All Forum Posts by: Dani Beit-Or

We own a rental property in Helena, AL that we purchased about two years ago. 

When we bought it, we made sure there were no leasing restrictions in the HOA rules.

Now, we’re are notified that the neighborhood is pushing for new leasing restrictions, and it’s not just about Airbnb—it seems like they’re trying to limit long-term rentals as well. The exact changes to the CC&Rs aren't clear yet, but we can see where this is heading. We received a notice from the HOA and waiting on a voting date & time on the proposed changes.

Has anyone else faced a similar situation?

• Were you able to fight it, and if so, how?
• Are there any Alabama laws that could protect existing investment properties from new restrictions?
• Any tips or suggestions on how to push back against this?

For context, we have great tenants, take good care of the property, and have had no issues in the community. This isn’t a problem property—just trying to protect our investment.

Appreciate any advice!

I’m looking for insights on how to put together a deal with the following details:

• Asking Price: $260K
• Market Value: ~ $265K
• Property Details: 3 bed / 2 bath / 1,400 sq. ft.
• Days on Market: ~100
• Loan Type: VA Loan (Attempting a VA Loan Assumption)
• Mortgage Balance: $200K

The Challenge

The seller is behind on mortgage payments, and while I don’t have an exact amount, the agent mentioned it’s over $20K. The agent also stated that because the seller is behind, the loan cannot be assumed.

Questions for the Group:

1. Is it true that a VA loan cannot be assumed if the seller is behind on payments?
2. How can I structure this deal to protect my interests? I’m open to paying the $20K to bring the mortgage current, but I want to ensure my position is protected. If the deal falls through, how can I secure my $20K so I’m not left out of pocket?

@Nathan Gesner - TY! So strange as they ghosted me

@Nathan Gesner have you used SureVestor? I spoke to them about 1.5 months ago and since then they have been non-responsive that makes them look like not the real deal and I'm wondering if they are still around and active and good? TY

@Tim Delaney that had been my experience as well. 

Hi, 

Are there any lenders offering HELOCs or second mortgages on rental properties with equity?

I'm exploring ways to access equity without selling.

@Jaron Walling - Thanks for the answer!

@Dave Foster, thank you for the detailed info! I understand your points, but I want to clarify the tax consequences in my example. I’m simplifying the numbers here to focus on the main concept, so I’m leaving out factors like expenses, improvements, property management, repairs, etc., for now.

Here’s the scenario:

- I bought my house in 2022 for $1MM and used it as my primary residence.

- In 2024 (after 2 years), I moved out and converted it into a rental. At the time, the house's estimated market value was $2MM.

- By summer 2025, I plan to sell it. Let’s assume I can sell it for $2.5MM, net after sales expenses.

In a straight 1031 Exchange, I would sell the property for $2.5MM and need to exchange into another property (or properties) of equal value to fully defer taxes.

My questions:

1. Since I have the $500K exemption, does that reduce the exchange amount from $2.5MM to $2MM? Or do I still complete the 1031 exchange for the full $2.5MM, with the $500K deduction only reducing the deferred tax owed?

2. Also, does the 1031 exchange cover just the $500K gain (appreciation since converting to rental) or the full $1.5MM gain?

Thanks for helping me understand how the $500K exemption interacts with the 1031 Exchange!

If my wife and I own our own house which have appreciated well over 1 million, and I would like to use a 1031 exchange in order to defer taxes - 
I have these questions, let's assume we purchased it for $1 million, and it's now worth 2 million dollars and I lived in it for the past 3 years as my primary residence.

1. Will I still be able to use the $250,000 per spouse exemption on the appreciation, and how will this impact my 1031 exchange?

2. In order to benefit from a 1031 exchange to defer my taxes will I need to convert my primary residence into a rental property and if I do, what's the minimum amount of time that I need in order to hold it as a rental to make sure it qualifies for a 1031 exchange?

3. Say we rent it out for 1 years after we move out - will the defer amount in the exchange be our entire appreciation?  only the appreciation gained during the leasing period? and how will the $500k exemption play into it? 

Subject-to deal: 

Cash required: $35k + 295k existing mortgage + 5k in misc = $335k for a 350k 2021 house.

Pros

2021

35k needed

3% int. rate

Good schools

Good location 

CONS

$145/m in HOA

Cashflow is tight

Mortgage Info

Last Recording Date 10/6/2021

Loan Type CONVENTIONAL

Original Loan Amount $319,105

Loan Term 361 Months

Est. Interest Rate 2.99 %

Est. Loan Payment $1,341 

Est. Loan Balance $295,000

Loan Maturity Date 11/1/2051

Property Specifications:

SFH

Bedrooms 4

Bathrooms 3

Square Feet 2316

Year Built 2021

Garage Size 2

Schools Rating (scale 3-30, 30 is best) 18

Lot size (sq ft) 7,631.0

Purchase price: $330,000

Market Value: $350,000

@Ferrode Joseph 

Cash flow (CF) might be challenging these days, but it's definitely not impossible.

So, how do you analyze your properties?

We've been using a proprietary tool (an Excel) that we created about 15 years ago. With this tool, we've analyzed and bought around 1000 long-term rentals, and over the years, we've analyzed approximately 75,000 properties with it. It's been a reliable tool for us, but like any tool, it's crucial to know how to use it properly and not rely on it blindly.

I've noticed that many investors tend to use rules of thumb when analyzing properties instead of diving into the specifics of each property. They often make worst-case assumptions, which can lead to always seeing the worst-case scenario and missing out on good opportunities. I've been there and done that myself. Having a good tool and using it correctly can make a huge difference.

Another important question to ask is: What's your cash flow expectation? Are you looking for $100 per year? $3000 per year?

We still find cash flow properties. Most of the ones we come across generate around $2000 per year in cash flow when we analyze them realistically. This takes into account factors like mortgage payments, vacancies, HOA, and so on.