My wife and I are looking to purchase a property in the Dallas Fort Worth Metroplex. We are also looking to build relationships in the DFW area, within the REI industry. We have money ready to go. We are being cautious about this method of searching for deals, but we ARE putting out feelers. We are looking to have a property under contract in the next two months. If you or anyone you know has any "problem properties" or headaches. I would love to talk about it.
Welcome to the game, @Dylan Whitcher !
When you say that you are "being cautious about this method of searching for deals," what do you mean?
@Will Fraser Thanks! I just assumed someone would take the opportunity to warn me about the potential problems of asking for deals and leads on such a big platform, such as scams or lemons, etc. I was making a point to save someone the typing, or at least attempt to! ;)
@Dylan Whitcher thanks for posting! Always great to hear from a fellow Texan. Bigger Pockets does have some good state specific forums and Texas is their most active forum. Feel free to post there if you ever need some more "local" advice about things.
Are you trying to buy a 2-4 unit property? or a 5+ property? Will this be your primary home? Or an investment property? If you can give a few more details of what you are hoping to accomplish that might allow us to give some more specific advice. Thanks!
@Andrew Postell Thanks for the tip! This property will be a 2-4 Unit and will be strictly an investment property as I have a couple of private investors itching to stuff money in something after the increase COVID gave their business'. However, my wife and I are on the lookout and will be purchasing a 2-4 unit in late Q4 21' - early Q1 22' for our primary residence & house hack.
@Dylan Whitcher ok, so if I understand you correctly, you have other people who are partnering with you to purchase a 2-4 unit property. So your biggest challenge will be that there are none. Well, maybe there's 100? But a normal month here has 10,000-15,000 units on the market....and about 100 of them will be 2-4 unit properties. It's really, really hard to make this work. So when you do find one that does fit, you'll need to have everything in order. Meaning, your partnership agreements, company formation, loan prequailification, etc. What method are you using to find properties currently?
@Andrew Postell I am calling for rent signs and asking about problem properties, I'm looking at the MLS, looking for wholesale companies and their offers.
@Dylan Whitcher ok, it will be challenging but keep looking. And get all of those other pieces in place right now. If you find a good deal then so will everyone else. Get everything ready right away so you can make your offer.
@Andrew Postell Thanks for the Info!!
Therr are multiple full duplexes on market right now in Fort Worth and Arlington in <$350k range. You might want to check them out, seem to cashflow per my calcs.
They are not a fit for me because we will be owner occuping one side. I need something in better school district for my kids.
I'm curious what percentages you are using for your expenses. I haven't found any on the MLS that cash flow as of right now.
Vacancy 5%, Maint 5%, CapEx 5%. I think the biggest difference is since we will be owner occupying we will selfmanage.
Real Estate Groups
DFW REI Club – www.dfwreiclub.com – meet about 50 times per year. Lots of different topics and a very friendly group.
Texas Investors Club – www.texasinvestorsclub.com - meets each month and is completely free. Usually free drinks and lots of people to network with.
Impact Grapevine - www.impactgrapevinetexas.com - Started in Bigger Pockets and super friendly atmosphere.
@Andrew Postell You're tha man
@Dylan Whitcher As you review properties and put together the information you need for decision-making, don't forget to get a no-cost estimate in advance for the incredible tax & cash-flow benefits available for investors in commercial and residential rentals. The benefits have never been better! If you are looking for additional investors, they will want or expect this information if they are savvy investors.
@Bonnie Griffin Kaake If that was a sales pitch for your services, it worked great, because I have no clue what you're talking about and I am interested!
@Dylan Whitcher Great response...thank you! My focus is educating investors and their tax professionals without cost, about how to leverage the latest tax regulations in the investor's favor. When investing in commercial or residential rentals, the tax advantages right now have never been better. You can increase your cash-flow and reduce or eliminate your federal plus state taxes by expediting your depreciation. Traditionally, CPAs and tax professionals have used straight line depreciation over 27.5 or 39 years to depreciate income property in full.
Instead, by expediting the depreciation (paper loss) under the current tax laws and regulations, you can enjoy an increase in after-tax cash-flow of about 6% to 10% of what you purchased the property for originally. This represents federal plus state taxes that you do not have to pay. The structure of the building goes on to be depreciated over the full 27.5 or 39 years. The simple way to explain this is that it is like getting an interest free loan from the IRS that you don't even have to pay back in full and what you do pay on sale in "recapture" is much less than the amount you had access to and had the opportunity to reinvest. Think time value of money...you win the lottery, do you want cash up-front or wait for dribbled cash over years and years?
If this is still sounding like another language, contact me. No obligation, no arm twisting, just information. If you don't pay taxes, are going to sell the property in a year or two, or paid less than $200k for the property, this strategy will not work for you. It is recommended by the American Institute of CPAs (AICPA).
@Bonnie Griffin Kaake This is interesting information. I will reach out.
Just Google cost segregation study...
@Dylan Whitcher and @Marco G. Not all cost segregation services are the same. You want to be sure you are covered in case of an audit. The IRS has increased their audits of depreciation schedules as of 2019. They are looking for ways to increase their income and poorly done depreciation schedules are targets. An engineering-based study is the IRS' preferred methodology and not something CPAs do themselves. The exceptions are the few big national accounting firms who have in-house engineers. There are strategies for leveraging the available tax benefits, including being in compliance with the Tangible Property Regulations (TPRs). Many are specific to a particular investor's situation.
@Bonnie Griffin Kaake Thank you!