Bipolar disorder is very amenable to treatment with inexpensive medication, but even when medicated and “in their right minds” many bipolar people make a choice to stop taking their meds, knowing full well the consequences. In doing that, this man abandoned his wife and son, lied and stole from his family, etc. None of this will make Val stop caring about his brother or spare him the grief of the likely outcome of his brother’s situation, but I agree that the help, to the extent he can afford it, should be going to the wife and son, simply because that’s all that will really do any good. In his right mind, I imagine that’s what Val’s brother would want too.

we’re new at this, but we bought a multifamily w/ a fha mortgage about two years ago. we found the house and started in january of 2008, but didn’t close until june of 2008.

we did it the “wrong” way. fairly early in we were told by our lawyer there was a lien on the house from the fire marshall- the owner couldn’t even sell it to us. the realtor knew all along- she even had the paperwork from the fire marshall, and she gave it to us once we asked for it.

plus, the property card for the city listed the house as a 3 family w/ 3 kitchens and 3 bathrooms. the house was actually a 4 family with 4 kitchens and 5 bathrooms. everyone told us it would be easier and faster to change the house to match the piece of paper, than to try and change the paper to match the card.

so we hired a licensed builder and had a hold harmless clause written up, and we did the work to the house the owner couldn’t afford to do. the fire marshall didn’t even have the paperwork anymore- it was in a different city office because a warrant had been served, so we gave it to him and he LOVED us- he was so relieved to have someone finally fix the problems. and the owner could stop worrying about the warrant for his arrest- the city had given him 30 days to remedy the 14 fire code violations, and it had been over a year, so it was a scary problem for everyone.

the place is still a bit of a fixer upper in some respects, but we’re so happy. we kept the tenants that were here before. their rent is still crazy low. because they had to do all of the work w/ snow removal, lawn mowing, and whatever their apartment needed, their deal w/ the old landlord was very low rent. so we made an agreement to keep their rent the same if they’d keep doing the snow removal and lawn mowing.

the very nice “owner’s apartment” we rented out right away. we’ve had the same tenants in there for almost 2 years.

we moved into the two apartments we combined to make one apartment. it is finally no longer a disaster- we could rent it out now if we wanted to. we might do that and find another place soon. or maybe not. i think now we know we have very good long term tenants in both apartments, we’d feel comfortable renting out the one we live in.

when the family moved in upstairs the place didn’t need painting, but i told them i’d pay for whatever paint they wanted, so they could decorate how they wanted and make the place theirs. one bedroom is a crazy shade of magenta, and another is tan w/ black trim. yikes. but it makes them happy, the rent is very reasonable for the 5 bedrooms they have, and i know they’re not going anywhere any time soon. i’d rather take in a little rent less rent each month and know i’m probably not going to have to show it for a while, than try to squeeze out evey penny and then have them move because they can find a less expensive place somewhere else.

anyway, we’re happy we bought this multifamily house. and we even did it WRONG. imagine how happy we’d be if we had bought a house w/ fewer issues???

before we bought this place, we were paying $1250 a month for a tiny little attic apartment. it was ridiculous. i’m 5′ tall, and i was too tall for the shower. i still work in the town where we used to live, but 40 miles away we bought this house.

our mortgage payment is about $2200 a month, for the principle, interest, and insurances- mortgage and homeowner’s. we take in $1330 for one apartment and $625 for the other. ours would rent for about $1000.

our apartment is a million times better than the tiny little attic one we were living in. sometimes my husband and i will be arguing about something and i can’t even focus and we stop arguing because i’ll say something like “wow- i can’t believe how high these ceilings are- look at how much space there is over your head.”

jeremy- if you’re renting now, and are thinking about owning rental property, then i’d look into an fha mortgage on a 2-4 family. you’ll only need a small down payment. and if you don’t have the down payment, there are programs to help w/ that. we had been saving for a 20% down payment, but used the $$ to fix up the place before we bought it, and then put down a 3% down payment. i didn’t look into the down payment assistance program, because we already had enough money.

also, one thing i learned that could be really helpful if you are looking for a bargain in the winter months- you can’t get a fha mortgage on a house that has peeling paint. your real estate agent will most likely tell you to not bother w/ houses like that, because you won’t be able to get the mortgage approved. and if the owner doesn’t have the $$ wait unti spring to fix the house before he sells it, then lots of buyers won’t even try to buy the house either, because only people who can pay cash for the house or get a different mortgage will be interested.

here’s the thing we learned- you can still get an fha mortgage on a house like that, if you put 150% of the cost to cure the peeling paint in an escrow account, and then you’d have the work done in the spring, when weather conditions will permit that kind of work.

you might be the only buyer who knows this and comes along who will pay a decent price for his house, and he might sell to you. it will be more than he would get from an investor who is in a position to pay cash, and will pay a rock bottom price. and it will be less than another similar house w/out peeling paint. you’ll save some money, he’ll make a little more money, and everyone will win.

it’s hard enough to sell a house in the winter months, and one that’s got peeling paint will be almost impossible to sell.

and about buying a multifamily- i know some people prefer to rent out single family homes, because the tenants will usually be responsible for all of the yard work and snow removal and utilities. but we were thinking it would be nice to have a multifamily because even if some of the tenants flake out and don’t pay their rent, they would hopefully not all flake at the same time, and there would always be at least some money coming in.

i imagine eventually we’ll buy some single family homes, but before then i want to make sure we have a huge amount of money set aside, just in case we get problem tenants.

this was long. yikes. anyway, i hope you do it jeremy!! i’m so happy we did.

A few years ago, I moved from central Illinois to Chicago for a new job. The new job was risky (a startup) and in case things didn’t work out, I didn’t want to sell my house (in my hometown).

Right as I moved, a friend I trusted needed a place to stay, so I rented my house to him. Since he was a friend, the agreement was that he would handle most house-maintenance-related issues on his own, and I would charge him a fairly low rent. I think I charged him $650/month. Later, his brother moved in, and they paid me $850/month. Consider that, at the time, the mortgage was costing me about $1200/month (that includes an escrow account that paid property taxes and insurance). My friend-tenant paid all the utility bills. Obviously I was losing money (but not as much as if the house was left empty). However, I figured I was coming out ahead, since the rent covered all the interest, taxes and insurance portion of the mortgage payment.

My friend finally moved out and the house sat unoccupied for several months. This was extremely stressful for me, as living 150 miles away, I couldn’t check on it regularly. So in addition to the mortgage, I had to pay a caretaker to regularly check on it and shovel snow (I didn’t want it to look vacant).

Living so far away, I also had to hire a property manager to (1) help me find tenants and (2) take care of the management once a renter was found. If you don’t hire a property manager, ask yourself this question: are you willing to take emergency phone calls at 2:00am in the morning because there is a flood or some other emergency?

Fortunately, my new job has worked out, and I’ve been able to completely pay off the mortgage on this house. However…

My property manager takes 7% of the rent, which is $1200/month. I paid $164k for the house in 2004. Property taxes are around $4600/year (there is additional tax because it is non-owner occupied). I’m now on the second tenant placed through my property manager, and both tenants requested a number of smallish repairs whose net costs added up to about one month’s rent.

Also, insurance on a rental property is higher; I pay around $700/month. Finally, for tax purposes, a rental property is considered a capital asset, and has to be depreciated. There is a cost for depreciation, payed when taxes are filed.

So, $1200/month in rent is $14.4k/year. That’s $13.3k after management fees, $8.8k after property taxes, $8.1k after insurance. Maintenance and repairs will be at least $1k this year (likely more), so I’m looking at a net profit of $6k to 7k for the year.

Is it worth it? Since the house is payed off, it’s basically “free” (i.e. passive) income, especially considering that the property manager handles the bulk of the management-related tasks. I look at it this way: 6 to 7k/year on a $164k investment works out to a return of over 3.5 to 4%. Given today’s low rates on CDs, money market and savings accounts, that’s a decent return. But that assumes the house is rented 100% of the time.

Overall, my take on being a landlord is that it only makes sense if you have a lot of capital. And I mean so much that your rental is an equal part of a diversified investment portfolio, that is equal parts stocks and other long-term investments.

Jeremy, I was considering rental property, but I just can’t get past the headaches involved. If you can handle bad renters as well as the good ones, it might be an idea for you. Good luck!

Craig, I’m 27 too and do not believe that the tax status of the Roth IRAs would be changed down the road for what’s invested now. I agree with Trent – they may change Roth IRA contribution rules in the future, but current investments will probably be grandfathered in.

Vai, you have your own family to worry about. Your brother needs emotional support but you need to keep your money for your future.

Julian, I agree with Trent – you need a roommate or a cheaper apartment. I’m 27 now and live with my husband in a house we bought…our mortgage is $740 a month and we need $300 a month for property taxes and homeowner’s insurance. After college, we lived in a $399 a month 1 bedroom apartment. $925 a month on your salary is a killer.

Fair advice given above. Something in the same lane I’d also recommend is Ramit Sethi’s “I will teach you to be rich”. Borrow the book at the library or take an evening or afternoon at Barnes and Nobles and read some of the chapters and see if you like it. Also, if you want a kick in the pants Larry Wingit’s (probably butchered the last name) “your broke because you want to be” might also be worth a look. In the end you have to make some choices. Choose to live like you are for the next few decades, or make some tough changes now and in the near future to live better in the next few decades. Good luck.

Generally the bottom 2 brackets were in the 9-20% and 15-22% range over the past 60 years. In the Reagan years the bottom bracket was 11-16% and the 2nd bracket 18-22%. But that doesn’t tell you a whole lot since you ahve to look at the size of the standard deduction and the top income rates for each bracket.

I dug into historical tax rates for a family of 4 making median income on my blog a while ago. If you look at just that specific family making median income with a standard deduction then the effective tax rate has varied between 6-13% from 1946 to 2006. In 2006 it was about 9%. In fact in the middle of the Reagan years it hit about 12%. This is the EFFECTIVE tax rate which I think is a better apples to apples measure over the decades since exemptions, standard deductions and the size of the marginal brackets all changed over the years.

But over the same time period the social security withholding tax has increased up and up. So if you add the effective income tax rate and the social security tax for median income family then the combined tax has trended up from 7% in 1949 to level off at a rate of 16-19% for the past 30 years.

Also, I don’t think that we will ever switch away from a progressive tax structure. Therefore, I think it is wise to put part of your money in tax-deferred investments, so that later you can withdraw it at the lowest tax bracket rates. Even if they create a national sales tax, I expect it would be dwarfed by income tax, which we’re all already used to paying.

First Trent you are way off the mark. The brother is not in his right mind he has untreated bipolar disorder and is either an alcoholic or self medicating. Neither of which is a good thing.

He’s probably done all these impulsive things while he was manic.

Now, the first thing I’m going to suggest is the letter writer contact NAMI. It’s a great organiziation and they have support groups for families of people with mental illnesses. They can also probably help you with resources.

The biggest thing, though, is as much as you want to help your brother there’s only so much you can do. Unless he wants help you can give him money you can take him to therapy you can get him medicines but unless he’s willing to take the steps to take the meds and get help there’s probably very little you can do.

for the person who said he needs pills shoved down his throat – well, even if she could get her brother committed and taking meds if he didn’t want to stay that way as soon as he left doctors care he’d go right off of them.

The biggest thing I think is contact NAMI also the Depression and Bipolar Disorder Support Alliance they can offer you assistance, even if it’s just support.

I have a sister-in-law who was diagnosed as bipolar, and then borderline personality disorder. Trust me, that is no fun.

Here’s what I would do:
1) contact your sister-in-law, and ask what I can do to help her, and your brother. She’s closer to the situation and might have some perspective. Plus, her son is one of your closest relatives, and helping them could prove to be very rewarding. In fact, my husband and I ended up adopting my sister-in-law’s oldest child, since the father was deceased.

2) See if you can arrange for a place for your brother to stay, even if it’s a mat on a floor. As long as it’s clean and safe, that means he has a place to go, when he can remember that it exists. Arrange for meals there, be they ever so humble. Just food and shelter are helpful.

Other options will probably flow from there.

Ditto #7 to Lehanne. Did you just assume you didn’t have to pay the bill ever since you didn’t get it?