All Forum Posts by: Aaron Schick

@Rick Thomas this unforeseen circumstances clause is music to my ears. I will ask my cpa about this. I will have to take a look at Pueblo. I haven’t spent enough time there to assess it. Thank you!

@James Carlson Yes I have seen quite a few go on and off the market quickly. A lot of them the  Victorian early 1900s homes which worry me regarding maintenance. The R2 homes with the cottage in back seem pretty great for hacking. I think doing airbnb on a unit or two and long term in the rest would be a great way to maximize profit and stability. I would expect May - Sept would be largely booked through airbnb. I would prefer get 3+ units so I may have to extend my search a bit out of downtown but who knows. Thank you for responding to my post.

Yes I am in the Springs now. Whether I seek rehab financing will depend on how much I get for the OKC sale and how far those proceeds will get me in the CO springs market. May have enough to get into a home and make some simple renovations.

@Jeff Zinsmeister thank you for your vote of confidence. I agree finding a value added opportunity would be ideal. I will keep this rehab financing in mind when finding a lender.  A lot of the multis here in the springs are  early 1900s Victorian homes which worry me a bit but many have rehab potential.

@Ron Harris. I have looked into 1031 exchange. Given the lack of inventory in Colorado Springs, the 45 day identification period worries me. I do not want to try to force a deal just to meet the deadline. That being said if the deals work out with the right timing I will definitely be looking at this option. Thank you.

@Nathan Allen I believe sell and multifamily househack will be the direction I will go. For some reason it seems the most daunting in the short term but I think it is better to not throw good money after bad. Thank you.

@Michael Guzik

@Michael Guzik I have been running numbers constantly up here in CO Springs and you are right the prospects are slim. The added advantage of working downtown and not paying inflated rent by living in my investment may make it worthwhile to me. I will need to see some reasonable cashflow to move on it and I am certainly not going to bank of appreciation. Wise words. I do believe I will be looking closely at OKC going forward. Norman around the university and midtown/inner city northside with the hipsters, OCU, and the med school has to be an easy buck or two.

@Thomas S. I believe you are correct. A simple shift in insurance or a significant repair could send this property negatiive. Thank you for taking the time to respond to my post.

Hello Bigger Pockets! This is my first post and I thank you in advance for sharing your expertise.

I currently have a real estate perdicament for which I could use some advice and I expect that my experience is a relatively common one.

I currently own a 3bd/2ba SFR in Oklahoma City (OKC) which I purchased as my primary residence in February 2016. At the time of purchase I was ignorant to the wealth buliding potential of real estate and purchased this property with no regards to ROI or investment value. Due to some unforseen job circumstances I moved to Colorado Springs in August 2017 and rented out the property. I will provide detailed numbers below, but suffice it to say that this property barely breaks even after expenses and has proven to be a worthless use of the significant equity I hold in the property. My goal is to turn this situation around and use this equity to begin building a buy and hold rental real estate portfolio in CO Springs and beyond. The sooner I can get out of this cubicle the better.

Now that I have summarized my situation let's look at the numbers...

Purchase Price: $207,000

Equity: $104,000

Monthly rent: $1300

Monthly expenses: $1229.54 (This includes P&I, taxes, Estimates for vacancy and repairs, insurance, & property management 10% ... No CapEx)

Monthly profit: $70.46 (so basically nothing)

Cash on Cash ROI: 0.79% (ouch)

Cap rate: 8%

As you can see, the numbers are grim...

My options as I see them are as follows:

1) HELOC to gain access to this equity. I have called around regarding HELOC rates. Wells Fargo offered $30k (due to rental status) @ 7% with negligible costs. Refinance would put cashflow way in the red so not really an option IMO. This option seems risky to me and $30k of lent cash doesn't get one very far in the CO Springs market...

2) SELL ... Average days on market in OKC is around 100 days and I would lose closing costs plus around $5k of maintenance I have put into the property. I did not live in the property for the full 2 years and so would have to pay taxes on any gains. I estimate I could get around $225k if I wait around for the right buyer or I could dump it for a bargain price and chalk up the loss to lessons learned. ****Any buyers out there?!?! Current tenants lease ends November 2018.

3) Maintain ownership in the property and get creative regarding increasing rental revenue and financing future deals. (Increase rent at OKC house, save like a mad man, and seek seller financing or low money down properties)

The benefit of the property is that it is an A- house/neighborhood surrounded by a rougher area that is experiencing gentrification. The detached garage and windows could use some work which could add value presale. Other than the windows and garage the property is completely remodeled. Granite countertops, new electircal, bathrooms and trim redone... the works. The house is a registerd historical home built in 1937.

Upon remedying this foolish decision I have a few options to consider..

1) Purchase a 3+ unit owner occupied multifamily property in Colorado Springs. Basically a multifamily househack.

2) Stick to a cheaper market I know well (OKC) and purchase investment multifamily residences while continuing to rent in CO Springs.

I am at a point of analysis paralysis and thus seek your input. Any and all advice is welcome.