All Forum Posts by: Owen Dashner

You are only required to have the property be your primary residence for 2 out of the last 5 years.  From Investopedia:

What Is the 2 Out of 5 Year Rule?

In order to qualify for the principal residency exclusion, an owner must pass both ownership and usage tests. The two-out-of-five-year rule states that an owner must have owned the property that is being sold for at least two years (24 months) in the five years prior to the sale. The owner must have also used the home as their primary residence for at least 730 days, which is 24 months or two years, in the five years right before the closing date of the home's sale. In both instances, the two years don't have to be consecutive.

Try meetup.com.

Also, go on Facebook and search for groups with the term "real estate" in your area.  Then just join the groups and message the admin about the logistics of any upcoming meetups.

Good luck!

You could just leave them in place and use hard money and/or private money to keep the ball rolling with BRRRR. Just refi out of the HML or PML note into an amortizing loan, assuming you are able to find deals with enough juice in them.

This seems sketchy.  They should be taking any points out at closing, which would be transacted using a title company or attorney. Don't send money to them outside of closing.  I own a hard money business and we never ask for payments prior to closing on the loan.

As others have mentioned above, the large majority of states do not require B2B lenders to be licensed.  You also need to be aware that usury laws (how much interest you can charge as a lender) vary from state to state as well.  Feel free to DM me if you have questions.  We set our hard money biz up in 2020 and went through a lot of research.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $142,000
Cash invested: $37,000
Sale price: $237,000

This was an off-market property that was brought to me by a contractor who has done quite a bit of work for me. I gave him $2000 for the referral, and we closed on the property for $142K on our LOC. It needed a kitchen and bath remodel, flooring and paint throughout, deck repair and staining, and some electrical and siding work. We also added a half bath in the basement.

The biggest challenge on this deal was getting it finished because my contractor got put in jail right at the end.

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

Flipping is one of my core businesses

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

A contractor I know brought it to me. The owners wanted a quick cash sale, as-is. I gave the contractor the work, and also a $2K referral bonus.

How did you finance this deal?

We bought it using our bank LOC.

How did you add value to the deal?

Full kitchen and bath remodel, added a half bath in basement, replaced flooring and fixtures, paint throughout, and an electrical panel replacement.

What was the outcome?

We made around $50K profit after soft costs.

Lessons learned? Challenges?

Don't be a bonehead and forget to check the electrical panel to see if it is a Stab Loc. Also, don't hire contractors who get put in jail!

If you are serious about investing in other markets, I would absolutely plan a couple of trips that coincide with local meetups/REIA events for each market. There you can meet other active investors, agents, lenders, contractors, etc. You'll get way more bang for your buck by being there in person and meeting these folks and being able to get the real dirt on each market.

Hi Kevin, happy to connect as well. We are a hard money lender based out of Omaha, NE. We lend primarily in the Midwest, but are able to lend in 45 states.

As Matt mentioned, it really depends on your goals. But, it sounds like you have the investing bug (it is contagious). I would sell the house. You hit a point of diminishing returns with SFR on price points, and that price point is above it in Omaha. I would sell your first several and stack up cash. A lot of new investors get "stuck" after their first or second deal because they decide they want to jump right into rentals and don't take into consideration the fact that money runs out quickly when plunking down money for downpayments. You are either going to need income "events" like flips, wholesales, brokerage transactions, etc to fund your portfolio as you go along. Or partner, or raise capital, or do creative finance deals.

People may argue that taxes suck on flips.  That doesn't mean you shouldn't still do them while growing your biz.  Setup your operating business correctly and you'll still be able to write off a lot of things to offset flipping income (vehicle purchase over 6000 lbs, mileage, home office expense, etc.).

  

I recently started talking with Builders Capital while researching construction loan options.  Just looking to connect with people who have used them on development/redevelopment projects as part of my due diligence.  Thanks!