All Forum Posts by: Kaleb Packer

@Adam Feick

Congrats on the accepted offer! I'm in Mansfield and keep an eye on what hits the MLS in the surrounding areas. I also know a little bit about Willard because that's where my wife is from.

I saw that rather large portfolio of rentals list recently, so I’m assuming you’re picking up one of those properties.

I don’t know of any property management companies in Willard, but there is Alpha & Omega in Mansfield and JEMM in Ashland. I have no idea if either will travel to Willard.

Good luck with the purchase!

@Peter Palmer

My family and I own 70+ units in Mansfield and it is a good cash flow market. However, rent growth and property appreciation is slow here. Rent growth was actually stagnant for quite a while, but we’ve seen relatively large increases over the last two years. It’s hard to say if the trend will continue.

If you’re considering buying in Mansfield, the best advice I can give is to buy quality properties in decent areas. Avoid buying based solely on price and what a current tenant is paying for rent. Cheap prices don’t mean the property is a good deal.

One other thing to consider how you’ll manage it from a distance. There are only a couple licensed management companies in town and it’s pretty hard to make any money based on their fees. Most people around here self manage or have large enough portfolios that they manage in house.

I hope this helps. Feel free to message me if you need anything else.

@Trevor Fritz Congrats on buying your first place! It sounds like you plan to live there for only a short period if you're already considering moving. However, I agree with the other comments about not letting taxes drive your decisions. 

First and foremost, are you financing the condo? Banks want to know if you're borrowing money for your personal residence or for an investment property. It sounds like you plan to live there, but make sure you meet the time requirements before you move out and turn it into a rental property. Otherwise it's considered mortgage fraud. 

Second, I'm confused about how you plan to deduct all the rehab expenses? Unless you're flipping the house, most of the rehab costs have to be capitalized, added to the basis of the house and then depreciated. Typical residential depreciation is done over 27.5 years. They are not immediate write-offs when it's a rental property. Furthermore, you cannot depreciate your primary residence. I hope I didn't just burst your bubble.

Another thing to consider is if you want to make it a live-in-flip. Again, no depreciation because it's your personal residence, but if you live in the condo for 2 of the last 5 years you get a $250k capital gains exclusion. I'd deploy this strategy if you plan to live there at least 2 years and know you can create a significant amount of value with your improvements. It's not the immediate deductions you're looking for, but it is a way to basically do a tax free flip. 

I hope this helps. 

@Crystal Smith you should talk to @Emmett R. McCarthy

@Pierre Mcgraw, what do you mean by "out of pocket expenses?" I ask because this could be interpreted several ways. 

1. You don't want to spend any money to fix it up

2. You don't want to bring money to the table to sell it (e.g. Short sale, closing costs, commissions, etc)

In the case of #2, all costs will be deducted from the sales proceeds, including the mortgage balance and the money left over goes to you. You would not directly pay "out of pocket" for any of the expenses unless the sales proceeds does not cover the costs. If this is the case, you will need to bring the difference to the table or consider a short sale. 

In the case of #1, there's always a buyer for every property, but I'm curious to know why the condo wasn't maintained by the association. Have you consulted a real estate agent to see what it's worth as-is? This may help make your decision. 

@Cory Gardner awesome post! Thanks for all the hard work of documenting the projects!

@Crystal Smith did you ever find a good Chicago attorney to handle foreclosures from tax deeds? If so, would you mind sharing any recommendations?

@Nnabuenyi Anigbogu congrats on all the success and upcoming wedding! Let me know when you're ready to do the next deal.

Do you have any before and after photos you want to share?