Future Income - Posted by Charlie (FLA)


#1

Posted by David Alexander on December 25, 1998 at 12:42:20:

Simply put, it is an IRA set up with a custodian,
that lets you make the choices of which investments.
I currently use Mid-Ohio. You can direct your funds
to buy paper, do rehab deals, promissory notes, etc.
When you have your money in a typical account say for Mutual funds, Your money compounds at one rate.
But, on the other hand if you are constantly getting
that money back in from say paper investments, and reinvesting it you start a compounding of assets, and your yield skyrockets.

David Alexander


#2

Future Income - Posted by Charlie (FLA)

Posted by Charlie (FLA) on December 24, 1998 at 15:42:34:

Friends,

I have ground to a halt in my real estate investing for the past two years. Recently I have tried to secure several forclosures in my area but they all seem to sell very close to the asking price. The realitor’s advise people ( off record ) to bid the house at asking price plus commision.
The other scenario is that the value of REO’s or foreclosure’s has been bid up due to people coming from the East Coast of Florida to West Coast. The property here is a steal compared to the East Coast. We also have a tremendous amount of retirees who are searching out these properties.

I am searching for a revenue stream for my retirement. I do not need income to survive on at the present time. I have money to invest but I am not sure what direction to take any longer.

The property I have secured in the past is secured within a
rental home portfolio. I did plenty of research prior to becoming a landlord so I have no tenent nightmares to tell.
I have tenents who have rented from me for 4 to 5 years.

My principal concern is also what the tax liabilities are on
flipping houses and securing notes.

I will welcome any and all advice from the board.Also, I will happy to assist any one on questions pertaining to rentals.

Sincerely,

Charlie


#3

Re: Future Income, Finacial Planning - Posted by Ruel

Posted by Ruel on December 30, 1998 at 10:37:15:

Charlie,

I would sincerely advise you to speak with some
people who have financial planning experience if you
wish to make the best use of “future planning” regarding realestate and the associated tax consequences.

Unfortunately I dont have enough information to recommend anything in particular. There are a number of financial products out there that have different advantages depending on how close to retirement you
are.

Also, IRAs have many problems assiciated with them such as taxation and timely availability. They might not
be right for you. Some type of Roth IRA with a brokerage account option might be more suitable if you want control of investment, tax-free growth and can wait until 59 1/2.

I work with people in financial planning; if you like, you can e-mail me directly for a pertinent discussion.


#4

Re: Future Income - Posted by David Alexander

Posted by David Alexander on December 25, 1998 at 12:10:11:

Look at setting up a self directed IRA if you haven’t already. If your looking for Income streams, look at
buying or creating paper. Mobile Homes, 1st mortgages, 2nd mortgages, etc. Maybe get the word out that you’ll partner with people in the area and carry back the paper on the deals in your IRA. You would have more deals than you would know how to handle. I would
say try to keep your money diversified and not ot much in one deal though.

Good luck

David Alexander


#5

Re: Future Income - Posted by Bud Branstetter

Posted by Bud Branstetter on December 25, 1998 at 08:37:37:

To address your concerns about flipping. If you start doing too many you become a dealer. There is no specific number that says you are a dealer. The IRS may not bother you for years. Then they will go back and nail you for the back taxes. The taxes result from notes that you take back. As a dealer you are not entitled to depreciation or installment sales. All of the profit(that is future income) is taxable in the year of sale. That are ways to approach the problem such as L/O’s, corporations, etc.

Read all the articles here and learn ways to make money without using all of yours. L/O’s, flips(all cash), MH can provide you income. While you can do foreclosures, they are not for the uninformed.


#6

Re: Future Income - Posted by Erskine

Posted by Erskine on December 25, 1998 at 06:37:55:

Please share some of the methods used to avoid “tenants from hell”…i.e. what type of background checking beyond credit reports? Did you visit the renters at their then present homes without calling to see how they actually live?

What is your opinion of section 8 tenants?

Thanks
Erskine


#7

Spend Some Time At The Cash Flow Forum - Posted by Marvin Seawood

Posted by Marvin Seawood on December 24, 1998 at 23:57:34:

Good luck, Charlie.


#8

Re: Future Income - Posted by Rob FL

Posted by Rob FL on December 24, 1998 at 23:04:51:

You need to start looking for properties that either (1) no one else wants or (2) no one knows are for sale. I was really frustrated myself a few months ago. But thanks to advice I got from the wonderful people here as well as some courses I bought, I have regained some focus.

I just bought another rental house last month. I did it by driving neighborhoods and looking for vacant or neglected houses. I sent out form letters to about 50 different people who owned these houses. And ended up buying from a lady who didn’t want to sell the house I wrote to her about but did want to sell another one she had. She gave me owner financing with 7.5% interest and low down payment. It is the second house I have bought (besides distressed properties) where the property wasn’t even being advertised for sale in any way.

Merry Christmas.


#9

Re: Future Income - Posted by darin

Posted by darin on December 24, 1998 at 16:49:22:

Charlie,

If I read you right, you sound a little frustrated. It sounds like not only do you want to start striking up some deals but have some fun doing it. in my opinion, maybe you should go back to some of your real estate investment reading material or order some new stuff from other investors to get your creative juices flowing and maybe focus on a differnt arena of strategy for investing.


#10

Re: Future Income - Posted by Charlie ( Fla)

Posted by Charlie ( Fla) on December 25, 1998 at 12:20:03:

David,

Excuse my ignorance but what exactly is a self-directed IRA? I was totally surprised to learn from this forum that I could hold an IRA in real estate.

David, can you provide me with some examples of how to go about finding notes or advertising to secure notes.
I appreciate your response and hope I may assist you in the future.

Sincerely,

Charlie


#11

Re: Future Income - Posted by Rob FL

Posted by Rob FL on December 25, 1998 at 09:07:25:

I use a somewhat inimidating rental application. It is very thorough asking for driver’s license and social security numbers. References for all previous landlords in the last 5 years and all previous addresses. Info on family size, pets, cars. Also background info, like job and income info, any BK’s or foreclosures or criminal background.

It says up at the top of the application : “Only clean, responsible people who pay rent on time need apply. All refrerences will be verified thoroughly.” It also says down at the bottom that we are authorized to do a credit, employment, and criminal background check. And any information found to be false will be grounds for eviction, prosecution, and forfeit of all deposits.

I also require that all applicants show me their driver’s license and social security card before we sign the lease (best if at time of application). This allows me to verify all their info as true.

It is not perfect, but it has worked well for me. (I will admit that most of the ideas I have stolen from others.) If you want a copy email me.


#12

Re: Future Income - Posted by Charlie (FLA)

Posted by Charlie (FLA) on December 25, 1998 at 07:46:31:

Erskine,

I believe the single most vital step in rentals is the initial contact and rental application. Prospective tenets are often intimadated over completing a rental
application asking questions as to previous landlords,
credit reports and employers name & number. The aplicants who return the completed form are the first step towards selection. Call and verify everything, never size anybody up or assume you believe you have a
good feeling about the person. People do lie. Next get
1st months rent, last months rent and security to equal
or exceed monthly rent. If the tenet can not make the required deposit you do not need them. We utilize a base rent plus a deduct off rent ($50.00) to insure all
rent payment is in by the 1st of each month.

Section 8 tenets will vary from community. The main problem with Section 8 tenets occur when a single mother with children gets a new boyfriend whom you have not qualified or even do not know is living in your unit. There also times when individuals rent out rooms to other tenets within your unit. I personally do not do Section 8’s. I have a person that a meet a few years back that did them. He had good and bad experiences. I
am sure if you screen prospective tenets you will be fine. Also, please remember if a person on this program
causes problems they will be deleted from the program.

Screen your tenets well and you should have few negative incidents.

Sincerely,

Charlie


#13

Re: Lost My Way - Posted by Charlie (Fla)

Posted by Charlie (Fla) on December 24, 1998 at 18:24:30:

Darin,

Thanks for the reply. I hope you are having a nice Christmas Eve.

It is rather bizzare to perhaps to be having this conversation, but I just lost my direction and focus.

I didn’t stray off and attempt another form of investment. The problem is that I didn’t do anything.

I have been lurking around this board off and on for about a week or so; intimidated whether or not to post.

I decided to further my education and submit a post for

review. I am a progressive person that learned long ago

to stay away from negative people.

The purpose of this forum is to gain knowledge and experience. An equal fact of magitude is to share and teach. I believe real estate is the best vehicle for us

to utilize to enhance our lives and financial resources.

The best item I have realized is the time value of real estate investing. Please feel free to sugggest any and all avenues for a wayward investor to research.

I wish to thank you kindly in advance for any advice.

Merry Christmas All,

Charlie


#14

Self-Directed IRA Custodian - Posted by William L. Exeter

Posted by William L. Exeter on December 28, 1998 at 20:58:27:

A self-directed IRA can invest in virtually any asset. The key is to locate an IRA custodian that will administer “unique” investments such as real estate, trust deeds, mortgage loans, tax lien certificates, etc. Security Trust Company does administer self-directed IRAs and we’d be happy to walk you through your transactions. Please email me if you would like more information.

Bill Exeter.
Security Trust Company.