All Forum Posts by: Pete Perez

Kitchen Plan PDF

Hello,

I have a property in Renton WA and I am starting a kitchen remodel. I am looking to hire a contractor for the kitchen demo. The attached link has a downloadable PDF that shows the demo plan. Its a complete gut job down to the studs. Demoing - cabinets, drywall, and a dividing wall. 

So far I have received a quote for $2500. I am still shopping for other quotes, but does this sound like a decent price? 

The contractor that quoted me said he could get it done in a day. Even if its a team of 4 guys working 8 hours...thats almost $80/hr. Seems high, but am I out of touch?

Thanks!

I wouldn't pay any capital gains taxes because I've occupied the property 4/5 years I've owned it. I'd only pay excise tax (WA state tax) and realtor fees. 

 I am trying to accumulate wealth and decrease my stress levels. I don't do well if I am constantly stressed out, so I hear you. I know flipping is going to come with its own set of stressors, but I feel comfortable in that realm, because in my day job I basically do Fix & Flip projects but for commercial HVAC. The project cycle + working with sub contractors is really familiar to me and having cash will make me feel a lot better. 

 Hi John! You hit on a great point. I really don't want to hold this property long term. Its a duplex, in a "C" area of the Renton Highlands near the Renton Boeing plant. Luckily I've occupied the property 4/5 years I've owned it, so I don't have to worry about capital gains. I do like the idea of 1031 exchanging into a property that cash flows better and is easier to manage. That is something I will likely try to do going forward when I start accumulating more properties. 

 This is an interesting idea. I think my cash reserves are decent right now. I've got ~$30k that I have stashed away in stocks + crypto that would be easy to liquidate. I don't like keeping my cash in a savings account when I can invest it. 

What are the interest rates/fees on a LOC typically?

I can see how this strategy would be advantageous because its using leverage and I can keep the property. I'd also be curious how easy it is to access the "Cash" in this strategy. Is it like - I have a "credit card" and I can use it to purchase other properties or are there more steps and paperwork required to get access to the "cash" to use it?   

 Has that turned out to be a good decision?

 Thanks for the response Jay! That is where my mind is as well. Eventually I'll want to accumulate cash flowing properties, but harvesting profits now is where my gut is telling me to go.  

This aligns most with what I have been thinking. I'd rather have the $200k now and use most of it to reinvest in Real Estate & other assets. Plus having the liquid cash when forclosures start is going to be very useful to me (I think). 

I did want to note that the $800/mo is factoring in a newer, slightly higher mortgage after pulling cash out to fund a rehab to the property. After renting both units out and deducting VIMR (Vacancy, Insurance, Mortgage, Repairs) I'll cash flow $800/mo. Still, I'd rather have the cash so I can jump on a good opportunity when it arises. 

 

Wow! I was not anticipating this kind of response. Thank you to everyone who posted.

Would you rather have $200k (after taxes) right now, or would you rather have $800/mo cash flow + money from future sale? I am anticipating "Well, it depends on what your goals are" as an answer. I want to know what YOU would prefer? Why? 

I've got one rental property that has $270k in equity and I am considering selling it, because I'd rather have the cash. I'd feel a lot better flipping a house with that much money behind me.