All Forum Posts by: Chad Kastel

@Jason Yamnitz

I've been day trading for 7 years.  I see all the things about a looming downturn you're talking about.  I agree that a downturn is going to happen.  As of September 2018, my plan was to sit on the sidelines and wait for the real estate market to sell off and then start buying.  But at the end of this October I found bigger pockets.

  I've listened to about 45 podcasts and read 6 books in addition to articles and local real estate  meetings I've attended.      What all the information I've gathering attempting to "time" a market is not a great idea.  In addition,  analyzing, making offers, developing your team, closing, and managing properties are all skill sets that get developed and become better over time.   If you hold back on the sidelines, you won't continue to develop those skill-sets.  Of course that doesn't mean you buy any bad deals, but maybe buy properties that have multiple exit strategies.   One of the biggest problems that investors put themselves in is they were over-leveraged when the 2007 crash happened.  If you buy one rental and there is a crash similar to 2007, will you have enough reserves to outlast the downturn?.  My guess is yes, I don't think a lot of people are making that mistake again.

In addition to the advice I'm giving, just as an fyi, I just got an offer accepted for my first full time investment property. Just a straight rental. I also live in Florida, but closer to Miami, and have found that I can not successfully use the strategies I want to to invest in property down here. I'm going to be doing my first BRRR property sometime by February.

Chad

@Jason Yamnitz

I didn't all the responses, so if my questions are addressed I do apologize.  What price did you buy the town house for?  Any renovations.

To go on your statement "buy low, sell high"  Of course this is ideal.  If you truly believe your market is going to sell of, then selling your property and 1031 in to an up and coming market is a great strategy.

If you don't thinking your market is going to sell of, then Brrrrrrrrrrrring is great.     In addition, if the market sells off but the rental prices stay stable (or go up) then brrrrring is also great.  If you plan on holding the townhouse for 10+ years then who cares if the market downturns.

Option #3.  Sell and Move in to an area where you can house-hack?

@Brendan Chase   The bigger pockets rental calculator has been excellent for me.   Helps me to analyze every potential deal.  Well worth the investment!

@Alexander Wardell

Seems like an easy fix.  Because the don't have a lease, just find new tenants.  Probably not a great idea to ask these tenants to "comply" with the laws, if they could have less people in the apartments they probably would've done that already.

@Brian Egr Makes sense. Is the LLC and tax you're referring to something that is a federal concept or something specific to where you live?

@Alexander Wardell

I am not an expert and am going off comments in the section I read, but it seems like with children occupying the space the laws are not super clear.  I would say just reevaluate when the lease comes up.  Their lease ends in 6 months, so you can just choose not to resign them.  It's unlikely you're going to have a problem with the law between when you buy it and the lease ends.

@Brian Egr   This sounds great.  But why flip it right away and pay capital gains taxes?  Since you have a renter, why not hold for a year or two then flip and 1031 exchange (or refinance)?

@Alexander Wardell

I don't know if this was asked and answered.  But how long has floor two been living at the property?  If it's several year, they have a good track record of paying on time, AND the apartment is in good condition is it something you even want to worry about.   Just because you have too many people in one space does not means they will be bad tenants (just more likely) and the reverse is certainly true.    If maybe they are pushing the envelope with expenses then renegotiate that.  

@craig garrow  

These deals do have drawbacks. But I think the upside is there.  owning 50% of a property (as opposed to 100%) allows the owner with cash to buy 2x properties and have a natural hedge built in.   Or it gives the ability to diversify in to different strategies.   Keep us posted with how your deal works out 

Chad 

I don't think this is you being greedy.   She may be getting taken advantage of, she also just might be a super generous person.   I might try explaining to her what she is going to be giving up as a yearly total ($3,000) and then ask her if she things that is worth it.   It's up to her how she wants to spend her money.

As far as her getting "stressed out."  There are two things happening, you're explaining it in a way that is forcing that to happen, or she is not prepared to handle the realities of making a cost/benefit analysis.   If you're doing it to her, then make an adjustment to your approach.   If it's her, then she doesn't have those skills yet  (I call them being an adult) and you probably just have to let it go.  It's likely she is using her emotions and not critically thinking.  This presents a lose/lose situation for you.