All Forum Posts by: Jordan Northrup

Hello everyone!  I just closed on my first deal last week!  Now I'm looking to take down the next one.  I've been approached by several people about partnering on some deals.  I know that partnerships are a way to scale faster, but they also carry a certain amount of risk.  I'm familiar with dispersion of duties, dual ownership, and having everything written down in a signed agreement. 

What I'm curious about is when one of the partners wants to leave.  Let's say he moves away, changes jobs, doesn't want to do it anymore etc.  In that case, what happens to the business?  The properties would certainly have mortgages on them.  Would they all have to be refinanced out of the partner's name and 50% of the equity handed over?  For example, if we owed $80k on a $100k house, would I have to refi him out of the property and give him $10k in equity?  A situation like that would turn any cash flowing property into a liability and sink the business right?

Hi Barb, you mentioned Quantico.  Do you work on base?  I've been on base here for number of years...been in the Marines since 2003. 

I didn't lose any money in that deal...that's what was so weird about it.  I used Rent-to-Retirement.  Have you heard of them?  They offer turnkey properties in 5-6 markets in the Midwest and south.  They buy trashed units, rehab them, place tenants, then sell to investors at slightly below market price.  On paper it sounds wonderful.  I put a house in Cincinnati under contract for $125k.  I was putting 20% down.  Property was valued at $130k.  So I would have had great equity to start.  R2R would manage the property for me for 8%.  After all expenses and savings (vacancy, repairs, mgmt.) it would cash flow $330 a month.  So I charged ahead.  R2R didn't collect any earnest money or anything.  We signed the contract and I ordered an inspection to be safe.  The inspection came back with all kinds of problems.  HVAC didn't work, water heater didn't work, electrical didn't work, railings were falling off the porch, the seals in all 11 windows were broken, some windows didn't even more, the garage door was broken, etc.  Just a mess. 

I called R2G to complain and they said "well, I guess our rehab team missed some things,  We'll fix them".  I'm like. "sure you will.... you were perfectly happy to let me buy a lemon and not say anything".  Their rehab team rehabbed the kitchen and bathrooms and painted the living area.  That was it.

Anyway, I just don't trust them.  At least I didn't lose any money!

So what type of investor are you? I'm more of a BRRRR guy. I want to eventually get into multi-family or commercial real estate.

Hi Barb, your group sounds really good.  I think I could certainly learn from the folks who attend and it's always good to network!

I'm curious as to the out of state investment you were considering.  I was working with an out of state turnkey group that sponsors the Biggerpockets podcast.  We had a house under contract until the inspection came back. What a mess.  I canceled the contract and moved on.  What was your deal?

Hi Barb, I just came across this post. I'm very interested in getting connected with an REI group here in NoVA. I'm a new real estate investor - working on my first deal right now. I'll another 1-2 here in the next 6 months. Can you tell me more about your group? Thanks!

Hi Dave, thank you for that analysis.  I understand what you said in your first paragraph.  #1 sounds promising.  My MIL has no interest in being a landlord so #2 is out.

This whole deal is really complicated.  Her husband died 1.5 years ago.  She said something about needing to sell the property before 2 years passed if she wanted to avoid taxes. I can't confirm or deny the truth of that.  It would also be difficult to renovate the property if she still owned it.  We'd have conflicting ideas and there would be coordination struggles.

Since she offered seller financing, perhaps we could arrange the sale where she takes payment after I rehab and sell the property?  I'd have to pay capital gains on my profit (would she as well?) but I can't think of another way.

I'd be open to renting the property instead of flipping it, but after the $400k acquisition and $50k rehab, I don't think the rents in the area would make it a cash flowing property.

Good afternoon everyone,

I have a question that you may be able to help me with.  My mother-in-law has a property that she owns free and clear that needs to be rehab'd and then sold.  She'd like me to flip it for her.  After I rehab and sell the property, I'll have to pay her, pay the realtor, pay myself back for the rehab, pay capital gains tax, and then whatever is left over is mine.  In order to minimize my tax liability, I was thinking I could 1031X the profit into another property.  One thing that came to mind is that my wife and I are looking for a new home.  Could I take the profit from the flip and 1031 it into a single family home for my family...like using that to provide a portion of all of the down payment?

My mother-in-law's house could sell for around $580k based on the comps.  she'd ask around $400k for it, I'd sink $50k into the rehab, pay 6% for a realtor, etc.  For the 1031X to work, does the value of the new property have to exceed the value of the old property?  Or does the value of the new property have to exceed the PROFIT from the old property? 

Let me know if I'm looking at this the right way or not.  Thanks!

Brandon L, thanks for offering to pull the comps.  Here's the address.

8609 Greeley Blvd. Springfield, VA 22556

Thanks for your help everyone. I hadn't even considered the tax piece yet. If I flip it, I could 1031 the profit into another house and use the BRRRR method.

https://www.biggerpockets.com/brrrr-calc/1076035

Hey thanks for the help. In this case, the owner is my mother in law. She sees it as a way to help her daughter, so she's offering seller financing with zero interest. She just wants a lump sum once the house is fixed up. I think I can get her to agree to $350k. I just ran the numbers on the BRRRR calculator. It showed a negative cashflow. I don't think I messed it up, by maybe I did.