All Forum Posts by: Jorge Perez

@Carolina Brembilla

Florida is a big state and I'm sure flipping opportunities will be available but speaking on Miami specifically SFH inventory is extremely low with realtors having buyers literally waiting for property to be listed so you will be competing with them in your flips. We have had to get creative and patient to find a flip that has a good margin. Even auction website prices are through the roof. We have actually shut down a lot of our activity and waiting for Q4 2020 and 2021 which we are hoping should present opportunities as the real pain of COVID in my opinion hasn't been felt yet in the RE market.

Hope this helps.

@Shirley Gregory a 1031 Exchange is short for a Section 1031 of the IRS tax code which specifies that you have to exchange “like kind” property so selling a rental and trading it for a primary residence property won’t qualify as an exchange of like kind property and you would have to pay taxes on it.

As always, speak to your accountant for confirmation.

Best of luck :)

@Jeff Adams You are probably going to get a million replies to this post on strategies and tactics but the most important thing in my opinion is mindset. You have to find your WHY(purpose) to be financially free through REI, set a definite goal and put your head down until you achieve it.

Start by saving, then start researching a 1-4 property that you can live in and rent the rest.m as a first investment.

With that confidence you can move on to bigger properties that ironically you won’t have to manage because a property manager does that job.

Doesn’t matter when you start, just take the first step.

Best of luck.

Hey Jacob, most if not all residential lenders(1-4units) offering financing via conventional/FHA or other loan products will want you to occupy the property for 12 months as part of the "primary residence" requirement for that loan down payment. Also note that loan down payment, which I classify as anything less than 20% will have a mortgage insurance premium or Private mortgage insurance which affects cash flow and may take up to ten years to come off.

Also, in residential property depending on if it’s a deed state or mortgage state(Check local laws) will require a human being and not a corporate entity to be on title and on the mortgage.

If you really want to get your assets into corporate entities you can buy 4+ units which now becomes commercial or you can pay off your mortgage completely and then transfer to a corporate entity.

Hope this helps.

@Darnell Nodarse Welcome to the world of real estate. It’s great that you are getting educated and hopefully applying that knowledge as real estate is in my opinion the best vehicle for wealth creation. If you need a guide or help in the Miami market or would like a rough idea of what it’s going to take to buy your first property, feel free to reach out.

Hey Stephanie,

I think the first step is to talk to your lender to see what the qualifying standards are for an FHA loan for a non primary property purchase. Once you know the down payment and expected closing costs you can work backwards to see the amount of property you can afford.

Condos are a nice place to get your feet wet in REI since a lot of the big expenses that you may incur are wrapped up in the HOA fee you pay every month vs Multifamily were you need real reserves and you are liable for all repairs.

Also, you need to address possible restrictions in these 55+ communities in regards to purchasing and renting. We purchased an asset in one of those communities and it is strictly a cashflow play, don’t expect appreciation in these communities.

Some questions to consider:

Have you thought about house hacking a condo? You can purchase it as a primary Residence with as low as 3.5%(FHA) down and then rent it after the first year.

Another thing to note is the Private mortgage insurance or Mortgage insurance premium the bank will charge you with any purchase with any purchase above 80% LTV. Sometimes these premiums can stay on for 10 years affecting your cash flow and wishing you put the 20% down to begin with.

Keep saving, prepare and you will do well in REI :)

Thank you for the clarification. A QOZ looks like a very promising alternative to a 1031! Appreciate your knowledge and time!

@Michael Ealyb Phenomenal deal structure and philosophical approach to real estate investing. Congratulations! I look forward to seeing more of your future transactions and structures!

@Eamonn McElroy Thank you for the clarification on the matter. I have a pending meeting with my CPA and he doesn’t have experience on QOZ I would love to connect with you if you consult for projects in the South Florida area.

@Eamonn McElroy Thank you for the insight. Am I correct in my statement which says... “In a QOZ fund investment you have to deploy ONLY the net equity in a replacement property” to defer the capital gains taxes?

As opposed to a higher purchase price and loan amount(if it exists) in a 1031 Exchange?

I am due for either a 1031 or QOZ investment in Q3-4 or this year so I want to get my strategy in place now. Thank you for your knowledge!