All Forum Posts by: James Folsom

would be great to hear from more local Cincinnati investors who have experience finding deals in THIS market..... I'm a new local investor as well and am having the same struggles...

@Justin Johnson Covington has good pockets and bad pockets.  I wouldn't label it as run down as a whole. 

@James Wilcox Thanks!

@Eric Sztanyo Thanks Eric!  I appreciate your comments and feedback.  Very helpful.  I did spend a morning with @Garth Kukla riding around a few neighborhoods.  Very good experience.

I'd dump it into a small apartment building, leveraging as much as I could.  Whatever the $200k could get you with a down payment on a commercial loan.

If you assumed ~$15% cash-on-cash after covering all expenses (including property management), you are looking at $30k in annual net-income in a very passive form...  Once you start re-investing that annual $30k back into your real estate business, things start to build and "snowball" very quickly.  That could essentially buy you a $100k property every single year, furthering your snowball process.

My reco would be to read the "ultimate beginners guide" (found under "education" tab on this website) and start learning the basics of buy and hold investing.  There are all sorts of articles, blog posts, podcasts, etc. on this website that you can dig into from there. 

I have been researching buy and hold for over a year now and looking to buy my first property now.  Oh how $200k would be nice...

Go turn that $200k into millions!

Hello Everyone,

I live in Cincinnati but I'm interested in the Northern KY market - specifically neighborhoods like Bellevue & Southgate. I'm interested in the BRRRR strategy for SFH's in these areas.

Does anyone have any insight on the rental markets in those neighborhoods?  I've searched current rental listings online and there aren't many available rentals in either neighborhood.  Not sure if that is a good or bad sign.

I'm a little wary of Newport & Covington, but would like to hear some feedback on these neighborhoods as well.

Thanks,

James Folsom

Thanks @Account Closed

A lot of variables involved.  All the more reason for CPA support....

@Kyle Hipp thanks for the info!  That is what I was thinking, but just wanted to make sure since you can actually profit with the cash-out refinance if the numbers work out.

I see you are from Appleton.  I traveled there a lot on business last year.  Really cool town...  

Does anyone know if you have to pay taxes on the cash-out portion of a BRRRR property? I know that you pay taxes with capital gains on a flip. But wondering how taxes would work on a BRRRR property.

I'll give a scenario.  Let's say I purchase a $50k distressed home + $20k rehab with a construction loan from a short-term lender, and plan to pay back the short-term loan with the cash-out refi afer rehabbing.  There is a local Cincy credit union that will apparently do a 1-year rehab loan with 3% interest.  But lets also say that the cash-out value is more than the original loan...

Original Purchase Price $50,000

Rehab Budget: $20,000

Total Financed Amount: $70,000

ARV: $115,000

Cash out refi (70/30): $80,500

Closing costs, etc: $5,000

Original Loan payback (+3% interest): $72,210

NET: $3,290

So in this case, I know that the majority of my capital gain is now equity in the property, and I wouldn't pay taxes on it until I sell the property (and could still avoid with a 1031).  But do I have to pay taxes on the $3,290 or any portion of the investment for that matter?

Thanks!

I am in the same boat - looking to purchase my first property.  

From the research I've done so far, if you can qualify for a traditional mortgage with a bank and have enough money for a 20%-25% down payment - go that route.  Interest rates are incredibly low.  

It seems that with trying to find a private lender who you do not have an existing relationship with, they will want to see that you have experience in real estate before lending you tens of thousands of dollars.  

My plan is to get several properties through conventional financing, and build a small portfolio before going out and marketing myself to private lenders.  Or if I try private money early in the game, talking with a friend or family member with $$ who I already have trust with.

Just my $0.02.  I'm sure others with more experience can speak more.

I've done this a couple of times.  When it come to reporting my monthly housing payment, I am honest.  With the spending, I am not sure how much it would help you reporting a lower number.  It actually may help if you report high levels of spending.  The CC company wants you to swipe that card!  

The biggest thing they will look at is your income and current debt liability (mortgage payment, car payment, other CC payments, etc.).  High income, low debt liability, with higher spend reporting would likely yield a good credit line increase.

Hello Everyone,

I am looking to make my first purchase soon, and have a showing lined-up on Thursday for a 4-unit building locally in Cincinnati.  Numbers look really good.

One of the pictures of the basement shows (likely) asbestos duct wrapping on all of the HVAC ducts.

The property is listed as SOLD AS IS.  Assuming that there are no other major issues with the house, I am thinking about what my options may be for the asbestos.  This is obviously before I have even seen the house, much less placed an offer and ordered an inspection.  But thinking ahead to how I might deal with this:

1. If the asbestos is in good condition, leaving it the way it is.  My only concern is that if it starts to become friable one day and I am unaware, could my tenants hold me liable for any health concerns?

2. Even though the house is sold as is, negotiate the price knowing that I will have to take care of the asbestos after purchasing.

If option number 2 is where I land, getting a full abatement/removal would be $$ thousands.  I know that you can wrap asbestos ducts.  Even with that, having a professional abatement company do that is still not cheap (I had a few small spots less than 3" each wrapped in my current house and it was $450, and this property's entire duct system contains asbestos).  Would it be sufficient to just get modern duct wrap insulation (I think it looks like foil) and wrap that over the asbestos myself?  

Looking for more experienced opinions on this. 

Thanks!