All Forum Posts by: Christie Gahan

I have a 1br condo in prime Dupont Circle neighborhood of Washington DC, - owned it for 27 years - could list it for $425k.  Fully depreciated so $100k tax bill due at sale.   It was long overdue for full renovation, (all surfaces) and I just finished that, so I’m at a crossroads. 

Rent or sell.  

I rely on the 20k annual net income, but that’s only a 5% return at best. 1031 exchange seems impossible in practicality with the timing etc…I’ve been looking and not finding a deal to move into. 

Would anyone ever just eat the tax in this situation in order to have funds at the ready for the next deal/better investment? 

I’d be left with only around $270k after selling fees,  if all went smoothly. $270k in Scwab money fund would get me $15k/year while I’m waiting to pull the trigger on something.  Some background information - I see new hvac $10k, new windows $10k, and building assessment $10k in the next few years on this property. 

I should think a move-up property exists somewhere in the $600-800k range that would cover a mortgage on top of my $400k down payment and still net me $20k/year or more, but not in the markets I’ve looked (DC area and my local NC area) . I need time to figure that out. 
More background info - I have no real W-2 income. My income is from 3 successful airbnb’s and this condo.  

If I get renters in place right now, take a year to figure out which market makes sense, I still don’t see a realistic path to 1031 due to timing with renters/sale/etc…am I wrong about that?

 Since you asked so "nicely":

Why does everyone want to chase strangers – and ignore their own personal network?

Which do you think will be more competitive, buying from wholesalers or your own referrals?

Per this NY Times article, the average American knows around 600 people.
https://www.nytimes.com/2013/02/19/science/the-average-american-knows-how-many-people.html#:~:text=The%20average%20American%20knows%20about,do%20you%20know%20named%20Kevin%3F

Per the US Census Bureau, the average American moves 11.7 time in their life, which based upon an approximate lifespan of 84 years, works out to be about every 7 years.
https://www.census.gov/topics/population/migration/guidance/calculating-migration-expectancy.html#:~:text=Using%202007%20ACS%20data%2C%20it,one%20move%20per%20single%20year

So, if the average American knows 600 people and they each move about every 7 years, that means that the average American knows around 85 people that move in any given year.

How many of those moves do you want to be involved in?

To maximize the number of transactions you’re involved in you will need to:

• Be Top of Mind when they think about moving - which requires consistent reminders.
• Be seen as an Expert – which requires a consistent message and Evidence of Success stories
• Gain their Trust – which requires communicating integrity

So, start out by listing everyone you know in an Excel spreadsheet.

Why Excel? Because later, you can easily use it as your mailing list! Create columns for Name, Street Address, City, State, Zip and then contact info: Last Contact, Relationship, Status, Email & Phone.

IMPORTANT: do NOT ask people for THEIR business, ask for referrals! Why? Because they will get defensive if they feel you are pressuring them. Remember, they can always refer themselves😊

Now, make it a goal to call at least 5-10 of these people EVERY day and ask a MAX OF THREE off the list below of who they know that:

• Just inherited a home
• Had a loved one pass away
• Is behind on their mortgage or tax payments
• Has a relative that can’t take care of their house anymore
• Has a house they’re having trouble selling
• Is facing bankruptcy
• Knows a probate attorney
• Knows a bankruptcy attorney
• etc

Why only three off the list per contact? Because on average, we can only remember three things at a time. If you try to go over the whole list, you’ll lose the attention of an average person and they won’t remember anything!

It should only take you about a month or two to contact everyone on your list and then the tough part – you start all over again.

Why the repetition? Because it takes repetition for people to remember things and you have to be top-of-mind when they encounter a potential client for you!

Have you ever been to McDonalds? Of course you have! So, why is McDonalds still spending billions on advertising?

One more tip – people remember stories that trigger their emotions. So, tell a story of how you (or a fellow wholesaler) helped a seller out with their challenge(s). Change your story each month as different stories will resonate with different people AND use each story to emphasize one of your “who do you know…” questions.

As you start closing deals, you will need to reinvest your profits into mailing lists and other scalable activities to grow your business.

One last thing – we recommended you create a Status column on your spreadsheet, now we’ll explain why. If you find someone that seems to know a lot of people needing your services, wouldn’t it make sense to focus more resources on them? Conversely, you will run into people on your list that just seem to be a waste of time, so you’ll want to avoid them. So, create status codes for both of these and a few in-between codes to help you work smarter, not harder.

I'm shopping the market for my first duplex to house-hack, it's my first time buying a property, period. I plan to use a FHA loan and put down somewhere from 6-8%. I'm finding it very difficult to find deals that will produce any positive income after I move out and both sides are rented out. The best deals I can find barely break even with the mortgage. I'm almost to the point where I'm feeling a little desperate and I'm debating if I should just buy a property anyway, simply betting on the fact that the property will appreciate over time when sold in several years, and not focus so much on the monthly cash flow I could receive if I found a good deal.

I'd like to hear your thoughts- Someone tell me why this is or isn't a valid way to evaluate/think about my first purchase.

My ultimate goal with real estate investing: buy more properties after this and achieve financial freedom.

My ultimate goal with my first purchase: get my foot in the door, make a little bit of money (I'd be ok with not making money, as long as I'm not losing money), see if I want to continue real estate investing, decide if this is the strategy I want to focus on (vs. BRRR, Airbnb, etc)