All Forum Posts by: Jeremy Fleming

Well.... we should be doing annual inspections anyways. What better excuse than to change the batteries!

Hey there!

First off, it sounds like you’ve got a solid plan and a great mindset for taking control of your financial future. Kudos to you for diving into real estate with such enthusiasm! I totally get the pull of investing closer to home, especially if your local market has some untapped potential. Since you mentioned that your area lacks nicer/unique short-term rentals (STRs), this could indeed be a golden opportunity. Here’s why I think investing closer to home makes sense and how you can maximize your returns:

Familiarity: You already know the local market, which gives you an edge in identifying good deals and understanding the demand. Plus, you can easily keep an eye on your investment without needing to rely entirely on a property manager.

Make Money When You Buy: This is key. Look for properties where you can negotiate a lower purchase price or find motivated sellers. This way, you build equity right from the start. It’s all about buying below market value and creating instant equity. OR you can make money when you buy with properly structured financing. (think Vendor Take Back mortgage at 0% interest)

Owner Financing: This can be a game-changer. It not only makes the numbers work better but also reduces the need for a large down payment. Approach sellers who might be open to owner financing – especially in a small town where personal connections and negotiations can go a long way.

Short-Term Rentals (STR): Given the touristy nature of your area, an STR could yield higher returns than a long-term rental (LTR). Plus, the tax advantages of STRs can be pretty sweet. If you nail the marketing and management, you could see some impressive cash flow. Just make sure to do a thorough market analysis to ensure demand.

Lastly, definitely sit down with a savvy RE CPA who understands the ins and outs of real estate investing. They can help you navigate the tax benefits and ensure you’re making the most out of your investments.

Hope this helps, and good luck with your real estate journey! Keep us posted on how it goes!

Cheers!

Hey there!

It's awesome that you're diving into real estate investing while still in college! That's a great move. Here’s my take:

Buy for the long term. Seriously, even if you're thinking about a short-term flip, make sure the numbers still work for holding onto the property. You never know what might happen, and Plan A can sometimes take a detour.

When you're crunching numbers, look at:

1. **Cash Flow:** Make sure your rental income covers all expenses—mortgage, insurance, taxes, maintenance, and a little extra for unexpected costs.

2. **Location:** Cincinnati has some great neighborhoods, but do your homework. Look at the job market, schools, and amenities. Stay away from tough neighborhoods. I made the mistake of buying a place in a less desirable cut-de-sac and I had nothing but trouble renting it out.

3. **Property Condition:** Factor in any repairs or upgrades you’ll need to make. A fixer-upper can be a good deal but budget carefully. Make sure you have a financial buffer too - renovations always run over. 

And always have a backup plan. If you can't sell for the profit you hoped for, can you rent it out and still cover your costs?

Good luck, and happy investing!

Why not buy it with private money, borrow enough for the purchase/repairs/carrying costs, and then refinance once the repairs are done? Take your equity cash out and do it again! I've done similar, and its a great strategy.

Hey there, future property mogul! Ready to make your move in the real estate game? Securing a rental property is an exciting venture, but gathering the down payment can feel like a mountain to climb. Fear not, because I've got seven creative ways to help you fund that down payment and get you closer to your dream of owning a rental house in Canada or the USA. Let's dive in!

1. Home Equity Line of Credit (HELOC): If you already own a home with some equity built up, a HELOC can be a fantastic option. This allows you to borrow against the equity in your current home and use those funds for the down payment on your new rental property. It's like unlocking the potential of your existing assets!

2. Partnerships: Team up with someone who has the funds but might lack the time or expertise to invest in real estate. Forming a partnership can be mutually beneficial. They provide the down payment, and you manage the property. Just be sure to outline everything in a clear, legal agreement to avoid future misunderstandings. Be sure to follow through with all your agreements!

3. Seller Financing: In some cases, the seller of the property may be willing to finance the purchase themselves. This means instead of getting a mortgage from the bank, you pay the seller in installments. Sometimes, sellers might require a smaller down payment or even none at all. It’s worth asking about! And in fact, this is my favourite way of funding a downpayment. In fact I bought a house with 100% owner financing one time - only because I asked.

4. Retirement Accounts: Certain retirement accounts, like a 401(k) in the USA or an RRSP in Canada, allow for borrowing or withdrawing funds for home purchases. While this can be risky and might come with penalties or taxes, it can be a viable option if managed wisely. Always consult with a financial advisor to understand the implications. In Canada you can also use a 3rd parties RRSP as a "loan" or a mortgage. Allowing you to finance up to 100% of the purchase price.

5. Side Hustles and Gig Economy: Channel your inner entrepreneur and take on side hustles. Whether it’s driving for a ride-sharing service, freelancing online, or even renting out a room on Airbnb, these extra earnings can add up. Dedicate these funds specifically for your down payment, and you’ll reach your goal faster than you think. Netflix and Xbox will be there when you're done buying your rental!

6. Lease-to-Own Options: Some sellers might offer a lease-to-own option where you rent the property with the intention of buying it after a set period. Part of your rent payments can go towards the down payment, allowing you to build up the necessary funds over time while living in the property. Personally, I've never bought this way, but I have sold using this method. I would purchase this way as well. 

7. Borrow from Life Insurance: If you have a whole life insurance policy, you might be able to borrow against its cash value. This can be a low-interest option for funding your down payment. Just be aware that it could reduce the policy's death benefit if not repaid.

Funding a down payment might seem daunting, but with a bit of creativity and resourcefulness, it’s entirely doable. Whether you’re leveraging existing assets, forming strategic partnerships, or hustling on the side, there are plenty of ways to gather the necessary funds. So, what are you waiting for? Start planning, get creative, and take that first step toward becoming a rental property owner. Happy investing!

Feel free to ask if you need more details on any of these options or have other real estate questions. I'm here to help!

Congrats on your house-flipping venture! It's awesome to hear you've got a partner on board. Here's a friendly breakdown of how you can structure your partnership without forming an LLC and still have both names on the deed.

Tenancy in Common (TIC) is probably the best route for you guys. Here's why it works. Both Names on the Deed: You can both be on the property deed as tenants in common. This means each of you owns a percentage of the property. You can decide how to split it, typically 50/50 for you guys. Flexibility in Ownership: Unlike joint tenancy, tenants in common can own different percentages. If things ever change, one of you can sell your share without affecting the other's ownership. No LLC Needed: This keeps things simpler and avoids the state income tax associated with forming an LLC in Tennessee.

Steps to Set Up Tenancy in Common:

Purchase the Property: When you buy the property, instruct the closing agent or attorney to list both of you on the deed as tenants in common.

Draft an Agreement: While it’s not legally required, it’s smart to have a written agreement detailing each partner’s responsibilities, the split of profits, and how decisions will be made. This can prevent misunderstandings later. Really.... don't do the deal without a written partnership agreement. I've used them and they save a lot of confusion later.

Deed Filing: Ensure the deed is properly filed with the county where the property is located. This formalizes your ownership.

Other Considerations: Capital Gains Tax: Remember, when you sell the property, you’ll need to pay capital gains tax on the profit. This is federal, not state, so it’ll apply regardless of your state’s income tax situation. Legal Advice: It’s always a good idea to consult with a real estate attorney to ensure everything’s set up correctly and to draft any necessary agreements. Make sure to talk with a lawyer!

This way, you both get to be on the deed, avoid the complexities and taxes of an LLC, and keep everything straightforward for your flipping project. Good luck with your flip, and may your profits be as smooth as your renovations!

It's a double edged sword. I've managed my own properties, and I've hired property managers. I was a ****** landlord. I really was (from a hands-on standpoint). So I hired a property manager for 1 of my 10 rentals at the time, and they did just as ****** of a job as I did - except they charged me 10%. I'd say my biggest mistake was not researching the property manager properly before hiring them. And I'd highly recommend doing a once-per-year walkthrough of the property yourself, so you know the manager is working in your best interest. 

I hate to say it, because I know there's lots of great pet owners out there, but I just don't allow pets - I have a few times and it bit me in the *** everytime.

"Thank you for your application, we have decided to rent to somebody else".
Why is this not an option? In 20 yrs, I've never given a reason why i declined a rental application.

Hey John,

Congrats on all your accomplishments! Here’s a streamlined game plan for your situation:

Leverage Your Current Home: Rent it out for $1,700/month to generate $600/month in positive cash flow ($1,700 rent - $1,100 mortgage). Consider a small HELOC for initial costs if you can secure a good rate.

Owner-Occupied Strategy: Look for a duplex, triplex, or fourplex with one unit big enough for your family. Properties with additional units on the property offer separation from tenants and rental income. (think guest house or apartment above the garage)

Financing the Next Property: FHA loans require as little as 3.5% down. Check for down payment assistance programs. Explore short-term solutions with hard money lenders and plan to refinance later. I've bought most of my rentals utilizing vendor carry back financing (for a zero down option)

Utilize Your Network: Use your connections for off-market deals and creative financing. Partner with someone who has capital while you bring project management skills. 

Actionable Steps: Understand your finances and potential rental income. Explore loan options and down payment assistance. Attend real estate events for opportunities. Focus on finding a property that fits your family and rental needs.

You’ve got a solid base. With some strategic planning and leveraging your network, you can take the next step in real estate investing.

Good luck!

Cheers, Jeremy