Auction Baby!
There are 150 properties going on the block this weekend! I was disappointed last week when I went to the auction unprepared BUT, I just got a second chance!
150 properties fell out for whatever reason - which means less people, less competition and, if last week was any indication, some AWESOME deals.
If you've been thinking Dallas, this is the weekend. Shoot me an email or call me at 214-257-0193 and we'll go together!
Showing posts with label income property. Show all posts
Showing posts with label income property. Show all posts
Friday, March 6, 2009
Thursday, January 8, 2009
Reader Email Regarding Investment Property
Got this inquiry about income property and thought you'd like my response:
Hey Miguel,
That's so great that you're from San Jose. I grew up in San Jose and have an office in Campbell and in Dallas. One segment of my business is cash flow houses in Dallas.
My clients have done really well in Dallas. We have typical returns in the 12-14% range - and that's just on cash flow. We aren't hoping that the properties double in value - because they don't here.
Austin has been a good market, their cap rates are a bit lower because they are betting on appreciation, but the key for an out of state investor is your property manager. I just had a client the other day that had paid their property manager $8,000 to rehab a rental and he couldn't figure out why the property was sitting vacant. Turns out the work was never done.
I also have an acquaintance from the gym that bought new duplexes in Forth Worth. It was cheap - $250K - and the projections looked really pretty. Turns out they bought in a sea of new duplexes. Remember vacant rental property is NOT an asset, it's a LIABILITY. In the end the property sat vacant for EVER, they finally rented it well below their payments and they are stuck in it. Last time I talked to her she was considering walking away.
I have a million stories like this - unfortunately.
So, Miguel, three things. 1) You need 25%+ down for non owner occupied money; ie; income property. 2) Crunch the numbers. As a rule of thumb, your $125K rental should rent for $1250 in order to cover your payments, taxes, property management and return. You may still have repairs to do on top of that. 3) You have to manage your property manager. They are your employee which means that you'll need to "stop in" every once in a while.
Investing in real estate is not PASSIVE income. It's work and it's your money.
Ok, off my professor box! Good luck to you.
Lastly, if you want professional representation and management in Dallas, I am always here to help.
Rebekah
408-378-5569
DallasForeclosureFinder.com
SanJoseForeclosureFinder.com
RebekahOwen.com
Monday, August 18, 2008
It May Be Time to Sell that Income Property
...if you are looking to pull your $500K worth of 121 exemptions from it, that is.
Yes, I am talking about the IRS code again. Section 121:
Section 121, as amended, provides that a taxpayer may exclude from gross income up to $250,000 of gain on the sale or exchange of a principal residence if certain conditions are met. In certain circumstances, a married individual filing a joint return for the taxable year of the sale or exchange may exclude from gross income up to $500,000 of gain. This exclusion also applies to the sale or exchange of stock held by a tenant-stockholder in a cooperative housing corporation (as defined in § 216) and may apply to the sale or exchange of a remainder interest in a principal residence if the taxpayer so elects. See Code §§ 121(d)(4) and (d)(8).
One of the greatest "get rich quick" schemes of the last decade has been the 1031 coupled with the 121. Add on top of that, the ability to convert an income property to a primary residence just by living there for two years and we've hit the motherload, baby!
Well, if the real estate market hasn't already come to to a screeching halt, this new "Housing and Economic Recovery Act of 2008" will do just that. Or maybe it will jettison all those fence sitters into selling that non-performing property while they can still get $500K out of it.
Either way, if you were planning on converting a second home or investment property into a primary residence so you could pull $500K worth of tax free money out of it, your better get the "pulling" done by the end of 2008. After that, your equity will become pro-rated based on the amount of time you held the property as an investment vs how much time it was a primary residence.
That sucking sound is the IRS sucking the wind out of your profits.
Yes, I am talking about the IRS code again. Section 121:
Section 121, as amended, provides that a taxpayer may exclude from gross income up to $250,000 of gain on the sale or exchange of a principal residence if certain conditions are met. In certain circumstances, a married individual filing a joint return for the taxable year of the sale or exchange may exclude from gross income up to $500,000 of gain. This exclusion also applies to the sale or exchange of stock held by a tenant-stockholder in a cooperative housing corporation (as defined in § 216) and may apply to the sale or exchange of a remainder interest in a principal residence if the taxpayer so elects. See Code §§ 121(d)(4) and (d)(8).
One of the greatest "get rich quick" schemes of the last decade has been the 1031 coupled with the 121. Add on top of that, the ability to convert an income property to a primary residence just by living there for two years and we've hit the motherload, baby!
Well, if the real estate market hasn't already come to to a screeching halt, this new "Housing and Economic Recovery Act of 2008" will do just that. Or maybe it will jettison all those fence sitters into selling that non-performing property while they can still get $500K out of it.
Either way, if you were planning on converting a second home or investment property into a primary residence so you could pull $500K worth of tax free money out of it, your better get the "pulling" done by the end of 2008. After that, your equity will become pro-rated based on the amount of time you held the property as an investment vs how much time it was a primary residence.
That sucking sound is the IRS sucking the wind out of your profits.
Sunday, March 2, 2008
The Glamorous Landlord Life
People think that since I own income property, I live the rich and luxurious life. So, let me just give you a glimpse into this cushy job.
First off, I am a professional, have been doing this more than 20 years, and I ought to know better than to manage my own property.
The first issue is that whenever you see a tenant you think it's a problem - when normally it's just a great friendly tenant that wants to say "hi" and catch up.
Second, there is always something that needs fixing.
Third, I hate evicting people.
So, this trip to Dallas was a quick four day jaunt. I had two tenants that were behind and it was an opportunity to touch base with my Dallas contacts.
Thursday I flew in. Met with my handyman about the work done this last month and went to dinner with clients.
Friday, I filed eviction on one tenant and a judgment against another, I broke into the abandoned property, assessed the damages, hauled all his junk out to the garbage can - including melted fudgesicles in the freezer, put out the "for rent" sign, made calls for bids and had dinner with colleagues.
Saturday, I chatted with tenants. Got some bids, shopped materials. Got new keys and a lockbox on the door, collected rents and went to the bank.
Sunday, after church, I checked on a NNN Investment that looks VERY promising, I cleaned my apartment, did the laundry, replaced a key, changed a mailbox lock, got new blinds and a mercury vapor light bulb for the security light and chatted with tenants before I hit the airport.
Sure, I love the weather in Dallas. I went running two out of four days, ate at some great local restaurants, read, worked with clients in San Jose and enjoyed the heck out of my time. I wouldn't change one bit of my glamorous life.
First off, I am a professional, have been doing this more than 20 years, and I ought to know better than to manage my own property.
The first issue is that whenever you see a tenant you think it's a problem - when normally it's just a great friendly tenant that wants to say "hi" and catch up.
Second, there is always something that needs fixing.
Third, I hate evicting people.
So, this trip to Dallas was a quick four day jaunt. I had two tenants that were behind and it was an opportunity to touch base with my Dallas contacts.
Thursday I flew in. Met with my handyman about the work done this last month and went to dinner with clients.
Friday, I filed eviction on one tenant and a judgment against another, I broke into the abandoned property, assessed the damages, hauled all his junk out to the garbage can - including melted fudgesicles in the freezer, put out the "for rent" sign, made calls for bids and had dinner with colleagues.
Saturday, I chatted with tenants. Got some bids, shopped materials. Got new keys and a lockbox on the door, collected rents and went to the bank.
Sunday, after church, I checked on a NNN Investment that looks VERY promising, I cleaned my apartment, did the laundry, replaced a key, changed a mailbox lock, got new blinds and a mercury vapor light bulb for the security light and chatted with tenants before I hit the airport.
Sure, I love the weather in Dallas. I went running two out of four days, ate at some great local restaurants, read, worked with clients in San Jose and enjoyed the heck out of my time. I wouldn't change one bit of my glamorous life.
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