All Forum Posts by: Joshua McMillion

@Ian Hurdle

@Stephen Wescott is on active duty and moving to San Antonio. Are you still considering investing in that market!? Thanks, brother! 

Sincerely, 

Josh 

@Andrew Cowles

My advice is to leverage the VA loan and focus on residential multiple families for a buy and hold. My goals are aligned with a long-term buy and hold, not flipping. If you want to make this your full-time job when you get out, flipping is a definite possibility, but I would be careful. Flipping is considered earned income and is tax differently, not to mention the marketing fees you will pay, initial capital invested, and your rehab budget. 

Your young and one of the most powerful principles I can think of is time. From my perspective, to gain generational wealth, buy and hold maximizes the full potential of REI (depreciation, amortization, appreciation, and cash flow). Eventually, you will hit a tipping point, and money will no longer be a variable. I highly encourage you to shift your "instant gratification" mindset and look at the big picture. The forum below can point you in the right direction. Take the time now to map out your goals and WHY. 

Also, look at BP Episode 447

Sincerely, 

Josh

@Jon Foley

congratulations on making your first post! I will address your concerns. Taxes: If you lived in your primary residence for the last two out of five years, I am almost certain you are not required to pay a capital gains tax. That being said, please check with a tax specialist if you have one. I am selling my home in Louisiana right now too, and am not required to pay. Worst case, say you do, all you need to do is an IRS Code Section 1031 and invest that money into a "like-kind" asset. Check out the link below. 

https://www.investopedia.com/a...

Family: Yes, I agree that you should focus on family first. However, don't shut the door on residential multifamily until you see the area. You could always find a duplex, townhome, triplex, or even four-plex in a neighborhood that works for your family. There are very nice four-plexes within walking distance to 10/10 rated schools, walking trails, and playgrounds where I live. 

LLC: You don't need to honestly pull the trigger on an LLC until you start scaling your portfolio. You can get an umbrella coverage that will cover up to $5M and have just as good protection. I am doing the same thing now and plan to start an LLC once I get my third investment property by the end of the year. It would be best if you determined as you grow how you want to hold properties in your LLC's too. For example, you don't want to have all your homes under one LLC because that opens up your portfolio to seizure if someone attempts to sue you. I plan to have two to three properties per LLC or up to 500K in assets, all under a trust. I am by no means an expert on this topic and would recommend finding a legal specialist. However, if you get into multifamily, you may want to pull the trigger on forming an LLC. You can always mitigate your risk by finding great areas to invest, building a great team, and ensuring tenants are screen properly, all while using an umbrella coverage.

Sincerely, 

Josh 

@Elizabeth Beard

Great question! By now, you probably know how to communicate with the seller effectively. I would show him the numbers for one year and how much he could save, just like you described. He is trying to fish for reasons not to move, and you need to paint the picture of what he stands to gain with the move or, conversely, lose if no action is taken.

I'm assuming the seller is a veteran, so I would recommend not taking the hard *** approach if possible. I would highlight the money he stands to make for the move and ask him what the worst case that could happen is. His neighbors hate him ( could live with that), he has to get a new car (he has multiple, it seems and will be saving $$$), and has to drive to a VA. If he retired from the military and is concerned with the VA that is a valid point.

Sincerely 

Josh

@Nathaniel Prince

Love seeing military members, especially active duty, post on BiggerPockets! Is this property you want to sell a VA loan. If so, that changes things up because 1031 is not required for up to 15 years. If not, I recommend selling the property with a 1031 and using that to fund your next Multi-family building. 

I am never a big fan of using debt unless you need to. You are in a position where you can place a large down payment on an MF or even acquired several SFH's with equity you already have. If you use the HELOC, make sure you have a team in place and quickly REFI if you go with a BRRRR. 

Sincerely, 

Josh

@Michael Montana

I would go with option two, given the position I am in and my current acquisition timeline. I aggressively save from my W2 job for real estate investing and am never a huge fan of pulling money out of a property to finance another unless the numbers work. Are you planning to rent out your primary residence? Do you have a team in-place to enter into BRRRR? Pulling out the equity can always be an option, but if you can save and use the additional $4800 you will get from the REFI each year from your primary residence to purchase a home, I would recommend it.

I'm always a fan of investing from a position of strength and not overleveraging yourself. 

Sincerely, 

Josh

@Joas Espinoza

Depending on your market, the 1% rule is tough to come by. For example, if you're building investment property in California, your play would most likely be appreciation and not cash flow based on the home's purchase price and rent. I modified the 1% rule down to a .07% rule. I justified that number based on cash flow and ROI%. Another useful way to look at properties quickly is the square footage and purchased price. Depending on the market, if you find a 1 to 1, it most likely will meet the 1% rule. 

You not crazy; this market is! Ensure you establish your crystal clear criteria and don't get hung up on the 1% rule. 

Sincerely, 

Josh 

@Jim K.

I 100% agree with this. I grew up in a family that only knew the coal mine and military life. That being said, I joined the military and do not regret it. I never was taught to manage finances or work for myself, and I have a master's degree in a STEM-related field. It takes a life-changing moment to realize a change is needed. That is precisely what happened to me, and I now I am making it a mission to educate others in the power of controlling and weaponizing your finances. I will ensure my children do not fall into the same traps I made and hopefully help others along the way.

Great thread! 

Sincerely, 

Josh

@Michelle Harrington

My advice would be the less sexy approach. I am never a big fan of pulling out equity or creating a HELOC loan unless you already have strong savings positions with cash reserves in place. Those approaches are something you can always use, but if you have the savings and the cash reserves in place, that would be my recommendation. You can always get the HELOC loan, but you don't have to use it. This would give you more flexibility. 

Sincerely, 

Josh

@Steven Gray

I love seeing other like-minded military members taking action! You are doing everything right, getting yourself out there, and it sounds like you have the vision to achieve your goals. 

Sincerely, 

Josh