All Forum Posts by: Leo Watts

Where do you live now? What areas do you like? I generally think investing in an area you know or like is the best strategy, as long as numbers look decent.

Have you gotten any quotes from builders? Don’t know that is achievable unless you are GCing yourself.

I think it depends on your goals and how much the 1031 is. How much cash you have to play with and how much return you’re hoping to get. How much you’d be open to financing, what type of tenants you want, how long you plan to hold, and whether you’re looking at a cash flow or appreciation play.

Also, 1031s can be fairly tricky to execute due to some of their stipulations, most particularly the timelines of identifying replacement property and closing, and then having your money tied up if you don’t close. I know because I attempted one once but backed out of the purchase. The benefits really depend when counted against how much capital gains you will face versus a decrease in flexibility when buying a new property.

I would buy a rowhome I can legally subdivide into two units in a desirable area with a strong tenant base though!

What’s the upside in this property vs a different one?

@Nick Thomas

I mean like, if you wanted to move somewhere else if your family grows, or your job moves, can you rent it out at a profit? I’ve seen a lot of situations that pop up and people feel “trapped” by a real estate asset that doesn’t cash flow and or can’t be resold without talking a loss.

@Nick Thomas

Paying at the top of the comps and it needing a fair bit of work makes me nervous, especially because condos are not generally flying off the shelves right now. Depends where you are exactly.

Not all off market deals are deals. Sometimes sellers actually get more money if a property never hits the market believe it or not.

I also look at potential exit strategies. What would happen if you wanted to move in 2 years? Can it cash flow? Will your equity gain make selling worth it?

Welcome!!

Considering Front Royal VA as part of "NoVa" is a bit of a stretch. I think your demographic and rental considerations are very different from what you'll have in a true DC suburb. Lower rents, different tenant base, but also likely lower acquisition cost.

@Aditya Maini

Like Joaquin said, it’s a pretty good place to start as a young investor.

If you can rent out 4 rooms at 800 a piece, you can cash flow about $1000 a month.

$1000 a month is cool. But also living for free is a big benefit as well. If you were paying $1200 per month for rent before, then your net swing is + $2200 a month.

If you do that for three years your net worth gain is $80,000. If you also factor in 5% appreciation on a $350k asset (this is not guaranteed), that’s another +$55,000 equity gain.

So by renting out rooms in your house you could gain $135,000 in equity in 3 years, not counting tax benefits, barring any major downshifts in the market. Not bad!

@Patrick Speller

I have a few recommendations depending on specs.

Square footage, finish out quality, overall budget, style of home.