All Forum Posts by: Bruce Jones

Good afternoon Bigger Pockets Community,

Long time listener, first time caller. I have a property I purchased via land contract/owner financing deal 5 years ago. I refinanced with traditional financing and a simple fee closing in 2021. During this time I also added my wife to the title because I wasn’t married prior. We’re now preparing to sell mid-2022. The home is located in Virginia and the original deal was for $270,000 and we owe $200,000 on the property. The resale will be roughly $450,000-460,000. I’m curious if there will be any capital gains tax on the profit. 

I live in a coastal market and there’s quite a few reasons. Typically the gross rental income at least where I’m at is 10 years = sales price. Not always but roughly. So if you’re bringing in 128k a year look to see $1,280,000 sales price. Once again this is not a hard and fast rule. With that said most of my vacation homeowners are making enough to pay the mortgage and usually much more. Even after the 25% for the management company. Is it the best investment? Just all depends. The other pros that I happen to see from my clients are this: 1) It’s still a vacation home as well. Not only does the mortgage get paid of but they can reserve a couple of weeks here and there and instead of dropping $20,000 in vacations per year, they just go to the house. They’ll do more winter trips but maybe a summer trip or two as well. 2) Repair costs. So for my 1.2m example. You’re a doctor, lawyer, business owner etc. Your not trying to become a slumlord or go through the hassle of tracking down great deals. They don’t want to purchase 10 properties and constantly be dealing with property management trying to squeeze out profits or manage flips. You buy one house. You enjoy the house yourself. It pays itself off. I can think of one where they purchased a short sale 12 bedroom for 680k in 2010 and now that properties worth around 1.2m - it’s already paid off, brings in around 80k a year and that’s just for the weeks that they don’t want to go there.

A lot of great advice so won’t go too much into action plans because it’s already been mentioned. One item you mentioned that is concerning is you said you did 200-300 letters to handout and you gained one contact but you lost track of. That’s this business. I’m 4 1/2 years in and just listed my first $950,000 property then leveraged that listing to receive a $1,650,000 listing going up in around 7-10 days. You can’t “lose” contact. The grind is for the prospects then converting those prospects to clients. Then serving those people at such a high level of service that they will refer you. It sounds like your letters potentially were a success then you lost contact literally or just over time. There may have been xxxx amount of other people that you didn’t consider a success that you “lost contact” with as well, or just never attempted to reconnect with. Ah heck I’ll throw in a little advice I can’t help myself. I usually do the personal notes after a good contact and I always attempt to follow it up with a plan of action then stick to it. Hold an open house and have a great conversation with a potential buyer that readily leaves their information behind? Write a personal note thanking for stopping in and how much you enjoyed the conversation. Only say it if it’s genuine. Say you enjoyed it so much you were going to reach out on say Thursday/Friday. Give it enough time that the letter will show up. Follow through with calls. It’s all a layering effect though. If you’re not going to make it financially but you still have the fire. Go join one of these super teams and let them feed you leads. You’ll work like a dog and they’ll take a pretty penny from your commission split but you won’t have to lead generate to gain experience. My personal advice if you can is to rough it out though. Yes you’ll gain experience but mainly lead generation is a lot of times the only difference between an agent with a team of 50 and the agent that can’t make it. Also maybe don’t try to define your business yet if you’re doing so. When I first got in there was tons of agents that immediately went for the luxury market or primarily flippers etc. Hardly anyone I joined with is still in real estate. I took anything I could get. Then focused on value for my clients, honing my skills etc. Now I have a couple of assistants and I’m slowly positioning myself for the luxury market but not because that’s really what I want but because my goals are value it’s difficult to offer value at 75-100 transactions a year but you can do at 15-25 a year. So for me I can bring gifts to listing presentations and send little pop bys that aren’t just silly notes on skittles because I’m focusing in on a smaller number of transactions. Learn tools to lead generate. Door knocking, expired listings, open houses, join a BNI Group or a networking group, see if your company has a relocation division. Don’t focus on a specific niche, focus on just improving your craft and make no doubts your craft/skill is lead generation right now. That’s it. Then find your niche. Mine was construction. I had experience working on homes for years. I focused on a more detailed market analysis, being more knowledgeable on homes and prices of materials/installation costs within the homes and used that to position me as a pro in negotiations and setting higher prices for listings and being able to make strong arguments for those prices. Last part is as you’re lead generating make sure you’re following up with those prospects. Start your day lead generating, then everyday near the end call past potential clients for an hour. See what’s changed. Maybe too early to jump into a CRM but just use an excel sheet to save what they’ve been doing or how far out they are.