All Forum Posts by: Melanie Hartmann

I haven't found one yet to BRRRR, but getting that cash flow coming in. Set out to get 2 rentals that cash flow $200 per month with an annual 10% ROI by April 3rd. I am closing on my first Jan 28th!

This is very exciting! I can't wait to be in your shoes!! Keep us updated on the numbers and how things turn out. I'd love to learn from the case study if you decide to create one for this property.

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Investor Carrot is really the way to go, as soon as you can afford to do so

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Originally posted by @Frank Chin:

Originally posted by @Melanie Hartmann:

Hey Nate! I don't know much about the 1031 exchange yet myself so very much looking forward to the insight provided by those more familiar.

I do know that capital gains tax is only deferred through a 1031 exchange so eventually it will have to be paid. What that looks like, when, and how I am not sure.

With 1031 exchanges, you'll have to hold it as a rental, and then take the entire proceeds, and 1031 it into something larger. You cannot touch the proceeds, must be done thru a QI, (Qualified Intermediary) There's a few on this site, like @Dave Foster

You can go on forever like this, 1031 into a replacement property, or several replacement properties. Then you can sell the replacement, 1031 into a third generation, 4th generation and so forth. If you 1031 into something smaller, you'll pay capital gains on the difference.

It's a long term game, and if you hold these things to your death, with the stepped up bases, there's no cap gains for your heirs. If you get tired of doing rentals in between, you can 1031 into DST's, in short, managed rentals that guarantees certain returns. See DST

Yes, there's a few rules you got to follow, but if you know them, or utilize a knowlegible QI, it ca be very financially rewarding.

Thank you Frank! I didn't know about this. All very helpful. I can't wait to learn more and get to the point where I am able to start doing this.

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Originally posted by @Nathaniel Hovsepian:

@Melanie Hartmann well, you better start learning with me!

Glad to friend you on BP as well!

haha! and likewise!

The sky is the limit! I love investing in real estate!

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Originally posted by @Dave Foster:

@Melanie Hartmann and @Nathaniel Hovsepian, There is no statutory holding period that qualifies a property for a 1031 exchange. It is your intent and how you can demonstrate that intent.

If you buy a property primarily to resell (sort of like you're doing or as a traditional fix n flip) then you cannot do a 1031. Your intent must have been to hold for productive use.

Most folks feel comfortable at anything more than a year. But there could always be situations where a hold time of less than (or more than) a year would be appropriate.

Things that demonstrate your intent are unsolicited offers to purchase it from you, actually putting a rentor in and treating it like a buy and hold, communicating with your professionals, listing it for rent, actual rent production, your past practice, etc etc. Every case is different. You just have to use the mirror test - look in a mirror and if you can say you were intending to hold the property with a straight face then you've got a good case.

The 1031 is incredibly powerful as @Frank Chin said. And it's interesting Nathaniel that you're already well down the road to becoming a savvy 1031 investor. Just put the brakes on some of those resales. Use the Brrrr method on the first ones. And before you know it you'll be building wealth from rental income, equity by acquisition, and making money off the deferred tax.

Melanie, keep looking dere be a whole heap of folks who've never paid a penny in capital gains tax. Here's a BP blog we wrote on some of the exit strategies - https://www.biggerpockets.com/blog/1031-exchange-files-3-buy-hold-exit-strategies

This is excellent! Thank you! I was contemplating applying the BRRRR strategy for the property I'm in the middle of flipping but once I heard what the rental rates would be, I doubt the numbers would make sense. So I'll flip it and then I'll keep my eyes out for a better property to apply that strategy too. I should also connect with someone in my local area who has done this so I can learn a few tips/tricks. I primarily got into real estate to acquire buy-and-holds, learned about the BRRRR strategy, and decided to get into wholesaling. Now that I'm flipping and working on increasing cash reserves, I'm looking forward to potentially buying my first buy-and-hold property this year, depending on how things go

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Hey Nate! I don't know much about the 1031 exchange yet myself so very much looking forward to the insight provided by those more familiar.

I do know that capital gains tax is only deferred through a 1031 exchange so eventually it will have to be paid. What that looks like, when, and how I am not sure.

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Originally posted by @Frank Patalano:

Originally posted by @Melanie Hartmann:

I know when I got started, I didn't have the belief that I could do it. I felt I wouldn't be smart enough or good enough and that really got in the way. The only thing that helped was to keep pushing myself out of my comfort zone a little more each day. Networking and connecting to others experienced in the industry helped immensely as well!

I know a few investors in the Baltimore area. You have a lot of helpful investors down there.

What would you say is holding you back today?

There really are! I've been fortunate enough to meet a few them thus far. Occasionally, I still experience "impostor syndrome" and feel like I can't do what I'm doing even though there is plenty of evidence to the contrary. So these days, I acknowledge those feelings and then set them aside and keep it moving. I'm doing what I've dreamed of doing for years and it's completely surreal at times!

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If the property is in Fort Lauderdale, FL This website appears to be the one you may need to find the information you are seeking:

https://web.bcpa.net/BcpaClien...

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May depend on the area but I'd highly recommend unloading that onto someone else who actively invests in that zip code and can get the rehab done on the cheap. Either sell it via auction or do a flat fee listing on the MLS. I know a few realtors who would be happy to list it for a flat fee as well for about the same price as doing it yourself but will keep all those "we can list it for you" calls from agents seeking out FSBOs. We also wholesale Baltimore properties so I could help you with that as well. Let me know!

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Baltimore, Maryland

All Forum Posts by: Melanie Hartmann

Melanie Hartmann has started 14 posts and replied 251 times.

Post: Using 1031 Exchange from Wholesaling to Buy Rentals?

Post: Best Website Creation website?

Post: Using 1031 Exchange from Wholesaling to Buy Rentals?

Post: Using 1031 Exchange from Wholesaling to Buy Rentals?

Post: Using 1031 Exchange from Wholesaling to Buy Rentals?

Post: Using 1031 Exchange from Wholesaling to Buy Rentals?

Post: So what's holding you back?

Post: So what's holding you back?

Post: Driving for Dollars question

Post: Distressed Property in Baltimore - Hold or Sell ?