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I've noticed that most of the regular posters on this site are very highly leveraged. I'm not comfortable going there and having not had ANY debt for probably 20 years, I'm not too anxious to do that. I would if I was in this landlord thing as a business but I have a full time job and I am doing this to prepare an income stream for when I retire in 10-15 years. (I'm 57 now). Our IRA/401K situation is pathetic due to everyone gaining wealth on our monies except us and if we don't do something significant we're going to be living on rice (maybe not even beans). My wife and I have lived as cheapskates our entire lives which is why we don't owe money. Our kids are in or past college so we're empty nesters now.

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Just a summary of where we're at property wise:
We own two pieces of acreage (95 acres in MI and 60 acres in Georgia) neither of which is close to us. Hunting property
We own our own home (worth $200k to $300k depending)
We have a rental about 30 miles away that we paid $33k for, put in 10k of repair and it's rented for $850 and worth 90k or so.
We have a house built 1900 that is about 6 miles from us and should rent for $625 when it's ready. We paid 25k and will invest $5000 to prep it. It is on 4 acres which includes a vineyard of muscadine grapes, apple trees, peach trees, etc. The agricultural aspect is probably beyond our ability to manage so I may lease that out separately. This house has severe termite damage (not recent) and needs significant structural repair (under the house)and that is in process. It may be months before that house is ready since I have to fit these project into my limited spare time.
We have a small bungalow in a nearby town about 30 miles away that needs major work. It's very small though and will probably rent for about $350 but when it's done we'll probably have less than 15k in it. No rush on this one. May be a year or two by the time I get to it. It's not "at risk" because there's really not much they can take...
We're closing within days on a house only about 4 miles from us. This should convert to rental ready quickly but we're gonna have about $53k in it. Not sure on the rent but thinking something around $750. I have to do some more research. There is a very high demand in the county (good schools) and almost no SFH available. ie, none currently listed.
Because we have so many projects, I don't want to acquire additional homes that will sit empty. Thus we're interested in picking up these "already rented" homes.

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Ranchland said:   
Because we have so many projects, I don't want to acquire additional homes that will sit empty. Thus we're interested in picking up these "already rented" homes.

  You make your money when you pick your tenant. The only way I will buy an "already rented" house is if I had a tenant lined up and ready to sign a lease the day I close.

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where these houses are located, they would likely have the copper stripped if they sat vacant for long. So "any" renters will at least be security for the homes. One of the tenants has been in the home 3 years and wants to buy it. We may consider a rent to buy for them. (if we wind up with that property). Another one of the homes has a woman who was just widowed Thursday (three days prior to our visit) and she wants to stay too. So it may not be all bad...

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Ranchland said:   where these houses are located, they would likely have the copper stripped if they sat vacant for long. So "any" renters will at least be security for the homes. 
  Okay, I admit I don't have any house in detroit or any in any suburbs that border detroit, but you'd have an empty house when

1) your tenants goto work (or are they sec 8/SSI/SSD blahblabh?)
2) go on vacation, out for the weekend / holiday
3) you have turnover

BTW your situation is a perfect example of the trade off you make to avoid "debt": to have to buy cheaper houses and deal with worse tenants to get the same ROR as buying nicer houses with mortgages

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Ranchland said:   I've noticed that most of the regular posters on this site are very highly leveraged. I'm not comfortable going there and having not had ANY debt for probably 20 years, I'm not too anxious to do that. I would if I was in this landlord thing as a business but I have a full time job and I am doing this to prepare an income stream for when I retire in 10-15 years. (I'm 57 now). Our IRA/401K situation is pathetic due to everyone gaining wealth on our monies except us and if we don't do something significant we're going to be living on rice (maybe not even beans). My wife and I have lived as cheapskates our entire lives which is why we don't owe money. Our kids are in or past college so we're empty nesters now.
  With leverage you are transferring risk to the lender. If shit hits the fan you can walk. You will certainly still lose, but you won't lose it all. Also, at 4% or less this is literally free money that you can invest at 6% to 10% instead. Finally, you get some additional tax deductions.

Your logic doesn't stack up to me.

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Ranchland said:   I've noticed that most of the regular posters on this site are very highly leveraged. I'm not comfortable going there and having not had ANY debt for probably 20 years, I'm not too anxious to do that. I would if I was in this landlord thing as a business but I have a full time job and I am doing this to prepare an income stream for when I retire in 10-15 years. (I'm 57 now). Our IRA/401K situation is pathetic due to everyone gaining wealth on our monies except us and if we don't do something significant we're going to be living on rice (maybe not even beans). My wife and I have lived as cheapskates our entire lives which is why we don't owe money. Our kids are in or past college so we're empty nesters now.
  

Against all FWF rules, I am also very adverse to debt.  I usually pay cash for my houses.  I sleep better at night and I can be choosy with tenants because my carrying costs won't hurt me.  I suspect we all have to do what's in out own comfort zone.  A good many of my friends lost everything starting in 2008.  I was very glad I owned all of my houses outright.  Let the RED begin....

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cajundavid said:   
Ranchland said:   I've noticed that most of the regular posters on this site are very highly leveraged. I'm not comfortable going there and having not had ANY debt for probably 20 years, I'm not too anxious to do that. I would if I was in this landlord thing as a business but I have a full time job and I am doing this to prepare an income stream for when I retire in 10-15 years. (I'm 57 now). Our IRA/401K situation is pathetic due to everyone gaining wealth on our monies except us and if we don't do something significant we're going to be living on rice (maybe not even beans). My wife and I have lived as cheapskates our entire lives which is why we don't owe money. Our kids are in or past college so we're empty nesters now.
  

Against all FWF rules, I am also very adverse to debt.  I usually pay cash for my houses.  I sleep better at night and I can be choosy with tenants because my carrying costs won't hurt me.  I suspect we all have to do what's in out own comfort zone.  A good many of my friends lost everything starting in 2008.  I was very glad I owned all of my houses outright.  Let the RED begin....

  
That alone is all the justification you need.
 

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chan101qua said:   
drew2money said:   I have a clause in my lease requiring utilities. if the house has no utilities, it is consider abandoned. 

NC lets you put almost anything in your lease, even skirting the statues in some cases.  its a contract, if they sign it, it's binding.

  
Thank you guys, for the advice. Also about utility, guess what? I contacted PG&E and found that they have by-passed the meter to steal electricity. They cleaned it up so well that I had never suspected that they grew weed until the PG&E guy told me. Because of the extensive of the clean up (around $10K to replace the flooring (dog urinated) & repaint the house, plus clean up ...) I filed an insurance claim. Any advice or experience dealing with landlord insurance adjuster? Any of you guy know of a good public adjuster (people that help you with insurance claim) in the Bay Area?

  Insurance adjuster from the insurance company came, and investigate. Somehow, he ignores a lot of problem, or say that they are not covered. Is he BSing? Should I get a public adjuster?

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rufflesinc said:   
Ranchland said:   where these houses are located, they would likely have the copper stripped if they sat vacant for long. So "any" renters will at least be security for the homes. 
  Okay, I admit I don't have any house in detroit or any in any suburbs that border detroit, but you'd have an empty house when

1) your tenants goto work (or are they sec 8/SSI/SSD blahblabh?)
2) go on vacation, out for the weekend / holiday
3) you have turnover

BTW your situation is a perfect example of the trade off you make to avoid "debt": to have to buy cheaper houses and deal with worse tenants to get the same ROR as buying nicer houses with mortgages

  The metal thieves seem to Target homes that are "vacant", not just because they're empty for the day or week. Turnover times could be an issue but I'm willing to investigate renting in this part of town because of the better than average returns. At this point in time our properties are a pretty diverse mix of  home sizes and qualities ranging from 1-4 bedrooms. My wife and I decided that if being a landlord doesn't work for us we'll just sell all the properties and try something else. I'm a handyman and can do any phase of repair or construction. The only thing I use professionals for are things like HVAC or septic systems that require specific licenses. I do my own plumbing, electrical, inspections, construction, repairs and whatnot so although refurbishments and repairs are time consuming, they are typically not expensive.

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Any reason the forum changes the word Target to a hyperlink? Seems silly.

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tehlorax said:   Krazen1211 said:   Hi all.

I have a tenant who has been paying his rent with a pair of $1000 money orders. Mostly an on time guy with no problems.

When I signed him to a renewal, he brought up the idea of depositing his rent as cash into a bank account of my choosing directly. I have a couple backup Wells Fargo checking accounts that I could use for this, and then xfer into my main checking account.

Is there any risk to me with saying yes?

  Where can I buy MOs in denominations of $1k???


Post office. They deposit into ATM just fine.

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Ranchland said:   Any reason the forum changes the word Target to a hyperlink? Seems silly.
  They're getting paid for it.  Not silly, just slightly annoying to the user base.

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cajundavid said:   
Ranchland said:   I've noticed that most of the regular posters on this site are very highly leveraged. I'm not comfortable going there and having not had ANY debt for probably 20 years, I'm not too anxious to do that. I would if I was in this landlord thing as a business but I have a full time job and I am doing this to prepare an income stream for when I retire in 10-15 years. (I'm 57 now). Our IRA/401K situation is pathetic due to everyone gaining wealth on our monies except us and if we don't do something significant we're going to be living on rice (maybe not even beans). My wife and I have lived as cheapskates our entire lives which is why we don't owe money. Our kids are in or past college so we're empty nesters now.
  

Against all FWF rules, I am also very adverse to debt.  I usually pay cash for my houses.  I sleep better at night and I can be choosy with tenants because my carrying costs won't hurt me.  I suspect we all have to do what's in out own comfort zone.  A good many of my friends lost everything starting in 2008.  I was very glad I owned all of my houses outright.  Let the RED begin....

i am also not highly leveraged...3 mortgages on 15 properties, all obtained >5 years ago. it is less of an active choice than the natural outcome of profiting from flipping/appreciation (+savings from day job) and needing to put that money into something. if all i ever did was landlord, i would not have as much free cash and would likely have to get mortgages.

also...the more you own, the more complicated your loan apps become, and the harder it is to get banks to submit to the lengthy process of getting a mortgage. JME. 

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I'm highly leveraged as well. The pickings were to good to pass up so I took out any and all loans I could get, 401k, signature. etc. I makes me short on cash flow now, (I am building a business) but once they are paid off, and into my retirement I'm going to be sitting pretty. Being leveraged is not bad. You are using someone else's money to become financially secure, but it's not for everyone. Only the smart people!!!    If you do the math, you pay the same interest amount on a 30 year fixed at 5% as you would on a signature loan at 10% over 5 years.   So, it's six, half dozen, the other.   You just have to decide if you want to be a landlord or not.


A note on insurance.  Does your insurance company know you are holding vacant properties?   There may be some clause that keeps you from collecting if you are stripped.  

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I seemed to recalled someone here is even using 0% balance transfer offer from CC to obtain more RE.....that's definitely qualifies for highly leveraged in my book.

For myself, slow and steady is the way. Plain vanilla 30yr conventional loans, and now starting to dabble into commercial loan since I'm over the 10 loans limit.

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rufruf44 said:   I seemed to recalled someone here is even using 0% balance transfer offer from CC to obtain more RE.....that's definitely qualifies for highly leveraged in my book.

For myself, slow and steady is the way. Plain vanilla 30yr conventional loans, and now starting to dabble into commercial loan since I'm over the 10 loans limit.

  
What interest rates are they quoting you on the commercial loans?   Aren't they usually 5 years amortized over 20?  

I recently got a signature loan at Lightstream.com, division of Suntrust, for 7.14% to refinance one of my higher loans.   Took about 30 seconds.

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