About to buy our first fix, rent and refinance.

[Patrick David Broughton]

Hello everyone,

Me and the wife are about to buy a small single family home in Richmond or Newport News VA. We have just over 100K in cash. The homes we are looking at are around 60-80K. Almost move in ready besides some paint and new appliances. 5-10 k in rehab costs.

Our plan is to buy the house for 75k and put 10K into it. Rent is going for 1300$ per month, so hopefully we can get a renter in for 1300$ quickly. The house's ARV should be 120-130K. We plan on putting mortgage on it for 75% value - 95K after all done. Rinse and repeat in a perfect world.

My questions- We need some contacts for a management Company, appraisal company, and real estate Lawyer in Newport News and Richmond.

Question 2- After we put a mortgage on the house do we need to put the 95K into a 1031 exchange? 

Question 3 - Does my overall process workout? Am I missing any big giant steps? 

I'm trying to learn as much as I can about everything real estate but soon I'm going to have to jump in head first!

Patrick Broughton

[Nathan Gesner]

Quote from @Patrick David Broughton:

A 1031 Exchange involves selling one property and purchasing another. When you sell the property for a profit, you have to pay taxes on it.

If you are following the BRRR method, you will pay cash for the property and renovation, then get a mortgage on it to pull your equity out. Because you are "borrowing" money, you don't have to pay taxes on it. The equity is then available to purchase the next property. Rinse and Repeat.

[River Sava]

Hey Patrick- I am not too far away in Blacksburg right now! Would love to connect and helo you out where I can

[Eliott Elias]

Once you recoup the 95k that money is debt, therefore it is tax free. 1031 only works when you make a profit and the property was owned for more than 1 year. One component you could be under-estimating is the rehab. 

[Sam Levine]

Being that the 95K is debt and not profit a 1031 would not be applicable. Good luck!

[Ana Nuckols]

Hope this is helpful! Happy to connect you with some folks here in Richmond that are in PM, appraisers, etc.

Question 2- No that is not necessary as you are not purchasing another comparable property and selling your current property.

Question 3 - I would advise speaking with a real estate professional. There are ALOT of steps in between the transaction, especially if the other side has representation, that may delay or even sabotage the deal. 

[Ana Nuckols]

Hope this is helpful! Happy to connect you with some folks here in Richmond that are in PM, appraisers, etc.

Question 2- No that is not necessary as you are not purchasing another comparable property and selling your current property.

Question 3 - I would advise speaking with a real estate professional. There are ALOT of steps in between the transaction, especially if the other side has representation, that may delay or even sabotage the deal. 

[Dawn Roy]

Here are resources for you here in Richmond:

Management:  https://www.padgettpropertiesv...

Appraiser: John Foster 804-216-6288 ( I have others if he is busy)

Real Estate Lawyer:  Heath Gates (Cowan Gates) 804-320-9100 or Aurora Title 804-729-9005

Inspector:  You didn't ask for one but you should have a good one available to you.  I highly recommend Chuck Branch with Pillar to Post. 804-928-1607

*1031 will come into play when you sell your investment property.

Cheers!

[Jacob Sloop]

Hey Patrick,

Im in the Hampton Roads area and would be happy to help !

Feel free to message me

[Michael Vittorio]

Quote from @Patrick David Broughton:

Hello everyone,

Me and the wife are about to buy a small single family home in Richmond or Newport News VA. We have just over 100K in cash. The homes we are looking at are around 60-80K. Almost move in ready besides some paint and new appliances. 5-10 k in rehab costs.

Our plan is to buy the house for 75k and put 10K into it. Rent is going for 1300$ per month, so hopefully we can get a renter in for 1300$ quickly. The house's ARV should be 120-130K. We plan on putting mortgage on it for 75% value - 95K after all done. Rinse and repeat in a perfect world.

My questions- We need some contacts for a management Company, appraisal company, and real estate Lawyer in Newport News and Richmond.

Question 2- After we put a mortgage on the house do we need to put the 95K into a 1031 exchange? 

Question 3 - Does my overall process workout? Am I missing any big giant steps? 

I'm trying to learn as much as I can about everything real estate but soon I'm going to have to jump in head first!

Patrick Broughton

I invest in the area and Lisa Murdock with BHHS Towne is fantastic. Haven't had an issue in 2 years. She's great! I'll PM you her email.