All Forum Posts by: Adam Rasmussen

 Hey John - the meetups are on the same Tuesday every month and there is a huge turnout every time it seems. Check out the Facebook page. I don't recall which Tuesday of the month the meetings take place

Ian,

Give me a shout if you need a real estate CPA to help out. Tax season right around the corner 👍🏼

Hello All,

Looking for that first deal to get me started. I have done some driving for dollars and have about 600 properties that I have identified. At the moment I have all the properties in a spreadsheet and have been slowly looking up owner information. I am using county records to find the owner name and then looking at sites like truepeoplesearch.com to find phone numbers. From there I call all the numbers associated with the owner until I either run out of numbers or contact the owner.

While this is extremely cost effective outside of gas and time spent driving, this process is extremely tedious and I am finding out that the free sites that supposedly have phone numbers are mostly incorrect (big surprise).

My question is: where is time and capital best spent when looking for off market properties? I am strictly looking at single family houses and small multifamily with the hopes of either flipping or wholesaling. I have no problems spending money if it is not wasted. I also have no issues spending time to cold call prospective sellers myself but finding the information feels like it could be a lot easier and more efficient. 

Thanks for the input there. And I absolutely agree that 4% is low. I am more or less hoping that this low deal is the one that gets the experience and doesn't make me rich overnight. The way my area has appreciated I would anticipate things continuing to do so but not at the rate it has been going. Very desirable area. 

Appreciate the advice on the maintenance. Never hurts to have an extra 5% buffer. 

The main reason for the creative financing is taxes. His basis in the property is extremely low. I would anticipate his basis being under $40k which is essentially the land value. His goal is to have more in his pocket and not pay 15% federal + 10% state capital gains. By stretching things out he might end up paying 0% capital gains on the sale over the long term. Plus the seller wasn't really interested in interest rates so it might be an opportunity to give him a higher sales price at 1% or 0% interest (pipe dream more than likely)

Hello BP,

I have recently been in contact with a motivated seller on a single family rental in my area. He is an older gentleman with a few pain points that I have found out:

1) He wants to make sure when he passes away, that his children are left behind with something.

2) He is tired of landlording and wants to be rid of his only rental property. 

3) He desperately needs a new vehicle.

The house is a 1300 square ft, 3bed, 2bath house that could rent for about $1900 - $2000 in my area. To my knowledge the property does not need a lot of work (famous last words).

The seller has a mortgage that he has been making payments on but is unsure on the balance. He estimates it to be about $50k left on the balance. 

I am trying to put together some creative financing option to make sure there is a deal that has some cash flow after all the bills and reserves have been taken care of, but also make sure the seller has his needs met. The seller is interested in listening to a few seller financed type offers so I want to try and present a few options for him. 

I am a local CPA very familiar with real estate taxation so he is aware of the tax hit he would take federally as well as to the state (owner lives in Oregon). Extra motivation for seller financing. 

Does it seem too crazy to pay the mortgage off as well as provide an additional $10k to the seller so he can make a down payment on a new vehicle, and then work out a seller financed note that is favorable to both sides? Assuming a sales price around $300k - $350k, interest is going to have to be low but I don't think that is his motivation.

I ran some initial numbers and obviously with the potential sales price being high this isn't going to be a home run deal. I am content with $200/mo cash flow and a smaller CoC Return but also want to make sure I am not just buying a bad deal. I am confident in my numbers except for reserves for maintenance and capital expenditures. If anyone has a good idea on how much to set aside for maintenance and capital expenditures, please share. Right now I am budgeting $200/mo.

Sorry for the lengthy post.

Good stuff as always! 

Yes you can withdraw from retirement accounts, penalty free. I believe it caps at $100,000. However, the amount you withdraw is still subject to the ordinary income rates. The CARES Act only relieves the penalty. 

Off the top of my head here are some of the benefits that I am aware of to the seller:

- Able to spread any taxable gains over the life of the note instead of all at once. Typically resulting in much lower overall tax bill since they would be in lower brackets each year (assumed).

- Able to get much more interest on their money through seller financing vs parking the money at a bank. 

- If you default, they essentially get their house back and resell again.

A combination of different terms, interest rates, and downpayments is usually the way I look at those 

strategies. Maybe they want a higher downpayment and are willing to take less interest? And the opposite, if they don't really need a bunch of cash right away they might be happier making more on the interest side of things. Are they willing to stretch the payments out further and take a higher interest rate? 

Definitely a lot you can do. 

Repairs and Maintenance is what I typically do for small things like that. It isn't a perfect fit for sure but its fine. 

Just because the IRS doesn't receive a 1099 for your crypto activity doesn't mean there isn't a taxable event.