All Forum Posts by: Holden Latimer

Welcome to the group! I am quite new as well and everyone has been really supportive and helpful so far. Best of luck in growing your real estate portfolio!

The book is great and there is a reason it is one of the best selling personal finance books of all time. The RDPD seminars on the other hand sound like a scam and should be avoided. I am a fan of the ideas expressed in the book and not such a fan of Kiyosaki himself.

This was the first book that helped me change my mindset about wealth and financial freedom. I think it is a great read for someone starting out in real estate.

@Quintin Mortensen

 You are really close then. My 4-plex is on 4th N just off Redwood. What are you rental rates there right now? 2Bd or 3Bds?

@Laura Levine I am pretty certain that proceeds from a refinance are not taxed. The reason this cash-out is not taxed is because it is simply a shift in assets. If you think about it on a balance sheet the increase in cash will be offset by an equally large increase in long term debt. The IRS does not consider the pulled-out cash income.

@Robert Sepulveda Great point. I completely agree that, if at all possible, debt should be paid off from cash flow and refinance proceeds should be used to acquire other assets. In this case though, if a large portion of the renovation was funded with a credit card, it may be best to use a portion of the proceeds to pay off that debt.

@Laura Levine

Renovation looks great! Not sure if you mentioned in your post, but have you guys looked into refinancing now that your value is closer to $415K? Or do you plan to refi down the road? 

Sounds like you guys put a lot of capital into the project and seems like you could recoup some of that cost through refinancing. I think my next investment will be a heavy lift like your guys' and would love to get your thoughts on refi strategy once done. Good luck with everything!

@Quintin Mortensen

Thanks for the response! I will have to give him a call when I get to my next project. Do you know about what his rate is per hour?

Our 4-plex is in the Rose Park area near Redwood Rd just off the I-80 West exit. Not the greatest area, but cash flow is strong.

@Adam Spencer

Our CapEx budget for renovations was out of pocket unfortunately. We were only able to afford this because of the 3.5% down payment offered by FHA. I think I will talk with my lenders about making our refi a 203K since we still would like to renovate at least one more unit.

This is a great strategy for a first property. My wife and I bought a 4-plex this way about six months ago. We were lucky enough to have a tenant giving notice during our due diligence period, so didn't have to worry about kicking someone out. Be ready for the financing. It took us a very long time to get everything in order, so have it ready ahead of time. Our lender allowed us to use 75% of in place rent towards our qualifying income.

I would recommend finding a value add opportunity. Since moving in six months ago we have fully renovated two units and added general amenities like an exterior fence and landscaping. With leases turning and one move out we have raised overall rents by about 18% and are cash flowing over $1000/month currently. We are in the middle of a FHA refinance now to lower our PMI and when done the lowered payments will result in at least an additional $200/month in CF. The amount of work has been much more than expected, but we expect our first property to be a strong beginning to building our real estate portfolio. It pays to recognize and add value to your deals. Best of luck with getting your first deal and let me know if you need any additional advice!

I bought my first investment property, a 4-plex, in Salt Lake City about 6 months ago. We have done much of the renovation work on our own, but I have a busy schedule and would like to find a reliable handyman. I have used two contractors thus far and have been wildly disappointed. Do any BP members in the area have suggestions?

Thanks!

@Bryce Till

Thanks for the response. I agree that it adds a sense of professionalism with tenants. Do you mind me asking what price the LLC set up is running you?