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All Forum Posts by: Glenn R.

Glenn R. has started 11 posts and replied 102 times.

Post: Where should I start?

Glenn R.Posted
  • Cornelius, NC
  • Posts 104
  • Votes 51

As a CPA you will soon know more about "everybody's business" & strategies  than any other profession.  I'd recommend saving as much as possible from the beginning and listen to you senior peers for investment advice.  You willy be privy to free info that we all dream of.

Post: What to do with your first 10k?

Glenn R.Posted
  • Cornelius, NC
  • Posts 104
  • Votes 51
Originally posted by @Larry Fried:

@London Robinson $10k, even with a 20% down conventional loan will only get you a $40 something house (there will be closing costs) and frankly houses in that price range most lenders won't loan on.  Further as an out of state investor buying individually in that range is asking for trouble - it isn't likely to be a happy investment.   I have found a way to invest in a diversified portfolio of 10 houses at a time in the Midwest.  It involves buying an interest in the portfolio with a minimum of $10k, and as an investor I co-own with the managers.  I blogged about these very passive and low stress investments quite extensively 

Have I Found the Holy Grail of Passive Real Estate Investing?

Larry,

That sounds interesting.  I read your blog & bookmarked it.  

Post: How to avoid Capital gains tax?

Glenn R.Posted
  • Cornelius, NC
  • Posts 104
  • Votes 51
Originally posted by @Dave Foster:

@Glenn R., No need to be worried. Although if you're going to be worried that a nice thing to worry about!  Those are the limits for a primary residence but if you're wanting to move and the gain is larger than those limits there is a way to combine the primary residence exclusion and a 1031 exchange to completely avoid all tax.

If you've now lived in that house for 2 years then go ahead and refi it or use another loan to buy your next primary residence.  Move into it and convert this current primary into a rental.  After a year or so (but less than 3) you could sell the new now rental and do a 1031 exchange but taking $250K 04 $500K in boot.  Boot is normally taxable but because you qualify for the primary exclusion that becomes tax free and the remainder is sheltered in a 1031 exchange.  You'll need some guidance along the way from your accountant and your QI but it's a very elegant solution to get money tax free and continue to build your portfolio tax deferred.

 Glad to hear there are solutions.  I've only had it since June 16', so I have time to cunsult and lay out the best plan for it.  I remember seeing your site a while ago when reading about 1031 exchanges.  I like the idea of keeping it in real estate.     

Post: How to avoid Capital gains tax?

Glenn R.Posted
  • Cornelius, NC
  • Posts 104
  • Votes 51

Good thread, with good replies.

But, now I'm worried.  I received a home as gift from my father.  His CPA told me if I made it my primary residence for at least 2 of 5 years there'd be no capital gains taxes.  Now I see the $250-500,000 limits...  It's worth a lot more than that now.  (Dad refused to wait for me to inheirit it, because of the stress of it. )

Anyway, what % will the gains be taxed at?  Maybe I shouldn't claim it as my primary, and perhaps rent it out for a while?  Guess I should revisit the CPA.  :(

Post: How can I estimate road building costs?

Glenn R.Posted
  • Cornelius, NC
  • Posts 104
  • Votes 51
Originally posted by @Tommy F.:

@Michael Elifritz  I'll take the liberty to assume you're at the very early stages of planning. That being said, I believe you may be putting the cart before the horse. I'm not a builder nor developer although I have worked with both in the past to develop land. Building roads and extending utilities comes after a lot of other expensive and time-consuming work. Consider the time, effort, and expense to develop a concept plan to include site drawings, home types, homes per acre, site storm water retention plan, tree save areas, conservation areas, wetland setbacks, time considerations for meetings with county land use planners, negotiating easements for utilities, rezoning meetings with county council, revisions to your plans to meet demands of neighbors, planners and/or county council, and hopefully getting a final approval for your project. Then you can start turning over dirt. Estimating cost for streets and utilities is just a piece of the puzzle, and likely easier, although more expensive. You can start by going to your county public works website and find the cost for tapping into sewer and water. You may find that accessing sewer comes with a high one-time tap fee plus a fee for each unit that will be served, the same for water. These fees can be in the tens of thousands and must be paid in advance. You'll need to know if your site will gravity feed to sewer, need easements to cross other properties, or will need a pump station or grinder pumps for each home.  For a 10" sewer line ballpark $90 per linear foot, for 8" line consider $75 plf, estimate sewer easements at $20 plf plus repair and restoration costs. If you can't get sewer, then your alternative is onsite septic, if soil is suitable, then your buildable area shrinks dramatically due to drain field and reserve areas for each home. I still haven't answered your basic question, so if you're still reading at this point and haven't taken two Excedrin, then you'll need to know your street layout, width, curb & gutter requirements to get any type of estimate from a contractor. Costs for residential street improvements will vary due to local code requirements for different materials, street types and layouts, and utilities. The combined costs for grading, surplus disposal, gravel base, asphalt, curb and gutter, manholes, sewer laterals, and sidewalks could easily be $200 per linear foot for a 20' wide street. It's all a guess until you get a professional involved to work with you.  I hope this helps.

That's very detailed & helpful advice.  My mother is being gifted a parcel of her family land near Charlotte, in Union county.  She's not sure what to do with it yet, so your post is a great one for us.  

It's crazy how expensive connecting to the city sewer & water can be.  I think it's about $2500 now to connect here, on Lake Norman. ( Considering how high the property taxes are you'd think the connection fee would be more reasonable. )  

Post: Modular Homes?

Glenn R.Posted
  • Cornelius, NC
  • Posts 104
  • Votes 51

I'm interested in modular construction too.  This thread is about a year old now.  Wish I could find more info about good modular factories in my area of the country.  

I wonder what keeps modular construction from overtaking the multifamily home industry?  I'm surprised to see site built still dominating the current apartment & townhome developements being built today.  Seems like factories have so many advantages, like 24/7 work shifts & no weather issues.  

What are the design limitations that keep modular out of the high-end custom home markets?  

They should consider heading over to Gatlinberg.  The fires devastated that poor town.  

Post: 3% return on equity - should I sell or hold?

Glenn R.Posted
  • Cornelius, NC
  • Posts 104
  • Votes 51
Originally posted by @Matt R.:
Originally posted by @Glenn R.:
Originally posted by @Thomas S.:

I can not believe you have any real positive cash flow on your investment. The numbers, although you have given very little info, simply can not work based on the equity. I may be wrong though.

The problem with appreciation investors is they can never sell because the appreciation keeps on coming.  The likely hood is they will never see a dime of their investment but guaranteed the heirs will sell in a heart beat as soon as they take ownership. They understand the value of a dollar today as opposed to tomorrow.

I would sell yesterday.

That's exactly where I'm sitting now, as the heir.  Dad gave me a property that he's had for 25 years, paid $205 K & now worth $2.4 mil (if I divide it & sell as 2 lots).  I'm not in real estate, but it looks like I should sell.  I'm sure it will continue to appreciate, but that's a lot of cash tied.  An index fund would have done almost as well if I couldn't divide the lot, and it would have been a lot more liquid.  (I'm studying on BP to help decide what to do with it next.)  

Edit:

After reading a few more posts I see that there's so much I need to learn!  :)

It is true, a simple index fund historically has out performed most REI and especially SFRs on average. This is just not the most popular topic on a REI forum. There are many exceptions still and most of those are located in the top tier locations. There are basic fundamental reasons for this, starting with the most fundamental "supply and demand".

My place is on what has become a highly developed lake, where dad's double wides got surrounded by mansions.  Undeveloped lots are vanashing, and a lot of folks that own exotic cars don't like buying "used" homes.  ;)

I'm looking at acreage on less developed lakes to move to.  Also intersted in rentals & index funds. <grin>

Post: 3% return on equity - should I sell or hold?

Glenn R.Posted
  • Cornelius, NC
  • Posts 104
  • Votes 51
Originally posted by @Thomas S.:

I can not believe you have any real positive cash flow on your investment. The numbers, although you have given very little info, simply can not work based on the equity. I may be wrong though.

The problem with appreciation investors is they can never sell because the appreciation keeps on coming.  The likely hood is they will never see a dime of their investment but guaranteed the heirs will sell in a heart beat as soon as they take ownership. They understand the value of a dollar today as opposed to tomorrow.

I would sell yesterday.

That's exactly where I'm sitting now, as the heir.  Dad gave me a property that he's had for 25 years, paid $205 K & now worth $2.4 mil (if I divide it & sell as 2 lots).  I'm not in real estate, but it looks like I should sell.  I'm sure it will continue to appreciate, but that's a lot of cash tied.  An index fund would have done almost as well if I couldn't divide the lot, and it would have been a lot more liquid.  (I'm studying on BP to help decide what to do with it next.)  

Edit:

After reading a few more posts I see that there's so much I need to learn!  :)

Post: Website

Glenn R.Posted
  • Cornelius, NC
  • Posts 104
  • Votes 51
Originally posted by @Dave Wells:

Weebly is easy to use.

I like Weebly too.