All Forum Posts by: Jacob Carlson

@Mitch Messer Thank you for your in depth reply. Everything you said makes sense and I agree. I ended up walking away from the deal. I don't think there was enough there to add value and I was not going to pay full price. I will continue looking mostly off market since the competition is too high for anything on market.

Hey Bigger Pockets!

I would appreciate some help analyzing a deal I'm looking at. 

2919 N 49th Ave

Omaha, NE 68104

 This will be my first deal. I want to get something where I can add value but not a complete gut job for my first one. So, I found a 2bd 1 ba 744sqft house. An older couple is moving. They listed it at $95k a couple months ago and have lower the price a few times and it is now sitting at $80k. 

The house itself is in move in ready condition and should rent as is around $900-$1000. 

I was going to purchase with traditional financing and finish the basement. It is a 6'-2" ceiling height so I can't make it into a bedroom... I was going to make it a living room, add a 1/2 bath and storage in the other half. (Roughly $5k) if it's going to be worth the return. So, possibly there to get more rent and add value. 

I offered $67.5k they countered $79k... I countered $70k they said $75k

So, looking at $75k PP

$900 taxes/yr

$950/ mo rent

The rental calculator told me

$16,500 down (including $1,500 for closing costs)

$149.33 cash flow 

I would manage so that's an additional $95/mo

ROI 10.86%

It's not a home run but it seems fairly safe. 

Let me know if you need any more info. 

What are your thoughts? Thank you in advance!!!

Joshua thanks for your reply! I would have to agree with you. That is also a concern of mine. I will have to consider some exit strategies for that scenario. I think that I will figure something out when the time comes... For now, it will be a matter of me finding the right property for a decent price and making sure everything actually works the way I intend it to which, at the end of the day, means me getting the cash flow return from my sister buying a house... Which seems kind of strange! 

I think there are opportunities here I just need to explore into them and figure out how to do it. 

Any one else have an opinion??

So, I asked an attorney what they thought about this and they basically said that it should work. I could gift the downpayment (which requires some paperwork) and have my sister be the one on the loan. This means its her name on the property. I want that property in my LLC so I think after the 1 year residency (for my sister) is up I could essentially buy it from her. Not sure if she could sell it for like $1.00 to me but that is something I will have to figure out down the road...

I would essentially be connected to the property by being the property manager and collecting rent as well as doing the tasks of any property manager using my LLC - This would save me from opening another LLC for the partnership and more tax complications. I am going to be in contact with a local mortgage loan officer and see what my next steps are.

So, I asked an attorney what they thought about this and they basically said that it should work. I could gift the downpayment (which requires some paperwork) and have my sister be the one on the loan. This means its her name on the property. I want that property in my LLC so I think after the 1 year residency (for my sister) is up I could essentially buy it from her. Not sure if she could sell it for like $1.00 to me but that is something I will have to figure out down the road...

I would essentially be connected to the property by being the property manager and collecting rent as well as doing the tasks of any property manager using my LLC - This would save me from opening another LLC for the partnership and more tax complications. I am going to be in contact with a local mortgage loan officer and see what my next steps are.

Hey Everyone!

I was thinking the other day how much I really wish I would have house hacked before my wife and I built our house. Now that our house is complete we don't want to leave it anytime soon... We had one of my sisters move in with us to help with the bills so that is sort of hacking I'd say. Then I just recently had this idea...Maybe its not possible but I have not heard of anyone doing it before.

What if I created a partnership with my younger sister (she is 20) and she signed an FHA loan for a property - duplex/trip/quad that I find. I would give her funds for the 3.5% down and closing and she would live there. But when I buy the property it will be in my name. Essentially she would house hack for me and I would be the owner. I could worry about the management and she could live for free or just a couple hundred a month... Then I have a property for 3.5% down. What are your thoughts?

This could possibly not work legally or for any other reason but if its possible I am going for it!

Thanks for the feedback!

Will do Cesar, I am going to ask my attorney about his thoughts on this as well

Hey Everyone!

I was thinking the other day how much I really wish I would have house hacked before my wife and I built our house. Now that our house is complete we don't want to leave it anytime soon... We had one of my sisters move in with us to help with the bills so that is sort of hacking I'd say. Then I just recently had this idea...Maybe its not possible but I have not heard of anyone doing it before.

What if I created a partnership with my younger sister (she is 20) and she signed an FHA loan for a property - duplex/trip/quad that I find. I would give her funds for the 3.5% down and closing and she would live there. But when I buy the property it will be in my name. Essentially she would house hack for me and I would be the owner. I could worry about the management and she could live for free or just a couple hundred a month... Then I have a property for 3.5% down. What are your thoughts?

This could possibly not work legally or for any other reason but if its possible I am going for it!

Thanks for the feedback!

Any advice on Midwest or decent national hard money lenders is appreciated. Thanks in advance for feedback!

Hey guys thanks again for the great feedback! I appreciate your responses. So, just a quick update. I have has several people go look at the house, send me pictures, give me updates and offers. It's looking fairly grim at the moment. I bought the property for roughly $20k (I know now that I was totally ripped off and will not invest out of state) and I'm getting either offers at $2000 our others saying they will not even offer due to its condition. The additional problem with this is that instead of rehab being done it has sat there collecting fines. I now owe over $5k in fines. I would need to sell at least $5k to recoup my fines. Thats to get out at zero and not put additional money in. So, all in costs of about $50k plus $5k in fines  This is the most terrible start I ever could have imagined. 

...and it's going to make a hell of "good" story some day when I get it out this hole and start doing some good deals. My plan is to find someone in Indy willing to pay what it costs in fines to sell it. Post the fines, seek the house and move on.  I will do flips using hard or private money and pay back my lender. This definitely set my wife and I back but we are just learning and are waiting for the next and BETTER deal to come around. 

I've got a question - would I have to pay any sort of taxes on this sell or since it's a loss do I need to?