Pyriel Real Estate Corner

[pyriel]

I have decided to create my own Real Estate Corner where i'll talk about what I am doing regarding real estate transactions and my thoughts about this market.

As of now, I am thinking really hard about stopping my max contribution to TSP and ROTH and have these funds reallocated to the real estate market. Currently, my wife and I are maxing our contribution and forking over $38k into these retirement vehicles. After reading "We want you to be rich" written by Robert Kiyosaki and Donald Trump, I have a mind shift on my current outlook for investment and would possibly reallocate them into my pot for real estate investment

Its a big step and i'm uneasy since I am going against the herd. However, unlike playing the market (which i really don't know what the heck i'm doing), real estate planning is something that I know how to do. If I do decide to go this route, i will make every attempt to write down the what why, how am I doing my transactions.

:-) Pyriel

[colonialmike]

P- I guess you are still deciding on the amount of contributions you will reallocate. I am sure you will keep in mind matching funds, aka free money.

best of luck...I will be living vicariously through you.

[pyriel]

P- I guess you are still deciding on the amount of contributions you will reallocate. I am sure you will keep in mind matching funds, aka free money.

best of luck...I will be living vicariously through you.

Dang, I wish i know what vicariously means;-) I've thought about it and will most likely keep the 5% for my wife since she gets a matching of 5% from her work. I'm also leaning on keeping the ROTH IRAs for both of us so we can pass that on to the kids. I am looking at the numbers now and will present it here. Then along the way, i'll be showing what I would be receiving in real estate vs. TSP. If I do start within this path, I will most likely start it off at the beginning of the next year which is less than two months from now. Good luck people..
P

[mlk_man]

Py, are you off tomorrow? Or is that today now? If so, I hope you got to sleep in.............;)

[pyriel]

Py, are you off tomorrow? Or is that today now? If so, I hope you got to sleep in.............;)

Just checked the TSP share prices after your post and I see that they are dropping. The thing is I am fully invested. Nevertheless, I am serious about staying in. Yes, I am now getting much more sleep. ;-) and ;-(
P

[Spaf]

Pyriel,
Hey, whats the time difference from Quam to say Central time??
Spaf

[pyriel]

Pyriel,
Hey, whats the time difference from Quam to say Central time??
Spaf

Spaf, not sure but I know 1200 est Friday is 0300 am Saturday here. So just work your way back an hour or so.

I would like to bring something to everyones attention. I am currently refinancing my home and have gone to several banks to get their supposedly Federal Truth in Lending quotations. After talking to several bank representatives, I decided to go to one bank which is the Government of Guam Federal Credit Union or GGFCU. Since I am not a member, they informed me that i just have to open up an account for $30 and they should be able to give me a loan. Prequalification took less than 3 minutes especially since I provided them my own financial statement. BTW, don't ever walk into a bank trying to borrow money without a financial statement or knowing what you are worth without one since it makes a big difference in the world on how you are treated by them.

Anyway, after they provided me the federal truth and lending paperwork which showed how much im borrowing, how much is the closing cost, and my monthly payment i then did all the paperwork to make a loan. The only difference is that I told them that I want to include the closing cost to the loan so no $$ will be coming off my pocket.

I was amazed when I received a bunch of letter from them a week later informing me that my loan had been approved and they provided me another truth and lending paperwork. BUT this time, this paperwork ended up having $12k more total and would have cost me $200 more monthly payment for the life of the mortgage. I went to see the bank rep and informed them that I decided to pay the closing cost myself and will stick with the original loan. I also started questioning each line item of the new paperwork they provided me.

To make the long story short, I was able to lower my monthly payment by $200. I also did not have to pay bigger closing cost. So, next time you see a bank or lending institution, don't throw away those truth in lending papeerwork they are providing you. Verify them again once they approve you on the loan since they are required to provide you another truth in lending paperwork which is also required by law. BTW, this is the one that really count....

Pyriel

[Gilligan]

I have decided to create my own Real Estate Corner where i'll talk about what I am doing regarding real estate transactions and my thoughts about this market.

As of now, I am thinking really hard about stopping my max contribution to TSP and ROTH and have these funds reallocated to the real estate market. Currently, my wife and I are maxing our contribution and forking over $38k into these retirement vehicles. After reading "We want you to be rich" written by Robert Kiyosaki and Donald Trump, I have a mind shift on my current outlook for investment and would possibly reallocate them into my pot for real estate investment

Its a big step and i'm uneasy since I am going against the herd. However, unlike playing the market (which i really don't know what the heck i'm doing), real estate planning is something that I know how to do. If I do decide to go this route, i will make every attempt to write down the what why, how am I doing my transactions.

:-) Pyriel

P,
Congratulations on your new RE thread, I always learn from your success.

As far as not putting any more money in an IRA you might want to look into a “Self Directed IRA”, (google that for more info). You can invest into all types of real estate with this vehicle.

I’m going to pick up that new book that you mentioned, maybe you could start a thread with your RE book recommendations.


G

[pyriel]

Thanks Gilligan. I'm aware of the self directed IRA using RE as the vehicle for it. What I don't know is the intricacy (spelling?) of what goes on with it. I went surfing with the MLS last night and found several properties that I might be interested with. One is selling for 125k which was foreclosed and VA owned. One thing I know about VA owned is that I could possibly take over the loan without having to put a down payment. My RE agent is verifying that now but I would welcome other people's opinion about this. The other two are selling for 119k and 130k bank foreclosed. I'll be doing an inspections of the properties later with my RE agent. We'll see what happened.

There is one thing I would like inform everyone here and that is about looking over your property boundaries. I really don't know that rules from other places but here the boundary rules when building a home should be 15 feet away from the front, 8 feet from the side and another 15 feet from the rear.
Now what I found out is that if the property is a corner lot, the property has two fronts (both are facing the street) and two sides.

Why is this significant? Well, i'm doing a renovation around the house and putting up a 1240SF patio and garage when I encountered this problem. My house sits in a corner lot and the garage is hitting the corner at around 13 feet. My RE agent who used to be an appraiser informed me to call a surveyor to verify the distance of the boundaries for my lot. I told the contractor to stop working and called in a surveyor. It cost me $500 but it was worth it and saved me thousands of dollars down the road. After he put up the boundaries we just had to readjust our work to meet the 15 feet variance. If I didn't catch this and we proceeded with the work, I would not be able to refinance for my house will be non conforming.

I understand that our zoning and voundary points rules and regulation might be different from others here but my point here is that you must never forget to check everything (to include baoundaries) to ensure that you will be in compliance with the law.

Goodluck to all.... Pyriel

[pyriel]

Went surfing at the MLS a couple of days ago. I found several properties that I would like to research. I called my RE agent and we looked at 2 of them. Both are selling for 135k. One was foreclosed by the bank while the other one was VA owned. The lender of the VA owned is willing to finance 100%. The problem is that there is a setback issue. The back of the house only has 8 feet instead of 10 feet. It would probably take 10k for each house to be renovated + throw in closing cost of about 7.5k each. On the other house, i have to put in 30% downpayment since it will be assessed as investment and there is no setback issue. I've done the numbers and the VA owned is coming up with good returns but with a problem. While the other one is coming up with ok returns but without a problem. What to do?
Pyriel

[colonialmike]

P-
What is the difference in returns? How long will it take t recoup the 30% if you went with that property? How will the setback issue effect your investment? I am not familiar with this.

By the way, what kind of house does 135K buy you in Guam?

Good luck

Colonialmike

[pyriel]

P-
What is the difference in returns? How long will it take t recoup the 30% if you went with that property? How will the setback issue effect your investment? I am not familiar with this.

By the way, what kind of house does 135K buy you in Guam?

Good luck

Colonialmike
will post it here as soon as i get back to Guam. Currently in Hawaii right now. Should be back tomorrow...

[pyriel]

Hello i'm back home now. I made an offer for 85k for a foreclosed property that has an asking price of 105k. When i did the calculation, i set the purchase price for 95k. Lots of work to be done and i'm thinking that I will need 20k (very high estimate) to repair and I will need to put 30% down since the bank will consider this an investment property.

I also made another offer for another property which is VA owned and the bank will finance me 100%. They had an offer for 100k and they turned it down so I offered 105k. I put down 110k in the excel worksheet.

Now, the excel attachment has four worksheets. House1 and House2. Each of them was analyzed using a 30 year loan and a 15 year loan. The loan rate used was 7% (if it comes out lower then its good for me). Maintenance fee was assessed but was not formulated for tax deduction. I figure that if there is no maintenance required then I can keep the money thus, increasing the rate of return.

I'm thinking of taking the 30 year loan for both of them. Comments?

[colonialmike]

P-

Just a few questions, not criticism. I'd like to know your thoughts and theories that I may use when I calculate my investment property profits. I calculated some of my profits and percentages but did it a little differently.

On the sheet for House 1 30 years, is there a reason you do not calculate the cost to you for the down payment and renovation, i.e. HELOC interest, or interest not received if funds were in an interest bearing acct? Shouldn't this "cost of money" be calculated? If not, why?

Still with House 1 30 year, your 5 year calculation shows you refinance (with closing costs not taken int account) and take out $38,902 as profit to get back your initial investment. But won't you then be paying on a $101,500 mortgage? That extra money each month in your mortgage payment would then negatively effect your monthly cash flow and you may lose money each month.

Lastly, on all of the properties, maybe I am just missing something on your profit %. For example, on house 2 30 year, your initial investment is $17,700, your passive income is $20,710, your 5 year profit is $3,010 and your cash on cash return on investment is $3,010. You indicate your profit is 117%. Why isn't the profit 17%? You got back your $17,700 plus $3,010 profit on the deal. Shouldn't it be figured $3,010 profit made on your $17,700 investment, which is 17%? Wouldn't 117% profit be getting back your $17,700 investment, plus 100% of that -another $17,700, plus $3,010?

Looking forward to your response.

Colonialmike

[pyriel]

On the sheet for House 1 30 years, is there a reason you do not calculate the cost to you for the down payment and renovation, i.e. HELOC interest, or interest not received if funds were in an interest bearing acct? Shouldn't this "cost of money" be calculated? If not, why?
But it is calculated... Money coming out of my pocket is about 55k something. That includes closing cost, downpayment of 30% purchase price, and renovation cost. This is how much that came out of my pocket.;-)

Still with House 1 30 year, your 5 year calculation shows you refinance (with closing costs not taken int account) and take out $38,902 as profit to get back your initial investment. But won't you then be paying on a $101,500 mortgage? That extra money each month in your mortgage payment would then negatively effect your monthly cash flow and you may lose money each month.
One factor you forgot to calculate is that taking out $38,902 after refinancing (+ the passive income of $20,710 received) would allow me to get all of my money back (+more). This means that even if I only make a $100 per month passive income this will equates to $1200 for a year which then equates to 1200% profit. Why, that is because I already got my initial investment back in my pocket. I am now playing with pure OPM.
Now, as for the new $101,500 mortgage with new 7% APR 30 years would come up to about $676 + 100 (insurance per month) + $40 (property tax) + $140 (maintenance fee) = $955 per month. With the projected rental of $1200 there is a passive income of $205 x 12 months = $2,460 per year or $2,460% return for every year there after since my investment on this is now zero (0) since I already got my money back. [/QUOTE]

Lastly, on all of the properties, maybe I am just missing something on your profit %. For example, on house 2 30 year, your initial investment is $17,700, your passive income is $20,710, your 5 year profit is $3,010 and your cash on cash return on investment is $3,010. You indicate your profit is 117%. Why isn't the profit 17%? You got back your $17,700 plus $3,010 profit on the deal. Shouldn't it be figured $3,010 profit made on your $17,700 investment, which is 17%? Wouldn't 117% profit be getting back your $17,700 investment, plus 100% of that -another $17,700, plus $3,010?
117% vs. 17 percent, that is the question. The money really never went anywhere and it is sitting as equity so the calculation would be money invested divide it by passive income received. The money I will be getting back (cash in my pocket) will be $20,170 but the money i put in ($17,700) is sitting as equity in the house. So if we really want to be technical, we have to put in $20,170 + $17,700 (sitting as equity) which will equal to$37,870. That will be a 117% return.

;-) Pyriel

[colonialmike]

Thanks P,

My thoughts are below, which prompted the questions:

RE #1: I meant to say the "cost" of taking the money from where it was...savings acct, money market, HELOC, etc. For profit calculations, I usually calculate the HELOC interest when I use it for my downpayments...14K downpayment at 7% (avg (downpayments...14K@7%(avg) for the last year) = $82/mo x 12 mo. = $984/yr. I would take this $984/yr "cost" and subtract it from the total profit.

RE #2: That is great that your REFI mortgage payment is still lower than the rent payment!!!

RE #3: FYI - In my profit calculations, I have not used the amount I put into the property (down payment, renovation, and assoc costs) to be included in my profit %. I usually use all funds and equity that I did NOT contribute in my profit % calculations.

Good Luck in your purchases and keep me (all of us) updated.

Colonialmike

[Gilligan]

Went surfing at the MLS a couple of days ago. I found several properties that I would like to research. I called my RE agent and we looked at 2 of them. Both are selling for 135k. One was foreclosed by the bank while the other one was VA owned. The lender of the VA owned is willing to finance 100%. The problem is that there is a setback issue. The back of the house only has 8 feet instead of 10 feet. It would probably take 10k for each house to be renovated + throw in closing cost of about 7.5k each. On the other house, i have to put in 30% downpayment since it will be assessed as investment and there is no setback issue. I've done the numbers and the VA owned is coming up with good returns but with a problem. While the other one is coming up with ok returns but without a problem. What to do?
Pyriel

Pyriel,
30% down sounds like too much money. Commercial investment properties here on the mainland only require 20% down with a possibility of getting a second mortgage on an additional 10%; thus the investor only has to put 10% down. I’m looking at your cash on cash return, you would have to be out 3 times as much money for the non-VA deal.

On the setback issue, can’t that be grandfathered in?

[pyriel]

Pyriel,
30% down sounds like too much money. Commercial investment properties here on the mainland only require 20% down with a possibility of getting a second mortgage on an additional 10%; thus the investor only has to put 10% down. I’m looking at your cash on cash return, you would have to be out 3 times as much money for the non-VA deal.

On the setback issue, can’t that be grandfathered in?

GGGRRRR!!!! I know, I know, Iknow.... GRRRRRR!!!!
This is the only thing i hate about living here. The banks here created their own rule about lending. There is no 100% financing here except for one designated area and that is up north of Guam. First time homeowner must put down 10-20% downpayment to get a home unless you have a VA loan which is 100% but on higher interest rate. Commercial loan and investment property is set for 30%. Oh lets not even talk about all of the banks closing cost...
This is why it is hard for someone to get started here to invest with RE. But once you get started, you can pretty much start getting into increasing your net worth. I am noticing that my competitors here when i bid are always the same. The problem here is that they've been around awhile and they have deeper pocket than mine.
Happy thanksgiving to everyone...Pyriel

[Ghageman]

Pyriel et al,
How familiar are you with rules regarding selling rental property that you lived in previously? I have 2 rentals which I lived in first....one out on Whidbey Island which I lived in for exactly 24 months (but only owned 12 months) and a second in Virginia which I lived in and owned for 19 months. They are both good rentals and I'll probably hold them both for at least another 3-5 years, but have no intention on living in them again.

Didn't the tax law change in 2003 in favor of active duty members who move around? I know the "must live in 2 out of last 5 years" rule, but I thought the law was changed to basically extend that for up to 10 years. I understand that I can sell one or the other and claim the 500K exemption as a percentage of 2 years that I owned and lived in the house. I think I have to wait at least 2 years between the sales to claim a second exemption as well....true?

I'm not sure I have any interest in a 1301 exchange. We've been very comfortable landlords based on the fact that by living in the house, we know it's history, the problems, and the neighborhood. I don't think I could invest in a property outright like a 1301 would require.

I would roll the profit over into a regular taxable investment, unless there is some other vehicle...thoughts?

Thanks in advance...your insight is quite interesting.

r,
Ghageman

[pyriel]

Pyriel et al,
How familiar are you with rules regarding selling rental property that you lived in previously? I have 2 rentals which I lived in first....one out on Whidbey Island which I lived in for exactly 24 months (but only owned 12 months) and a second in Virginia which I lived in and owned for 19 months. They are both good rentals and I'll probably hold them both for at least another 3-5 years, but have no intention on living in them again.

Didn't the tax law change in 2003 in favor of active duty members who move around? I know the "must live in 2 out of last 5 years" rule, but I thought the law was changed to basically extend that for up to 10 years. I understand that I can sell one or the other and claim the 500K exemption as a percentage of 2 years that I owned and lived in the house. I think I have to wait at least 2 years between the sales to claim a second exemption as well....true?

I'm not sure I have any interest in a 1301 exchange. We've been very comfortable landlords based on the fact that by living in the house, we know it's history, the problems, and the neighborhood. I don't think I could invest in a property outright like a 1301 would require.

I would roll the profit over into a regular taxable investment, unless there is some other vehicle...thoughts?

Thanks in advance...your insight is quite interesting.

r,
Ghageman

Hello Ghageman, the rule of thumb is for you to own and lived on the property at least 2 years. I believe that the scenario you provided does not qualify you for the exemption when you finally sell your house. If you do decide to sell a property or two, your profit will roll into your overall AGI. So there is a probability that you might get hit with a higher tax bracket or higher payment based on your income tax placement.

As far as rolling the profit over to another regular taxable investment, real estate is what comes into mind. If you would like to know more about mutual funds or stocks, im sorry but i am not really very knowledgeable with those.

On another note, i've stopped my TSP and ROTH contribution. I met with my real estate agent and we are pursuing in buying the VA owned house that I can convert into a 5 bedroom. I like this property because of 100% financing and minimal repair. Tomorrow, we will be looking at 3 half acre lots that we plan to purchase and build a 4 bedroom 2 car garage on it. The plan is to pay everything up front, then once the house is complete and the house should appraise higher than the building cost, we will refinance it and get our money back. We figure that the going market NOW, a 4 bd 2 car garage and fenced will fetched us 230k for appraisal. We plan on spending $170k in building it. We also found a bank that will give us 80% loan financing. 80% of 230k is 161k. This means that after the refinancing our investment will only be $9k, we have a $60k appreciation, with a monthly payment of $1300 (including insurance and property tax) and we know that we can have it rented to military for $2400 a month. That is an $1100 a month passive income which comes out of 13200 per year.

This is called leverage using OPM. For me, this is less risky because I know my market. With 9k, I am able to have an asset worth 230k that provides me $1100 per month. Since I will be getting my 161k back, I am now able to get another deal to do this all over again. I thought about this and all I need is ten of these deals. 10 properties x $1100 = 11,000 per month or 132k per year. If I start getting this at age 45, I would be well ahead of everyone here and I will still have my assets with higher appreciation in the end. The main thing is that I am reaping the benefit now, and not later when I am older.;-)

More to follow later...;-)

[colonialmike]

P- Once again that sounds great. Also, I guess once you have a few of these, you could sell one to get back your initial investments (9K in this scenario) and have no $$ invested and you get all profit.

Here are a few questions...How long do you think it will take to buy the land, build the 4 BR/2 car garage, and have a tenant in place? You wrote "the plan is to pay everything up front", are you paying cash up front? Using a HELOC? If cash, do you calculate "lost interest earned" on that money (if it was in an interest earning fund/acct) in your final calculation of 170K? If HELOC, do you calculate interest paid in your 170K?

Sounds like a great deal, not many other places where you can invest 9K and make 13,200K/yr each year.

[pyriel]

P- Once again that sounds great. Also, I guess once you have a few of these, you could sell one to get back your initial investments (9K in this scenario) and have no $$ invested and you get all profit.

Here are a few questions...How long do you think it will take to buy the land, build the 4 BR/2 car garage, and have a tenant in place? You wrote "the plan is to pay everything up front", are you paying cash up front? Using a HELOC? If cash, do you calculate "lost interest earned" on that money (if it was in an interest earning fund/acct) in your final calculation of 170K? If HELOC, do you calculate interest paid in your 170K?

Sounds like a great deal, not many other places where you can invest 9K and make 13,200K/yr each year.

Hello Mike, the land we are looking at is a 3 parcel land selling for 50k, 50k, and 35k half acre each. We would be offering 35k each for all 3 lands with a 10% downpayment, amortized for 30 years and for each land to be paid in full every year. This is what we call creative financing and we are hoping that the landowner will take it. My RE agent that the owner also sold similar lots for the same price previously.

We feel that our contractor can build a house within 4 months so for planning purposes we will be expecting 6 months. As for the land, we are being picky and only looking at good lots closed to the base. We will use our personal money and will not be borrowing from any bank sor there is no interest fee involved except for the land transaction and we are looking for that to last for only 9 months.

BTW, we can actually do two houses at a time but we feel that we should test the water just in case it gets too hot;-)

Pyriel

[fabijo]

Pyriel -

I'm just posting to let you know that I am reading this thread with much interest. I don't have much input since I've never purchased a home before. It's just too expensive for a young family like mine to buy in New York. I'm trying to get a transfer to Philadelphia where we'll be able to afford a house.

Fab

[Gaetaone]

Pyriel,

Have the decided whether or not Guam gets the carrier? That would certainly be a boom. Hope to make it over there some day...

John

[pyriel]

Pyriel,

Have the decided whether or not Guam gets the carrier? That would certainly be a boom. Hope to make it over there some day...

John

;-( Guam = no, Hawaii=no

Possibly CA or WA

[Gilligan]

Hello Mike, the land we are looking at is a 3 parcel land selling for 50k, 50k, and 35k half acre each. We would be offering 35k each for all 3 lands with a 10% downpayment, amortized for 30 years and for each land to be paid in full every year. This is what we call creative financing and we are hoping that the landowner will take it. My RE agent that the owner also sold similar lots for the same price previously.

We feel that our contractor can build a house within 4 months so for planning purposes we will be expecting 6 months. As for the land, we are being picky and only looking at good lots closed to the base. We will use our personal money and will not be borrowing from any bank sor there is no interest fee involved except for the land transaction and we are looking for that to last for only 9 months.

BTW, we can actually do two houses at a time but we feel that we should test the water just in case it gets too hot;-)

Pyriel

Pyriel,
This sounds exciting, the next thing you know you will buy a hundred acres and put in a golf course subdivision. When are you going to buy/build a hotel in Hawaii so we can have an annual TspTalk.com members convention. At the rate you are going you will be a Billionaire!

[pyriel]

Nggiiii... I can buy me a pot of soil in Hawaii but I don't think any of us will fit there;-)

Sorry haven't been posting coz my travel itineraries are so hectic. I'm currently in Orlando (nice weather) and will be here till tomorrow. We looked at the land and I was LMAO because although they were in a nice location, they are in a depression LOL. I told my RE agent to pls not waste my time and ensure that he eyeball the property before showing it to me. I'm still online the 3bd 2 bt VA owned. I resubmitted my bid and i guess will find out if that goes through. If it does, I need to do an immediate renovation so that I can convert them into 5 bd 3 bt. I just need to punch a hole since there is a bd 1 bt (with kitchen) extension in the back of the house.
We'll see... Not in a hurry and will stick to my comfort zone...;-)

Goal is 3 houses for 2007. I get those then I am pretty much on tracked with my goal....

Pyriel;-)

[colonialmike]

Pyriel

Thanks for the update, but what is LMAO? Let me know if you get to Maryland/DC/VA

Colonialmike

[pyriel]

Pyriel

Thanks for the update, but what is LMAO? Let me know if you get to Maryland/DC/VA

Colonialmike

Heheheh Laughing My A%% Off.... hehehhe
I was supposed to go to DC but its too cold, I opted to come here instead... hehehhehe

[pyriel]

Hello all! I'm currently in the Philippines vacationing with the family. We've missed our flight yesterday so we have no choice but to fly out tonight and spend our new year in a plane. Just to give everyone an update, i should be closing with purchasig two houses in January. I hope this will be a good start for me. I'll be writing the detail of these deals later when i get back to Guam. Hope everyone is doing fine and havig a merry new year....
Pyriel

[pyriel]

Hello all! I'm currently in the Philippines vacationing with the family. We've missed our flight yesterday so we have no choice but to fly out tonight and spend our new year in a plane. Just to give everyone an update, i should be closing with purchasing two houses in January. I hope this will be a good start for me. I'll be writing the detail of these deals later when i get back to Guam. Hope everyone is doing fine and havig a merry new year....
Pyriel

[fabijo]

Congrats on the possible purchases! It would be great if you kept up the updates even when you are a billionaire.

[pyriel]

Hello, just an update... I'm closing on a house on Monday (didn't happen this week). I have a tenant waiting so the lending company (they own the property) is giving me the key today so we can start renovating. We only have 5 days to renovate and tenants will move in on the 11th. Terms are as follows: 11.5% for 30 yr amortized with no closing cost, 5% down on 120k purchase with no prepayment penalty. Renovation will probably reach 5k.
Now why the heck would I get a property and pay 11.5%. This is temporary. My money are tied up somewhere and will not be available till next month. I plan on bringing this property to another lending institution and get a 6.5% interest, 20 or 30% down 30yr amortized. The bottom line here is that I secured a good property with a waiting tenant so I am not losing out at all. I will use my credit card check to pay for the closing. I will pay for it next month when the cavalry money arrive...

Risky, this is very risky for those who are not familiarized with RE. For me? Not at all. I like it because its a control risk. Unlike the market which I really don't know what i'm doing. More to follow...

P

[James48843]

That's definately Risky business P:

Hope it works out for you.

[Gilligan]

If real estate is so risky, why do bankers loan money for real estate investments but refuse to loan money to be invested in mutual funds like the TSP?

[SkyPilot]

If real estate is so risky, why do bankers loan money for real estate investments but refuse to loan money to be invested in mutual funds like the TSP?

Touche!

[Show-me]

If real estate is so risky, why do bankers loan money for real estate investments but refuse to loan money to be invested in mutual funds like the TSP?

Exactly! Nothing like a nice piece of tangible assets!

[GGal]

Exactly! Nothing like a nice piece of tangible assets!


I thought they shot and killed you the other day in Fayetteville, GA. Musta been another wild pig.

GA

[Show-me]

I thought they shot and killed you the other day in Fayetteville, GA. Musta been another wild pig.

GA

O.K., you have the advantage. Care to explain??????????????????????:confused:

[GGal]

O.K., you have the advantage. Care to explain??????????????????????:confused:


FAYETTEVILLE, Ga. - A giant wild hog boasted to be bigger than the near-mythical “Hogzilla” caught in southern Georgia a few years ago has been killed in a suburban Atlanta neighborhood.

The hog hung snout down from a tree Friday in William Coursey’s front yard, not far from where the avid hunter said he shot the beast. He said he hauled it to a truck weight station, which recorded the hairy hog at 1,100 pounds.

MO, I was just cracking a little joke at your extremely chaeuvenistic (sic) (pig-like) remark.......all in fun!

GA

[pyriel]

That's definately Risky business P:

Hope it works out for you.

Like what I said, it is risky for those who are not too knowledgeable about RE. And I also wouldn't want to recommend to anyone to follow what I am doing. Lets just say that I am in the Advance level now and anytime I get into this type of deal, I've looked at the numbers and did my analysis to minimize those risk. So for me, this is really light risk or no risk at all. Let me show you.

1. I was able to secure a property that it is hard to come by nowaday here in area.
2. I have a tenant ready to move in so I don't have to worry about paying for the monthly mortgage.
3. Lending institution is allowing me to only put 5% of the property value.
4. I will be getting a huge deduction at the end of the year for my closing (minimal) and my renovations. (this is called phantom income)
5. Interest paid by my tenant will also be tax deductible (also called phantom income)
6. My rental house will appreciate in value. Current appraise value now is 121k which i bought for 120k. After the renovation, it will most likely go up to 135k-140k. (also called phantom income)
7. Since i have no prepayment clause in my closing, another bank is ready to give me the loan next month is I put 20% down on this property. This will eliminate the 11.5% APR to 6.75 APR. With low monthly payment, my return will be higher so that I can start recouping the money i will be putting into this property.
8. My tenant market is under GHURA which is backed by Uncle Sam. So I get an automatic payment with my rent.

Now lets look at the risk with stocks.
1. You have no control of the market.
2. You can't use the money now. You have to wait for retirement.
3. Majority of the people (Us in TSPTalk are an exception) do not know how to manage their accounts.
4. Every month I know something is coming to me. We can't say the same with stocks... Many of the baby boomer who thought they were good to go before the crash in 2002 are now back to work because they relied on a market that they have no control of.

There are many more that i'll stop. I will reiterate that my way of RE is risky to other people who are not familiarize with RE transactions. Please learn more about it and start with something small before you proceed with RE. As for me, I love it;-)

Pyriel

[Show-me]

When I wrote it I was not think along that line, I am now. Real estate, gold, silver, and livestock are what I meant. Things that are not of paper or electronic. I will try to chose my words more carefully next time.

:D

FAYETTEVILLE, Ga. - A giant wild hog boasted to be bigger than the near-mythical “Hogzilla” caught in southern Georgia a few years ago has been killed in a suburban Atlanta neighborhood.

The hog hung snout down from a tree Friday in William Coursey’s front yard, not far from where the avid hunter said he shot the beast. He said he hauled it to a truck weight station, which recorded the hairy hog at 1,100 pounds.

MO, I was just cracking a little joke at your extremely chaeuvenistic (sic) (pig-like) remark.......all in fun!

GA

[GGal]

"Exactly! Nothing like a nice piece of tangible assets!"

RAOTFLMAO!

Maybe I'm the ONLY one who saw the humor in this. Everybody else was asleep at the wheel.

Usually, Milk Man wouldn't let one like this slip by him.

GA

[pyriel]

"Exactly! Nothing like a nice piece of tangible assets!"

RAOTFLMAO!

Maybe I'm the ONLY one who saw the humor in this. Everybody else was asleep at the wheel.

Usually, Milk Man wouldn't let one like this slip by him.

GA

Hmmm... I don't know how to put this without being categorized on the same wavelength. But, i'll give it a try...;-)

Ggal is definitely nice and with tangible assets to die for... I am bowing my head over this classy lady;-)

Pyriel

[GGal]

Well, when you put it like that.....

Thanks!

I was just picking on Mo. It was too good to resist!

GA

[pyriel]

Financial Advisors are dime in a dozen. At least this is what I am finding out. I've recently went to see my Financial Advisor which happens to be the one that sells me my insurance too. I told him that I want to pull out my ROTH IRA and invest them somewhere where I could take full control of it, get better return for my investment, and to invest it in something that I am good at which is RE. He talked to me about not pulling them out and that I may be exposing my risk by putting my investment in one basket.

Robert Kiyosaki wrote an article in Yahoo a couple of days ago about FEAR. He mentioned that Wall Street paid out billions of dollars to account managers and CEOs etc... because of FEAR. Fear is what these people try to convey to us so that we continue to become an average investor. I'm sure you've heard the saying invest for the long run; diversify; dollar cost average. I have to admit that this is good for passive investor who wants to be average. Robert had made me realize that we/I don't have to be.

There might be some people that frowns on my action since this is about retirement account and it is for the long haul. I also know that 9 out of 10 businesses fail. However, I only have to be right once to be successfull. And I believe that with my determination and action, I can reach my goal alot faster than for me to conform by being a passive investor.

I no longer fear opening a business and I look forward to finally having one and having my RE as my back up plan due to its passive income it will be providing me.

P

[GGal]

As long as you continue to at least get the matching on TSP, I can't fault you.

In fact, in today's economy, I think owning rental real estate is a good idea.

I don't want to go into debt at this point in my life, so I'm not on the same page as you, but still applaud you.

I fancy myself somewhat of a real estate investor even so. I bought my property at a lake resort and built a nice home in 2000. I bought the property before it became as scarce and at a good price per foot for the water frontage. Available lots in this area are now extinct. My neighbor, whose house was 400 sq ft smaller than mine and built about the same time just sold her's at a $300,000 profit. A builder is building on the lot on the other side of me, says he is going to live in it for 2 years, then sell it for not a penny under $700,000 profit. I believe that when I retire in a few years, my profit will exceed the $500,000 excludable gain on residence rule on sale of residence. I'm thinking by then I'll be getting a little too old for the boating scene.

So I do fancy myself having a good nest egg in real estate. And maybe when I sell, I'll be able to invest in some modest amount of rental real estate. This was all really just a matter of luck. I did think I was making a good investment at the time, but I didn't imagine just how good.

I think you will make a good Donald Trumph.

GA

[pyriel]

I'm thinking by then I'll be getting a little too old for the boating scene.
GA

Hmmm... I don't know how to take this? I really hope not... Alot of guys will be shortchanged if you don't go to the beach;-) I don't know how many of these people here have seen you but as for me, I am bowing my head up and down lol...

On another note, you are sitting on an egg nest there. I wish i have a house by the lake;-(

Update: My contractor finished renovating the house and my GHURA tenant already moved in. They will not be paying rent yet until GHURA approves it. If I haven't said it earlier, I bought this rental property because on of my tenant asked me if I have a 3br2bt house for her cousin who happens to have a voucher from GHURA or section 8. Her voucher will expire on the 13h of this month and I didn't learn about this until the 23rd of Dec when we were getting ready for our vacation. To make this story short, I made an offer and closed this house in two weeks timeframe. It took another 4 days to do a complete renovation.

For those who wants to get into real estate investing, please ensure that your credit score is good. Also have good management with all of your paperwork. It makes it really easy for the bank to approve you when all the documentations they are asking are all in the packet that you are turning in. What works for me is that I scanned my 3 years worth of tax return, I also scanned all of my lease agreements, business licenses, article of incorporation and bylaw for my corporation account. Lastly, I also have a ready made FINANCIAL STATEMENT. Having a ready made financial statement with all of your income, expense, assets and liabilities to be turned in really impresses these lenders. It showed them in one snapshot what kind of investor are they dealing with. This is the reason we were able to close really fast...

P

[Gilligan]

.

I think you will make a good Donald Trumph.



I second that!

[fabijo]

Lastly, I also have a ready made FINANCIAL STATEMENT. Having a ready made financial statement with all of your income, expense, assets and liabilities to be turned in really impresses these lenders. It showed them in one snapshot what kind of investor are they dealing with.

Thanks for that piece of advice. I'll take that to heart. I really need to start doing this kind of paperwork now.

[Gilligan]

Financial Advisors are dime in a dozen. At least this is what I am finding out. I've recently went to see my Financial Advisor which happens to be the one that sells me my insurance too. I told him that I want to pull out my ROTH IRA and invest them somewhere where I could take full control of it, get better return for my investment, and to invest it in something that I am good at which is RE. He talked to me about not pulling them out and that I may be exposing my risk by putting my investment in one basket.

Robert Kiyosaki wrote an article in Yahoo a couple of days ago about FEAR. He mentioned that Wall Street paid out billions of dollars to account managers and CEOs etc... because of FEAR. Fear is what these people try to convey to us so that we continue to become an average investor. I'm sure you've heard the saying invest for the long run; diversify; dollar cost average. I have to admit that this is good for passive investor who wants to be average. Robert had made me realize that we/I don't have to be.

There might be some people that frowns on my action since this is about retirement account and it is for the long haul. I also know that 9 out of 10 businesses fail. However, I only have to be right once to be successfull. And I believe that with my determination and action, I can reach my goal alot faster than for me to conform by being a passive investor.

I no longer fear opening a business and I look forward to finally having one and having my RE as my back up plan due to its passive income it will be providing me.

P

I think it was Kiyosaki who pointed out that it takes less training to be a Financial Advisor than a Massage Therapist. (Don’t take me wrong, I’m not putting down Massage Therapist.) I think that Financial advisors need to have several years of education PLUS several years of investing experience with successful results. Who would want a medical doctor operating on them if the Doc just read a couple of books and took a little test before he started practicing? Financial Advisors should have some sort of disclosure of their net worth, areas they have invested in and the loss or gains that they have sustained. Otherwise it could end up being the blind leading the blind.

[pyriel]

I'm tired... RE is paperwork intensive, especially once you start accumulating 2 or more properties. I am doing something different this year. I am going to get hired help. Someone who will go do errands like pick up rent, sign contracts, manage fixing the toilets, picking up mails, etc. etc. etc. This way, I can concentrate more on how to expand my RE investments.

Just an update, I signed a one year contract with Section 8 for a family to be renting the rental house i recently bought. Section 8's approved rent is for $1200. However, I am paying $1050 every month. This is due to the 11.5% that the lender gave me when I closed the loan with them (WELLS FARGO; NO WONDER). It's not really bad since I only had to put a 5% down with very minimal closing cost and a no prepaid penalty clause. During lunch,I met with the other bank and brought my closing documents with them. I told the loan officer that I will put a 20% down payment to refinance my existing home loan (of course no prepaid penalty clause is included as well). By the time, im done refinancing this house, I will be putting 25% down on a $120k house that is earning $1200 a month amortized for 30 years with 6.5%. Monthly will be about $576 + 130 for insurance and property tax = $706. This will give me 496 passive income per month or $5952 per year. And this is only for passive income. If i just have 20 of these? I think my retirement outlook will be cozy... BTW, i don't have to wait till i turn 59 1/2;-)
P

[fabijo]

I'm tired... RE is paperwork intensive, especially once you start accumulating 2 or more properties. I am doing something different this year. I am going to get hired help. Someone who will go do errands like pick up rent, sign contracts, manage fixing the toilets, picking up mails, etc. etc. etc. This way, I can concentrate more on how to expand my RE investments.



Now if I could just hire someone for free to finish my school for me so I can focus on programming what I want to program and not what the school wants me to do! :)

[ebbnflow]

I'm tired... RE is paperwork intensive, especially once you start accumulating 2 or more properties. I am doing something different this year. I am going to get hired help. Someone who will go do errands like pick up rent, sign contracts, manage fixing the toilets, picking up mails, etc. etc. etc. This way, I can concentrate more on how to expand my RE investments...

Now you know why Donald Trump keeps making them babies -- to delegate responsibilities for the good of the empire! :nuts:

[fabijo]

Maybe we can start a TSP Talk reality show. A bunch of us will compete to be Pyriel's Apprentice.

[pyriel]

You guys are funny!!!

I'm closing in on another purchase and this should happen within the next 2-3 weeks. This is for a 3bd/2bt with and 1bdrm extension in the back. The place is R1 residential and the zoning really doesn't allow that. So, we will be punching a hole to get to the 1bd place in the back and will turn this house into a 5bdrm with 4 baths. Section 8 will pay up to $1500-1600 monthly for this. Purchase price is $110,500 with 100% financing, APR of 6.75% amortized for 30 years. closing cost will probably about 7k with renovation being 13k. So total investment is about $20-25k. Monthly is about $717 + $130 for insurance and property tax = $847. If rent is $1500 that will be a passive income of $653 per month or $7836 per year. That is a return of 39% per year not including the rest of phantom income associated with it.

I have two more properties I am researching. They are more expensive ($200k+). This is to get ready for the military buildup. I'll give more update on this later on. These properties are to be built. One is supposed to be done within 4 months and the other is within 9-11 months. We are doing creative financing on this with hope in selling one and do a 1031 exchange fro the second one. We'll see how it goes...

P

[James48843]

Ok Pyriel:

Here are some questions for you. You state that "section 8" pays up to $1500-1600 for 5 bdr/4 bath. First, what makes you certain you can keep it rented under "section 8" housing; second, what do you plan to set aside for repairs to this property. Section 8 renters in my experience sometimes have a hard time keeping the place in one piece. My parents ran about 5 properties while I was growing up, and one or two were always "between renters" on the section 8 side. When someone moved out, it sometimes took two or three months to get the place back liveable again, and then rented again.

Next question- what do you pay for insurnace there, and what kind of unusual risks do you carry- I.e. is typhoon insurance available, etc?

Real estate can be very beneficial if you are the one actually operating, taking the tax writeoff for depreciation, etc, but there are risks associted with it, including the risk of having a renter burn the place down. (We had two of those over the years, insurance eventually covered it but it took a court fight- one was arson by a section 8 renters ex-boyfriend in a tri-plex, and the other two families also had to relocate, the property was a total loss, and we were lucky nobody got killed)

[James48843]

And I don't think the IRS classes it as "passive income" if you are actively managing it yourself, do they? Or has the law changed?

[pyriel]

James,
Knowing your market is one of the most important requirement for RE. many people here (and elsewhere) have asked me why don't i invest somewhere else. My answer is because I don't know the market somewhere else. Rent here used to be so high and what i found out during the latest crash and the military started leaving us, section 8 program stayed on island. Why? Because its a federal program and unless Uncle Sam folded, then they will continue to be here. Military here is beginning build up again. So i see many investors getting ready for their arrival.

Another thing is that all of our houses here are made of cement bricks that can withstand supertyphoons. So section 8 tenants really can't destroy them except for minor touches and repair. Our GHURA office is also very strict. All I had to do is send them a letter that they are not paying their co-payment or they are trashing the place and they would deal with them.

As for my tenants, I am a proactive landlord. I visit my properties often and inspects (superficially) when i pick up the monthly rent. I also ensure that their place is clean before I provide them the unit and required that I get the unit back in the same condition. BTW, if they don't give it back to me in the same condition, GHURA will automatically kick them out of the program as well. When my tenants have problems with their place, I always send someone to fix whatever is broken. This way, they have no excuses that I am not taking care of them.

My rental house is usually insured for about $1200 per year. And I know that they like single house residential better than apartment. I also know that many of their parents are products of Section 8 program. So history repeats itself and there would always be section 8 tenants here on Guam.

As for preparing taxes, I use 1040, 1120, schedule E, 4562, 8582, 8825, schedule K1s and other forms that IRS requires to do my taxes. The passive income that you are asking is explained in form 8582.;-)

P

[pyriel]

It's been a month since i updated this place of mine. Been busy with work mobilizing a 250 man team to Djibouti and a 16 man team in Afghanistan. I'm supposed to be on the cue for the next team for Afghanistan next year. The five bedroom purchase that i'm supposed to do sat for about a month. Lending company and I had a disagreement on some paperwork. In the end, they relented and we are moving on with closing it. I have 15k set aside to do the closing and repair with this unit. Purchase price of 110k amortized for 30 yrs, 6.75% apr. I will be contacting some contractors to do the repair and renovation then off to the market I go to look for tenants. We should close within a week or two and renovation will most likely take another 2-3 weeks. By the time i'm done, that ugly duckling will turn into a beautiful swan. I'm shooting for $1600 rent but will also settle for $1500.

I also signed a contract to purchase a 4 bedroom house that is being built in a good subdivision (phase II). Cost is $260k. I put down 5k deposit and it should be finish within 9-12 months. My friend bought a unit in the same subdivision (phase I) for $200k and immediately after it was done, it was appraised for $275k. The place is closed to where the Marines will be stationed so I think that it is possible for these type of properties to go up as high as $400-450k within the next 3-5 years. Although the growth projection here is about 6-8 years, im more conservative and will only hold the property with max of five years.

After these transactions, I am hunkering down for the long haul and start raising cash. One thing i've learned during the crass in 2000, cash is king and people with good credit were able to pick the best properties;-)

Goodluck to all and please dont do what i'm doing unless you have proper training.

P

[pyriel]

Hi all! I will be in Orlando Florida next week but I just want to give an update on that 5 bedroom purchase. We will be closing on it on 26 March when I get back from Florida. We have some renovating that we need to do so I need to start talking to contractors about them. RE is really a boring business. It can take weeks/months/years for a single transaction to actually transpire. But that is ok, you should all take your time before purchasing to ensure that you know what you are getting into.
Good luck to all...

P

[pyriel]

Hi All!!! Its been awhile. I haven't been posting much lately due to very busy schedule. Anyway, RE is really getting some pounding in the mainland and i'm sure that it will finally make its way here on Guam as well. In the meantime, RE here is still ok but I am more cautious and beginning to settle down and getting ready for the long haul.

We did closed on the 5 bedroom house on April but problems keep popping up in the paperwork such as wrong SS# or the forms were missing. We reconvened and finally got it all signed by the first week of May. Just in time for my bday (13th). So I consider this my bday gift for me. Renovation as I estimated would cost me another 15k and we should be ready to put it in the rental market by next month. My projected rental is $1600 with mortgage/insurance/tax coming to about $800 every month. Closing cost me about $4500 so I have a total cash lay out of about $20k.

I've been reading lots of RE disasters around the US. I feel sorry for those individuals that leveraged their homes and utilized those extra money to purchase nice to have things. Alot of speculators also got hit when the RE climate suddenly shifted. This is the reason I always advocate that RE is for a long haul. Yes, it is profitable to flip but it can also turn around and bite you if you are not prepared for the worst case scenario.

Good luck to all. This might be the last purchase I will make for awhile. I am refinancing my home as well and consolidating my loans by restructuring them. Stay focus and be safe...

P

[pyriel]

http://www.guampdn.com/apps/pbcs.dll/article?AID=/20070524/NEWS01/705240304

Japan commits 6 billion of the 10 billion. to relocate the marines from Okinawa to Guam. US will foot the other 4 billions. I know that RE is not doing well among other regions but it seems like Guam will be shielded for several more years....

I am optimistic but also reluctant to buy more for the pricing seems to be skyrocketing (due to speculations). I can see more people purchasing because of this which would drive the market up even more. I will use this time to start the reorganizing and refinancing my assets.

Take care all...

p

[pyriel]

http://money.cnn.com/2007/07/05/real_estate/futureshock_Florida_housing_will_fall/index.htm

It seemed that foreclosures around the nation are going up. These people are speculating around Dec or Jan drop. Anyone know why? Winter RE sell is usually the lowest selling season, couple this with pending foreclosures, well, you can see the worst case scenario. The good thing about this is that it becomes a buyer's market. So those who are sitting on the sideline, watch out, an opportunity is about to come your way;-)

P

[Miss Piggy]

http://www.nytimes.com/interactive/2007/11/03/weekinreview/20071103_SUBPRIME_GRAPHIC.html?hp# (http://www.nytimes.com/interactive/2007/11/03/weekinreview/20071103_SUBPRIME_GRAPHIC.html?hp#)

[pyriel]

Well, foreclosures are doing its job and it is now a buyers marker out there. Those who have been waiting to jumped in to RE are finding some good deals. Speculators have lost much but for those who have studied RE will find this time to be a rewarding time. Remember, you get the most gained when you buy during the downturn. Makes me remember the 160k 8 unit apartment I bought in March 2003 which is now appraised for more than 500k.
Please be careful out there. The market is very unforgiving, especially for those speculators that are overextended.

Pyriel

[Asylum]

Well, foreclosures are doing its job and it is now a buyers marker out there. Those who have been waiting to jumped in to RE are finding some good deals. Speculators have lost much but for those who have studied RE will find this time to be a rewarding time. Remember, you get the most gained when you buy during the downturn. Makes me remember the 160k 8 unit apartment I bought in March 2003 which is now appraised for more than 500k.
Please be careful out there. The market is very unforgiving, especially for those speculators that are overextended.

Pyriel


Be very very very careful!

I am a home builder I am seeing fully qualified buyers with steller credit and positive debt to income ratios take weeks to get approved. Long gone are the days of the fast-flip. Be preparded to sit on a property for months awaiting a sale.

[GUCHI]

asylum
i know exactly what u mean i have a house for sale its been 8 months !!! and noone has even made an offer. it was only shown twice in that time.Heeeeeeeeeeeelp !!!

[Asylum]

asylum
i know exactly what u mean i have a house for sale its been 8 months !!! and noone has even made an offer. it was only shown twice in that time.Heeeeeeeeeeeelp !!!



sorry... but I'm sure it's going to get worse before it gets better.

:(

[luv2read]

sorry... but I'm sure it's going to get worse before it gets better.

:(
and that means a lot coming from someone actually "in the business.":worried:

[GUCHI]

luv

thanks for makin my day !!!!!! LOL LOL just kiddin it is what it is.

[pyriel]

Hello all,
I totally understand what Asylum is referring to about banks tightening their belt and looking at the loan application with a magnifying glass. However, these loans are usually coming from new or secondary homeowners. I remember when I first bought my first property, it took 3 months before I finally signed on the dotted line. However, after doing my due diligence and proving that i could turn an ugly duckling house into a beautiful swan, getting a mortgage became easier. It is also the way you package your financial asset that the loan officer would see. Before I buy a property now, I usually sit down with several loan officers from different banks and show them my financial statement. To tell you the truth, in many occasions, I had to explain to them how to read a financial statement. Bottom line, the numbers won't lie and once they see the "net worth" they become pretty friendly.
Here are 4 RE investors:
1. Homebuilders that builds and sells home. If you have the asset to back you up, heck you can make a lot of dough from building home.
2. Passive investor that buys, fix, and rent homes or apartments. I fall into this category.
3. Flippers just like homebuilders can be lucrative however many novice investors try to be flippers without the asset to back them up and stay for the long haul. As a result, they end up foreclosing or losing out on a deal just because they can't keep the the monthly mortgage or loan.
4. Developers are those that have seen it all. These guys know the intricacy of government requirements.
Keep in mind that maybe flippers could fit into Asylum's category. I never ever consider a homeowner an RE investor since its not putting money in people's pocket (at least not until you sell).
Please be careful out there...

Pyriel

[Gilligan]

...To tell you the truth, in many occasions, I had to explain to them how to read a financial statement. Bottom line, the numbers won't lie and once they see the "net worth" they become pretty friendly....
Pyriel
Sometimes a loan officer will ask me, "Mr Gilligan, you show your net worth is $$$$$ but your government salary is only $$, how can that be?" I simply answer that I invest in assets and not liabilities. Like Rich Dad would say, "Assets puts money in your pocket and Liabilities takes money out of you pocket."

Here is a link for the SBA's financial statement:
http://www.dola.state.co.us/dem/sba_declaration/SBA%20Personal%20Financial%20Statement.pdf

[XL-entLady]

To tell you the truth, in many occasions, I had to explain to them how to read a financial statement.
As part of my job I have to review the financial statements of private companies. It is amazing to me how many companies don't know that Balance Sheets have to balance! :blink:

If you have something, you either owe money for it or you own it outright. Hello-o-o! Assets = Liabilities + Owner's Equity. How hard is that? :nuts: Makes me nuts!

Of course, driving me nuts is a short trip!

Lady

[squalebear]

As part of my job I have to review the financial statements of private companies. It is amazing to me how many companies don't know that Balance Sheets have to balance! :blink:

If you have something, you either owe money for it or you own it outright. Hello-o-o! Assets = Liabilities + Owner's Equity. How hard is that? :nuts: Makes me nuts!

Of course, driving me nuts is a short trip!

Lady

Maybe thats why businesses fail at such a alarming rate in this country.
1+1=2 doesn't count anymore (pun unintended). A+B=C leaves one to
find the value of A&B, A&C, B&C. Damn that new math is tough. Ooops,
I sound like my parents. I think I'll stay in my Gov't job, alls I have to do
is count inmates. What comes after 1215, damn ! Where's my calculator
when I need it !
:nuts:

[pyriel]

Glad to be out of Afghanistan back with my family. The market sunk while I was gone and if I had stuck with my strategy (100% stock Nov-April/100% G Fund May-October) I would have been ok. Too bad I didn't have the connectivity at the place where I was deployed. But that is ok... What comes down will also go up (slowly;-)

It seemed like the housing market is on sale bonanza... I wonder how many of our members plan on purchasing properties next year? I'm sure lots of them have questions whether they should buy or not. As for me, i'm in a holding pattern. I'm waiting on what Obama will do about this economy. My plan is to stay put for 09 and save as much as I can for future real estate investment. No need to hurry now since we should have 2-3 years of cheap housing market being available.

I was fortunate enough that my wife was able to take care of our rental properties while I was gone. She did a great job keeping all units to occupied. The Marines transfer to Guam from Japan has been pushed back for a couple of years so Guam is also starting to see overbuilding and it is becoming to be a renter's market. Till the Marines start arriving, things will be a little tight.

There are lots of options to implement to ensure all units are fully rented. Incentives that takes away profit are necessary evils to attract tenants. The alternative could be devastating if proper planning is not implemented (just look at what is happening around the country now). I continue to look at section 8 as a viable pool of tenants. However, I am seeing that the market demand is for 4-5 bedrooms rental units. 2 bedroom units just like my 8 unit apartment is seeing a longer turnover than the single housing units that I have (tenants stay longer too). So, some of my options are to turn the 3 bedroom single residential units into 4-5 bedroom units which could command higher price in the section 8 market and/or renovate the 8 unit apartment and turn it into a 4 unit 4-5 bedroom units. All these options, required initial funding and with the uncertainty of the market, a wait and see attitude is the best strategy I could come up with.

Appraisal value is also another avenue that is worth looking into. It seemed that values of my properties are in an all time high and it might be a good idea to reconsolidate and refinance. I haven't seen the numbers yet, but if I decide to do it, I definitely will not be getting extra cash and use them for something else.

Working with real estate is different from each place and from each individual. My wife and I are fortunate to have government jobs that allows us to take over payment of all rental properties even if they all become vacant for some unknown reasons. Not everyone has this kind of luxury and this is why we are seeing lots of foreclosures all over the US. People are just prepared for the worst case scenario.

I do hope that everyone continues to be proactive with their investments. Always be careful and always be safe. Continue to come and participate with this site. Continue to help us help each other.... TY

Pyriel

[GUCHI]

pyriel/MB
a mortgage broker told me that interest rates could hit 3-3.5% within the next 90 days, have u seen any indications to justify those numbers ??? i'm looking to refinance and combine if I can 2 home loans.

thanks
guchi

[GUCHI]

PYRIEL/MB
does anyone know which bank is better to deal with refi on a rental prop. ????? my bank is willing to give me a 4.3% refi on my rental, but i don't want to bite the first rate I get.
thanks

guchi

[Elgallo]

Guchi: What part of the country are you in? I just got a 4.875 quote on my principal residence at a 45% LTV. Typically, interest on NOO (Non Owner Occupied) property is higher. I live in CA.

[GUCHI]

el

i'm in N.C. i just talked 2 my bank today and set up an appt. for fri. to go over the numbers. this is with the bank i deal with.

[hessian]

Folks,
Wondering if anyone can help with this - I'm seeking a reputable source, on a news-story, that I'm almost sure I heard on Bloomberg TV yesterday at about ~5:00 pm. Sorry, but I only caught this on the TV, as I was doing other work.

What I heard was that traders yesterday, started buying extraordinary numbers of puts - I think related to Real Estate/Housing. Anyone hear this also?
I listened carefully afterwards, but did not hear any more on this, or know where to look to confirm this.

I also think I heard that this could affect, in particular, the days surrounding the May OPEX - and that there is an expectation that Housing could drop another 20% by end of May!

Obviously, if I heard this wrong, I do not want to spread/create a rumor. But if correct, it could be significant.
Hoping anyone can assist on finding truth, via options put/call data on this, any way to to confirm/or to deny!
Apologise, but last thing I'd want to do is to pass/spread untrue rumor!
VR

[hessian]

I found one article on Real Estate, that might be some small confirmation...
http://www.bloomberg.com/apps/news?pid=20601087&sid=a2pBt4Vo5uHk&refer=home
Still seeking someone with real option-trading experience to confirm/deny the options "news" re: chart showing if there was "extrordinary "put" buying on Friday! Could it just have been a "big-boys" news-ploy?
Folks,
Wondering if anyone can help with this - I'm seeking a reputable source, on a news-story, that I'm almost sure I heard on Bloomberg TV yesterday at about ~5:00 pm. Sorry, but I only caught this on the TV, as I was doing other work.

What I heard was that traders yesterday, started buying extraordinary numbers of puts - I think related to Real Estate/Housing. Anyone hear this also?
I listened carefully afterwards, but did not hear any more on this, or know where to look to confirm this.

I also think I heard that this could affect, in particular, the days surrounding the May OPEX - and that there is an expectation that Housing could drop another 20% by end of May!

Obviously, if I heard this wrong, I do not want to spread/create a rumor. But if correct, it could be significant.
Hoping anyone can assist on finding truth, via options put/call data on this, any way to to confirm/or to deny!
Apologise, but last thing I'd want to do is to pass/spread untrue rumor!
VR