Originally posted by @Amelia McGee :

I'm still in the learning phase.  Just purchased 3 audible books:  "Buy, Rehab, Rent, Refinance, Repeat - David Greene, "The Book On Rental Property Investing" - Brandon Turner, and "Long Distance Real Estate Investing" - David Greene.  I'm hoping once I've gone through these books, things will make more sense.  Like @Michael Ablan , I'm a lone wolf.  I don't have many friends and I definitely don't have family that could help me on this path.  I'm use to doing things on my own and not having to foster relationships with people outside of my tiny circle.  So doing what is uncomfortable is what I need to work on.  I've met a couple of real estate agents and I am also still in touch with the real estate agent who sold me my own home.  I know a couple of fix n flip guys too.  But because I work full-time, its hard finding what niche to get started in.  I really want to invest in multi-family units.  In fact, I've been chatting with a real estate agent in Chicago.  I'm in New Jersey so I'm thinking I'm a bit crazy for trying to invest in Chicago right at the beginning of this venture.  But the contact I made there seems to know his stuff and has some good connections. He sent me a presentation to read and also told me his knows a lender that specializes in multi-family units.  So what am I waiting for?  I have so many questions.  

Amelia, I love your determination even though you feel you are working alone. But the team you build over time will soften that feeling. Spend as much time as you can building your team by searching for BP members in your area to connect with, going to local REIA meet-ups and auctions where other investors hang out. Before you know it, you'll have a lot of people around you to work with and help you.

And as far as deciding which strategy, reading books and getting all of your questions answered, don't wait for all of that. Start by simply finding properties of any kind (SFR, Multi-Family, etc.) and analyzing them (running numbers as flip, cashflow rental, wholesale) without the expectation of buying anything at first.

Once you become comfortable with that, take it a step further and interview a seller (knowing you don't have to make an offer yet). Then try researching the property at the county looking for liens/deeds, encumbrances and code violations. You'll find that in all of this analyzing the best possibilities, offer strategies and exit strategies will reveal themselves.

The fastest way to learn is to jump right into the doing. But this way you can start doing without the fear and delay of having everything lined up first (which strategies, funding, contracts, team, knowledge). Just start doing it but take it one tiny step at a time and learn as you go.

You said, "I have so many questions." What's the first one that comes to mind?

@Karen Dixon

Jill has some great advice for you on the first page of this thread but her @ symbol didn't work right, so I thought I'd let you know in case you didn't see it.

@Lori Greene . Thanks for that great advice. You answered a few of my questions already.  So my biggest fear is running those numbers.  I’ve tried analyzing about 20 properties already using the calculators.  But I question the landlord paid expenses and future assumptions.  I usually guess based on the webinars I’ve seen but I still don’t get how they come up with those numbers.   

@Amelia McGee

The BP calculators are great time savers. But it's best to learn how to run numbers manually on your own so fully understand the formulas and why each element is important. Try to have an experienced investor help you go over numbers. I can help you if you like. Reply with one of your numbers crunches and I'll take a look.

Love this question.

For me it's timing. I purchased my first property in April using 203k for $86,400. Remodeled for $45k. Its now worth $172. With the 203k you must stay in home for at least 1 year. But I also learned from real estate agent you have to pay 25% in taxes on the gain if you sell under 2 years. I was going to take the profit to pay off some of my personal debt then reinvest in another property but as an investor only. My problem is that I also need a place to stay so I'll be renting while trying to start this buy and flip business. Rent is about $1k in my area. Do y'all think it's best to (1) stay in home 2 years, (2) stay in house only 1 year?

Originally posted by @Jan Kerr :

@Karen Dixon Hi Karen, I laughed when you said yout weakness is being blunt. I alwasy had the same problem, but over the years I have learned to let words be my friend and I have discovered that you can be direct as long as you learn the art of being tactful. That way you can say just about anything to anybody and they won't take offense.

Hi Jan! Yea, I will need to work on tactfulness. I really try my best but sometimes put my foot in my mouth. Glad to make you laugh a bit though! lol

@Nicole Parnell Hi Nicole, I see your dilema. We have all had to deal with that question of holding a property longer to be able to take the long term capital gain at 15%  vs the short term capital gain at 23%. But I think there is some confusion in your question.  

There is an IRS Rule that allows you to take the primary residential deduction of up to $250,000 if you are single and up to $500,000 if you are married on any gain earned from appreciation of your primary residence. The requirement is that you must have lived in the house for 2 years out of the last 5 years. 

For an investor who does not live in the house, that is not even an option, but holding a property 1 year and 1 day qualifies for long term capital gains. If you stay exactly one year or less, then you are into the short term capital gain. However, you can reduce the gain on the taxable amount by offsetting the gain by documenting and proof of any capital improvements you put into the proeprty. The capital improvements will be decusted from the gain amount and you will only be taxed on the difference. 

Capital improvements are major improvements that increas a homes' value, not just repairs or minor upgrades. 

To answer your question, If you have stayed over one year, you are already into long term gain. if it is less than one year, how much will you pay in taxes on the gain at 23% and how much will you pay in taxes on the gain at 15%. What is the difference. Can you deduct any capital improvements? Once you know those numbers, you can decide it it is worth it to pay the higher taxes to take your cash now, or if it is worth it for you to forget the cash out for now and stay another year to take the full deduction and not pay any taxes on the gain. 

FYI -I am not an accountant, but this is my understanding based on my own accountant's advice. Please verify with your own accountant before taking any action so you know for sure. I hope this has helped. Good luck to you!

Originally posted by @Jill F. :

Originally posted by @Karen Dixon:

...My strengths are consistency, reliability and being proactive. I'm working on my confidence, gullibility and I can be a bit too blunt. I am trying to increase networking, listen to more RE podcasts and to have more patience with myself. I'm hoping that doing a little bit every day and surrounding myself with more positive people that might help me conquer those weaknesses overtime. 

@Karen, Being "blunt" or very direct, if you can also be respectful, is one of the MOST useful skills to have as a landlord. You are dealing with people with all different types of backgrounds, traditions, and communication styles and preferences. If you try to tiptoe around or worse, dodge an issue, you'll foster confusion and miscommunication. If you can speak "bluntly" about awkward topics, and then make sure you both have the same understanding of the problem, many times people will come up with their own resolution and you can "fix" little problems before they become big problems. In landlord world, I think "hating confrontation" would be a huge liability where blunt, direct communication, is a HUGE STRENGTH that is not often appreciated in corporate America, especially from us ladies. I read that Steve Jobs once said the biggest thing that holds most people back is that they are afraid to ask for what they want. A blunt communicator is going to have less problems asking. ;) Good Luck!

Awesome, sounds like I'm headed in the right direction then. Thank you so much @Jill F. that means alot to me! 

@Lori Greene I love @Michael Ablan said! 

Trying to do this all by myself in the beginning. It was my brain convincing that I could do it all by myself. 

When I started partnering with others and assigning tasks, MAGIC started happening!  

Originally posted by @Lori Greene :

@Karen Dixon

Jill has some great advice for you on the first page of this thread but her @ symbol didn't work right, so I thought I'd let you know in case you didn't see it.

Ty. That happens to me all the time. :( I must do something wrong but I don't know what

Originally posted by @Ola Dantis :

@Lori Greene I love @Michael Ablan said! 

Trying to do this all by myself in the beginning. It was my brain convincing that I could do it all by myself. 

When I started partnering with others and assigning tasks, MAGIC started happening!  

Ola, I know what you mean. I'm always trying to help investors understand how relationships can make the difference between success and failure. When in your journey did you realize this? What inspired you to start working with others or how did it come about? Who did you assign tasks to? 

@Nicole Parnell

@Jan Kerr has given you some great advice. I agree with everything she said. And I'd like to add that since it sounds like you really want to move on, take what she said to your accountant and see if they can help you to deduct any improvements and get clear on the timeline so you can move this property as soon as possible at the lower tax rate.

Your wish is to sell soon and move out so you can free up your equity, correct?

@Jill F.

The trick is to type the @ symbol and start typing the persons name, then wait until the pop-up with names that match it and choose from the drop-down. Try it.

The other thing you can try is to click on the 3 dots at the top right of a post and choose quote, then type underneath it.

Another weird thing to note is that when you use quote lately, if you start typing your reply directly under the quote, it just adds reply to the quote so it doesn't show. See what I mean by scrolling up a few posts to @Karen Dixon post where she quoted you but her reply doesn't appear unless you hover over the quote and click on Show Post.

To get around this issues is to post your reply several lines down from the quote. You can tell if your reply will show or just be part of the quote if you look at the text as you type: If it is light gray as you type, like the quote, it will be in with the quote. If it is black, it will show as a reply under the quote. Try it out to see what I mean.

BiggerPockets is awesome but it seems to be a little buggy sometimes.

How long have you been using BiggerPockets?

Originally posted by @Jan Kerr :

@Nicole Parnell Hi Nicole, I see your dilema. We have all had to deal with that question of holding a property longer to be able to take the long term capital gain at 15%  vs the short term capital gain at 23%. But I think there is some confusion in your question.  

There is an IRS Rule that allows you to take the primary residential deduction of up to $250,000 if you are single and up to $500,000 if you are married on any gain earned from appreciation of your primary residence. The requirement is that you must have lived in the house for 2 years out of the last 5 years. 

For an investor who does not live in the house, that is not even an option, but holding a property 1 year and 1 day qualifies for long term capital gains. If you stay exactly one year or less, then you are into the short term capital gain. However, you can reduce the gain on the taxable amount by offsetting the gain by documenting and proof of any capital improvements you put into the proeprty. The capital improvements will be decusted from the gain amount and you will only be taxed on the difference. 

Capital improvements are major improvements that increas a homes' value, not just repairs or minor upgrades. 

To answer your question, If you have stayed over one year, you are already into long term gain. if it is less than one year, how much will you pay in taxes on the gain at 23% and how much will you pay in taxes on the gain at 15%. What is the difference. Can you deduct any capital improvements? Once you know those numbers, you can decide it it is worth it to pay the higher taxes to take your cash now, or if it is worth it for you to forget the cash out for now and stay another year to take the full deduction and not pay any taxes on the gain. 

FYI -I am not an accountant, but this is my understanding based on my own accountant's advice. Please verify with your own accountant before taking any action so you know for sure. I hope this has helped. Good luck to you!

Jan, this is such a helpful post. Thank you so much for all of the detail. I'm sure it will not only be helpful to Nicole but others reading this thread as well. Does your accountant specialize in real estate investing? 

@Lori Greene Hi Lori, Yes, my accountant did specialize in Real Estate and all things tax related. He's trying to retire now. I'm going to miss him. I've been using him since I bought my frist house in 1992. HIs son is taking over his business, but he's not the same.

Originally posted by @Jan Kerr :

@Nicole Parnell Hi Nicole, I see your dilema. We have all had to deal with that question of holding a property longer to be able to take the long term capital gain at 15%  vs the short term capital gain at 23%. But I think there is some confusion in your question.  

There is an IRS Rule that allows you to take the primary residential deduction of up to $250,000 if you are single and up to $500,000 if you are married on any gain earned from appreciation of your primary residence. The requirement is that you must have lived in the house for 2 years out of the last 5 years. 

For an investor who does not live in the house, that is not even an option, but holding a property 1 year and 1 day qualifies for long term capital gains. If you stay exactly one year or less, then you are into the short term capital gain. However, you can reduce the gain on the taxable amount by offsetting the gain by documenting and proof of any capital improvements you put into the proeprty. The capital improvements will be decusted from the gain amount and you will only be taxed on the difference. 

Capital improvements are major improvements that increas a homes' value, not just repairs or minor upgrades. 

To answer your question, If you have stayed over one year, you are already into long term gain. if it is less than one year, how much will you pay in taxes on the gain at 23% and how much will you pay in taxes on the gain at 15%. What is the difference. Can you deduct any capital improvements? Once you know those numbers, you can decide it it is worth it to pay the higher taxes to take your cash now, or if it is worth it for you to forget the cash out for now and stay another year to take the full deduction and not pay any taxes on the gain. 

FYI -I am not an accountant, but this is my understanding based on my own accountant's advice. Please verify with your own accountant before taking any action so you know for sure. I hope this has helped. Good luck to you!

Thank you sooooo much Jan for your reply. So basically I've been misinformed. A 15% tax rate is not bad at all. My real estate also mentioned that I need to check with my accountant to verify. I just don't have an accountant. I've been doing my own taxes for 10 years now because it's been simple but now is getting complicated so I may invest in one. Your reply definitely has me rethinking now. 

Originally posted by @Lori Greene :

@Nicole Parnell

@Jan Kerr has given you some great advice. I agree with everything she said. And I'd like to add that since it sounds like you really want to move on, take what she said to your accountant and see if they can help you to deduct any improvements and get clear on the timeline so you can move this property as soon as possible at the lower tax rate.

Your wish is to sell soon and move out so you can free up your equity, correct?

 Correct. Jan has definitely cleared up some confusion on my end. I don't have an accountant but will get one. I have proof of major upgrades, so that should definitely help out tax wise. I really want to move after 1 year and a day. 

@Nicole Parnell

@Jan Kerr

Since you're both going to be needing a good RE CPA (jan because yours is retiring and Nicole because you don't have one), BiggerPockets is a great place to start. Ask other investors in your area who they are using and why they love them. And ask other investors at local REIA meetings and auctions. Have either of you started looking yet?

@Lori Greene no I haven't. Do u know how to find people in your own area on biggerpockets? I have the app but unable to see people from my area exclusively.

@Nicole Parnell

I don't really use the phone app. I go to BP on my computer. On the desktop version, you can just click on the search icon at top right of any page, then type a city and state and choose members from the drop down. You won't be able to use additional filters unless you have at least a Plus account, but all members from that area will show up in a list below. (maybe you can do the same thing on the phone app?) Then just start sending connect requests. You can only have 30 requests at a time so, go through them often and delete the ones who didn't accept your request.

Using BP to build your power team is one of the most productive things you can do to have success as an investor and that's why I teach it to all of my students. If you've read all of the posts in this thread, you'll see several members saying that what kept them from progress in the beginning was not having a team and that as soon as they built relationships and started networking with others everything changed for them.

So besides searching members and sending them colleague requests, there are other things you can do to build your team as well:

1. Make the most out of BP. Ask and reply to questions often. Be engaged as much as possible with others, vote on the posts you like, follow others you like. Send direct messages to others to discuss things further or to thank them for voting for your posts, for following you or for sending you a colleague request or to ask them who they use for agents, contractors, etc. The more you engage on BP, the more people will want to connect with you or follow you. This will help a lot with building your team.

2. Ask BP members where the local REIA Meet-ups are. You can also find some online at sites like REIClub.com and REIClubDirectory.com. You can also build relationships on ConnectedInvestors.com, although it's not a great place for education and discussions like BP, but is good for making connections. Once you connect with others on there, see if you can find them on BP too, where it's easier to talk to them, learn from them and get team referrals from them.

3. Go to the local REIA meetings and local auctions as often as possible just to build relationships with other investors. When you start doing this, you'll see that all kinds of opportunities, referrals and possible partnerships will open up and you'll learn so much at the same time.

4. Search for local neighborhood I Buy Houses and For Rent signs and local classifieds and make a list of those investors and landlords. Shoot them a text or email saying you want to connect. Start a conversation about what they're into. Ask for team referrals if you need them.

The kinds of team members you should be building are agents, attorney's, title co's, CPA's, lenders, contractors, inspectors, appraisers and other investors.

Team building will open up a whole new world to you.

What kinds of team members do you have so far?

@Lori Greene

Couldn’t find a lender that wants to go below 87.5k. Found a property and made an offer for 78k (asking price 84k), I thought I had pretty good chance but lender wants 87.5k contract price (80% of accepted offer needs to be 87.5k or more).

Likely could come up with all the cash but then I won’t have any reserve for rehab.

Originally posted by @Lori Greene :

Originally posted by @Ola Dantis:

@Lori Greene I love @Michael Ablan said! 

Trying to do this all by myself in the beginning. It was my brain convincing that I could do it all by myself. 

When I started partnering with others and assigning tasks, MAGIC started happening!  

Ola, I know what you mean. I'm always trying to help investors understand how relationships can make the difference between success and failure. When in your journey did you realize this? What inspired you to start working with others or how did it come about? Who did you assign tasks to? 

 I guess when I started feeling super overwhelmed and realised that this can't be right? No one can be doing this successfully using this approach... That's when I realized. A mentor encouraged me to partner with others. As for tasks, we use VAs and other resources, paid or otherwise. 

@David Adamolekun There are a ton of Hard Money Lenders out there. They may all have similar policies, but they are all actually very different in what they will or will not do. Their rates and lending criteria are very personal to them and where they will lend is based on where they are licensed to lend. If you would like, I can send you a Hard Money Lender Profile Sheet that will help you create a profile on every lender you find so you will know at a glance what they will or will not do and what they want from you as a borrower. I have found lots of lenders who have lower lending threshholds in my searches. 

@Lori Greene

I’m slowing my own progress. I have two left feet and I hammer my thumb instead of the nail. 2 + 2 = 5, I file my taxes on 4/16, and I say “yes” to the sellers terms.

Just kidding!

I really should hire people instead of doing the work myself.

@Nick Rutkowski Hahaha! Nice sense of humor Nick. Yes, you really should hire people to do the work. The minute you pick up that hammer, you are limiting your income potential. Let them do what they do best and get it done fast. Your time is better spent finding your next deal.