All Forum Posts by: Dooreuhn Cee

You may be able to get out of the biz license, but technically, you are supposed to register your foreign LLC in California to the tune of $800/yr.

I was already in the game when we met, so she sees the success.  But I spend 50% of current earnings on real estate which can take a bit of convincing.  Usually, I take a little candy out of each deal before reinvesting.  

the people that took over Shore bank have some products

I found that Craigslist works better for higher priced rentals than lower priced.  Also, the ad falls down the list so quickly that it gets lost.  Postlets synch to Zillow and other online resources has been very useful.  Finally, answering the phone rather than voicemail helps because lots and lots of ads have numbers and no one ever returns the calls so some legit folks will hang up.

@Dave Foster yes net accounts for taxes.  id likely use a 1031 to transfer equity from the current house to the two houses.

I'm working on a SFH rehab that was intended to be a long term rental. Without going into details about why, I ended up making the house nicer than expected of course spending more than expected (about 100k total [50k purchase, 50k rehab] rather than typical deal of 70k total [40k purchase, 30k rehab]), and a a result, have decided sell the property instead of holding. I am looking for feedback on when a project changes intentions for you.

Typically, this type house typically nets 10k of annual rent as a buy and hold, and it can net 25k of profit as a flip.  My typical analysis is that 2.5 years of renting gets me the flip profit so I may as well keep the property.  Even more, I believe the area is due for appreciation so a typical hold to flip in 2.5 years from now could net 50k.  But remember that I spend more on this house than typical. 

As a hold, on this project, even though I can hit 15k annual net renting a nicer place to supposedly nicer tenants than typical, I'll be collecting about 1.6% rent to value compared to a more typical 2.5%.  Also, I am concerned with the upkeep of such a nice place in between tenants.  The flip profit should be 35k.  According to my above analysis, only 2.3 years of renting gets the flip profit so I should hold.  

But as a flip, I should be able to buy (1031?) 2 houses to replace this house at an income of about 2% rent to value.  Translated back to dollars, I can get close to 20k net annual rent without additional capital, but by renting two SFHs instead of one.  Another consideration is that the current project is closer to max value than the two replacements would be, so there is more appreciation potential times two.  Therefore, cash flow analysis indicates that I should flip.

Flip or hold? I am really up in the air about this and about 2 weeks away from completion.  I'd love to hear about how this translates in the other direction --- ie, flippers that ended up renting and the thresholds that were crossed to make the change.

- Here are before pics

- Here are current pics (kitchen cabinets will be 42" with granite; bathroom will have body shower; basement will be partially finished)

@Ryan J. Please don't take offense, but if you are asking this question, then you should probably be using an agent.  This is a very fundamental principle of real estate deals and there is a lot to learn after 6 deals.

This is coming from someone that had the same opinion that realtors were not adding much to my deals, and were actually slowing deals down with slow communication and lack of nerve for nonconventional offers and situations.  My approach was to get a broker license.  That way you do indeed get the 3% which typically covers closing costs.

Today, I just don't have time.  So I've found some responsive realtors and consider them as my assistants.  In other words, I don't mind paying 3% to take deal tracking off my plate.

 Yes, that is exactly my point.  You cannot expect rent prices to continue to increase based on a recent jump.

 Best guess is 3k/mo as of 2014, and was back to that 2.5k/mo as of 2012. 

 I have an account for every property.  Makes bookkeeping a snap!