All Forum Posts by: Vic Vega

Thanks for the feedback! You're almost exactly right in some of your assumptions. Here's a recap.

Purchase price: 158k

Down payment: 32k

Borrowed: 126k at 4.375%

Taxes: Approx 2.4k

PITI: $917 monthly

Current value: Approx 205.9k (based on comps)

As far as monthly expenses I know other thing needs to be factored in for cash flow such as maint, vacancies etc. I was just throwing out a gross number. Although I crunch numbers with a little lower percentages in regard to those factors. Utilities would be 100% on the renter and there are no fees for lawn care/snow removal. This is a town home with about a 120 sq/ft front and back yard. No HOA either.

The house now is in excellent shape structurally and cosmetically but like I mentioned in a follow up post the home is 22 years old and all major components (roof, hvac etc.) I believe, need to verify, are original so it may need some high dollar repairs in the coming years.

Cash out refinancing is an option as it would give me down payment cash for a new primary residence, allow for better cash flow if I rent my current home but would give me little to none in left over cash for future investment capital.

 This is exactly some of my thoughts on why I should not rent for a few years before selling bc I know I'd have to go back and dump money in it to bring it back up to premium sale ready condition. My home is currently 22 years old and all major things (roof, hvac etc..) are in fine working condition but all original so I may have some major repairs needed in the next handful of years?

Also, what exactly is "pay a recapture of depreciation..."?

Hey Everyone!

So I know many will say to this question it depends on what your goals are which I totally understand. However, just want to get a little conversation going with some of your opinions.

So almost exactly 5 years ago I bought my home on short sale for $158k in excellent move in ready shape. It's been gradually freshened up and updated since I've been there and now has a value around $205k, perhaps closer to $210k when I plan to put it on the market in a few months. I'd comfortably say my home is on the high-end of my neighborhood value wise. I currently owe $113k on my mortgage. To sell or rent is the question. Average rent price is around $1,500-1,600 and I could get the high end possibly get just slightly more. I have a mortgage payment of $917 so great cash flow obviously. 

Of course if I sell I'd need money for 20% down (prob $40-50k) on my new primary residence. I have plenty of cash reserves in the bank but wouldn't really want to use that on my primary residence, rather use it on investment properties. Be nice to use profits from selling my home for a new down payment.

My concern with renting, which maybe it shouldn't be, is that my home is setup to sell so to speak. Just like someone who bought a property to flip does a little higher end rehab vs someone who rehabs a property to rent instead. So that be a factor in passing up my home as a rental?

If I sell my home, after fees and cost I'd likely profit around $65-75k. Around $50k of that would go to my new homes down payment and remaining $15-25k would be added to my cash existing reserves and available as investment capital.

Thoughts?

@John Thedford so all your properties are paid cash in full whether your own or hard money? Am I correct there? Are you refinancing out on them as well or just letting that capital stayed tied up? Sorry for all the questions...

@John Thedford Are your rentals mostly turnkey or reno's when you purchased them?

Good points guys! @Ned Carey @Bob Collett @John Thedford  I agree 100% that flipping is more a business and buy/hold are more inlined with actual investing/passive income. And yes, I certainly don't have time for another business. I guess my lack of experience and newness to real estate has me thinking my feasible options are wider than they really are. And it's certainly not a bad thing necessarily if they are not. 

My train of thought with buy/hold has always been how much capital am I willing to tie up long term. I'm sure that's a question only I can really answer but do any of your have a general rule of thumb regarding how much capital your comfortable tieing up long term based on how much total capital you currently have?

Thanks for the feedback guys! @John Thedford POF is fortunately not a problem for me as I have plenty of liquid reserves sitting in the bank so I agree in that giving me a slight leg up.

In regard to your first part of asking do I want to buy/hold or buy/flip...too be honest I don't know. Having my plan set in that regard would always be ideal but for the moment I simply research properties and based on the situation I kind of say to myself ok I'm interested in this property for buy/hold or I'm interested for buy/flip. A singular focus would be nice but I feel it may take simply doing one or the other to really then know what my plan will be going fwd. 

Hey Everyone!

Thanks for checking in. So I'm extremely interested in real estate for a little while now and have been actively education myself and researching/scanning my local market for potential properties. However, I feel a bit stuck at the moment and allow me to explain.

So I own a successful small business which is great but of course it requires A LOT of my time. Therefore real estate investing would have to be a part time venture in comparison. It puts me at a bit of disadvantage compared to investors who work full time every day in real estate. Not so much just the time factor but those guys/gals are typically able to have better connections and more resources. They're doing multiple - to many rehabs at a time allowing them to leverage their resources better. And as I've experienced, outbid me on deals bc they can make the higher cost work for them overall but it wouldn't work for me doing just one house at a time.

However where there's a will there's a way of course. Just having a lot of trouble finding that way as someone in my position. Any thoughts or guidance would be greatly appreciated!

So I wanted to get some opinions on turn key rental investments. I used the word "corporate" just specify the turn key properties available from companies which are rehabbed ready to go with a property management team etc. in place. Specifically I was looking at midsouthhomebuyers.com just for some info regarding this.

I'll leave it relatively vague at this point just to get some conversation going hopefully.

@Brandt Smith thanks for the input. You say your require $400+ in cash flow. Is that $400 after taking monies for vacancy/repairs and property mgmt from your cash flow total?