All Forum Posts by: Ciarraghe G.

@Jay Hinrichs Those prices seem decently reasonable. 

I'm just wanting decent quality but not high end- for example vinyl plank floor, standard white cabinets, basic grade granite. The Driveway, Septic, well and power are already in place, we logged and prepped the site last spring so that's also done and paid for, although we still have to dig for the foundation. We haven't yet pulled permits. 

The excuse I keep getting is the lumber prices. Subs being in super high demand and costing 2-3X normal for labor has been brought up as well more than once. But based on doing 2 rehabs in the last year I'm not seeing the subs costing THAT much more to justify why things are adding up so high. Sounds a bit like people in this area of the world are taking advantage and price gouging above and beyond lumber prices because they hear "custom". 

Sorry OP for hijacking! 

@Jay Hinrichs haha, all out of crystal balls, unfortunately. But yes we are building a 3K square foot home- nothing fancy, but a custom floorplan... which is why we're reeling, because it's nothing fancy. I'm getting quoted 100K or more just for the lumber, not including trusses. Price per square foot when we bought the land was around $150 estimated by what the mortgage company was seeing and now we're seeing quotes for $350-500 per square foot!

@Jay Hinrichs since you're also a local Oregon builder, do you think it's worth building here (rural PDX south metro area) in the next year? Or take the risk that prices go even higher by waiting? We're trying to decide if we build this year or wait until 2022. Everything seems ridiculously overpriced right now that we're getting bids 100-150K over the budget set based on prices when we bought our land in mid-2019. 

Yes, it's called a Homestyle renovation mortgage,

https://singlefamily.fanniemae...

@Steve Morris I agree, it is a slow infection that eventually spreads to everywhere the infected people move to. I'm just hoping to outrun the infection as long as I can and then in the meantime try to find another country- if one even exists, which is not yet infected or is at least actively fighting the infection. 

I don't know that the activism is slowing, I think it's regrouping for a more aggressive push, but that's just speculation. 

So to close the loop a friend of mine called the representative about it yesterday and they told her that for now it will not move forward, so it's a huge sigh of relief. She asked for it in writing so we'll see if she ever gets it. That at least buys me time to make some moves without having to panic sell. 

@Dave Foster Thank you, that's helpful. 

@AJ Shepard This has always been a rental property, I've never lived in it and never wanted to, too many people too close together. It's also very far away from my job so it's never been an option, regardless. 

We do need the renter to give us a preapproval letter but she was getting her stuff together so we should hopefully have all ducks in a row, although things can always fall through no matter how good things are set in place at the start. Anything can happen. 

@Brad Hammond Haha, a good but extremely stressful problem! It's been keeping me up at night for sure. 

I'm not sure what kind of investor I am, truly. I'm just trying to find a way to retire as fast as possible with no debt and plenty of money to live on without working, so good cash flow is important (to pay down debt or make further investments) and so is appreciation (or at least not retraction) so that I don't run the risk of being under water and losing everything. 

I'm very risk averse (I'm a CPA). So I'm my own worst enemy when it comes to investing, I'm much too careful on the front end and extremely easily spooked out on the back end. I've walked away or exited early from dozens of deals/investments which all would have been fantastically profitable if I'd been less risk averse. 

My model so far has been A quality SFR, and I have very high income and credit standards that tenants have to meet to qualify for my rentals.

That's all partly why I'm trying to go to other cities as I am trying to spread out my risk. The Delaware trust thing is scary to me because you're locked in- the more I read about it the riskier and more painful it sounds. I need lots of exit options to feel comfortable I guess. That's why SFR always feels "safe" to me because it's easier to sell if necessary since the market is so broad. That's partly what's kept me away from multi-family, they're harder to sell if you have to get out fast.
I'm assuming when you reference a $1M property you're talking about a multi family? I also think of multi family as a lower quality tenant which may or may not be reality. 

Hello! 

I have a townhouse that is rented under a 2 year lease with the renter's intention to extend 5 more years. However the renter just approached us and asked if we'd consider selling the rental to them. We weren't intending to sell but now it's an interesting thought and I'm wondering how best to proceed. 

I currently have 3 properties all in the Portland, Oregon market. This one has 230K in equity and a 550/mo cash flow on a 4.75% 30 year mortgage. If I refinanced at 3.25% that my lender is offering me, I could get that up to 850/mo, which is what I was starting to work on until the renter approached me. My taxable amount would be 125K from appreciation, plus depreciation recapture of another ~60K on this property so this would force me to either pay a LOT of taxes or do a 1031 exchange which is a world I know nothing about and is frankly terrifying. 

So, I have a couple of questions- is there anything unique about selling to a renter? The rent is $2400 a month and there are 14 months left on the lease so I'm losing a lot of guaranteed income by selling, however I feel like I could buy multiple properties in cheaper markets with the amount of cash this will free up, which will probably replace the $850 a month cash flow by a multiple. 

I expect our market will continue to appreciate through the summer as well so delaying is in my favor in that aspect. One attractive thing about selling is that this community is due for a major special assessment in the next 3-5 years and the HOA fees are already high and increasing 15-20% per year. I believe the next project due is re-roofing and then painting.

I'm worried about not being very diversified as well being all in on one market, my whole portfolio here is about $2M in market value, and if I were to invest elsewhere I'd probably want to spread it out among 3-4 different areas to help spread out risk. 

I'm also wondering if you buy a property in another country, if that is covered under 1031 exchange or not? The 1031 scares me as it takes me an average of about 1 year and looking at hundreds of properties to find just one, so the short timeframe feels impossible to find several in other markets to use up all of the funds.  

Does anyone have any opinions on the best way to go here, and/or any experience selling to a renter and potential pitfalls? 

Thanks everyone :)