All Forum Posts by: Jodi M.

Not sure on the HELOC because we owned the house we use for a couple years when we started. We get our construction/repair financing by either refinancing a house with equity or we take out a construction loan. On the construction loans our bank has an appraisal done for the after repair value and will loan us up to 80% of that. Currently we are doing one with an ARV appraisal of $76,000. We bought the house with the equity in one house and asked for a $35,000 construction loan towards a complete rehab. Had no problems, the house closed and the construction loan which had already been approved was ready a week later. Good luck!

Thanks for the feedback on my post. I will have to check with my CPA (he is also my RE attorney) about correcting any problems.

On a side note to that, if I only flip 1 house a year is it capital gains or ordinary income? I have 1 property that I intended to make a rental but ended up doing more work and creating more equity so I have decided to sell it. I held it an extra couple months (while rented out) to qualify for short term gains vs long term gains.

I think my ordinary income tax is the same as long term gains so if it's not going to be considered capital gains would I have any reason to keep it for a year(or longer)? Thanks

When starting out is it better to go with a large national broker or a smaller local one?

I will have my RE license in June and plan to start off doing it part-time while keeping my day job, using the license for my own investing. I hope to go full time as an agent/investor in a few years. I didn't know it would be very easy to find a broker to work with when I started this process. I haven't signed anything yet but I had intended to go with the smaller one which is investor friendly. They will let me buy/sell a few for myself without paying the brokers part along with a few other perks. Since then a large national company has asked me to come in and atleast consider them. I used that office in the past because I had a friend there who was my agent. I know most of the agents in the office and they have told me they think my experience (Although limited at 1yr) will keep me from needing as much trainning and feel I can be succesful right away. I don't know if they are normally investor friendly but they said they would consider matching any agreements the smaller company offered including the buying/selling 3 without paying the brokers part.

What questions should I ask both brokers and where am I more likely to create higher income? The local company has only been in our market for about 9 months and have already taken over 25% of the listings. Since I'm looking to replace my current income and go full time I want to go with the company that gives me the best chance to create income and invest. Thanks for any ideas!

We are new at this but we did use a 1031 on our first fix and flip house last year. Since we're new I can't be 100% sure we did everything right (although it didn't cause any red flags at tax time) but with the help of our title company and CPA we did use a 1031 exchange to purchase rentals. We bought a house in the spring spent five months rehabbing it and sold it. Instead of taking the profit we did a 1031 and bought 3 new properties which are currently rentals. We were told as long as we identified and closed within the correct time frame it would work and the gains would be defered. We also wanted some of the profit to put toward other things so our loan officer then wrote a loan against one of the properites and was able to give us some of the profit to use as we wanted. Talking to investors in our area not many have used a 1031 regularly so I had to rely on my atterney on where to start and who to call.

We looked into both options with different agents and decided to put each property on it's own policy because if we did extension policies a claim on a rental could affect the clost of insuring our primary down the road.

Michael Smith We've only owned our properties for a year or less so at this point I haven't inpsected for pests other than when we first bought and it was required by the bank.

Terry H. In Iowa the requirments are a 60hr prelicensure course plus the 12 hrs each for listing practices, buying practices and eithics. If you have any experiene buying/selling the online version shouldn't be to bad. It does require a lot of self motivation to get it done quickly. In Iowa you have up to 6 months to finish it so it would be easy to put it off. I'm currently a teacher and started the process in March so I could have everything completed when school gets out.

Terry H. Due to having a day job and the classes being an hour and half away I took the 60hr prelicensure course online. Listing practices, buying practices and Ethics had to be taken live so I'm doing those as weekend classes. Almost finished, I have Ethics and the test left.

Great information as I am working through the same thing :) Terry H. I am currently in the classes and should be up and running in June. We have also been investing in real estate for the past year doing some buy and holds and a couple flips. We put all of the inventments in an LLC which is in my husbands name. The broker I'm going with is a midwest company that allows me to buy/sell the first 3 properties a year without splitting the commission with the broker. After that it's a 50/50 split. According to them investing while I work as an agent won't be a problem. I just need to disclose my relation to the LLC on each transaction. Not sure if it matters but I'm only doing the agent part-time for now because I have another full time job. I hope to evenatually get out of the full time job and consentrate on being an agent and investing. Good luck!

We do not provide pest treatment for our tenants. I would treat the property if we found termites but otherwise it's up to them. Last year the city tried to pass an ordinance requiring landlords to provide quarterly pest treatments. The local landowner’s real estate club fought back and has so far kept the ordinance from passing.