All Forum Posts by: Kirby Davis

@Jay Hinrichs Thank you! Definitely the kind of advice I’m looking for from someone with such great knowledge and experience.

@Steve K. We want more flexibility. Not completely passive. Not tied to the business ALL the time. More managing what’s going on - which can be a mix of needing to be onsite and a mix of being able to handle things remotely - whether that’s from home from time to time or from Italy for a two week vacation a couple of times a year. We also like to flexible enough to be at our kids’ games/recitals. Flexibility and the ability to manage your own schedule are important to us.

@Steve K. So your strategy is don’t ask other investors who have been successful for advice. Got it.

@Jay Hinrichs Thanks, Jay. I’m 35, and my husband is 39. My goal is to be out of corporate America within the next 10 years. Have enough money to travel and continue investing/managing what I have while no longer being in the 9-5. I have a strong income but want to maximize cash flow in order to continue investing so that my income is completely replaced and then some.

The only debt with the property/business will be paid off with the sale of the property, as we only have a real estate loan. The debt that I would pay off would be all personal debt - house, car, etc... ~$400k. 

We definitely don't mind putting work into something, but we'd like a more flexible lifestyle. The current operation is VERY demanding. 

Sorry, to clarify the debt piece would be personal - house, car, etc... ~$400k, and I'd have no debt whatsoever. The only debt associated with the 'business' is the real estate, which would be paid off during this transaction. Also, the property is the value of the business, so it's one transaction - a real estate transaction. One of the beauties of agriculture. 

Looking at the property you sent over. 

If everything you say is accurate, I'm not sure why the seller would sell at a discount. The property is great, and they can easily list and sell in less than a week with more money than you can pay regardless of commissions or a $5k allowance needed to make the house perfect... Have they indicated that they are just so over it that they'll take almost $150k less than what they could net in a week just to avoid dealing with an agent/listing? 

We have a farm that we built 2 years ago under contract to sell, which would net us ~$800k. This cashflows ~ $100k to us annually plus the tax benefits net us another ~ $50k in tax savings thanks to depreciation impact on my W2 income.This is not at all a passive investment, though. My husband spends a LOT of time managing it. 

We haven't been looking to sell the operation/real estate, but we were approached with an offer that we couldn't refuse. 

If the sell closes, what would be the best options for the $800k? 1031 into something else? If so, what type of investment - we obviously want to maintain strong cashflow and would want the next investment to be passive or to at least be a business investment that required oversight/management but not day-to-day grind. Curious on recommendations that net strong cashflow at this level of investment.

Or, take the cash, pay our taxes, use the rest to pay off every bit of debt we have, then use the ~$200k remaining to start investing completely passively to (hopefully) quickly replace any need for W2 employment going forward?

Depends on the market. Are you in a small town where everyone knows everything or a decent size city? If it's a decent size city, I wouldn't hesitate at all. (Side note - I'm from Memphis; if you couldn't rent a house someone was shot in, a significant portion of the houses in the city would be vacant... Ha.) As someone with marketing/business mgmt experience in a Fortune 100 company, I'd also go with this same evaluation criteria - size of city. In a pond, a catfish looks big. In the ocean, it'd be irrelevant. Weird analogy, but you get the point.