All Forum Posts by: Joe Farruggio

So I did my first flip. Worked out great. Bought it for $225k. Put another $125k in it. Sold for $450k. 6 Month time frame. Now... it's treated as a short term capital gain..... what can I offset it by? If I bought a truck through the LLC that the property was under, is it tax deductible? OR is the transaction treated singularly?

So we're working on a  2 home deal. Same seller. Single Family is almost at market rate, and there's no money to be made. 2nd Property is underpriced with decent upside. I reached out to a buyer I Know and they're interested, but Im not in contract yet. Is there a way to protect my deal here, or should I go into contract first? 

@Account Closed I gotcha.. I dont mind leaving 8-10k on the table. house was built in 2003... so it's in pretty good condition. mostly cosmetic/marketing upgrades that need to be done. so now here's where Im at. monthly rental income $2400- 5% vacancy $120 - Taxes $700 - Ins $120 - self management $192 =$1268. if I cash out 192k @ 5.5% (that's what I was told going rate for 2 family investment was) that's -$1090 = $178 free cash flow.. Wow... what I thought was good at first is'nt so good. 

@Account Closed how are you getting the purchase price at $192k? good point on factoring in the 5% from gross rents on vacancy, and the 8-10% when self managing. 

So.... my house is worth 1.3mil. and my mortgage balance is 250k... i have some equity. I've built 3 homes, and I know my way around... (these homes were for myself, my parents, and my sister).... Now.. saw a 2 family. asking $220k. probably get it for $200-$205k by writing a check from my Heloc. needs a little work. Which i can do on the cheap. after work. Should be worth $240k. I'll want to get back $ I put in when purchasing. Someone told me you can only get 70% on a cash out refi. Which leaves me with $168k of the $200k I put in, plus a rent roll of about $2300 month. $700 month taxes-$120 insurance-$954mortgage - throws off $450 month.. WHAT AM I MISSING?? cause by my calculations that's 16% on the $32k I came out of pocket. plus the repair costs... another $10k (let's not count that for now) 

Man. it' s nerve racking when you want to go in, but you're questioning yourself. 

great up and coming neighbrohood. lots of activity. Restaurants... stores....

it's a 5 min walk to the metro north. Apt needs $20k worth of reno to make it absolutely mint. Neighboring rental apt building is at $1900/month. Homepath is asking $171k, Im thinking to offer $165k. so I'd be in for $190k. it'll take me a month to get it done at which time I'd market it as for sale @ $239k or rent at $1700. Taxes are $265/month, HOA is $275. even if I rent it I stand to make $500 month (correct me here if Im wrong). What do you think?

@Kevin Siedlecki   went to take a look at this today. I like it. 

great up and coming neighbrohood. lots of activity. Restaurants... stores.... 

it's a 5 min walk to the metro north. Apt needs $20k worth of reno to make it absolutely mint. Neighboring rental apt building is at $1900/month. Homepath is asking $171k, Im thinking to offer $165k. so I'd be in for $190k. it'll take me a month to get it done at which time I'd market it as for sale @ $239k or rent at $1700. Taxes are $265/month, HOA is $275. even if I rent it I stand to make $500 month (correct me here if Im wrong). What do you think?

digging deep is right! these fannnie homes I guess are'nt that great. 

yea. did'nt think about that. Unless I sell it myself; dont know how realistic that is. The other way is that I put down the 20% and mortgage it and keep it as a rental and let it appreciate it. if I do it that way, it shoudl throw off $500 a month; give or take. The problem becomes if I have a problem tennant, that I can easily lose the years income. Man... this stuff isnt as easy as perceived. 

@Kevin Siedlecki

Thanks for that in depth answer. Appreciate that. So I'd be writing a check for it through my HELOC. Taxes are $3200 annually, HOA is $250. If I could get it for $155 and put another 26 into it, Im at $181. Holding costs for 6 months would be $3k. if I get 235k for it, Im up $50k. If that's not the case, I'd pull a HELOC on the property, and move onto the 2nd deal.