All Forum Posts by: Andrew Gingerich

Following.

@Bo Goebel thanks for the info. This is very helpful stuff. Yes, I agree it could be an incredible tool down the road. Seems like having yet another tool in the tool box is a no brainer. Again, appreciate the comments.

@Scott MacIntosh it looks like you have to be putting capital gains into the QOZ rather than non-capitalized gains. I.e you can't simply put after tax income savings into the QOZ and avoid paying capital gains ten years from now. Bummer. I don't want to sell an asset right now just to have capital gains to put into the new purchase. 

I really appreciate all the feedback here.

Andrew

As a general rule of thumb I like to estimate 25% of rents for vacancy and maintenance. So if rents are 1000 a month I want to have 250 in the bank monthly to cover these. You're at 20% with you math, which is fine... especially since you have that misc reserve.

Good points John. In this case we are buying the investment because we actually like the location and it is gentrifying, not because it is on an OZ. I just want to make sure I have the option to avoid the long term capital gains in ten years if I so choose. I just want it to be an option, rather than having to 1031 it. Not saying I won't 1031 it.

Here's an unlike scenario but an example scenario nonetheless: Ten years from now my youngest is 14 and I dump the proceeds estimated $138,580 in CG into her 529 and she doesn't pay a dime in college tuition. Not going to go this route because I'd like my girls, if they go to college, to fund some of it themselves. But it's simply an example. I don't want to regret not being able to take advantage of a goofy law. Right or wrong I want the option in the future.

Gabe, looks to be a 12% cash on cash return. For your first deal that seems really reasonable. Frankly many seasoned investors would take your numbers. I would. 

Take action man. 

Some might not like it but I like your 1/12th vacancy estimation and you can absorb a little more with your misc inclusion. 

I think your numbers are solid. In this case the question I would ask myself is how good do a feel about my partnership, what are the terms of the partnership, who's doing what, do I have it in writing. etc. 

Nice work. Get busy. :)

I'm closing on a new deal in an Oppurtunity Zone, as designated by the tax reform bill passed in late 2017. Are there BP folks that buy in these areas? Do you need to setup a fund before closing to take advantage of the 10 year tax basis change or capital gain exemptions? Would love a bit of free info here before calling a tax law attorney.

Thanks!

Andrew

Liam, how old is the house? Does it have galvanized plumbing. I.e. are the pipes that distribute the hot water galvanized? Or are they copper or PEX? Galvanized pipe was very commonly used in the 1900-1950s. Or at least is present in two of my homes built in 1940s and 1930s. The pipe has about a 30 to 50 year lifespan. It often corrodes from the inside, especially in hot water lines since the warmth speeds up the otherwise slow chemical process. Basically the corrosion restricts the flow of water overtime giving you very little water pressure. While your pressure problem may be unrelated it is worth checking how old your plumbing is. 

As a note, in most cases the water is totally safe even with corrosion. But it can give the water an ugly brown and red color from time to time. 

Anyhow if you don't have galvanized pipes ignore my comments but given that it is the hot water alone I am suspicious that you have old pipes that need to be replaced. 

Final note, if you do some pipe replacement, my recommendation is PEX. Very easy to install once you have a bit of training. Tools are a bit of an investment but you might be able to borrow a set if you don't plan on doing this routinely. Of course you can hire it out too, but plumbers aren't cheap!

Best, 

Andrew  

@Joe Villeneuve :)

Are you sure it was a moose? Could have been a deer'doe. https://www.youtube.com/watch?v=m0EsYiNA76Q

LOL!!

Nice job Ian! I've long been interested in upstate NY. Taxes are high but the numbers are seem so good. Buffalo turning a bit. Prices drifting higher. Still can do well over 1% rule in most parts of upstate NY. Syracuse, Buffalo, Finger Lakes, it all looks nice from way out West. 

Keep it rolling.

Andrew