All Forum Posts by: Matt Amundson

I appreciate the input from all three of you!

@Jon K. Thank you for the link! I will read through it right away!

Hey BiggerPockets Family!

I have a question about buying houses with tenants already in the house. I have an opportunity to buy a couple single family properties from an investor looking to sell. This investor currently has tenants in the properties but the rent he is charging is super low for the area. The tenants are month to month. Everything looks good on the properties if I can double the current rent. 

What do I need to do to assure that I can get the rent I need to purchase these properties? Do I need to give a certain amount of time for the tenants to move out after purchase if they will not agree to the new terms? Can I even get them out of the property if they are on a month to month lease right now with it being winter in Wisconsin and COVID?

This is the first time I am dealing with a property that has tenants already so any help and guidance would be helpful! Thanks!

Thought I was a newbie to real estate until reading this book and saw that live in flip was a niche of real estate investing! Now after reading about the chapter talking on live in flips, I had the realization that I now have 4 plus years of working in real estate investing. 

My first property which I am in the process of selling was a live in flip project! 

After the success I have had with this first property I am even more motivated to continue to grow my real estate portfolio into SFH rentals and to continue to live in flip on my next property. The home that I am moving into is another project home for me. I saw this home as being closer to move in ready than my last house, but also saw it as under valued. With a little work I again plan on selling this house in two years at another profit!

Just think that it is crazy that something I thought was just a random thing I did once is a proven real estate investment technique. Now going forward this is going to be part of my process on how to purchase more SFHs through live in flips. 

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $62,000
Cash invested: $15,000
Sale price: $144,000

Accepted an offer to sell the house at $144,000 and close on October 16th! Looking to now use the profits from my first house to reinvest in SFH's!

What made you interested in investing in this type of deal?

My original thought when buying this property was to one day turn it into a rental property. Buy it and slowly fix it up while living in it. This year I finished all the repairs that I had been putting off over the years and started looking into another house to move into. During that process my realtor thought that I could get between 135 and 150k for the property which in turn made me think that the profit would be enough to buy two SFH instead of just this one as a rental.

How did you find this deal and how did you negotiate it?

I found this home through my realtor at the time. It was a HUD house so I did have to live in it for min. of two years which was what my plan was in the first place.

How did you finance this deal?

Traditional loan.

How did you add value to the deal?

I added value by gutting the bathroom, renovating the kitchen, putting new flooring in the living room/ hallway, and putting in a new driveway/ extending the driveway.

What was the outcome?

Outcome was in five years I took a house I bought at $62k and sold it for $144k. After putting about $15k of work into it.

Lessons learned? Challenges?

To manage time better and renovate quicker. Could have flipped this house after two years instead of 5.
Finding great help to renovate can save you time and headaches. Trust professionals and do not take every project on alone.

Really just looking at how do I protect my money and maximize my money to work for me!

Looking into flipping houses with a buddy, but wondering how everyone goes about not paying a capital gains tax after the flip? I am also getting into rental properties and wondering if it makes sense to put it into a 1031 with the profits to reinvest into rentals or do you just take the tax and reinvest it into more flips?

@Dave Foster Thanks Dave for the insight! So I am curious, because I just bought another house and close on it in October. I was planning on living in this house, but if the market stays the way it does I think I could throw some paint on it and turn around and sell it for more. Would I then have to put that money in a 1031 to keep from a capital gains tax?

@Cody Barna So, I have been in it for five years now would I still have to pay capital gains tax? Otherwise, I was going to take that profit and put it into a 1031 and reinvest it into a couple of properties. What are your thoughts?

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $62,000
Cash invested: $15,000

Currently, have this home on the market at $149,500.

What made you interested in investing in this type of deal?

Was looking for my first home and wanted to make it into a rental one day. After remodeling it and looking into other houses to buy in the area I decided to list the house instead of renting it after my realtor thought I could sell it for 150k. I am now looking to take those profits and put them into my first couple of rental properties.

How did you find this deal and how did you negotiate it?

I found this deal through my realtor at the time and my bid on the house was accepted right away.

How did you finance this deal?

Took out a conventional loan on the house at 62k.

How did you add value to the deal?

- Remodeled the bathroom
- Remodeled the kitchen including taking out a wall splitting the living room and kitchen.
- New flooring in the living room and hallway.
- New front door and garage access door in the front of the house.
- Painted the entire interior of the house.
- Tore out driveway and widened it.

What was the outcome?

Just listed it two days ago and have had five showings so far. If it does not sell I will rent it out at an annual cash flow of $5,280.

Lessons learned? Challenges?

That remodeling bathrooms is a bigger chunk then you want to bite off and have professionals come in right away. Had a professional come in to do all of the plumbing and electrical once I tore it down to the studs, but this was after attempting by myself.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am currently working with Maureen Liebzeit and would recommend her.