All Forum Posts by: Joshua Morton

@Chris Sellers thank you so much for the feedback.

Hello,

     I own 110 acres of raw land free and clear that percs.  My county just passed an ordinance saying you cannot sell land zoned for farming to a builder with anything under 3 acres.  I have a friend who is a GC and we have been talking about taking 15 acres and putting 5 houses on 3 acre parcels for sale.  

     I am also interested in mobile home lots because I could take several acres and create a MHP, sell the homes and have lot fees as a source of cash flow.  

     I feel that with the amount of acreage I own, I could do both of these options but I don't know if I should just stick to one of  them.

Any feedback?

I am purchasing a condo in Kill Devil Hills, NC that I will be closing on in June. I have a beach house rental in Cherry Grove, SC that is free and clear and cash flows very well during vacation season. I will be financing $210k of the new condo and plan on putting all of the rental income I can spare from my current rental towards the principal for the next few years. That combined with the rental income from the condo once I get it on the market should pay it off in 3-4 years.

I wanted some advice as to if I should just hold tight until the condo is completely paid off, or if there is a smart way I could purchase another rental property in the next few years if I find a good deal. I've read about taking out a HELOC on my primary residence and maybe using that to assist in buying another property, but I'm not sold on that idea.

I like the beach rental properties because of the quick turnover and bigger payouts. I have not delved into the long-term rental pool because of the nightmare situations I've heard from clients and acquaintances that have had them.

I feel I am in a good position to start expanding and am looking for avenues to do that. My primary residence is also paid off. Any ideas/suggestions is appreciated.

I am purchasing a condo in Kill Devil Hills, NC that I will be closing on in June.  I have a beach house rental in Cherry Grove, SC that is free and clear and cash flows very well during vacation season. I will be financing $210k of the new condo and plan on putting all of the rental income I can spare from my current rental towards the principal for the next few years.  That combined with the rental income from the condo once I get it on the market should pay it off in 3-4 years.

I wanted some advice as to if I should just hold tight until the condo is completely paid off, or if there is a smart way I could purchase another rental property in the next few years if I find a good deal. I've read about taking out a HELOC on my primary residence and maybe using that to assist in buying another property, but I'm not sold on that idea.

I like the beach rental properties because of the quick turnover and bigger payouts.  I have not delved into the long-term rental pool because of the nightmare situations I've heard from clients and acquaintances that have had them.

I feel I am in a good position to start expanding and am looking for avenues to do that.  My primary residence is also paid off.  Any ideas/suggestions is appreciated.

Hello All,

    I recently bought my sibling out for 100 acres of land directly off of highway 24/27 in Albemarle, NC.  This property has tons of potential for development given its location.  My goal is to develop it and still maintain ownership of the land if possible.  I am thinking residential or a combination of commercial and residential.  If there are any developers on here who would be interested in talking about some possibilities, please respond here and we can start a dialogue.

Quote from @Myrtle Mike Thompson:

As Alex just mentioned, the location of the lot is a big factor.  I just came across a recent sale of a 3 bed 2 bath home in North Myrtle Beach that went for $339/sqft.  Nothing super fancy or special, but it was east of 17 in a decent part of town.  Oh, and the house is almost 30 years old.  So if you can build a brand new one for $250-$275/sqft, you'll have some great options.  Short-term rent that sucker and if you're not seeing the returns you want then look to sell it for a profit.  

Dealing with my sister on this is the X factor.  I think I'm just going to cut the stress and sell it.  I can take the half I take and put it towards buying out a house we already own on 53rd Ave Ocean Blvd.  That one has already been renting for 2 years and generates income very well.

If I bought my sister out it would be with the intention of building and renting the property.  That area makes alot of money in the summer time from vacationers.

I have a plot of land willed to my sister and me in the North Myrtle Beach, SC area.  It is .17 acres and is appraised for $220,000.   It is in a great location and would rent well once something was built on it.   Building is around $250 a square foot in that area currently.  So after buying my sibling out for $110,000 it would take $500k to build a 2000 sq foot house there.  (Just an example).  

I have multiple people interested in buying the property, but I'm wondering if I would be selling a potential real money maker by selling.  It would cost a lot up front to build and I'm not sure if it's worth the money at this time.  I could also buy out her half and sit on the property until construction prices fall, if that ever happens.  

Any advice is greatly appreciated!

Quote from @Sam Applegate:

I'm more rational and financially minded than most. 

But if there is no debt on the properties and they're cash flowing well, I'd consider buying your sister out. You can refinance the properties and pull out cash. Take the cash from the refinance to give to your sister for her share. You now own the properties and she is free to do what she wishes. 

It'd be a win win. It's important that the properties can handle the debt load though as the debt and properties will now be 100% yours. If there is excess cash from the refinance after paying your sister you could use it to develop the land.

Happy to help with the analysis if needed.

If I am pulling out equity on properties that are paid off, how will that incur debt?  The house is cash flowing well.  The condo has a tenant year round and his rent isn't that much really.  The land is not developed, so I would have to build on it to rent it out.

Quote from @Richard Phillip Lewis:

@Joshua Morton Im sorry for your loss. I love to study the flows of life and the most basic principle in nature is the concept of CREATION. MAINTENANCE. DESTRUCTION, CREATION and the cycle repeats. It reminds me that often times of great destruction can create an opportunity for something beautiful and new to come through and be made. 

My family has owned a beach house at the Jersey Shore all of my life. We rent it out all summer and just  started renting it in the winter. My grandmother passed away in 2018 and myself, mother and sister inherited the beach property. Together we manage it. When we inherited the property it was as my grandmother called it a "Beach Shack" which she wasn't wrong. We own the property free and clear like you, so we did a CASH OUT REFI and used that money to renovate the house. You just have to make the income from the real estate covers the mortgage, taxes and insurance. Not only did this renovation help to secure the property for future generations but it also allowed us to increase our rents and turn a good profit. 

In your situation with your sister it sounds like she has no interest or sees the value in owning real estate. I would have a conversation to see what her vision and expectations are for her inheritance, then use the CASH OUT REFI method to get her the cash she seeks. 

If you have to sell something I would sell the land. That sounds like an easy way to get cash. Unless the location has some great opportunity, then I would develop the land, then rent it or sell the developed land. 

If you want to keep all 3 properties you might try to sell her on paying monthly cash flow payments from renting the property and put each property into an LLC. As an LLC you both would own the LLC as partners which makes it easy to buy her out in the future because you own the LLC and the LLC owns the property. Its equity ownership rather than direct real estate ownership. LLCs to my knowledge are difficult to get a mortgage on so talk with a lender first.

I would most definitely NOT sell the beach house. Condo's can be annoying because of HOAs telling you what to do and Land can be sold or developed and then sold or rented. 

You have alot of great options here and Id be happy to offer more feedback if you have more questions. Im passionate about creating generational wealth and it sounds like you have an opportunity to do just that with this real estate. 

Good luck!

Thank you for your thorough feedback!  I would ideally like to keep the land and the house.  I would build on the land and rent that out as well.  have investments that I could sell to cover some of the cost, but I really do not want to dip into that.  There is a home in NC which I now reside I have to buy her portion of and 100 acre farm I'm buying from her also.  I want to develop that land as well.  If I can pull equity out of each of these properties to pay her that would be fine because I know I can make residual income on each of them.  It just will be VERY expensive from the outset.  But this opportunity is being able to purchase each of these properties for 50% off what I would pay for them if I was to by them outright.