All Forum Posts by: Devin McGinley

Hello all,

I've made some posts about this property before and have gotten some great feedback! However, the market here in Colorado is evolving so quickly and I want to make sure I make a good choice considering my options are expanding. 

With that said, I bought my first ever property a year ago using 12k-ish I had saved up on a 3% down FHA loan. I currently owe 274k on the home, have about 3-5k in sweat equity materials installed (floors, new tile, paint etc.) and the property is currently valued at 340k without my upgrades taken into account. The same floor plan has been selling in my neighborhood for about 350-370k.

While I enjoy living here, by no means is it my dream house or even something I see myself staying in for longer than financially appropriate. I bought the house planning to eventually save up, buy another, and rent this out. Potentially even doing a re-fi to get some cashflow for another. However I don't have enough equity to re-fi as of yet and my mortgage is a bit high ($1,600 a month at 3.25% (and I believe it would only rent for $1750-ish)). Which leads me to my point and question. 

Should I consider selling and taking the approximate 40k after closing cost and tax exchanging to avoid paying capital gains?

I can buy another property as primary residence FHA 5% down. Meaning about 20k down on a home worth 400k. This would leave me with a upgraded home and some cash in my pocket to get a head start on the next.

Open to all ideas and appreciate any and all feedback!

You might try reaching out to a local contractor. Within my company we have many clients we will ballpark numbers for. NEVER absolute numbers, but we get as close as we can with as much info as they can give. If you want to make it easy on them send a list of materials you're thinking of using (I.E. tiles, flooring, colors, etc.), and that should help them get a quick quote after there own labor and profit is tacked on!

If you're doing the work yourself it's obviously much easier to calculate, just make sure to leave some cushion for unforeseen issues/circumstances.

Good Luck!

Congrats Conor!

Where is this located? I'm curious as this property would be worth large six figures where I am in Colorado. Thanks, and congrats again!

I owe 274k on my property getting appraised in the next couple weeks, sometime. The exact same floorplan just sold for 360k down the street. I'm thinking around 350k is what mine will appraise for. With that being about 78% LTV; would that warrant a cash-out?

Knowing would help me prepare and plan for my next property.

Thanks!

Congrats on getting in the game!

In my opinion, BRRRR is just a more profitable version of a rental. Not drastically different, just more steps and effort required. I think if you understand them and have the capital then go for it! So long as you can put in the research and find a property that makes sense for it. I learned the rehab portion is the most strenuous and will require the most planning/thought ahead of time.

Hope it goes well and you succeed, good luck!

@Tanner Pile Thank you kindly for the response. I'm in the process of refining currently so hopefully all goes well. We will definitely have to stay in touch!

@David Mackin David, I agree! I hope to do another primary residence loan with 5% down shortly after this loan. My lender says I can potentially get away with doing it 3-ish months after my refi is complete. Do you agree? Please stay in touch in the future!

@Drew Sygit All great points. I will fully take each of those into account. I'll keep you posted on the success of the refi and which path I take moving forward in the coming moths. Stay in touch please, and thanks again!

@Mike D'Arrigo Mike! I realize I didn't tag you in my response above. Thanks again for the insight, I greatly appreciate it!

Hey Mike! Thanks so much for the response! I don't think it's cold at all and far closer to a reality which is important for me to keep in mind. She is willing to put up 50% of the down payment and 50% of the mortgage beyond that, she currently even pays rent in the home we occupy now. With that said, I think I would need to create some kind of emergency contract in case we split up. Seeing that the property and loan would be in my name and we'd both be occupying it.

Potentially better if I just save and buy my next one on my own to avoid potential conflict. Until marriage happens anyway.

Which makes me wonder if selling my current one and using the 40k(ish) in proceeds to purchase a home and then use the remainder for a new investment. And or buying a place now and doing a re-fi on this one later on. So many options and routes!

Thanks so much regardless!

Hey Daniel! What kind of work? We can handle anything exterior.

Hey Craig! 
Thanks so much for the response and insight. That's a good point about the 80%, that's actually something I learned shortly after posting. I am a bit weary of that considering I'm probably right on the bubble. However, I'm thinking I will follow through on the re-fi and at the very least I can lower my current payment from $1,600, so that I can actually get some solid cashflow from this place. I may have some assets I can sell and use towards 5% on our next house and we do plan to bring at least one roommate to lower the burden of the new mortgage. You've definitely reassured me that this could work, thank you!

Also, I work closely with the Insurance Industry being that I operate a local roofing company. I know some companies allow agents to refer contractors. If so, please do and we can pass on some commissions from time to time. Thank you regardless!