All Forum Posts by: Alan Russell

Bill,

I live in NC and I would love to know which bank that is.

My wife is not thrilled with my decision to move into REI, so as someone in a similar situation....I think (for me) it is important that I not only have her onboard for the excursion but it is extremely important that the first few go very well. For this reason I have made the decision that for at least the first couple of investments I will focus less on how much the ROI is and more on making sure there is a ROI. This obviously means I cant be as aggressive as I think I need to be however in order to bring her to the dark side, it is important to show her that we can actually make money doing this.

However,

Exemption for change in job circumstances - those who are laid off, transfer or change jobs may have exemptions available for capital gains. These changes include transfer to another state, loss of income from changing jobs, which makes the home unaffordable, and sale of home due to layoffs or in some cases retirement. Those who have to give up their jobs due to medical conditions may also be exempt from capital gains tax. There may be some restrictions, however, this should be investigated;

My answer would be to consult a tax accountant to get an answer specific to your circumstances.

Additionally, I have been in the Computer Field for many years and moved several times for Jobs and if you have "Good Credit" and you remain in the same field then you will certainly be able to find a bank that will give you a home loan. If you broker says he cant I would ask what the reason for that is. You may need a different mortgage broker.

If you own the property for less than one year it is taxed as regular income instead of as capital gains.

My understanding is the Capital Expense is actually to generate a savings amount to allow for future capital expense. Is that not correct?

My Grandma you to always tell me something about "a bird in the hand"....

At 57 Years of Age I recently graduated from College with a Business Degree. At my age I dont see a lot of difference between having it an not however, I suspect I might have been taken a little more seriously when I was younger and just starting out if I had obtained it then. I cant say it held me back however, I feel that if I had went to college when I was much younger I may not have had to struggle quite as much in my younger years.

No real imperical evidence here just my thoughts and feelings.

James Sinclair - I was able to obtain an Unsecured Line of Credit from Wells Fargo in my personal name. Took about 1 week from application to finish. They are looking at credit rating and debt to income primarily but I think having all your checking and savings might be helpful. Their website says upto 75K for unsecured Line of Credit.

Stephan,

My model is a combination of sorts. I also like the rehab however, I like the long term capital stream also. I am working on purchasing SFHs that need to be rehabbed (usually pay cash) and then rehab the property. Once I complete that I refinance the property to about 70% of the LTV. This allows me to cash out what I have invested and (usually) some profit.

This model also allows me to manage my cash flow because I can target my refinance to generate what ever cash flow I need by increasing or decreasing the cash out.

Additionally, if I miss the mark or there are unexpected expenses that keep me from being able to refinance and have cash flow then I can resell the property and cash out that way.

What my mortgage broker just told me is that I either need to be able to show 2 years of Rental income or I need to be below the 70% LTV number in order to offset mortage payments with rental income.

Hope this helps but in the interest of full disclosure....I haven't tried this yet so I dont know for sure if this mortgage broker knows what he is talking about.