All Forum Posts by: Jesse Stemle

@evanpolaski ,  My carrying costs on the house are just about $1,000/mo however it is currently my primary residence.  Once the house is finished at the end of March, I will be all in at around $155,000. The property needed substantial work but I was able todo just about all of it myself which is the reason for such low rehab costs (This does not factor in the value of my time). 

After selling this house, I plan on using the profits to purchase two properties.  One as another live-in flip similar to what I am doing now and the other as a SF rental house.  

After hearing your advice and talking with a few other people, I feel like my best bet at this point is to just hold out for the 5 months and list the house at the end of August. I just wasn't sure if I had any other options.  

I appreciate your input!

Hey Everyone!

I bought an old beat up house just outside of Louisville, KY in August 2019 for $120,000 with the intentions of fixing it up while living there as I am just out of college and was looking for a place to live. Once it's done the house should sell for around $240,000. I want to make sure I am making the right decisions now in order to protect myself from having a decent tax bill. 

My plan with the house originally was to renovate it over the course of two years and than sell it to avoid paying any capital gains tax.  About 6 months ago I realized I would probably have the house done much sooner than I had planned so I met with some realtors to talk about my options with selling it before meeting the two year threshold of ownership.  One of the realtors I met with suggested that I could do a 1031 exchange to avoid paying any capital gains tax on it despite only living in the home for just over a year.  Upon further research, I believe I have discovered thats incorrect and I wouldn't meet the requirements for a 1031 since its technically my "primary residence" and not an "investment property".  

My question is this:

What is the best way for me (if possible) to wrap up this house in the next few months, sell it, and avoid paying capital gains tax?  As stated earlier, I purchased it in August if 2019 and will have it ready to sell by the end of March.  Would waiting until the end of this August (2021) to sell the house be my best option? 

Any input or advice would be greatly appreciated! 

Jesse

Hey Everyone!

I bought an old beat up house just outside of Louisville, KY in August 2019 for $120,000 with the intentions of fixing it up while living there as I am just out of college and was looking for a place to live. Once it's done the house should sell for around $240,000. I want to make sure I am making the right decisions now in order to protect myself from having a decent tax bill. 

My plan with the house originally was to renovate it over the course of two years and than sell it to avoid paying any capital gains tax.  About 6 months ago I realized I would probably have the house done much sooner than I had planned so I met with some realtors to talk about my options with selling it before meeting the two year threshold of ownership.  One of the realtors I met with suggested that I could do a 1031 exchange to avoid paying any capital gains tax on it despite only living in the home for just over a year.  Upon further research, I believe I have discovered thats incorrect and I wouldn't meet the requirements for a 1031 since its technically my "primary residence" and not an "investment property".  

My question is this:

What is the best way for me (if possible) to wrap up this house in the next few months, sell it, and avoid paying capital gains tax?  As stated earlier, I purchased it in August if 2019 and will have it ready to sell by the end of March.  Would waiting until the end of this August (2021) to sell the house be my best option? 

Any input or advice would be greatly appreciated! 

Jesse

Hey everyone,

I got a home under contract (closing August 19th) that I’m looking to live-in-flip myself over the course of 2-3 years. Yesterday the property was inspected and a few things came up that I’m unsure about.

For starters there are a few active water leaks (one from the kitchen sink drain) and another that’s in the wall but the drywall is clearly damp. It appears that it may be coming from the upstairs bathroom sink yet I’m not totally positive. There’s also water coming in along the edge of the slab (that is below grade in the back since it’s a tri-level) and into the half of the home that has a basement during a hard rain.

I believe this is because all the downspouts along the back of the house are disconnected allowing water to just flow along the side of the foundation?

Electric wise there are also a few plugs throughout the house that aren’t hot and the panel has some missing knockouts which the inspector said was curious.

Other then those things the house is just extremely outdated cosmetically. It was built in 1963 and not much has been touched since other then the roof, AC, hot water heater, sump, etc. which have all been replaced in recent years.

The purchase price is $120 and the ARV is right around $200 I believe. I work in remodeling so I'm planning on doing the majority of the work myself while renting out a couple bedrooms to friends as I'm in college and don't have a ton of stuff going on.

I’m just unsure about the electric and water issues and am curious as to if it’s possible that I’ll need to replace all the plumbing and electric making the deal no longer work.

Any information or advice would be greatly appreciated!

Thanks!

I’m currently in the process of buying my first single family home which I intend to live-in for 1-2 years with some friends as I fix it up (very outdated).

The home I’m in the process of purchasing (closing date is August 19th) has 2 water issues that I am unsure about and was hoping somebody on BP may know more about it. The house is a tri-level so half of it is built on a slab and the other half has a basement. Along the back of the house both downspouts have been disconnected allowing the majority of the water from the roof to dump into these two locations right next to the house. Oddly enough, the locations of these two disconnected downspouts are areas in the house where the seller has reported small water intrusions after a heavy rain. One of these is on the side with a slab and the other is on the side with the basement. The basement leaks pretty good during a heavy rain often leaving large puddles on the basement floor. The side of the house with the slab is only slightly damp after a heavy rain but there are indications of a leak.

My question is: Would the fact that these two downspouts are disconnected and therefor not diverting any of the water away from the foundation wall/slab be enough water to cause these leaks? And if so would properly connecting downspouts and piping the water a good distance from the house correct the issue? My concern is that this would just be “putting a bandaid” on the issue and not actually correcting it.

Any information of advice would be greatly appreciated!

@Thomas Franklin @Account Closed It's not as much about being worried about making mistakes because that is inevitable in anything.  I am more worried as to what risks I should be aware of when making such a big move and what I can do to minimize those risks. For example what sort of money should I be making (w/o a partner in this example) in order to not like completely mess up my financial future if something were to go wrong.  I just don't want to go buy a property in the next few years and then realize I can't even begin to pay for it and end up defaulting or something.  I am just trying to shed light on what sort of consequences those things may result in so that I can be prepared.  Thanks! 

Mark Poulton I have read Think and Grow Rich. Currently the last book I read was The Power Of Habit by Charles Duhigg. I read a book about every 1-2 weeks and I listen to probably 2 hours of podcasts each day. I haven't really gave much thought into taking any courses though so I am going to look into that. I appreciate the suggestions man.

Hello,

I was curious as to what risks there are to investing while young (19).  I have a goal to purchase my first rental property by the time I am 21 but I am worried I might be setting myself up to fail.  What are some things I need to get straight before pursuing my first deal? What sort of money should I be making monthly before trying to buy a property? I am currently saving every penny I can for a future down payment, raising my income, and networking with other investors.  For some reason I am worried that if I was to buy a property young I could completely mess my life up if something were to go wrong.  I am still living at home and I am a full-time college student so the idea of me buying a house in the near future (next 2 years) seems absolutely nuts and honestly it really freaks me out. My parents seem to think the same thing so I am struggling to get past that mindset and I am not sure what my next steps should be. 

Any advice would be greatly appreciated!

Thank you guys!

Awesome man! Congrats on your success thus far and good luck in the future.  Thanks for sharing. 

That's awesome! Congrats on your success with that property.