All Forum Posts by: Jacob Sampson

The short answer is yes, every property in the world is a good and bad investment depending on the purchase price.  For me it depends on the reason the vacancy rate is so high.  Is it because it is a war zone?  Im not interested in those areas.

It seems reasonable air bnb will slow down/dry up for the duration of this virus.  This is when smart investors who have built up a war chest are able to shine. 

That will be up to your lender, but income is not the only factor they will be interested in the whole picture.  Balance sheet and profit and loss.

The private lender will want to be paid back in full so if your refi doesn't cover it then yes you would need to come up with the money out of pocket.

I don't know how or what a disregarded entity is but ultimately all profits from an LLC flow directly to your personal taxes as income and will be taxed at whatever tax rate your personal income is taxed at. Meaning yes, in general, if you show 100k in profit that will flow to your personal taxable income. You will be taxed at your appropriate rate and the rest is yours. Exactly the same as if you were making 100k more in income...because you are.

Don't forget to take advantage of depreciation.  It is arguably the top 1 or 2 reasons to even be in real estate.

What do you mean by conventional loan?  Meaning you will put 20% down and not be required to live in it and you will cover the rehab costs out of pocket or through a private lender?  

If you mean FHA you will be required to live in it as your personal residence. You could also do a construction loan to allow you to cover the rehab costs.

Is the private lender covering the entire purchase and rehab or are they covering your down payment and a bank is covering the rest?

The different holding costs will be handled differently and should be discussed with your lender.  For example, part of holding casts is utilities.  Those will have to be paid every month, either out of your pocket or your lenders pocket.  That will need to be discussed with them.

Interest may be deferred or charged each month.  You will need to discuss with your lender.

Taxes usually due every 6 months or once a year.  They have to be paid when due.  Again, either out of your pocket or the pocket of your lender.  Discuss with them.

Whether you can get 1% or 2% just depends on the area you are investing.  For example, I would be overpaying if I went as high as the 1% rule.  Recent example, I purchased 2 fourplexes that generate a total of 5k a month in rent for $290k.  We had to put about 10k into the buildings.  For my area this is considered a standard to good deal.

As far as 2% rule I have never seen any that are in areas I wanted to invest in, but in other states that may be different.

So, IMO I would be interested in getting into assets that cash flow better (or that cash flow at all).  I would lean toward a 1031 exchange as you likely have a ton of capital gains tied up in them. 

I've never been lucky enough to LOVE what I do year after year.  There are parts that I enjoy and parts I don't.  I enjoy what I do to a reasonable degree.  My experience is that life is a grind.  You simply get in and do the work.  I think you will do the job poorly if you hate it, but there is a range from like to love and somewhere in that range is sufficient.

In addition, I have found that I enjoy and get excited about my business the bigger and more successful it becomes.  That may simply be because once you get big enough you can afford to hire out the crap you don't like to do.

I've never househacked so don't know how it should impact.  In theory I would stick to my X60 multiple (of both sides) and if I chose to forego rent on one side in order to live in it then that is my choice.