All Forum Posts by: Greg Heden

I am looking for some creative ideas on how a can help my mother out of a predicament.  She is aging and was looking to relocate to Florida to get out from under her large, high maintenance upkeep, and two story home.  After deciding on a particular neighborhood(near my brother), she suddenly pulled the trigger and put in a cash offer with no contingencies, that was subsequently accepted.  The situation is that she has no cash and was naively thinking she could sell her home and magically appear in the new one!

Facts:

- Her current home is worth around 1.2M

- Has a mortgage of 85K

- Total cost to close on new home about 500K

- Applied for a heloc, but only qualified for around 435K when considering her income level

- She is dead set on this purchase and subsequent move, therefore, I must help facilitate or inherit anymore bad decisions.

I have the cash to bridge the gap between the HELOC and actual costs but was wondering if anyone had any other ideas on how to facilitate.

Thanks for any input!

Hello BT Community!

I am looking to connect with lenders on a possible four plex purchase in the Phoenix area. No issues with documentation, FICO, or up to 40% down. Looking to lock in the best overall deal.  Please feel free to reach out.  Thx!

@Basit Siddiqi 500K down - ROI consisted of 2.5% appreciation(No guarantee), principal reduction (guaranteed), and reduction in 2023 passive gain taxes multiplied by my effective tax rate(guaranteed). The biggest contributor is the first-year depreciation with cost Seg.

@Joseph Palmiero Great viewpoint! The first year of ownership calcs out to a 38.32% ROI considering all factors but comes with a negative cash flow of $5K. BE ( Cash Flow) is around year 3 conservatively where the overall ROI stabilizes in the low teens.

When analyzing a deal, should one factor in future appreciation, annual mortgage reduction, and tax savings from depreciation (offsetting other passive investment income) when calculating ROI? I am looking at a property that will take some time to polish out. The COC return doesn't warrant the investment but the total return paints a different picture. From a buy-and-hold standpoint, how much weight should I give to this total return?

@Josh Young Good point on the cost of funds and going to analyze the depreciation. Thx-

Let me preface this question with the following criteria:

-Looking to put work some capital from a cash-out refinance

-Currently earning 5% risk free in a MM account

- In need of depreciation to offset passive income from other investments

-Already in high tax bracket due to business income

-I am a buy and hold investor and own a design/build company locally for over 25 years 

My question is does it make sense to purchase a RE investment that has upside potential, in a great area, but currently will produce a negative ConC return with 30% down?  I can see the potential in this property but having trouble with justifying going from a 5% risk free return to a negative return.

Thanks for any and all input-

Thanks for all the feedback. Signing up today…….

Andres:

This is in a planned community with an HOA, but no oversight on the rental end. I know the board recently conducted a study on the increasing rental impact on the community. I will reach out and see what they found. At a minimum, I believe they have a grip on the average days per home. It seems like Air DNA would be the missing link. Good point on reaching out to rental companies. There are at least two players in this space. I will follow up. Lastly, we have owned a beach front home in this community for over 10 years. I am very familiar with the development and interest of the area. Just wanted to set a realistic expectation of revenue. Thanks for your input!

Mike:

My hope is that your previous 2,420 post were as upbeat and educating as the last. Sincerely-