All Forum Posts by: Account Closed
Account Closed has started 0 posts and replied 42 times.
Post: New Construction 4plex Vs Purchasing 4plex
- Posts 43
- Votes 28
Quote from @Robert Trevino:
Hello Everyone, I am located in Killeen, Texas and planning my next investment. We currently own 1, 4 Plex and am working on strategizing the purchase of the next one. I want to house hack the next 4plex with a conventional primary loan using 5% down. My other option that i am considering is doing a new construction on a 4plex. My question is.. does anyone have experience getting a conventional primary loan to build a 4plex and what if any experience can you share regarding the building of one. What can I expect when getting funding from a bank on something like this? Will they leverage the income potential like they would on An already built one? Who can i speak to in the construction/builder space that could help me get an understanding of costs /planning for a new build.
Thank you
Getting a conventional primary loan to build a 4plex can be a bit more complicated than purchasing an already built property, but it is definitely possible. When applying for a loan for new construction, banks typically look at your credit history, income, and assets to determine your eligibility. They may also take into account the income potential of the 4plex once it is completed.
It's important to speak with a lender who has experience with construction loans to fully understand the process and requirements. They can also help you determine the financing options available to you.
In terms of the construction aspect, it would be beneficial to speak with a reputable builder who has experience in constructing multi-family properties. They can provide you with a cost estimate and help you plan out the build from start to finish. Additionally, consulting with a real estate agent who is knowledgeable in the local market can help you make informed decisions and ensure the success of your investment.
Post: Fixing current rental or selling?
- Posts 43
- Votes 28
Quote from @Will Mejia:
In these situations I wonder if its better to just sell the building soon or repair. But my thoughts are will the hassle, time, money, spent on repairing give me any actual "gain" in the end? Or I could just sell it as is and save myself the trouble.
Why sell the property? I honestly find landlording very boring and after many years its not fun.
I also have thought of reparing it and then handing it off to a PM company and holding it for longer but dont know if it will be worth it.
If you are not enjoying landlording and find it to be a hassle, selling the property as is may be the right choice for you. By selling the property now, you can avoid the time, money, and effort required to make repairs and potentially deal with ongoing property management responsibilities.
On the other hand, if you are willing to invest in the repairs and potentially hand off the property to a property management company, you may be able to increase the value of the building and generate higher rental income in the long run. This could result in a better return on investment over time, especially if property values in the area are expected to increase.
Ultimately, it's important to weigh the potential costs and benefits of repairing the property versus selling it in its current condition. Consider consulting with a real estate professional or financial advisor to help make an informed decision based on your individual circumstances and goals.
Quote from @Crystal Sherman:
I am in the process of purchasing my first rental property and am looking for any advice on what to anticipate as a new Landlord. I have done some online research but am interested to hear firsthand what things I should be prepared for and probably expect as a new landlord.
1. Be prepared for maintenance and repairs, as well as dealing with tenant issues and potential vacancies. Consider budgeting for these expenses.
2. Familiarize yourself with the local landlord-tenant laws to protect yourself and your investment.
3. Screen potential tenants thoroughly to avoid any issues in the future.
4. Consider hiring a property management company if you are not comfortable managing the property yourself.
5. Establish good communication and relationships with your tenants to foster a positive renting experience for both parties.
Post: Minimizing Capital Gains when Selling House Hacked Property
- Posts 43
- Votes 28
Quote from @Keith Goepfert:
Hey everyone, this is my first time posting in the community, so apologies in advanced if I violate any social norms here.
As I understand, selling a personal property allows for no capital gains taxes to be paid on the first 250k profit from the sale. If one is renting out a percent of their personal property, that same percent of the profits will be subject to capital gains tax at the time of sale. (let me know if I'm mistaken in this initial assumption).
My question is if there are any strategies to avoid realizing capital gains at the time of sale. For example, if I were to stop renting out a portion of the home, and live in the entire home for the year before sale, would that allow the entirety of the profits to fall under the 250k tax free limit?
I intend to consult a CPA soon, but I was hoping the community could shed light on my question in the mean time.
Thanks in advanced!
Post: Potentially buying an off-market property
- Posts 43
- Votes 28
Quote from @Dan Deng:
I have come across a property that an owner approached me about purchasing off market with no agents because they do not want to pay the realtor fees. As I have never done an off-market purchase before, what steps do I need to take to make sure this is done properly? Can I just download a California Real Estate Purchase Agreement template from online, fill it out and move forwards with that? Is it more complicated than this? I know I will have to find my own inspection company(s) and the like but is there anything else I need to think about?
1. Conduct thorough research: Since you won't have a real estate agent representing you, it's important to do your own research on the property, its value, the neighborhood, and any potential issues or liabilities associated with it.
2. Hire a real estate attorney: Even if you are planning to use a template for the purchase agreement, it's a good idea to have a real estate attorney review it to ensure that it covers all necessary details and protects your interests.
3. Get a property inspection: As you mentioned, you will need to hire your own inspection company to inspect the property and uncover any potential issues that may affect its value or safety.
4. Consider financing options: If you need to secure a loan to purchase the property, you will need to work with a lender directly since there won't be a real estate agent coordinating the transaction for you.
5. Check for any encumbrances or liens on the property: Before finalizing the purchase, make sure to conduct a thorough title search to ensure that there are no encumbrances or liens on the property that could affect your ownership rights.
While you can start with a California Real Estate Purchase Agreement template, it's important to remember that each transaction is unique, and you may need to include additional provisions or negotiate specific terms with the seller. Having a real estate attorney review the agreement and provide guidance throughout the transaction can help ensure that everything is done properly and legally.
Post: Indecision around how to proceed with a parcel of land we purchased
- Posts 43
- Votes 28
Quote from @Karen W.:
A few years ago, we purchased a 5 acre piece of land that already has a foundation and septic, hoping to eventually obtain a construction loan and build a home. The property has a pretty low interest rate with a 15 year land loan. Although it's made our cash flow a little tight having this additional monthly mortgage on the land, we have not been in a huge rush to build. Part of the reason we've been taking our time is that the costs for building materials like lumber were highly inflated at the time we purchased the property.
Our primary residence, is here in the same state and we'd like to keep that home indefinitely and eventually it would be our home part of the year during retirement, rather than to sell it and move. Our goal is to (eventually) have a second property where we can spend time at our retirement, and that can generate some income as a short-term rental for a portion of the time when we're not using it.
In the meantime, we have set our sights on a different geographic location (also in the same state) for our retirement, and trying to figure out the best strategy to afford to ultimately purchase a property there. In order to make that happen, we are considering selling the land and taking what little profit or equity from that sale, and saving up to purchase property in this other location we decided would be more suitable for our retirement. But realizing it may be difficult to sell a lot with just a foundation, we wonder if we would be making an error or missing an opportunity. So, we are considering whether it would be better to forge ahead with building a home as soon as possible on this piece of property we already own, and then either selling it immediately after construction or living in it for 2 years and then selling. And THEN rolling the profit/equity into purchasing either land or a fixer-upper home in the other location we would like to retire. The real estate prices are high in this state and unless some miracle occurs, it's unlikely we'd be able to purchase anything other than land or a fixer upper.
Looking for any advice and inspiration on what to do. We are stuck in a cycle of indecision and for lack of a better word, fear, of making a fumble. We're not exactly loaded with money like many real estate investors-- this is about security in our retirement. And we have a lot to lose if we make a mis-step. We are, conservatively, about 10 years from retirement age.
Based on your situation, it seems like your best option may be to proceed with building a home on the property you already own. By building a home, you have the potential to increase the property's value, which could allow you to sell it for a profit or use it as a rental property to generate income. Living in the home for a couple years before selling could also provide some tax benefits.
If you decide to sell the land with just a foundation, it may be more challenging to find a buyer willing to take on the project of building a home from scratch. However, if you are able to sell the land, you can still use the proceeds to invest in property in the location where you plan to retire.
Ultimately, it's important to carefully weigh the costs and potential benefits of building a home on your current property versus selling and investing elsewhere. Consider speaking with a financial advisor or real estate professional to help you make an informed decision based on your specific financial goals and timeline for retirement. Having a solid plan in place will help alleviate some of the fear and indecision you are experiencing.
Post: Recently married capital gains tax - I'm a citizen, my wife isn't
- Posts 43
- Votes 28
Quote from @Freddy Neuhold:
I am selling my primary residence in San Antonio, TX. My wife is Filipino and not a citizen of the US currently, we married in September of 2023.
My question: While we've only been married for 5.5 months, can we qualify for the joint filing $500k exemption? Specifically wondering if my wife not being a US citizen will disqualify us or something. I've owned and lived at the property since 2021 so I meet those requirements. Just wondering if newly weds can still qualify for the exemption and if my wife not being a citizen will hinder any capital gains tax exemption qualifications. We're selling the property for $350,000
Post: How to manage expenses across multiple properties, LLCs, partnerships, etc.
- Posts 43
- Votes 28
Quote from @Matthew Banks:
Hi, we manage properties in a partnership and in a couple LLCs. We have Lowes and other accounts to purchase materials for repairs or renovations. Those expense accounts need to be paid with funds from the corresponding property and its bank account. Does anyone have a method or process that helps make this easy and quick to manage? We have a single Lowes Biz Pro credit account, for example. Do you group paper receipts into folders for each property/entity and then pay bills once a month, for example? Is there an easier, more automated process?
Thanks!
One efficient way to manage expenses for multiple properties and entities is to utilize accounting software that allows you to track expenses by property or entity. This way, you can easily allocate expenses to the appropriate property when making purchases with your Lowes account or other accounts.
You can also create separate folders or digital files for each property/entity to keep track of receipts and invoices. This will make it easier to reconcile expenses and ensure that each property is being properly funded.
Automating the payment process can also streamline the process. Setting up automatic payments for recurring expenses or using online bill pay services can help ensure that bills are paid on time and reduce the risk of missing payments.
Overall, the key is to establish a consistent process for tracking and managing expenses for each property/entity to effectively manage your funds and ensure that expenses are properly allocated.
Post: What Needs to be Different for College Students
- Posts 43
- Votes 28
Quote from @Caleb Rehg:
I have a long-term single-family home rental and is most likely going to be filled with college students. What do I need to do differently in regard to screening, writing up a lease, and actual management of this property? If I am missing anything else that would be greatly appreciated!
When screening potential tenants, be sure to check for credit history, rental history, and ask for references from previous landlords or roommates. It may also be beneficial to require a co-signer for the lease, especially if the tenants are college students with limited credit history.
When writing up the lease, clearly outline the rules and expectations for the property, including noise levels, guest policies, and maintenance responsibilities. Consider including clauses for subleasing, as college students may need to find replacements if they study abroad or graduate early.
In terms of management, be proactive in addressing any maintenance issues and establishing clear communication channels with the tenants. Consider setting up regular inspections to ensure the property is being well-maintained and address any potential issues early on. Also, have a plan in place for handling noise complaints or other disputes that may arise among tenants.
Lastly, make sure to familiarize yourself with local rental laws and regulations, as they may vary when renting to college students.
Quote from @Emilia Urioste:
hello! I'm a 21 year old female currently living in Texas. I am a college student and wanting to get into real estate investing.
I want to learn as much as I can before I take any action, since in my case I still have some time. I have no major responsibilities.
My question is: what books, seminars, or courses would you recommend for a college student that is just getting started in the real estate investing world.
I want to further expand my knowledge because I dont understand much of real estate terms, taxes, and everything in between.
Thanks :)
Good luck with your rental journey!