All Forum Posts by: Jimmy Lin

Hi Youssef! Please add me to your buyer list :)

Do you guys recommend the Houston Market as a cash flow play?  The high property taxes takes out most of the profits.  Is there a specific Niche in Houston market that investors are focusing on?

I am an investor from PA and recently moved to Houston.  What I noticed so far is extremely high property taxes.  This is a significant down side to me as a long term investor as it basically wipes out your cash flow.  Especially combined with the high interest rates right now.  On the appreciation end, properties values are not going up anymore.  Its stabilizing and will probably remain somewhat stagnant as interest rates come down slowly.  Value add opportunities are over-shadowed by massive amounts of new construction.  I think I might have made a mistake moving here.... lol

@Trevor Smith - Did you end up buying the multi in Northeastern?

@Dave Foster Thanks again for your insights! 

@Dave Foster

Thank you Dave. This may seem silly to you, but my overall capital gain will be around $61,000 after fees and commission. That translates to $9,100 of tax liability.

Does it make sense to buy at the current market to save $9k in taxes? It seems like the market is softening and prices are coming down . Would this capital be better invested maybe next year?

Thank you

Reading some 1031 articles on BP and it is a little confusing that the term proceeds and profits are being used interchangeably. 

From: https://www.biggerpockets.com/...

"Also, all the proceeds from the sale need to be reinvested. So, if I made $100K, all of that needs to be moved over. Or say I made $200K, the new property could be $201K or even $1 million. The point is the new property has to get purchased for more than the price of the old, and I have to roll all the profits over to a new property held in the same entity."

From my understanding, proceeds and profits are two different things.  Lets use this example:  Purchase price of investment property is 100k, with 80k in outstanding mortgage.  Property is sold at 150k to be 1031X'd.  In this example, the sales proceeds is 70k (150k - 80k), while the profit is 50k (150k - 100k).  Which amount will need to be reinvested in the new deal? 

@David Kimball

I think you already know selling is better. $200k plus profit is already pretty crazy. Sell it and take the capital gains exemption if you qualify.

Since you said you need to do a fresh coat of paint and new carpet to rent it, why not do it now to help it sell faster? If it doesn’t sell, then your rental is ready.

Paint and carpet it, then hire a company to stage it for $1500 - $2000. Do some landscaping, maybe even provide some seller assistance on the closing end. Drop the price to around $420-425k. Theres always a chance that multiple buyers will bid up if you under priced it.

@Irvin Nguyen

Sell! Sell! Sell!

Using the dates in your original post: Purchased in 2016 and moved out in 2019. You also used it as a primary residence before renting. This means you qualify for the capital gains tax exemption (since you lived there 2 out of the last 5 years). If you wait until 2023, you would fall out of the 2 out of 5 range.

You are able to gain 250k or 500k (married) tax free. And the $200 cash flow is very bad indeed. Sell it, use the tax advantage and invest in higher cap properties.

You dont even need to worry about 1031 - since this was a primary residence!!!

@Nick DiFinzio

I invest locally in York, PA.  I worked for Harley Davidson York Vehicle Operations for the past 5 years and invested heavily in York.  Have 10 units over 6 properties at the moment, and 2 in Philadelphia.  My next phase is also getting into small multi-families.  I will be taking some time off in May and returning in June.  Let me know when you come so we can connect. 

@Account Closed

If you ever need boots on the ground for York, PA just let me know.  I travel very frequently between York PA and Philadelphia.  Looking to expand my investor network as none of my friends are interested in investing...