All Forum Posts by: Jonathan Krauser

Quote from @John K.:

Hi Jonathan, this looks good to me--It'd be great to have you follow up with your results in a couple months! 

John

I would be glad to do that. 

Quote from @Nathan Harden:

The hardest part about direct mail is following up. It's hard to take money out of your pocket to send out mailers when the last 6 batches have only gotten you crickets. 

It's one of those things that you just have to keep on keepin on because at the end of the day, it only takes one seller to change your life.

I wasn't expecting to hear from anyone until I sent out letters for a year.  I was also going to send out postcards. I want to catch them at the right time.  

Thank you for replying John. I am only going after multi-family properties that have yet to sell since 2020. 

I am new to this amazing website, so please let me know if I need to post this in a different area. I want to find off-market properties. I have created the attached letter using Brandon Turner's post from 2016. I am sure there is much more information on what works for getting potential sellers to contact you back. For the experienced people who do this for a living, what have you found that works? How often should I be sending out letters/postcards to these people? Any suggestions would be greatly appreciated.

Quote from @Bien Nguyen:

My husband and I are planning on doing a couple's weekend near Satellite Beach, FL. I'm going to do some research but would also love to know if anyone has direct experience or familiar with that area?  

Hello Bien, I own three rental properties in Satellite Beach and live in Indialantic, which is just south of Satellite Beach. Just let me know what you need and I would be glad to help.  

Quote from @Dave Foster:

@Jonathan Krauser, The best idea is to slow your flip roll just a little. and instead of buy fix and flip. You buy fix rent and refinance. (the ubiquitous BRRRR strategy). Using a refinance lets you get your cash back so you can either pay yourself with non taxable dollars (from the refi). Or it lets you buy your next target to work on while you wait for the current property to season a bit. You do have have the intent of holding that property for investment use (not fix n flip) if you want to 1031. But if you've held it for a year generally folks feel like that is fine.

Unfortunately The attorney's for the 1031 were not correct (really a bummer).  Because you can take cash out of a 1031.  and you can purchase less than you sell.  You simply pay tax on the difference.  We process these partial exchanges all the time.  The exchanger looks at their needs and any unused tax writeoffs they may have.  And then we hold back some of the cash from the 1031 to go to them.  It's many times not taxed at all because they have carryover losses.  That would have been the next option for you to look at.

Bottom line - there's no reason to pay any tax - let alone the exorbitant ordinary income tax if you have the time to plan.

I looked into holding into doing a cash-out refinance with my flip and renting it out for a while to pay the long-term capital gain. The issue I had with that is the most I can get for a SF home was $3,200 per month. A duplex at the same value would bring me at least $4,000 monthly. 

Quote from @Bill B.:

It should be pretty straightforward. 

You can’t exchange flips… Make sure you’re exchanging buy and holds.

You can’t touch the money, get your 1031 QI involved when you list the property. 

Buy at least as much as you net from the sale and reinvest all the cash your QI holds. 

I suggest @Dave Foster. He helped me complete my first exchange last year and I hope to do 1 or 2 with him this year. 

Ps. He has both a book and youtube videos teaching about 1031’s. As well as 100’s if not 1,000’s of posts on BP. Pretty sure he was a guest in the podcast as well. 

Thank you for the reply Adam. I am looking for the best way to get a loan on the new property so that I can pull my money out of it.



Thank you for the reply Adam.

Thank you for the reply, Adam. I understand that part. I actually tried to do this last time and discovered a problem. I was trying to use the 1031 exchange funds to purchase a duplex and, at the same time, trying to finance the new purchase of the duplex.  The 1031 exchange lawyers told me I could not receive money at the closing a few days before the closing. I ended up closing without using my 1031 exchange because, at that time, I needed to pull my cash out.  I believe the lender said that if I had paid cash for the duplex I would have had to wait 6 months before I was able to do a cash-out refinance. I unfortunately could not wait for the 6 months. I was hoping that there was a better way to do this.  

After doing several flips in the last few years, I am tired of my profit being taxed as short-term profit.  I usually purchase properties in the $200K to $250K range for cash.  My rehabs have averaged anywhere from $120K to $175K, so I end up with a lot of my cash in these properties.  Ideally, I would like to use a 1031 exchange to sell the flip and purchase a multifamily.  My goal is to end up with a multi-family home with a new mortgage on it and pull most of my cash back out to be used for the next deal. How do I do this the proper way?  

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $150,000
Cash invested: $30,000

This is a duplex located within walking distance of the ocean in Satellite Beach. Each side is 2/1 with a fenced-in backyard. It has terrazzo floors that I had refinished in 2013.

What made you interested in investing in this type of deal?

Back in 2013, each side was renting out for $900. At a purchase price of $150,000, it produced significant cash flow. That was the extent of my financial analysis back then.

How did you find this deal and how did you negotiate it?

At that time, I was a full-time Realtor and listed the property. After one of the contracts fell through, I decided to purchase the property.

How did you finance this deal?

Conventional loan with 20% down.

How did you add value to the deal?

At that time I purchased "as is".

Lessons learned? Challenges?

I wish I purchased more of these duplexes.