All Forum Posts by: Jeffrey Holst

This is a time to be careful and keep looking.  You will if you keep searching find the right deal.  Unlike some people I am willing to slightly overpay for something if it makes sense to me for other reasons, ie I like the area and see long term rent growth, there are obvious inefficiencies that I can resolve but to do so often means placing more money down.  I dont think you should chase something if the numbers dont work for your analysis then keep looking.

@Dave Foster agreed

@Kevin Younger Jr.  If you only recently moved did you live in the property before your move.  The reason I ask is my understanding of the tax law is that if you lived in , and owned a property for 2 out of the last 5 years you can sell it and take an exemption for the gains.  There is a cap but for a married couple its like 550K so you probably can sell it and take all the gains tax free.  Check with your tax person on the rules to see if you qualify but in general I doubt you will have a tax issue and doing a 1031 wouldnt be necessary.  

If you were to do a 1031 its not something to be nervous about.  1) you have plenty of time to start looking now (before lease is up) 2) worse case you cancel the 1031 and pay the tax (if any--see above) 3) the time limits are fairly generous as long as you stay on top of it.  45 days to identify from your closing which means once you go under contract ie you know you are selling your place you start looking and then you have 45 days plus however long it takes the buyer to close typically this adds another 20 to 30 days to the period.  

Regardless, sounds like you need to sell since it isnt cash flowing and I think new investors should stick close to where ever they live when at all possible.  

State laws vary but in general the LLC should still provide some protection. It is certainly true that if you are negligent personally the LLC won't protect you but there are many circumstances in which a person might be non negligently liabile. You need good insurance but you are still way better off having an entity that provides some liability protection ie a corporation, LLC, etc then not having it.

Also as an aside if you want to do note investing make sure you have listened to show 28 It is packed full of great info on note investing

Quick Update,  I am just finishing up listening to show 28 with Dave Van Horn, and its a good one.  If you havent listened to it or its been a while you might want to take a moment to listen to it about buying notes. and raising money.  I have picked up several great tips. 

I have been increasingly interested in note investing but I think it makes more sense to start with a rental give the relatively small upfront funds you are suggesting starting with. One of the comments correctly points out lower dollar notes tend to be riskier in general and in my opinion should be only attempted if you are completely fine getting the property. A lot of times less scrupless investors sell their properties on notes and keep the notes attached to properties they like and sell off the notes on problem properties. For this reason I feel like low dollar notes are best suited for active property investors who have market specific knowledge related to the property securing the note.

You can just bid anytime you want on Hubzu.  Its not a scam but its also a hard market to make money on you need to be really careful and know your market well.  There are a lot of people that end up overpaying.  

@Victor Viyuoh yeah I listened to the 4 minute show 16 and havent seen a reason as to what happened with 21.  I assume there must have been one at some point but Ill likely survive with out it.  

@Sean McDonnell  I wonder if that included the state filing fees etc?  I paid about 1400 all in and fees are about the same annually.