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Old 09-04-2017, 07:57 AM   #201
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People claim to be retired early but if I have to refinish a kitchen or suffer the holding costs of a house while I take my time - that isn't retired. That's work.
+1

Perhaps the definition of 'retirement' on this forum is open to wide interpretation, but from what I see:

rəˈtī(ə)rmənt
(noun)
"the action or fact of leaving one's job and ceasing to work."

I think many here meet the first criteria - leaving their day job, but have they really 'ceased to work'? Even with landlords who have good tenants, It sure doesn't sound like it. Maybe a sub forum is needed for those who have 'working retirements' , an oxymoron if there ever was one.
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Old 09-04-2017, 07:59 AM   #202
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That's what keeps mystifying me. A whole lot of comments about how easy and minimal time and they hardly work, etc. then all these costly horror stories. People claim to be retired early but if I have to refinish a kitchen or suffer the holding costs of a house while I take my time - that isn't retired. That's work... ...
The horror stories are just that - good stories to tell. Some people need a little excitement or sense of accomplishment in their lives. Yesterday I was doing a laminate overlay on a countertop a tenant had rested a nice hot cast iron pan on - for some lengthy period. It was very satisfying to choose how to address the problem, stock the BMW wagon with all the tools and supplies to complete the job from stock on hand, and knock out the task in short order. I could have sat in front of the computer reading Early-Retirement or trying to figure out how to make a cool set of Apple Pro speakers work but instead I had a nice little feeling of accomplishment with physical evidence. I don't get that feeling when I review Morningstar at 4:30pm and discover we've made - or lost - some thousands of dollars in a day. The portfolio goes up and down with no action on my part - I'm without consequence.
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Old 09-04-2017, 08:02 AM   #203
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It was long ago, so I don't remember. What would be your credit score cut-off, and how would it have prevented the motorcycle-in-the-living-room incident?

Remember, our Mr. 800 Score, with nothing in public record besides a divorce and a couple of speeding tickets, turned out to be a dreadful PITA.

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Did the "tenant finder outfit" actually give you the credit scores, or just tell you that the tenants were OK, and collect their commission? Did they check all adults, or only the primary payer?

If you have 10 tenant applicants, and only one is bad but you do not know which one, your perfect criteria would exclude all 10.
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Old 09-04-2017, 08:05 AM   #204
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The horror stories are just that - good stories to tell.
It sounds like they're more than just stories - it's work for pay. I find many ways to challenge and engage myself that don't involve that tradeoff.
Seriously, pj.mask makes a good point - is it really retirement?
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Old 09-04-2017, 08:15 AM   #205
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The horror stories are just that - good stories to tell. Some people need a little excitement or sense of accomplishment in their lives. Yesterday I was doing a laminate overlay on a countertop a tenant had rested a nice hot cast iron pan on - for some lengthy period. It was very satisfying to choose how to address the problem, stock the BMW wagon with all the tools and supplies to complete the job from stock on hand, and knock out the task in short order. I could have sat in front of the computer reading Early-Retirement or trying to figure out how to make a cool set of Apple Pro speakers work but instead I had a nice little feeling of accomplishment with physical evidence. I don't get that feeling when I review Morningstar at 4:30pm and discover we've made - or lost - some thousands of dollars in a day. The portfolio goes up and down with no action on my part - I'm without consequence.
True that one needs to do something other than sitting there watching his portfolio going up/down (which I do a lot). However, my own homes already give me plenty to do, but I appreciate your perspective.

People have different pastimes. Some spend a lot of time and money to pamper a horse. You spend some time to take care of a property that pays good rent. People enjoy different things. We like to cook. Some dread that task, and rather watch TV. People are really different.
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Old 09-04-2017, 08:26 AM   #206
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IMO, for some folks doing repair work is "work" because they'd rather be doing something else. But for others, they love doing it and get a lot of self-gratification from it so it's not "work" for them. I think it all depends on what the property owner loves doing or not doing.
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Old 09-04-2017, 08:34 AM   #207
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On the contrary. We had a great run in the late 80s-mid 90's. Nine years of steady tenants, few to no complaints, paid on time, little to do between tenants except paint the place, run ads, replace an appliance now and then. One can become complacent.

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+1

I think many here meet the first criteria - leaving their day job, but have they really 'ceased to work'? Even with landlords who have good tenants, It sure doesn't sound like it. :
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Old 09-04-2017, 08:40 AM   #208
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On the contrary. We had a great run in the late 80s-mid 90's. Nine years of steady tenants, few to no complaints, paid on time, little to do between tenants except paint the place, run ads, replace an appliance now and then. One can become complacent.
Complacent until the next bad tenant?
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Old 09-04-2017, 08:42 AM   #209
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It was long ago, so I don't remember. What would be your credit score cut-off, and how would it have prevented the motorcycle-in-the-living-room incident?

Remember, our Mr. 800 Score, with nothing in public record besides a divorce and a couple of speeding tickets, turned out to be a dreadful PITA.
We don't talk to anyone below 650. Property managers will try to talk you into lower scores because of what they see as extenuating circumstances, but now that medical issues will apparently be filtered out of the scoring models, I see no reason to buy in. I have fired incompetent property managers that missed key problems, such as a long history of local misdemeanor arrests for malicious mischief, domestic issues, and traffic citations with no convictions (charges dropped multiple times, traffic citations plead down to infractions, etc.). Those folks ALWAYS get evicted eventually.

Before credit scoring, we did take a couple with a medical bill bankruptcy in another state. They moved home, rented a small apartment, got good, stable jobs, but wanted a house for their kids. Her parents lived in the area and helped out. Eventually they bought the house and still live there, fifteen years later.

I refuse to use Craigslist, as it attracts a bad crowd. Zillow, Hotpads and Trulia are the only places we advertise.

Mr. PITA would not have been renewed at the end of his lease.
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Old 09-04-2017, 09:01 AM   #210
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I was curious if any of you own RE in a self directed IRA, and if you did, did you manage to finance it in any way and still have some legal shell around it? There may be taxable cash flow problems with this so may not be a good idea. Tried doing a search here but after several pages of links to firms providing services decided to ask directly.

I know this may be a tad off the current thread direction but taxes and ways of holding RE seem to be pros and cons. Especially since a big pro is the depreciation amount that shows up on tax time to reduce apparent net income made.
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Old 09-04-2017, 09:02 AM   #211
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I enjoy this thread, so many parallels here and to a "Pros and cons of marriage" thread.

Some don't seek it, some don't want it, some don't want the work to keep it, some lose some money, some lose their shirts, some enjoy it, and some despise it.

Keep up the great conversation.
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Old 09-04-2017, 09:14 AM   #212
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It was long ago, so I don't remember. What would be your credit score cut-off, and how would it have prevented the motorcycle-in-the-living-room incident?

Remember, our Mr. 800 Score, with nothing in public record besides a divorce and a couple of speeding tickets, turned out to be a dreadful PITA.
I have a 625 cutoff. That is, NO ONE, not even an 18-year old kid, can have less.

An 800 Credit score person may be a PITA, and very demanding, but would not likely destroy an apartment. Typically, most adults in a household have a similar score according to what I see, and I screen for 125 units.

If someone had 3 speeding tickets in a year, or even three parking tickets, I would decline them. That shows they have a disregard for rules.
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Old 09-04-2017, 09:18 AM   #213
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Originally Posted by Carpediem View Post
IMO, for some folks doing repair work is "work" because they'd rather be doing something else. But for others, they love doing it and get a lot of self-gratification from it so it's not "work" for them. I think it all depends on what the property owner loves doing or not doing.
Exactly. We all have 24 hours in a day. You cannot sleep all day. Some people prefer to eat all day, I see you at the heart attack clinics. Or drink all day. Or read.

I prefer to be a bit active, and have a bit more money to buy a new truck...

BTW, here is my new truck...
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Old 09-04-2017, 09:22 AM   #214
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I made this thread because, at least for me and what I've seen with RE investors that I personally know, as bad as it might look short term my long term gains and income FAR outweighs any of the shortcomings I am having or have experienced. Every one of my houses can burn to the ground, I've already recaptured my entire investment and more
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Old 09-04-2017, 09:24 AM   #215
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.... The taxes we pay at sale time are pretty onerous though - when the places are about all depreciated out you end up with a big honkin capital gains hit as all that depreciation recapture goes rushing out. At almost 68 I'm getting tired of being a landlord but I'm too connected with the properties and want them to look a certain way. ....
One thing that might encourage you to sell 1 per year, is soon you will be 70.5 and have to take RMD's.

Imagine selling places after you start RMD's, along with your SS... ouch.. !!
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Old 09-04-2017, 10:02 AM   #216
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I do understand the sense of accomplishment thing and also wanting to be doing something other than golf/tv/post on ER.org

Maybe rentals give you that. I would get that feeling of doing something after installing a kitchen or painting a room, but I would not want to see it destroyed by dogs/kids/drug users. That is probably the main reason I could not be landlord. It is not that I don't want to do projects in retirement instead of sitting around but rather that I don't want those projects destroyed by others.

We bought this mountain land and spent quite a bit of time clearing out the old roads and making a little storage shed. Eventually we might build (doing it ourselves) a small ski cabin type place.

It got a little hot here in the summer and we were spending a lot of time just goofing around so decided to start writing a multiplayer computer game. That probably also kind of sounds like work.

As for toys, the stock market giveth toys as well. See my shiny new 9000 pound excavator? I even took the pods off of our RV to carry it home!
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Old 09-04-2017, 10:15 AM   #217
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One thing that might encourage you to sell 1 per year, is soon you will be 70.5 and have to take RMD's.

Imagine selling places after you start RMD's, along with your SS... ouch.. !!
The plan was to sell one/year starting in 2008. Man proposes... Instead we've just kept collecting rent and divesting of them now and then. RMDs are kinda meaningless to me - due to my indolent lack of employment by others I've no IRA or Roth or any of that. My SS income is about catfood for dinner but no rent money sized. The gal has about $130k in retirement accounts so it may affect her a little. We really are pretty much rowing our own boat retirement income-wise.
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Old 09-04-2017, 10:34 AM   #218
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I have a 625 cutoff. That is, NO ONE, not even an 18-year old kid, can have less.

An 800 Credit score person may be a PITA, and very demanding, but would not likely destroy an apartment. Typically, most adults in a household have a similar score according to what I see, and I screen for 125 units.

If someone had 3 speeding tickets in a year, or even three parking tickets, I would decline them. That shows they have a disregard for rules.


Senator what about the new HUD guidelines that a landlord cannot have a blanket rule against renting to felons. Kind of scary for the landlord. I am thinking of fair housing coming down real hard on landlords.
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Old 09-04-2017, 11:51 AM   #219
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Blankets have lots of holes. If you have a list of criteria for a person that is deemed likely to be a problem in the future, you can deny them. For example, the kid that at 18 got caught up in a statutory rape case with his 16 year old girlfriend and they have now been married for 20 years is likely not a problem. A child molester with two convictions and a recent arrest can be denied on the grounds the criminal behavior is likely to continue.

We tell people if they believe that qualify they should apply, but we do screen for evidence of current and recent criminal behavior. The credit score keeps a lot of these people out, as do the work history and income requirements.

I keep hoping Ben Carson at HUD now will pop his head up and fix this. So far, nothing.
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Old 09-04-2017, 11:57 AM   #220
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Lots of jurisdictions in large cities east of the Mississippi require that you rent to Section 8 tenants. Most of those folks can't pass the credit score, income history, or behavior requirements anyway. We currently do not accept Section 8 tenants, as that is permissible in the markets where we own. In the Bay Area, the maximum allowed rents effectively restrict Section 8 tenants to apartments, even with the location adjustments to fair market rent.
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