All Forum Posts by: Latimer Luis

I spoke to a loan office when I was thinking of doing a 1031 and have been in touch with a consultant from the One brokerage, but haven’t ran this by them yet. 

I am in contract on two newly constructed townhomes, to be completed by the end of the year. My original plan was to 1031 into these properties to take advantage of the equity I've built, but the cash flow on my current rentals are actually really good and so now I'm not so sure this is a good plan. 

Contract prices are $289 and $293K, with the more expensive one being an end unit. Current comps are between $330K - $340K based on recently sold townhomes in the same complex. 

My goal would likely to be to do STR in one and long-term in the other OR STR one and flip the other. It is in a STR-friendly market.

Are there financing strategies here that I can use to fund these properties without having to sell my current ones? 

I also want to add that it's not simply about the death or mortality rates. That is not the only reason why it's viewed as a "deadly virus." There's a metric called "R naught" that measures the number of additional people an infected person can transmit the disease to. This metric is important because the higher the number, the faster the rate of infection.

think: compound interest rates. 

H1N1 had a lower R Naught score compared to COVID-19. Yes, The numbers were astonishing from H1N1 and we've taken what we've learned in 2009 to know that our hospital systems couldn't handle anything worse; hence, the shutdown

I jumped on it because it was a nice home in a convenient location. We were thinking that if we were to move to Raleigh, we were going to live in the home for a couple of years and then reap the tax benefits after selling. It wasn't about the numbers for this particular house, haha.

@Adam Schneider I chose Raleigh because I was considering moving there at the time and thought I’d plant a seed. Its in NE Raleigh by the Triangle Town Center. Yes you hit on a lot of the points. I do think cash flow is important, but maybe timing isn’t right.

@Nathan G. Definitely disclose that you own the property and try not to smile too much when meeting prospective tenants. They’ll walk over you if they think you’re too nice. Be honest, firm and be sure to screen your tenants thoroughly. Congrats and good luck.

I would hire a PM if you think you cant handle saying no to a single mom with 2 kids and sob story. That was the toughest thing to do in my own personal experience.

@Frank Geiger its appreciated by about 10%. youre right and I will only break even but the experience was worth more than that. I appreciate your opinion and feedback on sticking to my current strategy.

Hi BP community -

I'm speaking with tenants later today who presumably will want to move out of the property by the end of the month, purely based on the tone of their text message. They had expressed in the past that they would eventually move to a larger home. They were good tenants, so it's a bummer. My wife and I are due in 6 weeks and so I'll need to make a decision quickly on how to move forward before things get really out-of-hand.

This was my first out-of-state investment property and I purchased it less than 2 years ago (Dec 2017). I didn't hire a PM because I wanted to know the ins and outs of being a landlord and what I'd actually be paying for. Luckily for me, I found decent tenants and never had to consider a PM to this point. My other properties do have a PM though, for what it's worth, so I definitely do see the value of having one.  

The property is in Raleigh, so the appreciation has been decent, which is why the decision is a bit hard for me. The cap rate is low though; thus, cash flow is minimal. Purchased at 187,500 and renting at $1280, but market rate is $1350+.

Should I:
1) sell the property and try and 1031 it, which will allow me to stick to my new MF strategy?
2) hire a PM to continue to rent it out and continue to see how much it'll appreciate? 
3) just sell it without an exchange and just pay the taxes?
4) consider something else?

@Eric Thiel et al

I made it clear to him from the start that I wasn’t going to have him manage any of my assets and that I was only after a financial plan + advice over the next year, so I paid an annual fee upfront. He seemed fine with this type of engagement and he doesn’t seem to be steering me towards any type of investment yet.

After reading these other comments, it now seems like I actually found a decent CFP so thank you all for your insight.

@Mark Rosario

Eventually you’ll have to replace a roof, evict someone, or something major will cause you to dip into your savings.

I hope it doesn’t happen but would hate for you to not plan for it.