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Ten Yard Fight

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  1. My favorite strategy is to take $500 to a $5 table with 10X odds. I play $5 on pass and $50 on don't pass, every single roll I play for hours, collecting free drinks and comps. I try to have a good time. I leave when I've got either $0 or $1000, or when I get tired. If I want to leave, but I haven't won or lost much, I'll accelerate the betting for about 15 minutes just so I 've got some "result". I win almost every time...(Small sample size of about 20 sessions). I haven't beaten the game, but I've reduced the house edge to almost coin-flip odds, and I take advantage of the player's only edge: He's allowed to quit while he's ahead. The house is not...
  2. That surprised me as well. That's an expensive jump for first-timers, must be people that were intentionally waiting for an integrated device or owners of another brand of mp3 player? Lots of switchers in the survey: half of the buyers jumped carriers to AT&T and one-third were new to Apple products. I'm strongly considering moving from Treo to iPhone and it will be my first apple product. I've been doing just about everything the iPhone does on my treo for years, and I've been carrying all of my MP3s on a few SD cards and using my Treo to listen to them. Still, my Treo is starting to look like a dinosaur and although I'll probably be disappointed with my next phone in a lot of ways, I'll take the bad with the good. I'm paying very close attention to Treo converts...
  3. Thanks Mike. That's the conclusion I came to as well...partly from reading this thread and what you've been able to do in Fort Wayne.The thing that really made me think about it was the existence of a AAA tenant. I don't really know how to value that.
  4. After chatting with Jeff and a few other people, I'm going to let this deal go. There wasn't any monthly profit to be had, only the possible appreciation.
  5. I don't have a lot of time, but I want to describe a potential deal to you. 2 BR, 2.5 Bath 1190 sqft Condo in a trendy section of downtown Indianapolis. The cost is $245,000. It is leased to pharmaceutical giant Eli Lilly for 3 years @1900 monthly. Assuming the condo is worth $245K, what kind of premium is reasonable to pay for having such a great tenant in place. Also, the seller (a friend) claims that downtown Indianapolis condos have risen 10% annually over 3 years. Thoughts?
  6. Is it illegal to be a licensed Realtor, and to own a mortage company?
  7. That helps, thanks RKMoney. This guy was upfront with me in saying that he'll make money off both the real estate commission and the mortage. He said therefore he doesn't need to make as much as a guy who is only going to see one side. I agree with that, I'll just use bankrate to keep him honest...
  8. We chose one of my wife clients as our buyer's agents 3 months ago. We made an offer on a house today. He obviously would like us to use the mortgage company that he has interest in. We want to, and it makes sense that since he'll be collecting a commission for selling the house he doesn't need to make a killing on the mortage. I'm cool with that. How can I be sure the rate is fair? Should I go to Ditech.com and get quote to compare it to? Anyone just want to guess what our rate should be? We're getting 100% financed. An 80% 1st and a 20% 2nd. We have good jobs good incomes, and FICO scores both between 700 and 730. Thanks!
  9. Ok, I tried to clean this message up.The question is for Mike, but I'm pretty sure he hates selling on contract. Thanks Jeff, I don't get the /tags/
  10. Mmmmm..... late night math. Sounds like fun. So you owe $101K and can rent it for $995. Payments are $895, so you get $100 a month in your pocket - AND you get the tax benefits.Only issue would be a bad tenant, and who's going to manage the place for you. For $100 a month I still don't want a phone call at 2 AM telling me there's a leak or the toilet is broken. Not my style, sorry. I'll share a story when I'm done walking thru this thread. Back to (1) - this is a workable deal, and if you get good tenants for the next 20 years, you'll have a cash cow. Good luck. (Note - here's an idea. Find a tenant then consider selling this as what is known as a "turnkey rental" to an investor. Many do want cashflow properties and would buy a property that cash flows to break even AFTER PUTTING 20% DOWN. That means these rocket scientists are happy to buy at $125K, put $25K down, and get $995 rent to cover the $100K loan. Not me, but hey - would you want $25K today vs. $100 a month....?) Another interesting idea. I think it's a very real possibility. Always consider alternate exit strategies. It is the above scenario that is making me consider selling my rentals ($2500 a month gross rent - but I can sell it for $300K or more I'd bet). How is it to be married to a massage therapist? Just curious. My SiL is one. It is great. I don't get a lot of 60 minute massages but about 15 minutes 5 times a week Did I miss the question....? I still don't see a question, sorry.It's not a question. I just throw as many details as possible out there, and someone generally comes along and tells me there is a better way of doing it. For example, I never thought of going from owning a home to renting a home in order to save on transaction fees... It was an idea that was born in the details... Just like the one about getting a tenant then selling to an investor. Thanks! Is this buy vs. rent? If so, you have to weigh $1200 rent vs. a bigger mortgage payment and if that equates. If they are close to equal, home ownership may give more advantages (as hopefully your new asset gains value). Transaction costs of buying also factor in, of course... Yeah, I think it is mostly based on the transaction costs that Mike and I have been discussing why to not buy a house that isn't going to appreciate and sell it in just a couple years. Maybe I should go to sleep..... Another possibility, and I know not a popular one, is selling on contract. The trend around here seems to be asking more than the house is worth, but still getting a buyer because of the attractive financing offer. Require a large down payment, and end up with a tenant that is better than a renter because they have a large down payment and a plan to purchase the property. You either end up with a tenant in favorable conditions or a buyer at a price slightly higher than the house's value. So Mike, if you already owned this house, would you accept $3000 down and $995 monthly from a well screened contract buyer? His $3000 plus something like $175 a month would go toward the purchase price of $121,000 if he executes the transaction within 2 years? Would you rather have that or get your 14K in equity out, give 8K to the realtor, and move on? I know you can tell I'm slanting the question in the direction I want to go, but I'm wanting you to play deveil's advocate on this idea.
  11. Mine was the FAR West Townhouse, all the way on the end, the very last one, of the long building that faced north. It might have not gotten the worst damage, but let's put it this way... If you still lived there, it might have been the worst day of your life. Though I know you've lived longer than I. You'd have been displaced for about 6-9 months. Luckily I ran the Indianapolis Athletic Club with 112 Hotel rooms at the time. Uncle Mike would have had Maid service. I am sorry to hear your brother was in there at the time. You'd have been a good friend to have at the time! It all worked out well, we had friends that were about to lose their house and my brother moving in allowed them to be able to afford to keep it. Help me get my arms around this renting idea. All of us have had it drilled into our heads all these years that renting is throwing money away. Well, so is paying double transaction fees obviously. How would I setup that spreadsheet to analyze if I should rent something instead of buy it. I don't know know what transaction fees will cost. Throwing out your Down payment that you would hope to recoup. Lets say discount closing costs of a Grand each side. (Hopefully someone in the business will post a better number, but with some phone work you can track this down). So a Grand each way (Which I think? is good), that $2K. Now, lets say even 6% on $130K is over $9K. So we are at $11K. So goto any on-line Mortgage calculator and figure out your Mortgage with whatever terms you can get (More phone work)BE SURE to add your monthly Taxes and Insurance (Even if you don't escrow, they need to be added monthly), then you will come up with a figure. Now, what is the monthly rent out of the paper or by going to showings on a place you would take? Lets say you rent for 3 Years, just picking a number, you pick yours. Is the difference between your PITI (Principal, Interest, Taxes, and Insurance) compared to rent-$11K over 3 years a good move or a bad move. Simple math has me seeing that PITI needs to be $306.00 less than rent over 3 years to be worth buying a home you will move out of in just three years. So, with everything escrowed, you could have a mortgage of say $1,000.00 a month, or rent of $1,306 a month and break even not counting appreciation. Living just outside Greenwood for a couple of years, I have to believe that appreciation is what it is in Indiana. It isn't there. Only you can produce these numbers, but I would encourage you to follow up on them. Owning isn't always the answer, run the numbers. Mine are all COMPLETELY speculation. So speculating, lets say it is two years. a $1,000.00 mortgage equals a $1,458.00 rent to break even. I would think that is a whole freaking lot of house you could rent. Go the other way using my SPECULATIVE numbers: Say you rent 5 years, $1,000.00 in Mortgage equals $1,183.00 in rent, most likely NOT the answer??? I just don't know what you are looking at, but that is how the math works. I've learned to be very detailed in this thread as you never know in what area someone can offer advice. This doesn't fit with the general theme of real estate investing, but I'll bet there's lots of footballguys making this decision. Here are some asumptions. 1. I own a 1200 square foot 3 BR ranch valued around $115K. I owe $101K. I bought it when I was 18, put $1,000 down, I'm 7.5 years in to a 30 year mortgage. Mortgage payment of $895 includes Taxes, Insurance, and PMI. I was thinking of renting it for $995 rather than selling it. A hundred bucks isn't a strong enough margin. EXPECT that every year you will have a month of down time. Not always the case, as some tenants stay a life time, but lets just expect that every tenant leaves after a year, they ALL leave the place in great shape, and you show it for a few weeks and get a renter. This would be a decent scenario. Sure some tenants stay 5 years, some tenants do $6K in damage and disappear into the night after 4 months. So, to average it, assume you have a down month every year. In that case you made a WHOPPING $305 for the entire year. You have two months down in any given year and you just netted -590.00 for the year. Are you willing to carry a negative balance for the appreciation? I know the appreciation in Indiana, and I wouldn't be ready to do that. The margin is TOO tight. 2. I work almost exclusively from home, and my wife (massage therapist) works from home part time. Currently, one bedroom is my office, one bedroom is her massage studio, and one bedroom is ours. Obviously people raise kids in 3 bedroom homes all the time, but we both generate income from our extra rooms, and so I pretty much insist on moving to a 4 bedroom -or- a 3 bedroom that also has an office, den, or basement where I can work from. Do you have/Can you finish out a Basement office and just stay? That is Obviously the best financial position. 3. There are plenty of houses around here that are around $130-$150 that we'd be very comfortable in. I think I'd have to spend about $1200 to rent a house I'd be comfortable in. That being said, I've been working very hard to put us on a path to be able to buy a very nice house in 2-5 years. God willing, we'll get there, and I'll want to ditch this next house in a hurry. Any more advice? TIA If you are honestly 2 years away, I would do everything in my power to make the current house work. If it is more like 5 years, then I would look to move. Only you have the facts and numbers you need to consider here. Hopefully you can follow and plug into the framework I put in here. I can follow that, and you are right about the appreciation here. I was interested to know what you thought about renting my house out. If I use a realtor to sell it for 115K, I'll get 107K, right? I'll walk with about 6K. In addition to the $100 monthly profit when it is rented, should I give any weight to:1.) The 8K I'll need to pay a realtor to sell it? 2.) The $125 each month I'm reducing the principal? 3.) The tax advantages? There are some, right? Or do those go away when you rent it? 4.) Mild appreciation of even 1% is $1200 annually. Kind of seems to me the real cost of keeping the house is lower than $895. Obviously this isn't a house you'd buy for investment purposes (not like getting double the mortgage in the Fort!) , but now that I already own it, isn't the threshold lower? It's not my living. I know you'll correct me if I'm way off, go ahead. Thanks again. I'll check back tomorrow.
  12. WOW! Is that ever different!Did your brother have issues with the LL? If the same guy owned it in 97, 98, 99 range, he was no end of problems for me. His son tried, but never got much done. I had to fight them for my deposit. The poor interactions I had at this place actually formed a lot of the opinions of what kind of LL I wanted to be. The opposite of what I experienced here. However, a TON of insurance money to take the pressure off could easily change a person. His name is Jim. My bro thought he was cool, but my brother, a grad student was the ideal tenant. My brother mentioned that maintenance was not fast, and not available on the weekend, but no major problems. You are probably right about that insurance money though. He just moved 6/26 so the deposit is not due him yet. I hope there are no problems. Oops, I didn't mean you weren't a fine tenant. I'm just saying that it was kind of obvious Jim catered to my brother a little bit. Many of the people living there now leave something to be desired, from a landlord's perspective. He's also got quite a few vacancies.
  13. WOW! Is that ever different!Did your brother have issues with the LL? If the same guy owned it in 97, 98, 99 range, he was no end of problems for me. His son tried, but never got much done. I had to fight them for my deposit. The poor interactions I had at this place actually formed a lot of the opinions of what kind of LL I wanted to be. The opposite of what I experienced here. However, a TON of insurance money to take the pressure off could easily change a person. His name is Jim. My bro thought he was cool, but my brother, a grad student was the ideal tenant. My brother mentioned that maintenance was not fast, and not available on the weekend, but no major problems. You are probably right about that insurance money though. He just moved 6/26 so the deposit is not due him yet. I hope there are no problems.
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