All Forum Posts by: Justin Sherman

My goal is to gather enough investments to have a total non-W2 income equal to my current income. Time line is by 2030. It is an aggressive goal but that's are what goals are for.

Ok, so your timeline is 6 years to match your income for 2024, yet you assume your costs are going to remain the same?

Would your 2018 income make sense for 2024?

Just like too many on this board, you're not going to replace your W2 overnight and this is almost overnight. Not without some extreme luck. You should look to build a portfolio that can hit at all angles, depending upon the capital you can employ. Not have fixated timelines like 2030 because they mean nothing and will force you to make impulsive decisions, leading to far slower and likely arduous decisions later. You'll also get very stressed, and likely depressed with the route you took. Every 10-15 years, you'll need 40-50% more so please do the math appropriately and if you ever go full nonW2 there's so many more costs to assume(retirement contribution, health, dependents, etc.)

Let's first focus on reducing all the personal debt you have, outside of a primary mortgage. If that's done, look at investments that fit for your 2024 barrier of entry but have the risk tolerance to hold for the next 15 years +. If you find multiple--great--if you can't afford multiple I would recommend swinging on the big rocks first. RTR are what they are, I would recommend if you're truly going to invest in physical RE to do it at your level. For turnkey, you're paying the premium today instead of realizing it later. And with physical RE, there's a high likelihood your expenses on top of the premium are going to be realized a lot sooner than true cash flow.

Remember fast solutions, have slow problems.

I've been creeping on this thread since I am in a very similar situation. This post was really great and makes a lot of sense. When you first read all the fun books that get you fired up about REI, theres a sense of FOMO and a "i need to catch up" feeling (speaking for myself). This reply kind of sets that at ease and is a reminder to work methodically and intentionally, play the long game.

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Quote from @Christian Ehlers:

Seller finance would be a clean and simpler way to set this up if you have money for a downpayment but cannot qualify for a traditional loan. If they are worried about the mortgage having the Due on Sale clause called you could set it up as a contract for deed instead so that the title doesn't transfer to you and the due on sale can't be called.

Thanks for the reply! Just doing some quick googling on contract for deed, and it actually looks like it would fit my scenario perfectly. When the payments are finished and the deed/title are in possession of the buyer, is there any Due on Sale at that point? Also, is contract for deed a synonym for loan assumption, or is that still a separate/different process?

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Washington, DC

First time attending (meetups in general as well) looking forward to it! Is there anything in particular needed to prepare?

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Washington, DC

Quote from @Brandon Wagner:

Sounds like a great opportunity! You should definitely capitalize on it if your family is willing to work with you on this. A few options I would recommend to you.

1) You can always have them sell it directly to you. You don't have to put it on the market, and deal with the competition. You can do this with a title company. You may want to find an lawyer or an agent to help you with the paperwork. The title company can probably provide this for you too. (You can find an agent willing to do that for 1% of the sale price)

2) You can do the trust strategy too. Although you may not want to, that is probably the most effective way for you to inherit the property and pay the least amount of taxes. Just including it because it is an option.

3) You could discuss directly with the family member to find something that works for you and them in the creative finance space. I wouldn't overthink this too much. Just understand what monthly payment you need in the end, (with loan, taxes, insurance, utilities, etc) to still be able to make X amount of profit after you start renting it out. Then set up the creative finance in a way that you can make money.

4) You could form an LLC or an LLP with the family member use that to define who is responsible for what, and how the cashflow/equity is split between you both.

5) You could be the asset manager/property manager for your family member. They own all of the house outright, you take a small fee of the rents for the work you do for them managing the property.

Long story short there are lots of options. Just need to find what works for you and them

Thanks so much for the response, you gave me a good sanity check.

It's not that I dont want the house to be in a trust (the current owner is putting it in a trust regardless, which i agree is very smart) i just want to make sure they feel "taken care of" financially instead of making a donation. But I suppose if the house is going to a trust regardless, getting money to them probably is more of a personal finance/tax discussion rather than real estate discussion, so I appreciate your feedback there.

It will probably be a mix of trust ownership, me being asset/property manager, and sending them a check every month (and somehow a nice chunk up front). I just wanted to make sure I wasnt missing anything special I wasn't aware of. Thanks!

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Washington, DC

Hello, I'm looking for options/opinions/ideas on how to basically take over ownership of a retiring family members townhouse in northern virginia, for the purposes of renting it out long term.

You probably ask, "Why dont they just put it in a trust and name you the beneficiary?"
I don't want this to be a charity case , so I'm trying to figure out a way to "purchase" or "finance" the house without actually going through the traditional home buying process. I.e. i want this person to get their equity out of the home (provided by me) without having the tax headache and drawn out process of a sale etc..

Folks local to the DMV area know how precious of a gift it is be able to have a lead on a nice townhouse , to not have to compete with other buyers and drive the house price up, so that is the advantage i have here, and i consider that a gift enough , without directly inheriting the house.

They arent hurting for the money, so im trying to think of creative or long term ideas, some things that come to mind:
1.) lump sum up front (maybe using irs gift limits?) and then split rent 50/50 until a limit is reached, once limit is reached i take over deed
2. ) somehow seller financing with a generous term

Please let me know if i am overthinking or getting too whacky with this, I'm just curious what others would do.

Some relevant details:
1/2 way through a 15 year mortgage
located in northern va
will be put in a trust regardless for asset protection
zillow estimate is 690,000

TLDR
want to take over family house to rent it out long term, but dont want it completely gifted to me, how can make sure owner gets paid over time?

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Washington, DC

Hey Everybody, hoping to give this post a bump. I'm literally in this same exact scenario with the same exact questions, thought I'd ride along here instead of creating a new post :)
Looking forward to more replies, hopefully OP does not mind, thanks!

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Newark, New Jersey

All Forum Posts by: Justin Sherman

Justin Sherman has started 1 posts and replied 7 times.

Post: looking to invest out of state, I keep going back and forth with a bunch of states

Post: Where to invest my capital

Post: Advice on townhouse transfer from family member. (northern virginia)

Post: Arlington Cash-Flow Breakfast Club

Post: Advice on townhouse transfer from family member. (northern virginia)

Post: Advice on townhouse transfer from family member. (northern virginia)

Post: Buying our first Investment property