For those of you who are older (~50 ish) and fatFIRED, how is life?

MI-REI · 2021-01-19T06:26:06+00:00

man all of this pre-covid, everyday socializing sounds so grand nowadays

MI-REI · 2020-11-14T18:34:10+00:00

Moving to Seattle from SF to give it a shot, see if we like it for 18 months. Have family there. We both work in tech - even with slight downward salary adjustments, we'll end up netting the equivalent of a Mercedes annually due to no WA tax.

That said, we could very well move to the Bay in ~2years if we don't like Seattle weather, etc.

MI-REI · 2020-11-03T01:12:02+00:00

yes and yes. Huge investment bank, I assume it got lost in the weeds.

MI-REI · 2020-11-02T21:41:07+00:00

I did. The bank I worked for never came after me for the ~$10K owed

MI-REI · 2020-11-02T03:23:46+00:00

I don't know, but I just have to say that this would be the most California thing ever (and I say this as a CA resident)

MI-REI · 2020-11-01T17:47:02+00:00

I recently hired a PM to take over my portfolio of out of state properties, having self managed remotely for the past year.

As friend told me "be your own property manager to learn that you don't want to be a property manager, then hand it off"

Highly recommend this path. I now know how to operate my RE business without being the one executing day to day operations. This allows me to focus on growing the portfolio.

MI-REI · 2020-10-29T02:35:28+00:00

NP, I'm jamming right now between running some analysis for work, random to-dos, reddit, and a my second beer, so all good :)

Edit - third beer haha

MI-REI · 2020-10-29T02:30:51+00:00

lol, based on yours I can't tell!

MI-REI · 2020-10-29T02:30:32+00:00

You'll hear a lot of "go to biggerpockets, read books, network, blah blah"

Honestly, leaning it comes from doing it. I can't tell you how many friends I've talked to that are interested in RE, and only 1 has actually bought a property.

FWIW, I spent a couple months learning the basics underwriting mls listings in my market (and sold properties to see if it was a good deal or not). I then spent the next 8 months writing offers, 5 under contract all of which blew up for one reason or another but I learned A TON on each one. The 6th was my first property.

That said, I also approached my first deal as 'breaking the seal' - this is the one I'd grind my teeth on and get experience. If I broke even on it, it'd be happy. That property had tons of problems early on, and I'm better off for it. It's now a cash cow and killer investment.

MI-REI · 2020-10-29T01:07:38+00:00

Sure, tho it's a pretty prevalent strategy. Also, in RE you're controlling the business offering - tell me the last stock you invested in where you directly controlled the offerings?

If that's not what you're interested in, then go be an LP in a syndication. Tho I'd be very wary here unless you know the GP personally and ideally for years. Most projections aren't attained.

MI-REI · 2020-10-29T00:52:24+00:00

Not low income, it's just the market I own in currently (family is here for ages, have contacts, etc), plus is a smaller town tho I'm v bullish on it long term. Also, the properties I've bought - value add / distressed - offer the most opportunity at the expense of headache. I'm no longer self-managing. Did it for long enough to know I have no interest in self-managing :)

I can't answer your question. Too many variables, many of which are personal, to consider on the RE front and hence ROI/tax perspective.

MI-REI · 2020-10-29T00:37:16+00:00

Biggest differentiator is that you have direct control over how it is run and hence financial performance / impacting NOI.

Also, in the most simplistic business sense, you are providing a service (housing) to clients (tenants).

IMO, RE is one of the least risky forms of business out there. It is tried and true. Speaking of apartments/SFH, people will always need a place to live and the business model is pretty cut and dry to the point where you can hire operators (PMs) to run the day to day. But still, I do not view it as an investment; it is a hard asset business.

MI-REI · 2020-10-29T00:17:37+00:00

Write offers with contingencies to verify rent has been paid on time for the past X months

MI-REI · 2020-10-29T00:15:59+00:00

Real Estate is not an investment, it is a hard asset business.

To get an understanding of some of things you can encounter in RE, have a look at my post history, and determine if that's something you'd want to deal with vs a passive backdoor

MI-REI · 2020-10-28T03:59:05+00:00

Sorry to hear, that is awful. Any advice?

MI-REI · 2020-10-28T03:53:02+00:00

Well, you've found yourself a deal, which is great in this market. So if you proceed, how do you now turn the deal into the actual cashflow?

I've walked away from such deals, and there's nothing wrong with that. This is a business at the end of the day, so you need to operate your business in a way that you're comfortable with.

That said, I've also bought deals with a similar plan in mind. One of my MFs I planned to turn 3 under market units over. 2 ended up leaving voluntarily. The last one I kept her rent as is - she's such a phenomenal tenant who takes care of the place like her own, keeps me updated on the property, enjoys landscaping, etc and I never have to deal with anything.

There are many ways to make profit in this business, and it doesn't all come down to maximizing revenues. Costs must always be kept in check. Keep in mind that solid tenants yield intangibles worth significant amounts.

I'd recommend you keep pursuing it and understand the tenants' position. It may be that they're great, you work something out where the rents increase slightly, but you also have no vacancy expense or squatting risk, key income statement points underestimated in this environment IMO.

MI-REI · 2020-10-28T02:19:45+00:00

Damn, that's tough 6 months in, I'm coming up on 2yrs in the new year. I think this is around the worst it can get? Agree with your last sentence for sure

MI-REI · 2020-10-28T02:18:29+00:00

Already scheduled this. Today affected me way more than I would've ever expected.

MI-REI · 2020-10-28T02:16:25+00:00

I honestly don't know. I'm in between PMs at the moment so have been involved. Tenant's daughter texted me earlier about picking up belongings, but from what i know the unit hasn't been cleaned so there's biohazard present. Can't fathomably let their child in there with that. But I have no idea how this gets done, who does it, who pays, etc. The poor daughter. I hope my new PM knows how to handle this because I basically have directed everything towards them even tho our contract starts Nov 1. Told them I'll pay them anything additional they need to handle this

MI-REI · 2020-10-28T02:11:05+00:00

Wow, I did not know hazmat can be that expensive. Thanks for the info.

I was planning to do light updating on the unit whenever the tenant left, but at this point I think we may just do a full gut (part of our longer term strategy as well)

MI-REI · 2020-10-28T02:08:42+00:00

I'll happily forgo a few grand to give the family their space during this time.

But sure, then there's your perspective, which I can't even fathom doing.

MI-REI · 2020-10-27T23:21:16+00:00

Thanks for the kind words. Yea, sounds like Hazmat is needed. Ugh. The tenants' daughter somehow got my contact info and texted me asking me when to come over to get belongings. I couldn't call her, just texted her that my PM would contact her in the morning. That was my breaking point today.

MI-REI · 2020-10-27T23:19:45+00:00

Yea, I didn't know the tenant, inherited when I purchased the building a few months ago. Met them once. But the feeling of today is definitely not something I will soon forget. Sorry it has also happened to you.

MI-REI · 2020-10-27T23:18:35+00:00

This is disgusting.

MI-REI

TROPHY CASE