All Forum Posts by: Jeffrey Holst

So if the house is not selling its too expensive.  30 days isnt that long so maybe its not a big deal yet but with flips you need to turn them as soon as possible.  If the neighborhood is less attractive and the house is nicer than the nearby houses you may have been to aggressive in your rehab.  Doing good work is important but making your house better than the neighborhood justifies will rarely get you enough extra on sale to make up for it.  

My gut tells me you need to be aggressive in getting it sold even if it means lowering your price a bunch but keep in mind I havent seen the house or the area.  And @Jason D. is right if other houses take 90 days then yours probably will too.  When we do flips (which is rare) we price below market to get rid of holding costs as soon as possible.  

First off talk to an attorney for local laws but in general I think LLCs are usually well worth the expense. Most banks dont charge anything different for LLCs from a financing perspective as long as you sign a personal guarantee on the note. LLCs are very affordable often they can be set up for a few hundred dollars in fees. The liability protection is the main reason to do them and in general I figure that even if you dont think you need it you are better to have it. If you own a proeprty for 10 years your situation might be significantly different and the LLC offers protection with flexibility for relatively small cost.

@Justin Zoeller Great question.  Its important to gain as much knowledge as you can before moving forward. BP is a great place to start with that process.  I cant tell you exactly what to do next because I think its important for you to study and learn to the point where you can make your own choices about how to proceed.  I will offer some observations though.

First regarding the rental that you currently have.  Your analysis is missing a number of variables.  How much will maintenance cost?  How about vacancy?  What about management fees?  I know if you rent it yourself you can avoid fees but you should budget for them anyway in case you cant always manage yourself.  

In truth your current rental probably doesnt cash flow that well.  I think you need to assume at least 10% of rents will go to maintenance and you will have at least 8% vacancy on average plus another 8-10% for management costs.  Based on the 1000 per month rent those costs should be about 260-280 per month leaving your cash flow to be very small.  

This is not to say that you cant make it work since you certainly can mange it yourself to capture some of that back.  Also in general $1000/month rent on a 90K house since too bad deal but if you bought the place 8 years ago it might be worth more or less than that now.  I am assuming that your taxes and insurance are included in that payment.  You might want to check with your insurance agent and make sure that you have the right type of insurance on it.  

If you have a lot of equity say the house is worth 125K or more then it might make sense to sell and use that equity to buy something that cash flows at a better rate,  you also could look at your interest rate.  Rates are fairly low now it might be possible to get a lower payment to increase your current cashflow.  IDK if I would sell or not in your situation but I think its really smart of you to think about your options.  Keep asking questions and best of luck.  

Let me know how it goes.  

I love small multifamily for a house hack.  I'm a fan of the Chattanooga market and also think it's a great place to live.  From what I hve heard Nashville had gotten expensive we are starting to see Nashville investors buying here as a result.  Idk about Tampa but  if you do end up down here in Chattanooga look me up.  

I don't think you will have trouble getting financing for a newly formed LLC. You will both likely need to sign a loan gaurantee but that's pretty typical. We form llcs all the time and get loans for them with no prior business in the entity.

The easiest way is if you have an agent that you work with, if not it's about finding sales of duplexes in the market and comparing them.  It can be tricky.  I buy duplexes but before I started in my market I watched the prices for a long time.  

@Abel Curiel makes some very good points house hacking in the way he describes maybe you best option. It is also important to check out the local market.  The best advice I have received is to do it.  Don't wait around and see what happens.  Just get out there learning about your market and put that equity to work once you have a solid play.  A good realtor and local banker will be key.  Step one is getting out and meeting people.  Best of luck

Also you could identify a property from a syndication as a back up,  there are bunches of options for Delaware statutory trusts that pay reasonable returns that qualify.  

@Wes Harrington this might be something youd like

@Fradel Schaechter each syndicator is going to have different needs,  some wont want any help from you some might.  I think the trick to getting involved in real estate is to start.  Go to meetings, look at deals, talk to other investors.  Tell people you are newish to real estate but you find it fascinating and you are working on getting your first deal.  If you are having a good conversations eventually an opportunity to help someone will present itself.  The idea that you should just cold call people who syndicate deals is often thrown out there but its not really practical.  Mainly because syndicators who advertise deals are so far above the average investor that they arent going to need your help.  They people that do a couple of syndications a year and have small staffs that might need you help arent advertising so there is no easy way to identify them.  

In my estimation you really just need to network and keep you options open.  Maybe there's a guy who is flipping houses that you can learn from or a buy and hold gal that could use a hand.  The point is to not worry about the who and just get out and learn about real estate.  When you learn enough you will start to see ways to make money and then its off to the races.