All Forum Posts by: Aileen Ouyang

I have a condo currently cashflowing about $250 a month ($2250 rent - $2000 PITI + HOA). I have about $100k equity in it. It is currently on a 15 year schedule and I have 12 years until paying it off. The interest rate is 2.375% so I am having a hard time letting go of the excellent rate.

My question is: To scale from here, should I sell it and buy a fourplex as a house hack? I understand it depends on the deal, but just wondering if this is the right direction to consider.

Living in MN.

3 Votes

Minneapolis, Minnesota

Quote from @Brittany Kuschel:

@John Woodrich Is a great resource and option and in the tax arena! He is also an investor so has a good handle on those tax benefits as well.

Thank you Brittany! I have heard a lot of great things about him and have reached out recently. It doesn’t seem like he is taking new clients but I appreciate the recommendation.

0 Votes

Minneapolis, Minnesota

Quote from @Account Closed:

Hey @Aileen Ouyang,

We as tax pro's are not allowed to promote ourselves directly due to BP's rules.

To help you in your search: be sure to find an accountant that is willing to grow with you, and is not too high priced fee wise. Not to low either, you don't want to go with someone who is just focused on price as this is a quality of a not so great accountant. Accountants are in such demand, that the best are not even accepting clients half the time.

The other problem I see often with accountants on here is that they specialize in larger investors, and have really high prices when you as a smaller investor do not need all the bells and whistles.

Another thing I see is folks thinking they need to have a tax professional in their state. We as a firm have investors working with us who invest in rental properties all over the US for example big and small.

Best of luck in your search!

Thank you! Really appreciate the detailed answer. For a small investor, what would you say is a reasonable fee for tax prep?

0 Votes

Minneapolis, Minnesota

Hi BiggerPockets community,

I am looking for an accountant to help with my 2023 tax and planning tax strategy for 2024. Preferably someone in Minnesota.

My husband and I each have a w2. We also have 1 investment property and 1 primary in the south metro area.

Thank you,

Aileen

3 Votes

Minneapolis, Minnesota

Quote from @Joe Villeneuve:

Sell it. Do the math. You're losing money right now by the fist full.

You're equity is what you are paying for your property. As your equity grows, so does the cost of your property to you. When you buy a property, and put 20% down, you are buying a property worth 5 times what you are paying for it. As your property valued grows, it grows equally with your equity, on a 1 to 1 basis. So, as you property value and equity grows, you are paying more and more for your property, and getting less and less for the cost...to you.
In your case, you have a property value of $300k, and equity of $120k. That means you are buying the property at 40% of its value. If you were to sell the property, and use that equity as a DP on the next, that equity could be buying you over $500k in property value (assuming closing costs on sale of $20k). That's almost twice the PV you have now. I bet with the added PV, additional cash flow would also come with it.
Refinancing isn't the same thing. You won't pull out as much in cash from the refi, and your original property's CF will go down due to the higher mortgaged amount.

Don't fall in love with properties. Fall in love with your cash (cash flow and equity). Your cash works for you, as long as you keep moving it forward. When it sits on it's a$$, doing nothing but getting fat (equity), it loses you money.

Thank you, Joe. I really appreciate the insight!

0 Votes

Saint Paul, Minnesota

Quote from @Jason Wray:

You can refinance the rental and take out up to $45K at 75% LTV which would allow you to buy another property in the $250K_range using 15% Down + closing costs. You do not have 6 months title seasoning in your primary yet so cash out is not an option. You might be able to get a heloc but I would check rates versus the cash out on the rental option.

Hi Jason, thanks for your response! I'll PM you for more details. Cash-out refinance is a great option but I just need to figure out whether the cash is worth a much higher rate and a longer-term mortgage. Appreciate the engagement!

0 Votes

Saint Paul, Minnesota

Quote from @Joe Villeneuve:

Sell it. Do the math. You're losing money right now by the fist full.

Hi Joe, thanks for your response! Are you suggesting that I sell the investment property and 1031 exchange for something like a multi-family that cashflows better? Okay if I have tenants in it? Could you help me understand why I am losing money? Thanks again!

0 Votes

Saint Paul, Minnesota

Hi all,

This is my first post on the BP forum and would love to get some advice here. Thank you for engaging!

I own a condo in Apple Valley, MN that is currently a long-term rental property. Currently evaluated at 300k. I owe 180k on it and it is cash-flowing $200/month. I will be able to pay it off in 13 years (2.3%, 15-year conventional loan). My primary home is a townhome, 380k, and I just bought it with 20% down and moved in a month ago. It might have appreciated some since I moved in since I got it at a discount and I just saw the builder listing the same floor plan now at around $400,000.

I have some 401k and emergency savings that I don't plan on spending for my next investment property. and the amount of HELOC that can be pulled from my current property is pretty limited. In your opinion, what would be a reasonable strategy to consider if I want to acquire my next investment in the next couple of months?

Thank you!

0 Votes

Saint Paul, Minnesota

Investment Info:

Townhouse buy & hold investment.

Purchase price: $256,000
Cash invested: $54,000

Apple Valley condo, 20% down, conventional 15-year loan at 2.4%.
Lived there for 2 years before renting it out for $2100, which covers the mortgage ($1606) and HOA ($303).

How did you find this deal and how did you negotiate it?

Kind of by accident. I was living in the townhome myself and one day I went to a real-estate investment seminar and realized that what I had been living in was actually a very good cash flow positive investment property.

How did you finance this deal?

Conventional mortgage

How did you add value to the deal?

Swapped out the 20-year-old carpet for $7000.
New water heater $2200.

What was the outcome?

Case flow positive ~$200/month. Happy tenants.

Lessons learned? Challenges?

Real estate investment can be a lot of fun if done correctly and smartly.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, I had a wonderful real estate agent who walked me through everything!

0 Votes

All Forum Posts by: Aileen Ouyang

Aileen Ouyang has started 4 posts and replied 9 times.

Post: Keep or Sell?

Post: Looking for a tax strategist and preparer

Post: Looking for a tax strategist and preparer

Post: Looking for a tax strategist and preparer

Post: Would love some advice on next steps

Post: Would love some advice on next steps

Post: Would love some advice on next steps

Post: Would love some advice on next steps

Post: Apple Valley condo, 20% down, conventional 15-year loan at 2.4%