All Forum Posts by: Katie Southard

@Aaron Zimmerman you read my mind. That would be an ideal scenario. My problem is knowing who to trust and where to start to find actual deals.

@Bill B. 195 originally refinanced to 224. Owe 200

@Nithin Kumar interesting. Care to share the details? I'd love to look at the layout

@Ken M.  Good reminder. It's not fully closed as in drywall, it's sort of a faux wall on our side, but the tenant could open the door on his side and come through if he wanted. We have an acoustic panel set in there for aesthetics and sound. Not sure about fire marshal would love that though, but at least we didn't drywall it 😫

Also, if it's Lennar, be prepared for problems, insulation issues and therefore paper thin walls. 

@Ken M. we live in one, it has an attached unit, but with a door that passes through from both units. They are designed particularly with mother-in-law or next generational living in mind. The one that we live in has a kitchenette, but not a stove because then it would have to be zoned multifamily. We do have a tenant in ours but have closed off the pass through door. The unit shares the same heating and cooling as my own house. That is one of the issues we noted AFTER moving which is annoying. Luckily our tenant is easy going. 

his entrance has a different front door but not his own house number. 

OP, keep in mind not having access to heating and sharing same water heater and etc will require an easygoing tenant in the nextgen. Pay attention to what's connected. 

we also use the same mailbox. On Zillow, we simply call it #A with the same address.

I work (kind of) with a few GCs. I'm a few steps away. It's complicated. I don't know any out of there at the moment but I do know an AMAZING home inspector out there. I'm betting he'd drive to that area. He may know some GCs so I'll reach out- but meantime if you need an inspector you can trust for before, during or after construction, he's a Godsend. 

@Shiloh Lundahl great answer. Lurking as I'm in a similar scenario IF I sell an owned property currently being used as a rental in my home state.

Ill apologize in advance for hijacking the post but wanted to keep this public for others' input too.

The rental is currently managed by my husband and I and I do the paperwork and lease etc, and hire contractors or husband does light repairs. Anyhow, we can sell the home within the next 1.5 years and take the equity tax free or we can keep as a rental as we lived in it 2 of last 5. I'm so torn. The end goal for us is to be in TX (in 8-11 years) and would prefer to have investments there as I don't want to be returning to Colorado all of the time once we move. We visit TX several times a year to investigate new areas of interest.  I decided to answer your questions as I'm interested in your response. 

1. Do you want to be more of a passive investor or active investor or somewhere in the middle? Ideally, middle. Letting go of control into passive investing and being a money investor makes me nervous. Which means it may make me an active investor.

2. Would you like to manage the property yourself, have an assistant do it for you, or have a management company do it for you? If out of state, it'd be a combination of someone else (maybe an assistant) and I'd manage paperwork, leasing, as much as I could from here. Coming out to the property once or twice a year would be a given however. 

3. Do you want to own the asset yourself or would you like to be partners with someone else who may have more experience and you could be the money partner? Or do you want to be a part owner with a group of people like in a fund or syndication? Lean heavily towards owning myself. Possibly partner with a group but would only do money lending or group in exchange for gaining knowledge of how to independently do things. I don't want to sit back and collect, I'm always hungry for more knowledge and never satiated. I make a decent income in a corporate type job and have an end goal of someday replacing that. Anything to propel that goal forward is of value. 

4. Do you want an investment that you can use yourself such as a short-term rental in an area you like to vacation in, or does it matter which type of asset it is? I've considered this and it is a nice-to-have and would love this, but it's not the first goal.

5. Is your highest priority immediate cash flow or would you rather have an investment that may give you a greater return but it may take a couple of years? In between. I'd like to cash flow about half and keep half the investment in the investment and continue to grow. We currently net about 1k from the rental now and rely on about $500. We could cut things and not rely on it, but it would be a little uncomfortable. Not impossible.

6. Is cash flow the most important or is equity growth more important to you? Both, as above 

7. Do you want something close to you that you can go look at for yourself or are you okay with investing in something far away that you would probably have to fly to if you wanted to take a look at it in person? I believe this is mostly stated for me in response to earlier questions- I'm stuck in CO for time being but want to invest elsewhere. 

Quote from @Aaron Zimmerman:

@Katie Southard - there's a lot to unpack here. 

Here would be a reasonable case if you sold the property while getting the section 121 exclusion. If you sold let's say for $460k net and you've rented out the property for a little less than 2 years, you'll have some minor depreciation recapture. I would venture maybe $20k total, conservatively. The ultimate tax hit is at most $5k (20k * max 25% tax rate) and it's probably not worth it to 1031 exchange for that little of tax deferrals. It'd be better to pocket the cash in my opinion and invest elsewhere.

It seems like there's a bit of conflict between where you are and where you'd like to be. You are working a demanding corporate job but also want to build rentals on the side. Is there a way to reduce the amount of hours so you have more time for other activities?

I would recommend you and your husband get on the same page about future investing goals. Something I do with my wife is quarterly money dates. We discuss spending, net worth, and future investing goals with the cash. It's not perfect but it's a start and something for you both to look forward to as you continue building your life together.

Some other questions to consider are:

1. What do you want your ideal life to look life?

2. What problems do you want to be solving? Do you want to be solving tenant issues, buying properties, problems at work, etc. 

Happy to be a resource as I know all of this is challenging. You've done well with having options, now just need to decide and get on the same page. 

Great questions. I know what my ideal life looks like in ten years, unfortunately, I don’t feel like I can have my ideal life now because I am having to stay in the state that I am in until we can move without risk of my husband losing custody of his child, which will be in about 10 years so believe it or not I do spend a lot of time thinking about what I want the future to be like. We’d have a regularish house, a few acres (maybe more), gardens, alpacas, chickens. 

We currently have Chickens in suburbia that are secret, lol, and I’m an avid gardener. Ideally, I’d be buying and selling and potentially managing properties as a job, and be working the gardens and hobby farming, potentially attending farmers markets on weekends (we both love to create things). But we are also both very used to corporate and used to having a security of a job. I am more likely to take a risk, but i suspect when my husband is out from under a controlling baby mama, he won’t mind a little risk either.

I love Texas, try to vacation there often and my husband is aligned with Texas farm property as a ten year long term goal.

I’m also passionate about the trades and if i could do it all again I’d be part owner of some kind of builder or remodeler or specialty trades business.

Quote from @Ben Trageser:

There are a lot of options here. It really depends on what you are looking and I think your thought process is correct. Bigger Pockets is the right place to come for resources as there are plenty on the site here.

My love and my hate: options. I love that we have several ways we could go, but I’d hate to make the wrong decision. If it furthers our goal of a couple acres and a home in Texas in 8-11 years without being a slave to the system, I’m all ears.