy...."

 

Oh really?  Did you forget about property taxes?  Upkeep?  Homeowners insurance?  HOA fees?  Vacancy periods?   Good luck renting out that house.  Tell us how it worked out 6 months from now. 

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for benjaminbenjamin

the 700 is with taxes, ins. etc..... everything combined... the house is 3 years old, so i am not too worried about it.....

1.  Average rental in this neighborhood is over 1K, so i am actually going under

2.  If in 6 months i tell you how great everything is going, will you shut up???

  • February 12 2008
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Even RE agents charge one months rent to find a renter. That isn't even to manage it but just to get some one in the door because that is about what it costs to do it correctly.  Unless you aren't doing credit checks then you can include the cost of eating it when they don't pay or the cost of a legal battle.

 

I am not trying to "be right" I am just saying that what you are describing is not going to yeild a return for the amount of time applied. You would be better off financially taking all that time and energy and get a minimum wage job.

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for JimSulli456

bubba...An investor usually takes these things into account.  It's much more complicated than how you are explaining it.  Real estate happens to be a favorite investment because the return can be so great.  In order to minimize risk, investors do an investment analysis which takes into account all of the things you mention.  When I do an investment analysis, I take into account all expenses, mortgage, depreciation advantages, pricipal reduction, vacancy rates for the area...etc.  From these numbers, I can come up with different rates of return based on the motivations of the investor.  So no, it is not as simple as "getting just above the monthly mortgage", it is about weighing all of the risks and benefits, and coming out on top.

  • February 12 2008
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Good intentions with the OP Jim, but it has become almost impossible to have an informative discussion here anymore.  Over run with people who would rather argue for no reason and throw in opinions on things they are not educated in rather than actually have productive discussions.

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

"It's much more complicated than how you are explaining it. "

 

Jim,

 

Isn't that what I said to the guy who is renting for just above mortgage?   I wasn't trying to write a book just saying there is more to it than the whole " my mortgage is less than rent" theory. But thanks for going into more detail.

 

Didn't think it looked like I was going for an end all be all list of RE investment. Zillow only allows so much to fit:)

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

"It's much more complicated than how you are explaining it. "

 

Jim,

 

Isn't that what I said to the guy who is renting for just above mortgage?   I wasn't trying to write a book just saying there is more to it than the whole " my mortgage is less than rent" theory. But thanks for going into more detail.

 

Didn't think it looked like I was going for an end all be all list of RE investment. Zillow only allows so much to fit:)

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for JimSulli456

I just re read, and at the time you posted, he did say that the loan was 700 and the rent was 950.  So I stand corrected.

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Along the investment style OP I think that depends on more of what you are investing in. Is it  rentals or is it flipping. Maybe that would be for the responding part to say what angle they are coming from.

 

Which type of investing would determine who you would want for your "team".

 

 

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for JimSulli456

I'm sorry, I don't think I understand what you are asking.  Let me see if this is right.  Are you asking if there are different "team members" to the two investment styles you mentioned.  If that is the question, than I would say yes.  You most likely wouldn't need a property manager, or eviction attorney when flipping.  In flipping, some people have a "foreman" that would facilitate all of the repairs...that would probably replace a property manager.

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

No I was wondering if there was a specific type of investing you were asking about because you didn't specify but I guess I wasn't clear.

 

A RE attorny who could handle both purchases and evictions would be key. You could be buying a flip that has a squatter or a tenant whose lease is nearly expired (that happened to us) we didn't use our RE attorney but the piece of mind is nice to have a decent one who does both is nice. 

 

 

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for JimSulli456

I agree about the attorney, a good real estate attorney is like so clutch.  I see what you are asking.  I was looking for both of the styles you've mentioned.  Basically, any style, and how they accomplish, and qualify properties.  Some invest in TIC properties now, which is getting more popular for 1031 exchanges. 

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I am not at the point where I would be confident with a 1031 exchange, but I could see where a super knowlegable CPA would be handy. Also a young one so they'll still be around to help calculate all those deffered taxes.

 

 

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for JimSulli456

Oh yes, very important.  If they are not young, they should at the least keep a great file, and also be able to advise you on what you need to do when you change your basis in a property.  Very important for the tax benefits part of investing, can't say enough about them.  I have a great one, I couldn't live without her.

  • February 12 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

There is no reason not to feel confident about a 1031 exchange, bubba. I encourage you to do a little homework and contact a Qualified Intermediary (QI) with any questions or concerns. You can start at the website for the Federation of Exchange Accomodators (FEA) at 1031.org.

  • February 13 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for d_Random

Deduct 25% of the rent for expenses and PITI there is actual cash flow at the end of the month.
When you apply for a rental property loan, lenders only count 75% of the rent towards your income. I think they have it figgured out.

  • February 14 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for JimSulli456

Random...the 25% that you speak of is only a rule of thumb when looking for income producing properties.  It's called Operating Expense Ratio.  25% is a great rule of thumb, but I've run into properties that have a 38-40% opex ratio.  Also, principal and interest is not counted in that, only Taxes and Insurance.  Your net operating income is never figured with principal and interest deducted.  That is a seperate category.  When principal and interest is deducted from NOI (Net Operating Income), it is called Cash Flow before taxes.

  • February 15 2008
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

what's your marketing plan?

  • February 19 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for JimSulli456

My marketing plan?  Do you mean for my investors?

  • February 19 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for d_Random

Thanks for the info Jim! Good to know. :)

  • February 19 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Jim Hi... yes for investors.

  • February 20 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for JimSulli456

My marketing plan is more of a "networking plan".  I just place myself in situations to talk about real estate investments.  As that happens, you find more and more investors, who know more investors.  You start showing them that you can "make them money" (which is the only thing they want to hear), and you can start working with them.  That's my "marketing/networking" plan in a nutshell.

  • February 21 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for designer08

My motivation of course is selling and cashing out fast.  The tax issue, as far as capital gains, isn't so bad, its much lower than years before.  Thats why I must carefully choose the right flips.  I definately run the numbers and do the due dilegance.  Also part of it is gut feeling and the potential of the flip.  I am a interior designer by profession, so I can see a lot of potential in properties.  My team is basically, my wonderful contractor, my accountant, my RE attorney, mortage broker, my hubby.   I rarely use agents, most of the properties I find are just by talking with people, needing to sell for whatever reason.  Business has slowed, but I am still making a decent profit, about $20k-30k, per flip.  I finance my own flips, I usually pay cash for the home and improvements.  The problem most investor's get into is their carrying costs.  Having to pay a mortgage, taxes, utilities and insurance every month you have not sold that property, kills your gains.  Fortunately, I am able to sit on the property and I am not desperate to sell, since I am not paying a mortgage every month.  Of course I want to sell ASAP, but it won't kill me if I don't!  I am still flipping and making profits, but its slower.  I don't do rentals, I eventually want too, I am just building up my cash position to buy several, down the road. 

 

cheers!

  • February 21 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for JimSulli456

Awesome post designer.

  • February 21 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for jpongracz

No flipping here, ( motivation ) investors have different ideas about this word, fast cash, flipping, tax issues or renting for long term. In todays market, investors who flip get burned, real bad, real quick, you have cash good for you, but don't forget about long term. Tax issues,  long term gains means nothing, my wife and I earn too much. Fast cash, one or two hundred bucks a month on a property, minimal profit. Long term is the ticket, my wife and I started in 2001 with 40k, today our 5 properties are worth over 1.1. I hope in 15 years when we retire, we'll be on a tropical beach drinking Miller Lite's. Motivation's in my last sentence.

  • February 22 2008
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

  1. 1
  2. 2