Comments by "Crime Stoppers" (@crimestoppers1877) on "Northeast Landlord's Perspective; Trouble Ahead! Real Estate Update" video.

My approach to real estate as an investor is Buy at my best price and Hold. I do not have or allow tenants, visitors, "guests" or others on my properties ( SFR's). I have found that the minimal profit from renting or leasing is not worth the potential risks. I pay property taxes and continue to have each property with scheduled preventive maintenance as well as a periodic inspection by a Restoration company and Private Patrol operator to assure that the homeless and transients have not trespassed or dumped garbage on my properties. Buy at the lowest price with no mortgages and Hold for as long as I determine. From time to time I might sell a property at a below market price if I want a quick sale ( less than 7 days). I have never lost a dime in this process: No evictions, excuses, late pays, secret drug labs and excuses ad infinitum. A bite of $500/hour from thirsty attorneys does not increase profit.
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@toddspangler6669 Additional answer with a rhetorical question. Lets say you paid $425k cash for a property with an arms-length market value of 1.3M? You do updates and upgrades ( for YOUR living benefits) of lets say $100k. You live exclusively in the property for 13 months ( identifications, motor vehicles, voting, utilities, mail, taxes etc). Your neighbors observe and know you - AS A NEIGHBOR. The typical residence in your community has a DOM of 60 days in a sellers market. This is Not in an economic downturn or local labor market problems. You can easily sell this property as long as you meet the legal requirements of the LTCG laws. You can write off only those legal expenses for that property incurred over the previous 12 months. Most of the difference is PURE cash at minimal tax. The lower your active or working income the more you keep. If you earned 200K in your "day job" that previous year, you would pay most of it in taxes!! What is fair about that? If you made almost nothing ( less than 40K) you would have zero taxes. I am not a tax attorney, go ask one and they might agree! The required tax forms are very simple and uncomplicated. I have all expense receipts documented and sent to my book keeper who happens to be a retired CPA. NO tenant or tax hassles and it is like I am already retired. No debts to anyone except my annual utility, property tax and insurance requirements. My CPA charges are also lower since I do not need lots of forms to be filled out. Keeping it simple makes YOU money and not the accountants, bureaucrats and lawyers. I prefer to list with a single broker and prefer "Dual agency" where permitted. Many investors love getting deals by using the listing agent as their buyers agent. I try to avoid buyers who require mortgages. Fast and quick is better than waiting for inspections, reviews, loan approvals, Escrow and more and more clerks to muddle up the sale. The BUYER will make lots of money on the transaction but speed is more important to me than a few thousands. My agent loves the 6% + commish and they get popular with qualified buyers looking for almost instant equity. I have had some properties flipped with months and I do not care. I don't like waiting for the money I earned by taking a big risk ( cash transactions are always a risk).
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@toddspangler6669 You have to think outside the box. I came up with this idea while being a tenant of a landlord who had 70 SFR properties , almost all of them leased. I was waiting out a house price bubble and watched quietly as millionaires were losing everything. I learned by watching their machinations, errors of operation and made a list of ALL possible outcomes. It is a long story but they were barely successful ( for the debts and income). I bought my first post housing crash property in a good location at less than 30% of comps/CMA/asking by buying through the listing agent. I learned to be a prudent and careful buyer by watching the failures of others ( Brokers, builders, politicians) . I also hired a tax attorney and RE attorney to help me with tax planning BEFORE any purchase and detailed contract wording to use on my offers. This information is extremely valuable. The laws of property and taxes requires the use of the "correct" words with the specified legal definitions. The typical RE Boiler plate Offers and Agreements do not come near the accuracy required under the law as legal interpretations of these laws changes almost daily. Few tax preparers are Tax attorneys and very few property agents are Real estate attorneys who are in court every week practicing in court and representing clients in the real world. As a buyer, I act like a cross between Gomer Pyle and Forrest Gump right off the bus. I make one offer only and accept counter offers ONLY if it is a better deal for me. I walk if No acceptance of my carefully written offer within 24 hours. It takes time to find each property ( this is my job). ABL = Always Be Looking. I can and do close in a day (until it is properly recorded). A cashiers check can work miracles. Everyone gets paid: WIN, WIN, WIN, Grant Deed.
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@toddspangler6669 and the benefit of virtually NO complex tax audits. The forms are easy to understand and the laws are clear. You mentioned the 2 year exclusion for 250k/500k. Read the tax tables for those with taxable active (earned income). It gets better if you are "unemployed" ie less than 40K/year and have no additional interest income. I like to stay below 15K just in case I make some money somewhere that I did not know about, yet gets reported.
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@toddspangler6669 It is actually quite simple. I do not like complexity involved with unknowns. I am interested in controlling all segments of my investments. Can I control tenants behavior? No! Can I control local market rent rates? No. Vacancy rates? No. And the myriad additional variables involving humans? No. But I can accurately predict an increase in SFR market prices in respect to purchase costs. The tax advantages are huge. I save big bucks on not having to consider the hundreds of pages of annual tax forms. I minimize my legitimate annual costs and write offs. This avoids a miasma of tax regulations. I like the K.I.S.S. principle of Keep It Simple Stupid. What is the primary goal of investment? Increased profits and decreased taxes. I do not focus on maximum profits exploiting sellers, buyers tenants to extract the most. Or having a staff Of CPA's to play the ever changing tax games which is good for CPA's and tax lawyers but not my profits. I like the slow and simple approach with NO debts and less helter skelter and worries. If I need some quick money I can list and sell an SFR for a fast sale (a few days). I can easily sell way below market prices in any market since my buy, repair, property taxes and PM costs are so low. Why be greedy? I have never lost on the sales of any real property. Look at the Case-Shiller studies of housing. I make my increase in assets ( not taxable profits) by keeping it simple over the Long term. Why enable everyone else to make money off of my efforts? ( mortgage companies, taxing authorities, Estate agents, and many more).
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@toddspangler6669 Thanks for responding. You are close. I'll try explaining for the typical flipper perspective and you will understand. Most flippers depend on the following: 1) Quality tenants who are never late so you can have enough $$ to pay mortgage, taxes and insurance. 2) Low mortgage interest 3) Low property taxes, 4) Good local tenant laws so you won't get sued for ignorant reasons. 5) Local courts who will support you when it is time for evictions or criminal tenant and "homeless" issues 6) Good CPA that will help you write off as much as possible for expenses, taxes and other legal expenses from income taxes. I do not need the monthly tenant income stream since I have no mortgages. I never need to worry about damages including wear and tear by tenants. I never have to worry about advertising and screening tenants. I never have to worry about tenant squatting and other "guests" of tenants ie no lawsuits. I never have to worry about my vacancy rate. I never have to worry about looking for write offs to deduct for annual income taxes. Why I have extremely low active income . It is so low I can legally qualify for welfare but I would never do that. The Benefits are Peace Quiet and Freedom from "victim" tenants and overzealous government bureaucrats. Have your attorney look up LTCG for real estate and you will understand. I lose some potential profits but avoid tons of time wasting and hassles. If I need money to buy more, I just sell one of my properties. The only requirement is that I live in that same property for 12 1/2 months prior and make a very low taxable active ( earned + interest) income. But the trade is worth it to me., I live like I am retired and only buy one SFR per year. Some years I do not sell any property since I have plenty of liquid cash from previous transactions ( use for maintenance, insurance property taxes etc on each property some which can apply to my basis when selling).
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Yes live like a "homeless", no job, no income, no government benefits but lots of liquid assets, cars, food, water and of course shelter ( my house). I even have a "maid" service that takes care of the interior ( restoration firm) , but sometimes she makes me a meal ha ha ( not billed to the job). The Life of a 21st century "Al Bundy", but I don't have to sell ladies shoes.
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@johngund9921 I am ready. Think about this. What has the most value to humans? Rank in order of importance: Water, food, clothing, a safe place to live, reliable transportation, and money near the last. If some steals your money, what do you have? If a bank closes and keeps your savings, you know crooked bankers never go to prison and they have your hard earned money. What about Gold, Silver, diamonds? You can not eat these, only trade them. If someone has "lead", it is more valuable than all the Gold in the world if it is not on "your side". So accumulate water, food, clothing, tools and have housing which you own. Do you think housing ( SFR) is valuable now? It can protect and store all of the above safely in all types of weather. So SFR in the correct location is very very valuable to most humans. Instead of just investments mostly on paper just like Fiat ( no intrinsic value) currency.
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@toddspangler6669 Read this and enjoy. After reading you will want to know way anyone is crazy enough to work as an employee in a regular job all which have HIGHER TAXES than via qualified investments. Look at the table for single and see at a MAXIMUM income according to the IRS rules you can theoretically and legally NOT HAVE ANY income taxes due for a single residence transaction that yielded a very large profit according to the tax rules. Like I said you could work your butt off 12 hours per day 7 days a week for a year at $200,000/year ( 2022) and end up paying ALL of it to the IRS on one successful Real estate deal. On the other hand if you earned less than $41,675 in 2022 you would pay ZERO percent tax for your 2022 RE success! I suggest you wait one month until Feb 1, 2023 before you sell to make things look pretty and nice ( > 12 months continuous living in that investment house according to IRS rules) . Why not? Link here---> https://www.investopedia.com/taxes/capital-gains-tax-101/
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