Lakeland, FL · Member since 2017 · 44 posts · 25 votes
9y
Amazing job @Cory Iannacone. So talk some number if you don't mind! it seems like a long hold time so did you make your desired profit? What are some of the lesson learned and mistakes you made? did you do any of the work yourself?
Real Estate Agent · Mechanicsburg, PA · Member since 2014 · 529 posts · 217 votes
9y
@Cory Iannacone What was the appraised value of the property for settling the estate? You did a great job, but for a rental it seems like you probably could have spent 10k to make it rentable. One of my earlier properties I did something similar, putting in granite, SS etc....It was totally unnecessary, but it did attract a great tenant.
Investor · Harrisburg, PA · Member since 2016 · 126 posts · 377 votes
9y
@Christian Bors Thanks! No appraisal done at this point. There were a number of reasons why I did put the extra money into it.
#1 - to attract the best tenant.
#2 - to address as many issues with the house as possible (i.e. plumbing, electrical, etc.) to avoid these issues once a tenant was in place. Nothing had been done to the house since 1965.
#3 - to leave open the option to sell the house,
#4 - to maximize the appraised value for purposes of a HELOC within the next 2 years. I have 24 months of no interest on my Home Depot account for the materials I purchased. Once that no interest runs out, I will have to pay off the HD bill. The HVAC will most likely need to be replaced around that time, so I'll probably need another $5K. I would like to pay all those expenses through the HELOC, if not actually pull some extra money out for another investment. The higher appraised value, the more money I will have available to me. For the time being, I am just trying to maximize the cashflow.
Real Estate Agent · Mechanicsburg, PA · Member since 2014 · 529 posts · 217 votes
9y
@Cory Iannacone When someone passes away, all assets need to be valued in order to determine if the estate is subject to state or federal taxes. I was curious to hear what the executor decided was the value of the real estate was at date of death. You should use that figure as purchase price since it will be the stepped up cost basis instead of backing into the 70% rule to evaluate a purchase price.
I too placed a significant line of credit on a property after couple of months. I use that line for all sorts of things such as; flips, down payments, repairs etc.... Its great to have access to the equity in the home so you can continue the growth of the portfolio.