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might be dumping my entire RE portfolio

97guns

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#1
i had a very good property manager that i trusted 100%, this morning he suffered a massive heart attack and passed away this afternoon. now i need to make some decisions.... whether to find another property manager or liquidate everything, ive had the experience of using many property managers over the course of my RE investing, 5 others before this one and every one of them became totally untrustworthy over time, nickel and diming me to no end.

if i liquidate i will clear around 950K and would dump it all into trust deed loans that pay 11-13%, netting me around $114K a year, a nice jump in income from my current $66K through the rents. im undecided and have only given it a few hours thought but im leaning towards selling because im pretty sure an honest property manager does not exist.
 

Mujahideen

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#2
Sounds good to me. What are the risks of deed trust loans?
 

edsl48

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#3
Deeds of trust = bond for deeds around my neck of the woods
Property declines in value they walk away leaving you holding the bag
Property goes up they get the profits
um...you sure you want to do this?
 

Hystckndle

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#4
66k net yoy against 245 k original investment.
945 k yoy net at 11 to 13 points.
8 year total return ?
Sounds pretty golden.

Death is stressfull.
Take a few months to think.
JMHO
 

97guns

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#5
im not absolutely sure, but am leaning towards it, my mom and grandfather made a killing with deed loans in the 80's when they were paying 18-21%.

pick and choose the offerings with lots of equity remaining and spread out your notes to diversify. i would probably go 35-50k on a single loan. both my mom and grandfather went through defaults without loosing principal
 

Usury

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#6
Why not sell the ones you own and carry the paper. Save the selling cost.
 

Uglytruth

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#7
A bond for deed is a contract to sell real property in which the purchase price is to be paid by the buyer to the seller in installments and in which the seller, after payment of a stipulated sum, agrees to deliver title to the buyer. It may also be called a "contract for deed" or a "Land Contract"

BE VERY CAREFUL. Laws change & getting rid of the them is not easy. They have more rights than you do.......

I had one destroy my fathers house. I had every I dotted & T crossed, They destroyed the house and lowered the value 40K. I went to law library & knew the law better than the corrupt judge. I got $2500 taking them to court. Told judge I would appeal if he signed it. He signed so I appealed, court of appeals was another $2500 out of pocket and they slapped the judges wee wee. I then got 13.5K......... and am still pissed.
 

nickndfl

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#8
IF you have a good portfolio I would ride it another year. You will probably get more money on the sales next summer, maybe as much as 10% more. I wouldn't be in such a hurry to sell especially since who knows what the tax impact will be next year.
 

louky

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#9
Definitely the time to dump it if that's your decision. Market is topping.

1st sign was for sale homes taking days to sale for the last year.

2nd, now flyers in mailbox, phone voice mails and door knob hangers every day from agents trying to drum up business

Bought the last exact bottom personally and wish I was ready to sale now. 20-22 next housing bottom
 
Last edited:

BackwardsEngineeer

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#10
Hey 97,
We sold some RE in 2010 for what would now be considered low prices, one extremely low. The sale has crossed my mind from time to time, when someone or thing jogs a memory, we honestly have never looked back. Would recommend you talk to a tax pro who specializes in your type of property, you might be eligible for 1031 or similar, whatever you decide go into something with a well thought out exit plan. Honestly, the piece of mind of easy exit is worth a couple less % points of return....
 

saskgold

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#11
Careful 97 Guns...u don't wanna be retired at 39 and back to work at 55. Housing price wise I do think housing is frothy...especially up here in Canada
 

Montecristo

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#12
I think the RE market is topping also. Mortgage rates are ticking up a few more ticks and many people are going to be priced out.

I don't know your situation or where your properties are, maybe sell half or 3/4 of your properties and keep a couple that are close enough to where you live that you can manage yourself. Kind of hedging your bet and eliminating the cost and worry about finding a new property manager
 

Scorpio

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#13
might want to check those 'after taxes' figures before you make any decisions.

doesn't matter what they sell for vs how much you owe,

what matters is what is left after all that + selling fees + .gov stealing from you,

not to mention, a surge in income in 1 yr will be the hell out of you in taxation,

net net net is all that matters
 

Ebie

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#14
You want to exchange real property for FRNs?
FRNs are in a bigger bubble than real estate...IMHO
 

97guns

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#15
It's been a good 6 months or so since my property manager passed away and now I'm having his widow manage it all now, the transition has been seem less and my income hasn't missed a beat.

I've contemplated selling off my silver holdings for income stock/funds because I've become a passive income whore and need more but I'm afraid of the market. I've been out of paper assets since reopening of the market after the 9/11 halt