All Forum Posts by: Jessie Huffey

Is there any reason you could not use a typical home loan and just have it as your primary residence?  If you have access to a Home Equity Line of Credit that could finance your flipping cost. Finally, when you need to sell down the road you would not have to pay capital gains on the profit (due to the fact it was your personal residence for 2 years).

Benn, Yes, I realize it is not traditional for husband and wife to ever be living apart, we have been married for 18 years and do fine living apart for a couple of months if need be. We would prefer to be together but if his business dictates he must stay and I need to be elsewhere to deal with an investment property, we have done that in the past and it works ok for us. But 5 years from now I would like to be spending my summers here in Sandpoint and my winters somewhere warm (hopefully hubby can retire).

Ross, I never thought about setting up a mobile home park, but our property is zoned rural residential with one residence per every 5 acres so the county would not allow this as a possible use. If we could though- that could make quite a bit of $.

So, thanks to a flip property we sold in California a couple of years ago, we have been able to get out of debt (including mortgage debt) and are looking at a couple of options for our next investment (s). We have a home equity line of credit we can utilize for any purchases up to 200k (at 4.5% interest). There are two ideas we wish to move forward on but I don't really see how we can move forward on both at the same time, although I would like to. We own a 16 acre parcel of land outside of Sandpoint, Idaho. Using the home equity line we could build 2 residences on the land and sell them, rent one out and live in one and sell/rent our current home or we could invest out of state in an undervalued market (Central Louisiana comes to mind) and either flip or renovate and rent or have a vacation rental. If I am being honest with myself I would really like to live someplace warm in the winter- I am just trying to work out how to make a good investment out of it. My husband has an established contracting business where we live so he needs to be here most of the year, but I am not tied to a specific location. Can anyone offer up things I should be thinking about in trying to make a decision? Thanks! -Jessie

Anita- I am also from the Bay Area and live 2 hours away from a market you are considering- Spokane. Please feel free to PM me if you need any more info. Here are my answers to your questions: 

How did you choose your state/city?  We started investing here (Sandpoint, Idaho) in 2001 when we realized we could never afford to buy in the Bay Area (although we did eventually buy in the Bay Area after the crash in 2008). We chose Sandpoint because it was beautiful, we had extended family close by, and we could afford it. (Bought a 2000sq. foot fixer upper home on 5 acres for 95k in 2001, it is now appraised at 300k)
Do you tend to stick to that state or do you start to move to other areas? Other than a flip property in Prunedale, Ca. we have invested here but are now looking to invest in southeastern U.S. because we feel there is more opportunity there for appreciation. However, we are still planning to invest in Sandpoint by building 2 homes (hubby is a building contractor) on a 16 acre land parcel we own.
How do you develop connections? Bigger Pockets is a great place to start, but many areas have investor groups, etc.

Contractors? My husband is a contractor and works with lots of other contractors that he trusts so that is a big PLUS in finding the right person for the job.

Real Estate agents in that unfamiliar state?

I would interview any agents you are considering and review the sales history, etc. but I find that sometimes not having an exclusive agent can get you more leverage in making deals.

How often are you finding yourself having to travel? When I was telecommuting to the Bay Area for a regular job I was on a plane once a month, but that was for work. When we rented out our home in the Bay Area, I was down there 1-2 times per year (you can deduct expenses for property management).

All in all, 200k is a great number to start with. Some specific things I can tell you about the Spokane/North Idaho market- I have noticed that once marijuana became legalized in Washington, properties on the Idaho side of the border started becoming more expensive than properties on the Washington side. Idaho has very landlord friendly laws, Washington does not. There have been quite a few California natives moving to Sandpoint including some tech companies, which has really made a difference in the Sandpoint job market as well as more and more people being able to telecommute (my current tenant works from home). You may consider adding Post Falls/Couer d' Alene to your potential list if you want to stay in a city type market. Definitely do visit any markets you are wanting to invest in.

$780 really doesn't sound like enough to make up for damages they caused. I would do a more thorough walk through to spend the deposit on fixing/replacing damaged parts of the rental (you can use estimated costs instead of receipts if you are under a deadline to get the deposit back). If you have before and after pictures, you will be in good shape, unless of course you have missed the deadline to return the portion of the deposit they are legally entitled to. I actually have kept a security deposits for unpaid future rent but I had a lease in place and they left the lease early. Next time, before you agree to extend a month, insist on a walk-though to determine if the place is in good enough condition to show.

A non-communicative tenant is a very bad sign. Keep in mind that he may not agree to your lease addenda and doesn't want to sign (also, if you already have a valid lease in effect you may not be able to force him to sign it) If I were in your shoes, I would send him a letter (include the lease addenda you want him to sign) stating that you have tried to contact him several times (list dates) regarding important lease paperwork and that you expect him to contact you within 24 hours of receiving the letter or to sign the paperwork and return it to you. Remind him in your letter (sent certified) that rent is due on.... and that if it is not received at that time that you will be forced to initiate eviction proceedings because you are unable to contact him. In my opinion landlord/tenant communications should be somewhat impersonable (especially after a tenant wont return your calls). 

Before I "retired" at age 37, I worked in the corporate world for 15 years and held a variety of jobs including marketing manager for a tech company, a conference and event director, a probation officer, an office manager for a major alcohol distributor, and a counselor at a residential rehab facility for teens. Now I "work" at home by choice, fixing dinner, cleaning, driving kids around, gardening, and taking care of my animals (dairy goats, chickens, dogs, and cats) as well as doing property management for 1 rental and flipping a house with my hubby.

I disagree that you should buy something for 20% of what it is priced at. There are a lot of overpriced homes on the market. I would follow advice closer to: Buy something that you can get for 10% or more below market value. If it is a buyer's market you might be able to get substantially more of a deal, especially for fixers that scare other buyers away. Just be patient and a good deal will eventually come up if you are searching in the right markets.

Buy a cosmetic fixer that is structurally sound. Renovate it and sell in a couple years and you can keep the profit tax free due to Section 179 primary residence exemption.

We did mid-grade new cabinets, quartz counter tops and backsplash, and paint for our kitchen sized 15ft by 15ft for 10k (already had appliances) and a gut job on our standard size bathroom for 5k with tile surround on the tub/shower combo. We didn't pay any labor fees as my contractor husband did all the labor. You could probably add 25%- 30% to those costs if you were paying for the install.