All Forum Posts by: Matt Leber

@Dave Foster thanks! Thanks for all your guidance through the process too. Hoping to get #2 closed soon!

@Clay Lehman it’s on the smaller side about 1100 sq ft but it’s a 3/2/1 on a pretty private lot and I think I can get $1600-1650. I listed at $1650 and my phones been ringing off the hook. Now for some screening…

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $197,500
Cash invested: $49,500

Part 1 of my 1031 exchange of selling one of my older properties that was not performing as good as I would like. Trading into something that is newer and in a more quality renter pool. This house was built in 2009 and is instantly my most renovated property in the portfolio. My goal is to rent to long term tenants who will like to stay for multiple years and reduce my turnover costs, while also entering a market in Ocala that I believe has room for appreciation growth.

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

Wanted to do a 1031 exchange from older (junkier) properties into something that was newer and would be less maintenance and a better fit for my portfolio long term hold plans

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

FSBO

How did you finance this deal?

Conventional loan but used 1031 exchange for the down payment funds

Hi all,

I’ve been a real estate investor for a few years now with buy and hold properties in central and north Florida. I am considering 1031 exchange of a property of mine in Jacksonville into an investment property in the Ocala FL Marion County area. Looking for an agent with boots on the ground in that area who is investor friendly and experienced with the 1031 exchange timeline urgency and process. I will also be looping in a qualified intermediary for the exchange at the right time. Since the 1031 will allow me only 45 days to identify the new property, I would like to connect with an agent who has high availability to show me properties on Fri-Sun most weeks. Thanks.

@Justin V. Usually takes them about 2 weeks to turn and about 6 weeks to qualify someone. Takes them about a week to get the scope list to me after the tenant move out, I redline items that aren’t needed day-of and then the get their contractors going and it’s done in second week. I’ve seen it go 3 weeks if weekends or holidays get in the way of communication. They don’t start marketing until the unit is turned and showable. We usually get tons of interest bc the units are affordable class less than 800 per month, but a lot of the applicants have issues qualifying due to credit or criminal history or issues submitting all the necessary paperwork. That’s what the PM tells me is the major drag on the full time.

I’ve considered switching PMs multiple times. I think they’re too slow too. I just always revert back to reminding myself of year 1 for these properties and losing all the original tenants bc they resisted the change from mom and pop collector to PM rules. I have a little fear I could de-rail what actually is working now by rocking the pm boat again.

@Dave Foster that’s not my goal at all, which is why we switched them over to property management right away. The tenants from the old LL weren’t a fan of the rigidity of the new rules and we lost all of them in the first year. Which was sort of expected.

But yeah, it was my first venture into semi-long distance and low income property investing, and I think I’ve gained education about both of those though it.

Anyway, I might be asking you about 1031 soon!

@Nick Barlow I ran the numbers and I can exchange into 2 newer build SFH in the 185-200k range with rents in the 1600 range and make it work. I have a couple markets nearby that I could find these and self manage (I already self manage 4 SFH and that's fine). Returns would be a wash or better if these two SFH perform at all alike to my other SFHs. Plus better tenant pool and appreciation potential.

@Alex Forest I did. I took this years return on the duplexes and bounced it off the expected return of exchanging for 2 SFH in the 185-200k range w rents at the 1600-1700 range which I've identified a couple markets where this is possible within 1.5 hrs of my home that I could easily self manage. Cash flow return looked like a wash even going from 4 down to 2. Overall return if counting pay down and appreciation potential would be better on the 2 SFH. I think they would be more quality tenant pool and properties. Another reason I'm leaning this way is that my overall portfolio property class would become much better, bc I would be eliminating the ones in the worse neighborhoods. I'd like to get my daughter involved some day and I'm not taking her to certain neighborhoods if I can avoid it hahaha

@Cory Binsfield I am 100% looking to move them within 1.5 hrs of home, and I could cut out the PM. I self manage the other 4 singles I own and effort is minimal, I actually like it most of the time. Getting them closer to home base is definitely part of my strategy if I go for the exchange.

@Tucker Cummings this is a great, simple way to look at it. I’m not sure I subscribe to ROE over all, as I would like to have at least some paid off properties one day (I’m sure lots of BP folks find that controversial). But I’m going to bake ROE into my spreadsheet for each property as another metric I need to consider. Especially on this set of properties the ROE plain sucks as you have pointed out. Thanks again.