All Forum Posts by: Michael Bettencourt

HiSarah Dumm, Im in the Navy and I have 2 houses in San Diego rented to Navy. I always have trouble meeting the 3x the rent rule, I think in other states that is a great standard but Californias are willing to pay a larger percentage of their income for housing. 3x $900 is a good rule 3x $2600 for a 3 bed in Clairemont is difficult. The pros of military tenants: I agree with Chris that if you have the right work info their Commanding Officer can easily garnish wages if they become delinquent. Also Financial issues can adversely affect their careers. Their pay and job is fairly secure and only increase. They're likely to be pleasant, honest and respectful. Their not con artist, sue happy or professional tenants. The cons: By law they can get out of lease agreement due to new orders or even a deployment. They're likely to transfer out of the area every 3 or 4 years. Ask for a copy of there orders, sometimes they come home from deployment need a place to live, sign a 1 year lease then 2 months later send you orders showing there transfer out of the area. If you have a house be careful renting to 3 or 4 junior (E-5 and below) personnel, if there like me when I was young your house will soon become a mini Frat house. Don't mistake income for maturity, I rented to a dual military both E-4's (it matters) with the crazy housing allowance their combine income was six figures. They we 20 and 21 and I was reminded of that weekly feeling like a father/ landlord. So there was more cons then pros here but I think the Pros outweigh the cons and I always rent to military. Just yourself a favor and get a copy of their orders and make sure they don't rotate within the year.

@ Mark Fehlman there both 3/2 with 2 car garages on 6,000 sqft lots, ones in Claremont the other is in Spring Valley. I am looking to get close to market value because I am currently making repairs and renovating.

Yes I will be stationed at Great Lakes as the Navy's equivalent to a drill instructor. I wasn't planning on holding onto the rentals just because I'm looking for more of a cash flow position. Even though I bought them at the right time and have equity I'm barely breaking even. It was an equity investment and I have accomplished that. It's hard renting a $550k home for $2500 even if my payment is $2100.

Current situation: Found out I'm moving to Chicago from Southern Ca. In May or June. I own my residence in Ventura Ca. and have 2 rentals in San Diego totaling roughly $450k in equity. My plan: Sell both rentals in San Diego, 1 will be tax deferred due to previous primary residence and the other I want to 1031 exchange into a 8+ Multi-Family anywhere I can make the numbers work. The other cash use as down payment to purchase a live in flip and a couple SFR's. My questions: 1. I'm I crazy for searching multi families in 6 or 7 states if the property meets my criteria? (I'm using Redfin and LoopNet). I have excepted that I'm not going to get a steel trying to invest out of state, short fuse and with a 1031 exchange. 2. What's the best way to find commercial multi family deals? Do I need to narrow down an area first? 3.Am I foolish to think that I could qualify for a commercial loan up to what I can afford 30% down on with the right deal? 3. Is successfully executing a 1031 exchange in my situation a stretch? 4. Am I missing anything? I much appreciate other opinions and advice.

@Lane K. Good point! is there a point in negotiations you recommend disclosing that I am looking to do a 1031?

@Dave Foster good point thanks Dave, I'm sure most turn key providers are more 1031 friendly and convienent then a standard sale

Good evening BP,

Has anybody used or know of a turnkey co. that provides a one stop shop for a 1031 exchange for a turnkey property?

I figured things would be smoother if one company handled the whole process. Any thoughts? I have roughly 200k in equity and looking for turnkey because I live 4 hours from the home and am moving  out of state shortly after the sale. Thanks!

Hi Richard, I originally didn't want pets in my rentals so I charge a high pet rent of $100 a month I thought nobody would take. I was wrong and found a lot of tenants were happy to pay an extra $100 a month and $500 additional deposit. I'm not sure if that is a sign that my rents are too low? As a percentage of total rent it is likely less then your example though, they are in San Diego and rent in the mid $2000.

Thanks a lot for the help!

Good afternoon BP,

I purchased a primary residence in NOV 2015 and recently decided to sell a rental home, both have a similar value but the rental has $150k +/- equity. Is there any way to structure a reverse 1031 exchange using my recently purchased home? Thanks for the help!