All Forum Posts by: Anthony Parsons

@Anthony Parsons

Busy professionals are well compensated and have very little time. To get someone to donate time to you for free with no agenda, getting nothing in return, and to provide you a model they have probably spent thousands of hours developing and tens of thousands of dollars building is not realistic.

You can post on the forum to solicit free advice.

Your question should be… what can I do to bring value to a busy professional that has already succeeded in an area I am interested in?

If you are looking to be a Real Estate Investor the best way to get a water fall full of advice and someone’s time is to use them as an agent, use their property management services, their 1031 program, or whatever business they are running.

Their agenda is to continually build their business. If you want help… give help, and don’t ask for peoples time for free because that is in extremely short supply. Most people that are somewhat successful in investing or in any field related to real estate work a lot of hours at a fast pace. They would rather donate money than time to a cause because they have less of the latter.

What extra time they do have goes to loved ones, soccer games, family parties, and homework, etc…

Not to strangers on the internet asking for agenda free advice and offering up business models that have been paid for in blood or something similar lol.

That’s what makes bigger pockets great, you can get free advice from multiple individuals on the forum.

Getting 1-1 attention from someone, as it should, requires you to be a paying customer.

You come across to me as spoiled.  Where was all my help?  It’s probably not coming to you on a silver plater.  

@Anthony Parsons have you tried going to REIAs?  Most folks going to REIAs love to talk shop.

Most experienced investors I know are willing to share knowledge and help those who are less experienced, but they're also busy running a business. Time is precious and most people who are "getting started" waste it. They don't intend to waste it, or even know that they're wasting it because they fully intend to put your advice into action. But they don't. Things stop them: life, analysis paralysis, fear, whatever.

I don't want to position myself as an expert but I'm not brand new either. I've had people offer to pay me for an hour of my time. But then I felt guilty about taking them up on it because am I really providing enough value to justify charging for that time? Who the hell am I? And if I am providing value, my time is worth far more than what was offered in those few cases. So where does that leave things?

Combine that with the fact that of the dozens of "getting started" people I shared as much knowledge as possible with over the past few years only one or two ever took action. It gets frustrating.

So much of what your asking is subjective. There is no "best" path, or strategy because it's entirely dependent on your goals, abilities, resources and risk tolerance. Online forums are great for fundamentals but experience is the best teacher. Make some decisions, take action, start networking and reciprocate value. Then you'll find people are more willing to take the time.

@Anthony Parsons

We are looking at this situation right now.

Us: Own a house thats worth 350-400k, looking to sell or rent soon.  

Rent:  Owe 89k at 3.25%  Should rent for $2300,  Mortgage is $900/month. Checks the 50% rule.  Cashflow should be $500+ per month, not including principal paydown. Lets assume $7.2k profit, these calculations assume reserves build for maintenance, capex, vacancy.

Sell: Assuming a sale at $350k - $2.5% for realtor (Im listing it) - 89k debt =$250k "tax free profit"

So, how long would it take to make up that difference if we rent it?  $250k/$7200/year = 35 years Not adjusting for taxes paid, which would be income tax.

In the end, I ended up setting a threshold for the sale at $300k.  If we can sell above that, Ill be happy in selling it.  If we can't sell it for thatt much, then we will hold it for a rental.

It might make sense to sell your current place and reinvest in a better cashflow market anyway, if youre going for cashflow.

Maybe that helps?

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Quote from @Steve Vaughan:

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I'm in a position to sell or rent my current home prior to moving out of state for work where I may rent for a couple of years or buy depending on what the market is like at the time.   

 For most everyone that's lived in their primary for at least 2 years, it makes the most sense to sell tax-free.  Absentee landlording can really suck. 

In addition, most primaries are too nice to be good rentals and we don't know if you've ever landlorded before.  Steep learning curve.  

So- have you owned and occupied your primary for more than 2 years? 

What was your purchase price? Estimated sale price?  

Have you ever been a landlord before?

 These are the important answers to me when deciding to sell or rent out a primary.

I'm trying to determine if I should rent out my current Townhome or sell it. What I'd prefer to do is rent it out for long-term purposes as I am 43 and this will pay my future home off when I retire.

I purchased the townhome for 340k and owe 330k after a refi last year. Currently, it is worth 430k+ If I sell I can make about 50-70k after fees. 2 years in the primary home this May 27 and it is in a new area that is developing quickly. I have been a landlord before but years ago and briefly. I don't have any debt besides my car and have good credit (low-mid 700's) but limited savings after recently paying off a card. I am a GS-15 in the gov. and make a good salary (163k) plus 600 monthly from the VA. My current mortgage is $1900 at 2.25%, after speaking to an agent, I believe I can rent it for $2400-2500. I am in a good financial position but in order to pay my home off once I purchase it, I don't want to have to pay an extra 1000k to principal to get it paid off before retirement, which is why I want to rent my current home. In 3 years I will have over $2500 additional monthly due to child support ending and would take a HELOC as a safety net if needed.

Looking to move to Orlando to be closer to friends and family eventually purchasing a new home around 500-600k. I have many questions regarding waiting to purchase a new home in 3 years once inventory increases. Should I rent an apartment or house since rental prices are going up? I'm curious as to which kind of HELOC I need that would allow a refi down the road on my rental should I need it since it is a VA loan-I'm uncertain as to my COE right now.

My big concern is retiring with a home at 57-62 with a paid-for home and believe renting my current place will fill that demand and then some. However, with rental property and a HELOC how hard will purchasing be in 3 years? How are future DTI's calculated with HELOCs; will my VA loan be usable in 3 years or will I have to convert my current loan at 2.25% to conventional?

Sure, I can sell and hold the money, or just jump in the market which I'm not particularly a fan of (especially since I’ll $2500 back in 3 years from support), but is renting out my place worth it with the amount of equity I have if I sell it? I have many other questions. Should I sell/rent now or wait to watch the rate hikes and how they impact the market? ETC. I can go on.

Thanks again.

It would be good if you did an analysis on your primary as a rental. Put this into the BP calculators (or any calculator) and see what the monthly cashflow / return looks like. On the surface I like the idea of renting out your primary. (1) Your debt is so cheap. 2.25% is a great rate. (2) $50k after fees isn't that much for a $430k property. (3) Hold until it appreciates to $475-500k+ 

Rent/buy in Orlando is completely a personal choice. If you can find a good deal now then buy. Otherwise, renting is a great option. You can get a better sense of the area(s) and you don't need to come up with $100-150k down. 

@Anthony Parsons the reason you weren't/aren't getting good replies is because your initial post was too vague.  Garbage in, garbage out.

Now that you provided your real life situation and numbers, it makes it easier to everyone reply with better answers.

First off, it's a no brainer to sell your home after May 27.  If you lived there 2 out of the last 5 years, you won't pay any capital gains tax (for now, there are proposed tax changes on the hill, one of them is getting rid of that and everyone paying capital gains, period.  Hopefully it will get shot down.)

If you did decide to keep the house, and you get a heloc first, then you likely won't be able to refi after the fact.  The heloc would need to subordinate to the new first lien, and that would be a challenge.  So get that plan out of your head.  So if you kept the house, you would need to refi to Conventional first, and then get the heloc.  Yes you are going to lose your 2.25% rate and you would need to make peace with that, but the longer you wait, the higher it will likely be.

So if I were in your shoes, I would sell, and take those tax-free gains, and reinvest. You can buy another primary residence with 0 down with your VA entitlement, and use the rest for a down payment on another property if you wanted. You could also house hack, meaning you could buy the first home, live in it for a year, then use your secondary/bonus entitlement to buy another home with a VA loan with 0 down (or close to 0, depending on your entitlement), and keep the first one as a rental. For this, your best bet is to get with an investor-friendly LO who also specializes in VA lending, to map out a strategy. Now you have 2 properties and still have all your equity from your sale.

The good thing is, you have options, because you have capital and your VA entitlement, which can be a great combination if you want to have rental properties.

But as far as renting vs buying now, there is no crystal ball.  No one can definitively tell you right now if it's smarter to buy now or in 3 years from now.  Way too many variables and unknowns.  You will need to take a leap of faith either way, and the only way you can truly and accurately answer that question will be in hindsight, years down the road.

TYFYS and best of luck!

If you're approaching them like you're approaching this article, then you're giving them the "you owe me before I've even met you" vibe. Ain't nobody got time for that.

If that is the case, your best course of action is to start building a relationship with a broker. Join a meetup where brokers attend, make friends and buy someone coffee and talk about whatever.

Oh, and offering to work for them for free part-time or on a project that's dragging them down helps tremendously. Give and you shall receive. 

@Anthony Parsons If it was easy EVERYBODY would do it. So you've tried a couple times and haven't found the right connection... big deal. Keep trying. 

Your post surprises me. I've found most people in real estate are willing and eager to help others. 

I'd encourage you to continue making connections with investors, agents, etc. Be specific with your ask. Come to the conversation with what you think you should do and see if they agree/disagree. You're asking for feedback so be open to constructive criticism. 

Quote from @Anthony Parsons:

I purchased the townhome for 340k and owe 330k after a refi last year. Currently, it is worth 430k+ If I sell I can make about 50-70k after fees. 2 years in the primary home this May 27 

Ok. So taxes on the sale aren't really material.  It would be nice to close after May 27th but a long-term gain of $50k-$70k won't kill ya.  

I personally wouldn't subject a nice $430k house to a renter, but I may do a Lease Option for a homeowner in training.  Get you past May 27th and save a ton of transaction costs. 

I'd sell or LO this.  Good luck!