All Forum Posts by: Lauren Cutchen

We have been looking non-stop for a house to flip for the last 2 months. We have been really eager to get started and have signed up with wholesalers in the area, been driving for dollars, and sending direct mail. And then I came across a listing on the MLS for a flip house. It was an inherited property, the started to try and renovate, and didn't complete it. I brought in 2 GCs for estimates before the offer and it would have made a small profit - around $25,000. But it seemed too goo to be true - cosmetic changes and roof replacement. Nothing big.

To our surprise, we beat 15 other offers, and the agent said ours wasn't even the highest offer. We won by having the best terms (short inspection period, quick close, etc.) We lined up 7 different contractors including home inspection, plumbing, roofers, other GCs, and flooring estimates. We were organized and ready to show up Thursday for it all. Well, thank goodness it rained Wednesday... It showed to be a total train wreck of a place. 

We pulled out of the contract after the other agent gave the cold shoulder to our counter offer. It wasn't the outcome we wanted. But the inspections and estimates came back way too expensive to make sense. Although disappointing, I'm glad we stuck to the numbers and not our emotions. This was our first actual flip my husband and I were going to do. 

Hey! Congrats on taking the next step! 

Generally, it's fine to keep a single rental property in your name. Yes, you'll lose homestead exemption for tax year 2022. You'll still keep the tax benefit when filing your taxes. In my experience, it costs like $200 to form an LLC, and then it was around $400 to file taxes under an LLC with a CPA, not to mention the fees they'll charge filing your personal returns. I didn't find it to be worth it. Also, be aware that a lender has your name, not the LLCs name. I've heard folks say there is a "due upon sale" clause if you switch ownership from you to your LLC. For one home, I don't think it's worth doing an LLC - in my opinion. Just keep up your rent rolls, expenses, and keep a detailed file. Also, talk with a CPA and see what they have to say. There's always a benefit for another "level of protection," but at this point, in my opinion, you'll be fine without one.

Good luck! 

As a realtor in the area, we have a running list of HOAs that allow STRs. Still plenty to choose from. Some neighborhoods will only allow certain sections to have them, like April Sound.

@Art Webb, there are plenty of condos available around Lake Conroe. Alligators are rare. The lake is very active with sporting and leisure. Let me know if you want more information with which areas allow for short term rentals.  

@Daniela R. That question would be best suited for an appraiser. For resale/marketing for renters, I hear more buyers preferring gas. 

@Daniela R.

Are you asking would you install gas in the 2/1 property or are you debating between 2 properties?

@Daniela R.

Gas is great in my opinion. I pay between $20-60 per month, depending on the season. I have a gas water heater and gas stove. It helps when you don't have depend on electricity when/if the electricity goes out during a weather event. I don't see a con to having gas at this point.

What area of town are you looking at? Feel free to reach out if you need anything.

@Ciro Cuellar

What is your goal? If you want faster capital - flip. It's a bit of work to find the off-market deal, but faster timeline. If you are looking to rent the house out long term, new construction isn't a bad idea if you are willing to wait for permits. 

Talk to some lenders who might know this answer. I personally don't know if you can get assistance for multi-family- it just says "primary residence". Depending on your occupation, I know of homes for heroes has these programs. This is a good question! 

You can find some new built homes in Conroe - north of Houston. They will have smaller cash flow, but the area is growing so much, and there's such a shortage of rentals here. You also need to lookout for the tax rates. It changes with each area of town.