All Forum Posts by: Maugno M.

@Brandon Sturgill exactly my thoughts. BRRRR sounds like putting a lot of debt On oneself. Thanks for your input.

Banker told me i could either do a Cash Out refinance or that I can put it down for collateral and get a Line Of Credit. Whats the better move ? I thought maybe a line of credit because i only pay interest on the money i use, when i use it.

Thoughts?

So I am in the process of finishing up a rehab i have been working on for several months now. I wanted to do a BRRRR strategy but have been thinking maybe its not to smart for me to holding on to property without cash reserves. Other than that i would love to keep this house in my portfolio. The only problem is if a flip it, i'll be subject to short term capital gains. Can I BRRRR first and then after the year passes sell it that way i only pay long term capital gains ??

Any advice is appreciated

@JD Martin I like that. And that is exactly why i was looking into the BRRRR. If i was to be able to pull out 70k, I'd still have to pay back the 25k so that would leave me with 45k though.

Short term capital gains is 25% I believe so if i profit lets say 50k
I'd be paying over 15k in taxes. Sound correct?

I have a 1300 SQFT SFR foreclosure I bought back in December. This property will be done with Rehab by August i estimate. I'm stuck on whether to Flip the home or try doing a BRRRR. The reason I am leaning towards the BRRRR strategy is that this home is down the street from my parents house in a good location right off the highway. It also has a separate mother-in-law type of apt which is where i currently live in. This little house is about 600 sqft and has its own electric meter. It has kitchen/room/LR/BR. All the good things for a person like me that has no kids. So it's basically two houses i have in this one lot.

The reason to sell is of course to make some cash money.  I want to turn a good profit and use that money to keep reinvesting. My money is tied up with this property. I borrowed the money to buy this house from bank using my vehicles as collateral. The Rehab portion I've been funding with my own money and money from my cash flow from mobile home rentals that i have.

Numbers:

Purchase Price:$25,100.00
Afterclosing costs:$27,000.00
Rehab:$10,000.00
ARV: $100,000.00
Holding Costs(Interest Paid to Bank):$2300(10monthsx$230)

My Point of view is that if i flip it, i can take my money and go. Pay off the loan i have, Pay of my credit cards, and have cash money i can use toward my next purchase or keep adding Mobile homes to my small trailer park i have going on. But if I sell, ima have to find another place to live.

If I refinance this house, I get to keep the house. I can rent it, and house hack by living in the mother in law apt. I don't want to do this because this feels like just borrowing money and now I'll have a mortgage hanging over my head. I understand the tenant i put in there will be paying rent, but there's something about it that makes me not want to take that route. I believe this house can rent between $700-800/month once rehabbed.

Is there something I'm not seeing?

@Justin Fox Well if that was the case the buyer shouldn't have closed. You are over complicating this. We are the investors. Our rules. If you don't like it, we'll find another. The buyer's problem now, especially since @Kyle Houlahan let them know before the closing. A/C Units need Freon added all the time.

@Kyle Houlahan I am on your side on this. You sold the house "AS-IS" so it shouldnt fall on you. Even the inspection passed so that's on them. You were not misleading, you were not trying to be sneaky. The buyer went ahead and closed so that is on them.

@Scott Rogers No its cpvc and pex. So it has good plumbing. The water heater is brand new and electric.

Thank you all for the replies. I have an appointment with a plumber to go inspect it Tomorrow.

Recently, one of my mobile homes has had several plumbing issues. 1st pipe burst underneath. I fixed it quick with a Sharkbite T. Then a line on the water heater that goes to the PEX also busted. I sent my dad over there and he just replaced the pipe and g2g. This weekend i get a call that the pipe had busted again ! I go there the next day and replace and fix it. Nothing to it, just have to have the tools and anyone can do it. The tenant tells me i need to get a plumber to fix it right. I told him the plumber would do the same thing i did.
He tells me that i need to hire a plumber and this and that.Because if his stuff messes up with a water leak, (Tv/PS4) ima pay for it etc. That got me angry as hell.  I told him i was not liable for any of his things in the house if damage occurred. My lease has an indemnification clause.Told him i wasnt liable at all for any of the things inside. I told him he needed to get Renters Insurance if he was going that route. I told him i do my own repairs and at my own discretion, decide if i need to hire anyone. I could tell he was upset, but he just said ok.He added that i was being "negligent" I told him negligent would be if i didn't fix it. I ended up calling my plumber(Professional Plumber) who had just done a complete re-piping for me on a Foreclosure i bought. After going over some details with him, i mentioned i had turned up the water heater to maximum level because they had complained that the water wasn't hot long enough. He instructed me to turn that to the middle. It's Summer now basically and Water heater doesn't need to work as hard. To call him if it happens again after i turn the knobs. The renter fussed again about water not being hot enough which is why i had turned it up in the first place. Told him that's just the way it is.

This is actually my fam bam. My cousin and her husband i rent to. I helped them out by not charging them a deposit and gave them a better deal on the monthly rent. They are on a MTM lease. So neither I or them are obligated to stay. They have been paying me on time every month which is good though.

Any advice on this ? I cant let tenants dictate how i run my business.