All Forum Posts by: Mike M.

Thanks to everyone for the responses; it's helping me out a lot. 

@Account Closed, @Paul Santos , I lived in the condo for the first year, and then I was in Afghanistan for about 7 months (it was rented out), and then I got home, lived in it for another few months, and then rented it out for about the last 8 months. Later this year, I'll deploy again and my family will move back into it while I'm gone. All that to say, if you count the time I had to rent it out while I was in Afghanistan (assuming that qualifies as being moved under orders) I should have the requisite 2 years of primary residence to qualify for the tax break. Obviously, I need to talk to a tax lawyer, but that's my understanding. 

@Elizabeth Colegrove, @Andy Mirza, @Brent Coombs   In the cumulative year or so of having the condo rented out, I was at first just breaking even on rent, and now I'm making about $200/m positive on it. Because the condo is so new, so small, and I've been careful about selecting tenants, I have had barely any expenses on it, and were it not for one month of vacancy I'd actually be at a net gain right now. BUT, that month of vacancy cost me 1800$, and on 200 a month positive cash flow, well, it takes a while to do anything but make the payments. So in summation, I'm not making any money on it, but I'm not losing my *** on it. The (assumed) drastic appreciation of the last couple years has made it much easier to bear. And @Andy Mirza, yes, selling the condo would free me up for another VA loan as a primary residence, which would be a big plus for my family.

@Tyler Flagg, I have considered doing the 1031 exchange, since I really won't spend those capital gains on anything but another investment. I need to read up on it some more, but that's definitely some good advice. 

@Bill Exeter, I had not heard of that rule before. Thanks for setting it straight. I was under the impression that for that tax break, the amount of time you spent using the home as the primary residence made you proportionally eligible for tax-free capital gains. And being married, living in that home for around 2 of the first 3 years would make us eligible for something like a few hundred thousand dollars tax free, well below the profit we'd make on the house. Tax law is pretty confusing, haha. Do you have a resource where I could read up on this stuff so I don't walk into someone's office with unrealistic expectations?

Thanks again to everyone who's helping me out.

Hello all, I am about to have some money saved up and I want to spend it smartly. I’ve been reading about real estate and the like for a few years now and I’m really interested in pursuing it for some long-term wealth/security. This will kind of be a long post, so I apologize in advance if this should have been in another forum or a blog- I’m new to this community- so just tell me if it should be somewhere else and I’ll move it immediately.

A little about myself: I'm 27, recently married with a 5 year old daughter. I'm active military, and own one property that I rent out. I am debt free (aside from a low-interest car payment and the mortgage) and I've got some decent money saved up. After my next deployment, I'll have something to the tune of 80-100k in the bank set aside to invest. I bought my condo (high rise, downtown San Diego) in Nov 2012 with a zero-down VA loan that it currently making $650 a month in positive cash flow, which is only $200 a month if you take the HOA fees into account (which has meant in effect that I am taking a slight loss with maintenance). The condos in the same building of comparable value have appreciated from 50-70k in those couple years, by my reckoning. My wife and I make enough that we're willing to put some risk into the money, because we're still going to be able to pay the bills if all this money gets hit by a meteor or something.

I’ve been reading the forums here and my own books voraciously and I think I’m ready to put some options out for general scrutiny. If you take the time to read this, thank you in advance, and please pick apart anything you think might not be a good idea.


STRATEGY ONE
Sell my condo after some minor upgrades, and best case scenario make 70k on it. Add that to the savings and have around 150k to throw around. Use this money to make 25% down payments on 3-4 properties (or a multifamily) in SD or Phoenix (where I’m from and my extended family lives) and from there, use the cash flow to save for more properties. Refinance when it makes sense to maximize returns and continue until 10-15 properties are owned, pay down the loans, and be set for retirement.

STRATEGY TWO
Sell the condo I currently have, then do the same thing as above up until the 3-4 properties (or a multifamily) are bought, but use the cash flow to pay down the principals on the original properties, refinancing when it makes sense until the homes are owned outright and then use the income to buy more properties, rinse and repeat.

STRATEGY THREE
HOLD ON to the condo I currently have, put the saved money into a refinance, and then make at least $800 a month in cash flow. Use the cash flow to pay down the loan, refinance as needed. Assuming the value of a high-rise condo with a view in downtown SD will continue to rise, make use of the cash flow until the value is attractive enough to sell, then sell, use the money to buy more properties, rinse and repeat.

I’m assuming that some of what I said doesn’t make a ton of sense to an experienced professional, but that’s why I’m here, haha. Thanks for reading and any feedback would be awesome.

Apologize for the double post if that's frowned on here- I've been out of the message board game for a few years. One quick question to get me started- I want to create a somewhat long explanation of where I am and some ideas I've got for where I'm going with investments; should that be a blog post or is that more appropriate to put in the "Starting Out" forum? Thanks!

Hello all, 

Just wanted to introduce myself. My name is Mike, I'm from Phoenix, and I've been living in San Diego off and on for about 8 years now. I own a studio unit in one of the high-rises in downtown SD, which I'm currently renting out. I'm interested in RE investing, and I'm trying to plan carefully for the next step. I do a lot of reading and a lot of scribbling plans for what I'll do next, when enough money is saved to move on to some more aggressive moves. I've been reading the site like crazy for about a month and I think I'm ready to start fleshing out some questions and thoughts for public scrutiny. 

Anyway, thanks in advance to everyone that's created the wealth of knowledge on this site; it's already helped me a great deal. I will be posting some questions and ideas in the applicable forums here soon, and will be keeping my ears open to the experts. Thanks again!