All Forum Posts by: Marcus Kennedy

Awesome story Doug. Like the others have said before me...you learned a crap load on this one project and have gained invaluable experience. I hope you start your next one soon and kill it!

Well I am a real estate agent so I wouldn't have to pay fees on the selling side. I'm thinking I will likely assess the situation closer once August rolls around. I don't have a whole lot of capital tied up in the place considering I bought it for 68k and put 10% down or $6800. It might just make more sense to keep it since this house is nothing more than an expensive car that can be paid off in less then ten years although it's a thirty year loan. I would not take any of the cash flow when rented out. I would build up reserves and then make double and triple payments each month to knock down the principal quickly. 

Selling was never really in my mind until I realized homes were selling near me. I'm probably leaning more towards keeping it now although once I started this thread I was leaning more towards selling. 

Thanks guys for the input and if you have more you want to say just keep it coming!

@Account Closed

Payment to the lender excludes taxes and insurance and is just the P+I of $321

I pay taxes once a year in full and I paid homeowners insurance full for one year when I moved in.

Because it was a foreclosure I had to pay the nonhomestead tax rate of $1200 which it will be when I rent it out but I will have a break of one year paying a homesteaded rate of $600 since our tax payment is due Oct 1 in my city and I will move out Aug 20th or so.

@Alexander Merritt

 When I bought the place last year I came in a did a lot of painting and repairs and made the place look really good. There are a few other things I could do but don't necessarily have to do. The neighborhood is decent. I'm not familiar with any crime over here and everyone seems to be nice. The city was actually voted one of the top 3 safest places in and around Birmingham. I do think this place would make a decent rental but I feel like I could possibly have high turnover. The two bedrooms are both upstairs and each has its on bath. 1/2 bath downstairs. Small kitchen. It's not a place an older person would want to stay because of the stairs and for younger people it's a good start but likely not where they would stay forever. So while I think the home could have a decent cash flow I feel if I could sell it and make a quick $15,000 to $20,000 then maybe I could take that money and invest it in another asset. If it were a nice 3/2 with a great backyard and favorable floor plan for a family or elderly person I would think it could be a long term rental for someone. But with it being a 2bd and 2 1/2ba it's clearly not much of a family and not for an older person but more for roomates or younger crowd who will upgrade soon.

@Account Closed I see what you're saying now. Also I don't think my taxable gains would be too high in this situation since Im a 1099 and write everything off to the point my income is very low. Also my fiancé has her own home which is better than mine and I dont think she would be willing to move into my little place!

@Account Closed Are you sure it's two years? I got this from the turbotax website.

"If you can manage to hold your assets for longer than a year, you can benefit from a reduced tax rate on your profits. For 2014, the long-term capital gains tax rates are 0, 15, and 20 percent for most taxpayers. If your ordinary tax rate is already less than 15 percent, you could qualify for the zero percent long-term capital gains rate. For high-income taxpayers, the capital gains rate could save as much as 19.6 percent off the ordinary income rate."

That is referring to long term capital gains.

Thanks for the replies guys!

There is no HOA Fee. So the $521(total payment)= $321(P+I) and taxes are $100(Non-homestead) and insurance around $100.

Would I have to keep it for 2 years before I could sell without capital gains? Would this be taxed like normal income or for sure it would be capital gains tax?

When I bought the property I planned on never selling it because this neighborhood is very rental heavy and I was fine with that but then when I saw homes were selling I thought maybe I could make a quick exit and profit from it and use the funds towards another investment.

@Account Closed

Hey Biggerpocket experts....I was hoping you all could give me a little advice as to what you would do in my situation. I'll try and fill you in as much as I can and then you can either answer or ask more questions to understand better.

So I bought a townhouse for $68,000 that is 2bd and 2/1ba. I originally bought the townhouse as an investment knowing I would only live there for a year and then get married this August and move in with my fiancé and rent this one out for around $800-$850. My payment is about $520 and I would have to account for vacancy and repairs so it would cashflow a little. This would have been my first buy and hold investment.

It's in decent part of town more around the B/C neighborhood. Looking at whats selling around me I think I could theoretically sell it for around $90,000 if I listed it now or slightly below that. Seeing that I could get that much for it, does it make sense for me to rent it out now, lease option it, or sell it out right? The influx of cash would be nice.

What would you guys do?

Thanks for your input!

@Jay H. Please send some sauce lovin this way!

@Casey Miles Oddly enough it looks like I might be wholesaling it to my parents!