All Forum Posts by: George Pauley

You have "acquired" a home.  May I ask how you acquired it?  If you inherited it, then the basis value is reset to the value on the day you inherited it.  In other words there won't be profit to tax, as far as the IRS is concerned.

If that $400-500k is actual profit for you, then I don't see how you don't 1031 it into other property.  Like Bill Brandt says you are leaving ~$150k in taxes on the table!  

Why do you not see yourself buying replacement properties?  What is the obstacle?

You have "acquired" a home.  May I ask how you acquired it?  If you inherited it, then the basis value is reset to the value on the day you inherited it.  In other words there won't be profit to tax, as far as the IRS is concerned.

If that $400-500k is actual profit for you, then I don't see how you don't 1031 it into other property.  Like Bill Brandt says you are leaving ~$150k in taxes on the table!  

Why do you not see yourself buying replacement properties?  What is the obstacle?

Dang auto-correct

 Memphis Tenseness- Pretty much cash-flow capital of the US.

Just want to re-iterate the concept of return-on-equity (ROE).  Do the math and the math will tell you what to do.  If your ROE on a property is less than the ROI you expect for a new investment, then it's time to get the equity out of the property and into the new investment.  This might mean selling the property, or it might simply mean re-financing it.

I tend to buy properties with the intention of passing them to my heirs.  The tax advantages for inheriting real estate are outrageously generous.  This makes me lean towards refinancing.  If, you do end up selling, try to buy a new property via an IRS 1031 exchange to avoid losing these tax advantages.

Your property manager is the most important member of your team.  Find the right property manager and they'll be able to tell you what neighborhoods to focus on.  I regularly run prospective properties through my local property managers.  They can tell you what a particular property will rent for, what type of neighborhood it is in, turn over rates, etc.

I house hacked my first home before I had ever even heard the term.  I would think sites like Rent.com, Nextdoor.com, etc would be the place to look.

If you can cook...  I used to always have a big pot of spaghetti sauce simmering in the crock pot when potential renters would come buy to check out my house.  The house smelled heavenly.  Many prospective roomates would comment on it and ask questions like "Do you always cook things that smell great?"  LOL - Simple but it works.  ;)

I think you have to contact them and find out if they are proceeding with the move out, or are staying due to impact of stay-at-home order.  You really don't know what their plans are at this point, and guessing or assuming will almost certainly get you in trouble.

It seems to me that the current virus situation likely makes it difficult to find new renters for the next month or more.  As such having the current renters stay on a m2m lease seems like a win for you?

My first thought is how will you manage the home once you move to DC?  Presumably a property manager?  Unfortunately, good property managers are hard to find.  (Not so good ones seem to be easy to find!)  Overall your plan is good, and I don't want to imply otherwise.  What I would suggest is you start, at least casually, the property manager hunt now.  Check references etc.  Things to look for are years in the business (particularly amongst the current employees), number of units managed.  Also, if the PM seems to spend considerable time trying to lower your expectations:  Well, they are probably pretty good!  LOL

My second thought falls under the "Gee I wished I had known this when I got started" category.  Understand your market.  Property managers can actually be a great resource here.  You need to know what rents well and what doesn't.  A lot of mentions 3-2 homes in previous responses.  Normally those are solid performers.  But not always.  Sometimes in college towns, or at least the college area of towns, smaller homes rent better.  Understand your customers.  What jobs are they primarily working to get money to pay the rent?  Are those jobs secure?  What does the local economy look like?  Are more people moving in to the area or out?  Do people even rent in the area?  (Some areas are predominantly filled with home owners and not renters.)  Again property managers (good ones) likely know the answers to all these questions.

I've recently had problems with my personal home's master shower (Phoenix area).  After 2 quotes to fix at $8, I jumped on the 3rd quote of $6k.  If you have one of those cool shower inserts like you see at Home Depot all is great and cheap, if you have tile and cultured marble and the like the price skyrockets quickly.