All Forum Posts by: Nate Williams

Your family and friend has certainly put you in a tough spot. I rehabbed a house that a family member owned. When we sold the house for a large profit, it was difficult to determine who got what profits and the CPA struggled to navigate how to file taxes since I lived in the house for over two years. I estimate I lost probably 15k in the deal and taxes this year will tell for sure. However, my family member has been very kind to me, and I do not want to hurt our relationship, so I'm fine with losing 15k. I should have put the house in my name regardless- which is my fault. If you want to minimize the relationship damage, you can perhaps sell. If you want to keep the house, you'll have to what do what any reasonable property manager would do-regardless of the relationships. 

I've refinished wood floors from 1904, and I would find it hard to believe a light sanding couldn't be done to remove shallow cat scratches. Original wood flooring is so beautiful and hard to come by. Our old floors from my 1904 house was sanded to the bone to get the old waxy paint off. The had scratches and even bits of old paint still on them after I finished. When we were selling, people loved the "aged" look, and it was a big selling point for that house.

Thanks for your response, Wale. Those are great options that I will consider. I especially like the BRRRR rental. Thanks again!

Quote from @JooYung Choi:

Have you considered purchasing a short term rental? More cashflow but of course more work. Highly recommend self-managing so you can take advantage of a cost segregation and the short term rental loop hole!

Thanks for the response, JooYung! I live in a town of about 100k people here in Dothan, AL, so STRs aren’t the most popping market. If I knew I could break even every month, I would go for it. I just have no experience with them.

Quote from @Travis Timmons:

With 40k cash, a wife that loves your current home, and 2 kids, stay put unless you can find a compelling reason to convince your wife to do another live in flip or live in a 2-4 unit house hack. Good luck with that, but I would not push it. You need those cash reserves as an emergency fund that makes your life better and less stressful.

Thanks for your response, Travis. I certainly think that’s a great option as well. My worry is, my family will keep growing, and I’ll never continue my real estate journey.

Thanks for the response, Caleb. When you say update and moving, do you mean sell our current residence or rent?

With the flip we sold last year, everyone I showed the house to when selling pointed out the unique things of the house. Things like the real hardwood floors, claw foot bathtub, and stylish kitchen. We sold the house in 3 days and didn't use an agent (probably should have looking back though). 

Check out Jesse Vasquez Airventure on YouTube. He has a lot of good info on MTRs. He has podcasts as well.

Jerome, I lived in Lake Charles for a little while on a job contract! South LA is such an interesting part of the country. What's your income and how much money do you have in the bank would be the first thing I would consider. I can't say what's best for you, but I can tell you what I did for my first house. I found a run down house in a great neighborhood. This house had a working HVAC, working electric, and all plumbing was functional, so all it needed was cosmetic work. So I learned as I went and fixed everything I could YouTube or find a friend who knew how. If you live in it for two years, you should be able to sell tax free up to 250k if you're single. So I bought this fixer upper for 65k, had a low monthly mortgage, used the extra money to rehab out of pocket for the next three years. So three years and 30k later and countless hours of work, we sold for 195k for a total profit of 100k. 

I found the worst house on the best block in a local historic neighborhood. Lots of old houses valuing over 500k and up to 1M (local house price in my market is 167k). I eventually tracked down the lady who owns it, gave her a call, and we had a friendly conversation about her house and real estate deals of her past. She said that she knows that house is worth 300-400k (and she's right), but she told me to bring her a price that would work for me, and she would be willing to owner finance if we agreed on a price-she has done owner financing for other buys in past years. The house needs about 50k worth of work which I could myself. 100k if I were to sub it out.

My question is, how do I navigate this? I know little about owner financing, and to be honest, if I take on a 300k house payment (or even 250k for that matter), I would struggle to make the payment if I had a prolonged vacancy due to my current W2 income. 

My current options: rent out the current 4 bed 2 bath house that I own and live in so I could move into the 300k house and remodel while I live in it. Or I could buy the 300k house, stay in the house I'm in, get the 300k house remodeled asap and get a renter in asap. I have 35k in the bank currently, so I also could simply be over my head going for a deal this expensive. It is just a once in a lifetime find in a such an expensive neighborhood.