Tough time to buy an investment property

GJarrett said:
Yep, I've never been able to do that before; I've always had to put some work in before reselling. Sometimes a lot of work. However this home had so much equity in it and so little work needed that a local builder has decided to take it and do it. I'm selling it to him cheap (79% of as-is value) and I could probably sell it for more, but for me it's worth it not having to mess with working on it or worrying about getting stuck with it for several months. I could keep it, paint/carpet it, do minor repairs, and then market it on the MLS... but it could take months to sell, and I'd lose the 6% real estate agent fee, and I'd spend another 10% fixing it up, and etc.... by the time all that happened I might not make much more than I will now just quick-flipping it.
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Thats great...I was never able to quick flip either, though I never really looked into it. Always had to do some good work to make them profitable.

However, mine were long term, live in flips. The last 2 homes my wife and I lived in were the crappier house in the nicest neighborhoods. We did everything ourselves (I grew up as a contractor/landscaper and my wife did habitat for humanity), lived there for 2 years, sold it with great profit. Everything from gutting bathrooms and kitchens to redoing all of the landscaping/decking/brick work etc..

This is how we came to be in the wonderful home we are in now, which we intend to stay in for the long term now with very little "out of pocket" down payment. We used the profits of the last house to put a significant chunk down.

I have contemplated getting a RE license and doing flips, and let my current business maintain itself.
 
billandamy said:
Thats great...I was never able to quick flip either, though I never really looked into it. Always had to do some good work to make them profitable.

However, mine were long term, live in flips. The last 2 homes my wife and I lived in were the crappier house in the nicest neighborhoods. We did everything ourselves (I grew up as a contractor/landscaper and my wife did habitat for humanity), lived there for 2 years, sold it with great profit. Everything from gutting bathrooms and kitchens to redoing all of the landscaping/decking/brick work etc..

This is how we came to be in the wonderful home we are in now, which we intend to stay in for the long term now with very little "out of pocket" down payment. We used the profits of the last house to put a significant chunk down.

I have contemplated getting a RE license and doing flips, and let my current business maintain itself.
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"I have contemplated getting a RE license and doing flips, and let my current business maintain itself. "

+1, me too, too bad you are 5000000 miles away, we could partner ;-)
 
billandamy said:
.....
I have contemplated getting a RE license and doing flips, and let my current business maintain itself.
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IMHO - Since you are selling your own property you don't need a RE License and I would not get one if all you are going to do is handle your own property. The Liability & disclosures you would have to make as a realtor far out-way the benefits for your own property.
 
mrsrobinson said:
"I have contemplated getting a RE license and doing flips, and let my current business maintain itself. "

+1, me too, too bad you are 5000000 miles away, we could partner ;-)
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Yo! We can work the two coasts and work inwards!:thumbsup:
 
chuck1 said:
IMHO - Since you are selling your own property you don't need a RE License and I would not get one if all you are going to do is handle your own property. The Liability & disclosures you would have to make as a realtor far out-way the benefits for your own property.
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Oh, we wouldnt be selling our own home anymore. We did it a few times to move up the property ladder while we were young, crazy and willing, and before the 3rd child came along. We used a RE agent (family friend) but gave up those commissions to her, albeit even if it was at a reduced rate.

In the future, we would be buying homes. I would get the RE license and work for an agency. The benefit is I can MLS it, and keep the commissions.

All speculation anyway. I also want to be an astronaut.
 
billandamy said:
Oh, we wouldnt be selling our own home anymore. We did it a few times to move up the property ladder while we were young, crazy and willing, and before the 3rd child came along. We used a RE agent (family friend) but gave up those commissions to her, albeit even if it was at a reduced rate.

In the future, we would be buying homes. I would get the RE license and work for an agency. The benefit is I can MLS it, and keep the commissions.

All speculation anyway. I also want to be an astronaut.
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I understand totaly were you are coming form. That is what got me interested in real estate many years ago. I'm not talking only about your own personal home. As a realtor you have to DISCLOSE and are LIABLE as a licensed person (Even for things you are not aware of). Keep dealing with your realtor/friend (Not sure about your state, but in some states if your realtor is family it has to be DISCLOSED) There is a fine line when you start working for an agency, you don't want to start competing with your customer/clients.
 
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chuck1 said:
I understand totaly were you are coming form. That is what got me interested in real estate many years ago. I'm not talking only about your own personal home. As a realtor you have to DISCLOSE and are LIABLE as a licensed person (Even for things you are not aware of). Keep dealing with your realtor/friend (Not sure about your state, but in some states if your realtor is family it has to be DISCLOSED) There is a fine line when you start working for an agency, you don't want to start competing with your customer/clients.
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Hmmm...all good food for thought, thanks. And it is a family friend who is the realtor, not family.

Actually, a lot of what you said kinda make s sense in the respect of the RE agent we do have. SHe really is amazing, and has been top in all of CT a couple of times. She also does give us a backup on her commission, and gets a house sold quickly. I personally now have 3 purchases from her, my parents 2 and my brother 2.
 
mrsrobinson said:
A lender today gave you more money than the agreed purchase price? Really?
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Yep. Small local bank that knows me very well and has done a dozen flips with me and always done well with them, plus my credit rating is somewhere way above Obama's pay scale.

This wasn't a bad deal for them. They covered themselves well; this was a loan for 70% of as-is value and I was about to put work into it that would raise that to a value that left their exposure to about 60% loan to value... even if I went south and screwed up the deal they'd still get their money back because the supporting asset is worth well over the loan.

The current mortgage crisis involves a lot of bad loans mortgaging 100%+ of the home cost to people who couldn't afford it in the first place, and subprime second mortgages on top of those. You wouldn't believe the judgement amounts I see all the time in foreclosure court. Typical in foreclosure court now is a house two years old worth $150k, that sold new two years ago for $140k and has a foreclosure judgement amount of $180k. What moron approved that mortgage? DOZENS of those go through our county's foreclosure court every single month. If those banks followed the mortgage practices of my small local bank, we'd all be having a lot more fun right now.
 
So you folks buying and selling houses for a profit...are you paying capital gains on the profit?
 
mrsrobinson said:
So you folks buying and selling houses for a profit...are you paying capital gains on the profit?
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That is a loaded question. I don't think you are going to find anybody say that are not paying taxes on a public board:lol:

Now to answer your questions depending on how you are doing it there is smart ways to purchase/sell investment real estate like a true 1031 exchange, etc.

Please talk with your local Realtor and CPA if it would be right for you.
 
chuck1 said:
That is a loaded question. I don't think you are going to find anybody say that are not paying taxes on a public board:lol:

Now to answer your questions depending on how you are doing it there is smart ways to purchase/sell investment real estate like a true 1031 exchange, etc.

Please talk with your local Realtor and CPA if it would be right for you.
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Agreed, and I was not looking for anyone to tell me "their secrets". Capital Gains has been one reason we have held off on buying/purchasing additional homes/rental properties.
 
mrsrobinson said:
Agreed, and I was not looking for anyone to tell me "their secrets". Capital Gains has been one reason we have held off on buying/purchasing additional homes/rental properties.
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I'm not sure what your saying here. I sounds like your saying that because Uncle Sam will take a % of your gain, then you don't want any gain at all.
 
I may have an ignorant, pig headed approach to this, but if I use my mind/skills to turn a profit why do I owe Uncle Sam 15% of my profits? I make 20%, owe US 15% of that, 3%, so i only make 17%. yeah, you are right, I still turn a profit...but what if I can only make 5% profit...
 
"If you are selling your house for medical or health reasons, be ready to document those reasons with a letter from your physician"

By a rental, see the doctor, buy a rental, see the doctor...I have a plan now ;-)

Or, make friends with a doctor.
 
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