Author Topic: Real Estate Ty-cats  (Read 2405 times)

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Offline Kat Kid

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Re: Real Estate Ty-cats
« Reply #100 on: July 28, 2018, 03:35:01 PM »
I have a few units. Couple of thoughts about 'nalysis

Assume the worst in your analysis. You don't want to get foreclosed on.

I assume 8% gross rents are vacancy costs (lost revenue, turnover costs)
15% gross rents go to repairs
Always assume 8-10% for property management. Even if you self manage, you don't want to take that option off the table.
Property tax, insurance, debt service also needs to accounted for

I look for deals that offer at the very least 7% cash on cash return. Appreciation is just icing on the cake. I don't plan on it

This is great advice. Think about what a rental home in MHK looks like and whether that matches up with your ideas about "appreciation."

If you have a rental property that you have put significant capital investment in to, that changes things, but that is a lot more risk.
@bentren

Offline HerrSonntag

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Re: Real Estate Ty-cats
« Reply #101 on: July 29, 2018, 12:08:43 AM »
You also need to subtract the interest payments from your take home figure, since thats not getting reinvested.  But I mean, 8-10% ROI  is nothing to sneeze at if you've exhausted some other financial options.

From what i've talked to with people, one off the worst parts is that you're renting to rental people. Now, say you live in a college down/military town/transient town (oil boom folks?) there are legitimate reasons why someone wants a short term rental.  But, most other places, your average renter is a renter because they can't get their crap together enough to own a home.  Those are the folks who can loose a job and go full hobo in a months time, those are the folks who have to get evicted and spend the last 3 months or whatever they get trashing the place.  Those are the folks who yell in your face when you make really reasonable requests that they not trash your property.  And it can be anybody. 
Had a coworker tell me about a rental he had, nice looking couple moved in, payed regularly for over a year, then one month missed a payment.  He shows up because they aren't returning calls and the place is trashed and looks like an 19th century opium den. 
Had another buddy rent his house out because he moved out of state and didn't have time to mess with selling it, so he had his brother manage renting it out.  Renters stopped paying after 3 months, 6 months later when they finally are evicted they check out the house and they had stopped paying for trash service and just used one of the bedrooms to store all the trash. Like, trash bags floor to ceiling.

Now, those are the horror stories, my neighbor sold his house about a year ago and a guy 2 blocks down the street bought it, owns several houses in the neighborhood and rents them out.  First tenants seem nice, he even popped in and had an awkward "Hey i'm a cool landlord" conversation on their front porch a few weeks ago that i over heard while painting my garage (an experience that made me not envy the thought of having multiple houses to keep on top of painting)  Seems like he's had pretty smooth sailing.

But yeah, sounds like a fun opportunity, huh?

Offline WonderMeal

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Re: Real Estate Ty-cats
« Reply #102 on: July 29, 2018, 04:03:20 PM »
From what i've talked to with people, one off the worst parts is that you're renting to rental people. Now, say you live in a college down/military town/transient town (oil boom folks?) there are legitimate reasons why someone wants a short term rental.  But, most other places, your average renter is a renter because they can't get their crap together enough to own a home. 

"Rental people." What an incredibly myopic and classist view of humanity you have.

The fact that you only have anecdotes and expressed worry about painting multiple houses and not just writing that stuff off on your taxes tells me you have zero to add to this conversation.


I have a few units. Couple of thoughts about 'nalysis

Assume the worst in your analysis. You don't want to get foreclosed on.

I assume 8% gross rents are vacancy costs (lost revenue, turnover costs)
15% gross rents go to repairs
Always assume 8-10% for property management. Even if you self manage, you don't want to take that option off the table.
Property tax, insurance, debt service also needs to accounted for

I look for deals that offer at the very least 7% cash on cash return. Appreciation is just icing on the cake. I don't plan on it

EuroCat gets it.

Offline catastrophe

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Re: Real Estate Ty-cats
« Reply #103 on: July 29, 2018, 05:27:58 PM »
Do you own properties through an LLC? How do you finance?

Wondermeal or Eurocat. Thoughts on this? Also, do you rely on an accountant come tax season or do you factor in the available tax breaks in how you purchase/rent?

Offline Kat Kid

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Re: Real Estate Ty-cats
« Reply #104 on: July 29, 2018, 05:33:39 PM »
From what i've talked to with people, one off the worst parts is that you're renting to rental people. Now, say you live in a college down/military town/transient town (oil boom folks?) there are legitimate reasons why someone wants a short term rental.  But, most other places, your average renter is a renter because they can't get their crap together enough to own a home. 

"Rental people." What an incredibly myopic and classist view of humanity you have.


The fact that you only have anecdotes and expressed worry about painting multiple houses and not just writing that stuff off on your taxes tells me you have zero to add to this conversation.


I have a few units. Couple of thoughts about 'nalysis

Assume the worst in your analysis. You don't want to get foreclosed on.

I assume 8% gross rents are vacancy costs (lost revenue, turnover costs)
15% gross rents go to repairs
Always assume 8-10% for property management. Even if you self manage, you don't want to take that option off the table.
Property tax, insurance, debt service also needs to accounted for

I look for deals that offer at the very least 7% cash on cash return. Appreciation is just icing on the cake. I don't plan on it

EuroCat gets it.

All your vassals think you are cool.
@bentren

Offline EuroCat

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Re: Real Estate Ty-cats
« Reply #105 on: July 29, 2018, 07:21:28 PM »
Do you own properties through an LLC? How do you finance?

Wondermeal or Eurocat. Thoughts on this? Also, do you rely on an accountant come tax season or do you factor in the available tax breaks in how you purchase/rent?
I just use my local bank and it's a "typical" fannie mae underwritten mortgage. Since it's not owner occupied you will likely have to put at least 20-25% down and pay a slightly higher rate.

Some people transfer properties to an LLC after taking out the loan but there are risks to doing that. The way most mortgages are underwritten the bank can call the note through a due on sale clause. If this happens you will be required to pay off the note immediately or you can be foreclosed on.

However, I think that is pretty rare these days as many banks only care that the monthly payment keeps coming in. It is certainly a risk, though.

I don't have an LLC at this point but i have considered it. I would definitely do your research if you are considering doing this.

Offline WonderMeal

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Re: Real Estate Ty-cats
« Reply #106 on: July 29, 2018, 10:18:38 PM »
Do you own properties through an LLC? How do you finance?

Wondermeal or Eurocat. Thoughts on this? Also, do you rely on an accountant come tax season or do you factor in the available tax breaks in how you purchase/rent?

I don't have a ton of advice on financing. Me and @MrsWondermeal bought the house to live in, then moved out and rented out our side. So it's just whatever our first mortgage was. For that same reason, I don't have advice on whether to use an LLC. We have a small liability policy (a few hundred a year) which would help us in most cases. The biggest regret I have for not doing an LLC is credit card points-related.

Definitely use an accountant. It's significantly easier, you can write off the preparation expenses as a business expense, and it helps me believe I'm getting every tax break available to me (and not say...messing up the depreciation deduction).

 
All your vassals think you are cool.

I would definitely rent to MrsKK. Not sure that you could pass my three-question background check.

Offline puniraptor

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Re: Real Estate Ty-cats
« Reply #107 on: January 30, 2019, 06:58:58 PM »
how do i stop my renters from being disgusting and living in dog and cat crap without kicking them out (thus having to fix everything before renting to more potential disgustos after lowering the rent by several hundos because the manhattan rental market is tanking)?

Offline Spracne

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Re: Real Estate Ty-cats
« Reply #108 on: January 30, 2019, 07:00:52 PM »
A controlled infestation might work

Offline puniraptor

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Re: Real Estate Ty-cats
« Reply #109 on: January 30, 2019, 07:04:48 PM »
A controlled infestation might work

like hire a team of insects to eat the pet waste out from under them?

Offline Spracne

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Re: Real Estate Ty-cats
« Reply #110 on: January 30, 2019, 07:21:09 PM »
A controlled infestation might work

like hire a team of insects to eat the pet waste out from under them?

I was thinking more like scaring them straight.

Offline wetwillie

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Re: Real Estate Ty-cats
« Reply #111 on: January 30, 2019, 07:27:29 PM »
Long distance landlording seems fun
When the bullets are flying, that's when I'm at my best

Offline gatoveintisiete

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Re: Real Estate Ty-cats
« Reply #112 on: January 30, 2019, 07:32:36 PM »
the perfect rental property would be made out of semi-indestructible material, with industrial drains so you can just firehose the place clean between tenants, basically like a la petit daycare.  If this could be done I would invest everything in rentals.
it’s not like I’m tired of WINNING, but dude, let me catch my breath.

Offline eastcat

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Re: Real Estate Ty-cats
« Reply #113 on: January 30, 2019, 09:08:33 PM »
the perfect rental property would be made out of semi-indestructible material, with industrial drains so you can just firehose the place clean between tenants, basically like a la petit daycare.  If this could be done I would invest everything in rentals.

Sounds like Marlatt hall.
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Offline KITNfury

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Re: Real Estate Ty-cats
« Reply #114 on: January 31, 2019, 03:04:16 PM »
I invest in RE, and to me, nothing makes more sense. I started w/ multifamily, sold those through a 1031 exchange to purchase some others. Going through a cash-out refinance now which I'll use to buy more.

I won't claim to be the authority on this stuff, but would be happy to help those interested or answer questions.
I once blew clove smoke in a guy's face that cut in front of me in the line to KJ's.

Offline WackyCat08

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Re: Real Estate Ty-cats
« Reply #115 on: February 07, 2019, 10:20:31 AM »

Online libstradamus

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Re: Real Estate Ty-cats
« Reply #116 on: February 07, 2019, 10:25:33 AM »
Don't do it bud, that house is ugly as crap
Hyperbolic partisan duplicitous hypocrite

Offline WackyCat08

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Re: Real Estate Ty-cats
« Reply #117 on: February 07, 2019, 10:26:36 AM »
lol. Yeah, I agree. Not happening.

Offline Brock Landers

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Re: Real Estate Ty-cats
« Reply #118 on: February 07, 2019, 11:36:26 AM »
I'm glad this thread got bumped because there's two things I really liked about it:

1. A bunch of grizzled old veteran landlords banding together to keep a potential fresh new landlord out of their industry.
2.  The idea that you can pay a property manager $28 per month.

Offline ben ji

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Re: Real Estate Ty-cats
« Reply #119 on: February 07, 2019, 06:17:59 PM »
"I think my grandpa killed some body once, he never liked to talk about Kent State though"

Offline WackyCat08

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Re: Real Estate Ty-cats
« Reply #120 on: February 07, 2019, 08:18:58 PM »
Lol. Yes. Trust me, I rolled my eyes.

Offline meow meow

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Re: Real Estate Ty-cats
« Reply #121 on: February 08, 2019, 12:59:47 PM »
sounds like your wife doesn't appreciate what she has, and will always look to upgrade.  watch your back wackster.

Online chum1

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Re: Real Estate Ty-cats
« Reply #122 on: February 08, 2019, 03:17:30 PM »



Online steve dave

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Re: Real Estate Ty-cats
« Reply #123 on: February 10, 2019, 02:14:49 PM »
lmao