All Forum Posts by: Denise Mayo-Walley

Hello fellow investors or future investors!

I am struggling to make a decision about what to do with one of my rentals. The last tenants have really made me want to not actively invest anymore. They have been out since January and the house is destroyed.

I have been approached by several investors interested in purchasing it, but I also had a make ready company come out and give an estimate for a full flip type reno. I am also not sure I want to part with the property and I am trying to reflect on why I bought it in the first place.  I have also considered doing an almost full rehab then selling it and keeping profits. However, that involves real estate commissions, closing costs and higher long term gains taxes. Here is the info:

Home: 3BR/2BA 1280sqft. Large lot in cul de sac. Zip 70083

Purchase price: $99,500 in 2016

Loan amount remaining: $69,000

Wholesaler offer: $116,000

ARV:~$160-165k

Rent: Could likely get $1400/month once rehabbed

Full Rehab estimate: $40k (I would remove some items from their estimate. They included everything that way things could be removed. I would estimate I'd spend $30k.

Long term gains: Wholesaler ($116,000-$99,500) * 15% = $2475 Im in a high tax bracket); sale full price ($165,000-$99,500) x 15% = $9,825

Depreciation recapture: Have deducted $4130 x 5 years = $20,650 * 25%=  ~$5160

*************************
I am assuming refinancing only makes sense if I want to cash out to repay myself for the rehab work, then hold the property. This means I could get more horrible renters.

Please help!

I recently reviewed Texas law pertaining to applications. It seems that you must have your criteria in writing. If you do not and people pay an application fee and have no chance of being approved, there could be a bit of legal trouble if the application fee is not returned. Also, it helps you not waste time with non-qualified applicants. Good luck! :-)

@Joe Splitrock I understand what's going on but moving and being ABLE to do so are different. Why do you think people end up homeless?  Clearly the law exists for situations perhaps such as this where the people did not end up there by chance. Their children should not be homeless and living on the streets because of a scammer. 

I'm just happy I have a home and wasn't taken advantage of. Have faith that there are some good people still out there and that not everyone is intentionally trying to get over. I'm sure you'd feel differently if it happened to your family. It's unfortunate but there are things more important than money. They will leave. They were given 60 days. 

@Joe Splitrock - Since they just lost their deposit and spent money moving, has it struck you that they are perhaps financially unable to? Giving back a computer does not leave you homeless. And as we as investors know, it takes money to move. If it was an easy task, I'm sure they would have left rather than have their family's being taken advantage of being displayed for the entire country to judge. 

If everyone reads the article then they will see that the people are not typical 'squatters.' They were scammed and paid someone to rent the property and were given keys by the scammer who claimed to be a co-owner. They also have what they believed to be a lease. So it's a bad situation all around. The family is out of money and the landlord is as well since they are unable to complete the sale until the inhabitants are out. I don't envy either party. I'm not sure why they called them squatters in the article when they were victimized. They did not break into the property and start living there. They thought they were doing things the right way. So the negative comments should be aimed at the scammer who is out there with fatter pockets.

@Josh Legg - Thanks for sharing the pics. Beautiful job! And I love the exterior paint color. Congrats again!

Alvin Trinh Welcome to BP. I'm in Sugar Land as well and I will say that majority of the meetups are not in the SW area, however they are not too too far if you work in the city. I'm hoping just changes soon! I've attended FBREI meetings and they tend to be geared more towards flippers rather than buy and hold. That's just been my personal experience but your strategy may determine which meetings you attend. Good luck!

Josh Legg - congratulations! Do you have any before and after pictures to share?

I paid for a premium membership with Myhousedeals.com and it was not worth it. Premium members can access new listings before free members but the deals were not worth it and it was the same old rehab underestimates and ARV overestimates. And actually I would get emails from other sources showing the same properties.

Beautiful job!!!!! Congrats on your successful flip!