All Forum Posts by: Account Closed

Hello!

Considering investing in Wichita County, TX as a place to both BRRRR and flip.

If you invest here, or purposely have avoided it, would love to hear why.

Thank you!

Hello!

While building a financial model, I realized how mediocre my understanding of taxes are.

Assuming a flip is done in less than a year - so short term capital gains - what are the taxes to account for?

My current assumption is that you'd be taxed at the federal and state level as if the capital gain was normal income, and so it would be taxed at your current tax bracket.

I've recently heard that states have a capital gains tax separate from the income tax earned on a property, but there was no clarification of if this is done on top of or instead of the income tax on a flip.

So, from the following, how many are to be accounted for in a short term flip?

1) Federal capital gains at capital gains rate

2) Federal capital gains at income tax bracket rate

3) State capital gains at capital gains rate

4) State capital gains at income tax bracket rate

5) Others that I haven't listed

Thank you so much!

None but planning ahead! Just starting on my journey :) @John Morgan

Thank you all! Very helpful and beautifully clear.

Hello!

Since BRRRR is dependent on the cash-out refinance, what do you do once you've exhausted all 10 loans you can get through traditional financing?

Thank you!

Happy to have a phone call and talk this through. I'm 21 and have faced similar challenges. Now, I don't have my first property yet, so take my advice with a grain of salt, but my ex and I did break up because of conflicting interests - she wanted to travel and I wanted to focus on my corporate career - and I was the one who wanted to try and make it work. But don't know if I would a second time around.

On a high-level, though, I'd say why do you have to choose? How can you have both - the girl and REI?

If you pay for it all in cash and add the rehab costs to the HUD, you can cash out with delayed financing in less than 3 months. Let me know if you wanna chat about it.

Account for vacancy (i.e. 90% assumption -> $1000 rent being counted as $900), holding costs (it's January, you might need to wait a bit to find a tenant, or you could find one next week!) and regular maintenance (I use 1% of value, some use 10% of rent, others say screw it and use a HELOC as a catch-all).

Also, account for opportunity cost. You're getting a property with lower returns than an index fund would over multiple years. If you're going to put in the sweat to manage it, what's the reason you're choosing to get a property you can't add value to through a rehab? (Unless you plan to add that pool).

Otherwise, get an inspection post-offer, as well as any notices from the seller, to understand if a structural issue is causing the market hold.

Hope that helps! Good luck!

And what benefits do you see in using another low-down loan vs a piggyback loan?

Hello!

I'm excited about multifamily owner-occupied investing as I believe it can supercharge my real estate journey.

But I don't want to spend the money to refinance an FHA loan.

Can one get a different low-down payment loan at the same time as having the FHA loan (or do it in reverse order, this is a trivial part of the question), as long as I live in each house for at least a year?

Thank you so much!