All Forum Posts by: Chris Youssi
Chris Youssi has started 5 posts and replied 282 times.
Post: Should I sell my investment property or hold on to it?
- Rental Property Investor
- Caledonia, IL
- Posts 289
- Votes 213
SELL SELL SELL! Anytime you have any one of the following
Break even cash flow at best / run up of appreciation which is not sustainable / $5000 in expenditures not counting rental loss's while rehabbing
and you can do any one of the following;
Create 100k in tax free gains / reinvest with 3-4 SFR with your equity which will spread your risk / create + cash flow with 3 /4 SFR
It is time to SELL SELL SELL!
Post: Share your 20/20 Hindsight - what would you do differently day 1
- Rental Property Investor
- Caledonia, IL
- Posts 289
- Votes 213
Love this thread lots of good insight. EZ answer for me personally
1.) If I could have financially, I would have bought more SFR earlier than 2015 still have forced major equity on all my deals but far and away the best way to invest IMHO
2.) Always follow my # 1 Proverb no matter the appreciation "You can never lose money by taking a profit!". Selling 4 /30 this year taking money off the table preparing for larger purchasing opportunities.
3.) Once in awhile we get caught up and "love our investment". Never lose sight that this is a business and do not fall in love with your properties. Sell high buy low no matter leaving your emotions out of the decision. EZ to type sometimes difficult to achieve.
Best wishes moving forward.
Post: June Winnebago Investor Network (WIN) Dinner Meetup
- Rental Property Investor
- Caledonia, IL
- Posts 289
- Votes 213
Sandy and I will be attending. THX for putting this together.
Post: New home construction
- Rental Property Investor
- Caledonia, IL
- Posts 289
- Votes 213
Morning John. Sounds like what your referring to is a "spec home " or speculation which most lenders in our area will run from because of the rawness of the correction. Not sure of your market but I suspect it is similar in nature. I am a custom builder in our market and here is how I am able to build spec homes with no issues:
1.) I own the dirt - similar to your situation unless I'm misunderstanding
2.) No GC fees / overhead n profit or Realtor commissions included in my financing
Between these 2 items I have 70-75% equity all day every day which is acceptable to most lenders. Not sure why you are having issues but here is a suggestion. Talk to a community bank or a credit union. if your using a similar strategy per 1/2 above why not rent the units then sell 1/2/3 years later for capital gain which can be quite a bit lower than ordinary income tax.
Best wishes on your new endeavor
Chris
Post: How to survive the next downturn?
- Rental Property Investor
- Caledonia, IL
- Posts 289
- Votes 213
Originally posted by @Anthony Dooley:
@Chris Youssi please do not take offense to my disagreement. My opinion is mine. There are only three exit strategies that I know of, so having an exit strategy isn't really a strategy for protecting you during a downturn. You can refinance or sell which may not be useful during a downturn. Lending may dry up and prices would be down. The other strategy is to hold. If the property cash flows, holding works. If it doesn't cash flow, you will lose it. Securing a ton of debt is great while everything is great, but a bank can call your loans due if they get spooked. They call it technical default, even if you are making the payments. If your net worth or income changes significantly. If the property value drops significantly, or for a number of reasons. When the lender gets scared, they can call the loan and foreclose.
THX for the post appreciated none taken. One comment has me very intrigued and have been doing this for quite awhile so hoping you enlighten me on Technical default and where this has taken place? Commercial lending for sure, what about the secondary market?
THX
Post: How to survive the next downturn?
- Rental Property Investor
- Caledonia, IL
- Posts 289
- Votes 213
Originally posted by @Anthony Dooley:
@Chris Youssi I disagree that any of your top 3 will protect you from a major down turn
My first comment :."Lock in as much long term funding as possible!" followed by the idea IF you can /are going to purchase this will help you survive. I can see how this would be misunderstood.
Getting more debt, which can be called during a downturn, isn't a great plan. People should always have an exit strategy,
My second comment: "Always develop an exit strategy when you make a purchase." so i guess you do agree with this or maybe you don't not sure -perhaps you agreed before you disagreed?
but in a downturn selling may not be an option. Making money on the buy is an old saying, but it is really making equity on the buy.
My final comment "Lastly is you make money on the buy not the sell." regardless of it's age will withstand the test of time for the simple reason that purchasing properly regardless of market conditions greatly enhances your odds of having equity. Maybe saying the same thing different way.
The equity does not monetize until you refinance or sell, which in a downturn may not result in much depending on the severity of the downturn. I submit that cash flow survives all downturns. If you have enough cash flow, you can weather the storm and even purchase discounted deals during the storm.
I wholeheartedly agree cash flow will survive all downturns and the bonus of tenants paying down debt.
Post: How to survive the next downturn?
- Rental Property Investor
- Caledonia, IL
- Posts 289
- Votes 213
Originally posted by @Thomas S.:
In a down turn never carry a non paying tenant. Compassion will be a investors down fall. The worse the economy the faster you must begin eviction proceedings and the less room for compassion. Always place the health of your business ahead of the individual.
This is what seperates successful profesional landlords from bankrupt hobby landlords.
Agree with you here with one add. I try and treat all my investments like my business all the time every day because I'm sure most of us who have been in this for any length of time recognize tenants can be very crafty.Hate to say it but when it is applied keeps you focused " always assume a tenant is lying!" and you will be protected in all markets.
Post: Need your expert advice! Selling a very good rental vs holding
- Rental Property Investor
- Caledonia, IL
- Posts 289
- Votes 213
# 1 CY Proverb " You can never lose money by taking a profit!".Madison about 50 minutes due north from me and our market also overpriced for SFR homes we like to add to our portfolio. Couple of questions / comments
1.) What are your short term 1 year medium 3-5 years and long range objectives 5+ years and how does holding vs selling into these plans?
2.) I am a huge fan of rehabbing like new when we purchase anything so there is minimal maintenance on any of our 30+ SFR. In 2017 we spent on average $47/month / unit with an average value of $110k. The comments you made about some repairs would be a concern windows deck etc...
3.) Have you scoured the market with a Realtor who specializes in your market with investors? I would start here and also get an accurate value for the prop.
4.) Another alternative - I think your best is to do the rehab now and force more equity then sell - reinvest . Madison was very stable thru the correction - head south to Janseville or go 20 minutes in all 4 directions for better values on your purchase after sale.
Happy hunting!
Post: Multifamily Proverbs And Psalms
- Rental Property Investor
- Caledonia, IL
- Posts 289
- Votes 213
# 1 CY Proverb - "You can never lose money by taking a profit!"
Post: Selling my investment home to LLC which is owned by my IRA
- Rental Property Investor
- Caledonia, IL
- Posts 289
- Votes 213
IRS forbids "self dealing". I would check with whoever handles your IRA and make sure they understand these rules. IMHO it sounds like a prohibited transaction. In other words one cannot profit from ones own deals - has to be an uninterested third party.