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Updated over 8 years ago on . Most recent reply
Making my equity work while on deployment
Hello Bigger Pockets Community!
I am pretty new to Real Estate investing, but I currently have 3 units (1 MF, 1 SF). My first house, which I owned for a few years before I knew anything about real estate investing, has quite a bit of equity built up and has appreciated about 30% just in the last 2 years, but it's cash flowing just below the 1% rule, so I'm considering selling it, and putting that equity for better use. (I've realized that here in Texas 1% doesn't quite cut it)
Now that I have read about a dozen books on real estate investing (including all the BP books) I am in a better position to make sound choices. My only hurdle is I have a deployment coming up in a couple of months(I'm currently in active duty in the military) and I won't be able to be as active in investing as I hoped. After doing a lot of brainstorming, the best I could come up with is being the financial partner of a few flips while I'm away. Is this a good idea? Does anyone have any experience being a partner to flips from another part of the world? What are the pros and cons you can think of? Also if this is a good idea, does anyone know any reputed flippers you can recommend? Thanks in advance!
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@Account Closed
Before you sell your home with equity I have a few questions. What are you looking at when you compare the 1% rule? Your purchase price or its value now? How much cash flow are you getting when rented? When did you buy the house? You will have to pay taxes on the profits if it was not in the last few years. The reason I ask is people throw around these rules like they are concrete. I do not use a percent rule when buying rentals, I use cash flow. If I can make $350 a month on a rental it is worth my time.
If you do decide to sell, there are many ways to partner with people on flips and be passive. You can take a percent of the profits or just get a interest rate. I have worked with people doing both so feel free to ask many any questions about them.