All Forum Posts by: Gallagher Wilson

You may want to consult a local realtor (who may not hang out here and see this). That's very market specific. If your location in title is correct, Spanaway is out of the big bubble of appreciation, but if you thought value was going to grow substantial in the next few years it might be worth it to hold and rent. Also consider the cost/stress of managing a rental from OK. May not be what you want to do. Based on the numbers you threw out, it doesn't sound like you've got a lot of potential for appreciation. My gut would be to sell. Good luck on your decision.

Good move if you can pull it off. 5 years ago, my brother and I bought my parents house from them.  You can have them gift you equity towards a down payment. IRS allows currently (don't quote me ~$15k a year, tax free). So your mother can gift you $15k, your father can gift you $15k for a total of $30k down. If you have some cash you can through it in, or partner with a sibling/family member, who can then receive another $30k gift from parents.  Essentially then, you shoot for a bank appraisal of $650ish, and then your mortgage is appraisal minus whatever gift + cash you can put in. IF your value is correct, $30k gift only gets you just under 5% down, which means you've got MI in the payment for a while. But I assume in SF area you can rent that pretty easily. Good luck, its a great way to keep money in the family. I ended up using that gift + appreciation on our house to buy a rental last year, so turned $30k gift into several hundred thousand. In short, I'm a big fan!

@Madeline J. Great heart and attitude towards the communities that may be run down and materially impoverished.  As others have suggested, I would do some research on how to actually be effective in having a positive impact in a community.  There is lots of good research and reading available on the concept of "poverty culture".  If you've grown up in a most of middle class America, it can be hard to understand some of the cultural differences.  There can be different attitudes toward money, resources, opportunity and community that impact how those your are setting out to help may receive the "aid", and it won't always be positive.  I spent some time working in very impoverished communities in high school, and found that it can be very different than I assumed it would be.  Great attitude, commendable desire to help, just take time to make sure it really does help, and doesn't hurt the community in the long run.  One book I've like is "When Helping Hurts".  Good luck!

Congrats dude! That sounds like a sweet setup.  Hopefully its smoothly sailing and good cashflow!

@Michael L. That's a great point on the reputation vs. cost of turnkey providers.  I hadn't thought of that.  Sounds like you've found the real numbers to be fairly close to the pro forma, which is cool.  I'll be curious to see how things go as you choose to diversify into other areas.   I've been through KC a few times on business.  It seems like a well-diversified area from an economic point of view as well.  I didn't have an investors eye at the time, but looking back, there is definitely some possibility there.  Keep us posted!

@Michael L. Just read your whole thread.  Thanks for posting the open-kimono version :)  I've debating/researching turnkey's and this is a massively helpful write-up on what to expect diving into this.  Maybe I missed it in there, what were your factors in considering Chicago? I keep hearing good things about Kansas City from turnkeys, but also see lots of Chicago area.  If you have thoughts, I'd love to hear them!

@Matt Bowers I'm in a similar boat on my current home.  We bought around $310k in 2011 and comps in the neighborhood (Shoreline) are $550-600k.  Talking to a friend who's an accountant, his suggestion of selling to reset basis on the growth for tax reasons can be a good idea.  And, as many in here mentioned, you remove a lot of risk buy resetting that way.  Only downside is how hot the market it, and you're buying high because your selling high.  Maybe sit on it for a year or two and see what happens.  I know that drives the "your moneys not working for you" crowd nuts, but waiting to reinvest till it cools off a bit could make sense, based on your risk tolerance. 

I've also considered investing in a more stable market (Kansas City seems to come up a lot on the forums), not an appreciation bet, but seems to be steady cashflow and you could land a couple multi's out there on good mortgages with that equity spread between as down payments, and a pad for rehab/capex.  Good for you, whatever you decide!

Hi all! Been lurking on here a few weeks.  My wife and I are closing on our first buy/hold rental in Shoreline (N. Seattle suburb) in two weeks.  I've been pouring over the site trying to glean all that I can.   My interest in real estate is fairly broad: I'd love to end up with several buy/hold rentals for long term income stream, but also have interest in flipping.  I grew up remodeling with my dad, and so I have a good basis for the technical, and love the numbers/business side as well.

I'm really interested in connecting with local wholesalers, contractors and potential mentors on the flipping side of things.  For buy/holds, I'm working with my uncle who's been a long time buy/hold investor in Seattle.

So awesome to have the community and knowledge base here for all of us learning the game!

@Jaysen Medhurst thanks.  Those were all my thoughts, just wanted to make sure I don't overlook anything obvious or not-so-obvious.  Thanks again!

First post on BP, love the content.  Been pouring over this for a few weeks and love the amount of advice and encouragement that floats around here!  

My wife and I are closing on our first SFH buy/hold in Shoreline, WA in a few weeks. In the meantime, I found a quadplex a few miles north. Owner has been in it for 20+ years (likely has paid off, or mostly, I haven't verified) and is interested in selling. We've dialogged via email the last 6 weeks, and he's getting closer to ready to sell. Because of our current debt/income ratio, and conversing with my lender, getting a loan on this is a stretch for me at the moment. The cash flow is good and there's room for improvements as well. If you were/are a seller, what is the motivation to owner finance? Tax benefits in not taking buyout in lump sum (assuming he wasn't going to 1031). I've novice enough I don't know if there are other perks I could use to sell him on the idea. I realize it will totally depend on his situation and reason for selling. But I want to hear thoughts before pitching to him. Thanks in advance.