All Forum Posts by: Brett McCurdy

Also to clarify when I say "jump from house to house" as primary residence it would have to be 2 of previous 5 years obviously.  I am not advising this because it would be a pain in the *** moving that frequently, i was just making a point on how that works.  

@Kristen Martin 

   I would have to disagree with the advice given to you so far...  

I would suggest either staying in your principle residence or investing in another SFH but NOT moving into it and NOT going the route of living in a duplex (or similar scenario) because:

a) For your principal residence all your capital gains that you have accumulated up to $500k (since your married) are TAX FREE.  The requirement is that you live in your primary residence 2 of the previous 5 years.  If you were to live in a residence that is also used as an investment such as a multi-family then you essentially are wasting this HUGE break.  You could technically jump from house to house if you would like to fix it up some but you must show it's your primary residence and not an investment and you will accumulate more wealth this way on a yield standpoint.

b) DO NOT make the common mistake of buying a new home and renting the house you currently live in because you will essentially be taxed on all capital gains which could have been avoided easily. If you go the route of buying another SFH (maybe with a few partners to lower your entry-point) then be sure to rent out the NEW home not the one you have already stayed in for 3 years because you will lose thousands of $.

* You pose great questions to get started but be advised on the above items so you don't lose out on before you even begin.  This is why your primary residence is such a great investment!   

I would be interested to hear the route you lean towards and best of luck!

@Francois D. 

  I don't believe that CF is the single strategy and you shouldn't be persuaded that way just because everyone is doing it, what matters is what YOUR goals are and base your investments around that.  If you are a high earner and want to shelter your income (possibly all of it) than maybe you don't want a bunch of CF properties which adds to your taxable income.  This does not mean hold forever and buy out the property because you will be stuck with huge depreciation and cap gains all at once.  This is exactly why they say "find your niche" because if we all acted like sheep then we would all be doomed...  Don't ever invest if (like mentioned from others) you don't already have an emergency fund or if it goes south you won't be able to feed or house yourself that should be common knowledge.  Also, bankers are not financial advisers.  Question everything!

I hope to spur some follow-up :)

@Jered Sturm  Awesome story!  Keep up the good work.  $200-300 living expenses is an achievement in it's own, I probably spend that at Chipotle monthly...

If your talking about the Northern areas of Rockville along with Gaithersburg and Germantown I would also guess this is as simple as a supply/demand aspect.  Drive around the area (I live in aspen hill so I am up that ways A LOT) and you will see the amount of new condos being built up there.  There is still a ton of land to develop on around that area whereas if you come down to Bethesda, Kensington, Chevy chase, closer to DC you will see this is much different.  If you are looking for appreciation yield in this category in those areas it might be tough.  

@Pedro Oliva 

   Check out the documents (fileplace) tab.  I uploaded a brief comparison between some of the top VoIP platforms.  I currently use ringcentral and they are good.  Mightcall was HORRIBLE with customer service although they had many of the features I was looking for.  Hope it helps.

@Nick Mainella Try overnightprints.com  I use them for mailers for day job and they can do the mailing lists and everything at the same time.  Make sure they're NOT double sided gloss because you will find that they stick together and the PO hates that.  I learned from experience that the key to direct mailers are to farm the same neighborhoods over and over and over.  Don't do it once and expect any return.  The person needs to see your name in front of their face (marketers will say 7 touches is ideal for sale) or have it in mind when they are in need of your service.  also agree with the other posters to do plenty of demographic searching before making your mailing lists.  OR hire a company to supply the mailing lists (can get expensive though).  Good luck!    

@Nathan Emmert I agree with your posts. Everything depends on personal strategy and goals. I think if there was one general ROI% if would be

I am not an expert on this market, but we would need more information.  

What area, whats your strategy, how do you want to structure the deal, have you looked at comps?

Can the supply of more condos easily be increased in the local market?  What are the restrictions?  Is it in a flood plain (additional insurance costs)?  etc. 

Those were the other aspects I was referring to yes but:

With the idea of the "principal being paid off":  You slowly begin losing more and more leverage in the property as you pay down the principal.    

       -Not only are you losing the leverage on the Bank's (or other type of lender) $ AND in the cases I see argued by paying it off you lose all of that leverage.

       -The capital-at-risk is also effected by "paying off the mortgage" or with that end goal in the mind of the investor.  If for some reason that area or market goes south you now have more equity in that one building to lose (relates to above leverage).

*How about a shorter hold period with the idea that once the leverage is lost the investment is sold and the process repeated.

The other thing about an indefinite hold period is that like you mentioned once the property is finally sold they will deal with a huge taxable amount that could have been prevented with a shorter period. Look at the tax benefits and depreciation numbers in the 5-8 year range and see what happens, this will probably look much better to you. This is for SFH but apartments and multi-units held longer.

The tax benefits are real and I would be very interested in the restrictions that you are speaking about.  Depreciation, Interest Expense, and amortization of loan fees are all writeoffs and can easily outweigh a "low cash flow property's" bottom line.  Capital gains will be taxed at 25% but this is recovered during the sale and NOT many years down the road when it would be so high.  Also the power of $1 tax saved today is much better than $1 reduction is basis 20years from now...(as long as that dollar is used wisely haha)

In regards to appreciation, many regions did get hit hard with local economies still recovering.  BUT this should also be a good indicator of which regions and economies can recover quickest after a housing market crash.  Many risky investments proved to be exactly that during the correction and might have wised many up to narrow their focus on areas that they are experts in only.  This is a major aspect and if an area is studied enough and enough due diligence is done then a buy/hold(medium term) should be very good.  Like with any investment the opportunistic buy is usually the riskier.   

thanks for sparking the conversation, interesting thoughts!