All Forum Posts by: Adam Klugh

18k a month IS gross. But the taxes and insurance on them only amount to a little over $3k. So the net is a little less than $15k

@Tim Sterr I've thought about structuring an equity split where I pay for the purchase, the GC pays for the reno and we split the monthly holding fee until it sells and we split the profit. In theory, my thought was that this structure aligns our interests and motivates the GC to keep costs down while also making the place quality enough to sell. 

But... that's just a theory. I've never actually done it. If the contractor leaves to work on other projects that are more lucrative to him or if things go really bad and the contractor can't finish, where does that put me when I hire someone else to finish and the old GC still has an ownership interest when I'm ready to sell.

 All 4?

@Derrick E.@Justin B.@Levi T.

Guys, its a story problem. "I have 3 apples. I eat two of them. how many do I have left?" 

It doesn't matter that I don't actually have or eat any apples. The purpose is to present the scenario in as concise and simple way possible so that the focus is on the math problem and not relationship between characters. By saying "I own 18 properties free and clear that make 18K a month." Those responding ask their questions directly to me. There are questions people may not have asked like "why aren't you happy retiring with 18K a month?" because they may assume an intermediary wouldn't know. I wanted those questions to be asked and answered. 

If my ultimate goal was to trick people into thinking I was something I'm not, why would I tag everyone and give them the full conclusion after it was all over with. I gave a final breakdown because I thought it would be beneficial to everyone involved after talking about it for the last couple days.

Am I only making sense to myself, because I feel like I just entered the twilight zone or something?

@Levi T. and you don't see the difference between posting a scenario and telling people you have experience that you don't with the intent of getting them to trust you with their money. This was a brainstorming session. 

Telling people you have experience that you don't and taking their money isn't a white lie. It's a boldface lie with intent to trick. I apologize if I offended you

@Levi T.@Richard C.@Chris Purcell ok guys, I guess I'm a big swindler which is why I tagged everyone and gave the full scenario (which I could not have fit into a single sentence to explain the scenario)

But anyway, what do you three think of the strategy? All of you are experienced flippers - do you have any thoughts?

@Derrick E. @Kyle J.@Chris Purcell@Chris Armstrong@Steve Vaughan@Bill Exeter@Dawn Anastasi@Rebekah Keller@Mark H.@David Faulkner@Account Closed and another strategy session on Friday we've decided to take advantage of rolling a good portion of these properties into a large apartment complex through using a reverse 1031 exchange. 

Jackson is cheap. We are looking for a $1-2 million apartment complex. We will cash-out refi a portion of the best performing, most stable properties that we plan to keep long term. We will use that as the down payment on the apartment complex and over the next 180 days liquidate as many of the single family residences as we can deferring the tax into the apartment complex. (We actually have a way of getting rid of all the rest of them at full appraised value, but that's for a separate thread and you can message me if you want to know more about that).

If this strategy works as planned, most of the loan on the new apartment complex should be paid off. We could then re-leverage the complex and use that cash as down payments on 2 more equally sized complexes or one much larger complex. This should drastically increase monthly cash flow AND consolidate the management. 

Experienced investors please tell me now where I'm going to screw this up so I can prep for those issues you already know I'm going to run into. 

Thanks @Mark H. I will definitely throw it on audible. Traditional reading puts me to sleep when I do too much of it all at once. 

@Bill Exeter my concern is the 45 day requirement to identify a property. 2 purchase a $2 million apartment complex I'd need about 400k. With my properties averaging around 100k each, I would have to get 4 properties close within that 45 day window. Sounds like I would be at huge risk of major tax penalties of even 1 didn't make the deadline. You have any ideas? 

Kinda a breath thread, but mostly I want to figure out how to convert my management intensive equity into something more easily managed like apartment complex's for high cash flow, and fixed index annuities for hands off security. There are tax hurdles that a 1031 exchange doesn't really fix due to not being able to sell all the properties at the same time.