All Forum Posts by: Ryan MacDonald

San Marcos appears to be a great place to invest as the student population continues to grow. I recently moved to New Braunfels from South Austin as of January of this year as my wife’s career went to San Antonio. I also lived in San Marcos back when I went to school there in the mid 2000’s and still regularly travel there during the football season to go to the games. As Leland mentioned previously, it does seem to be a great place to find investment opportunities if you can find a good enough deal.

When I went to school there, I lived in a duplex on Sagewood which still seems to bring in a lot of students but a lot of the Duplex’s appear to have deteriorated from when I went there. I actually toured a duplex as an investment property a couple weeks ago that needs a ton or work too both units. After doing some digging, I noticed that they buyers purchased it in 2013 and have differed all kinds of maintenance which appears to be the standard in that area. SO I am assuming they are not involved and now that they are wanting to sell, the price they want and the actual value of the property is not likely to align. But who knows. I bet they are really motivated to sell and I plan on offering on that property today or tomorrow.

If you are looking in SM for student housing, I would make sure you check with zoning as when I lived there, some areas would not allow for more than 2 people living under the same roof with different last names (which was a problem for my friends and me). I would say near the campus up towards the hill from North LBJ to RR12 and to Craddock would be a prime place to look as it is right next to several bus stops for students or near walking distance. I’d say any area near Craddock would be good to look into.

So I have a question regarding the selling of a foreign property and paying taxes on it.  My family has property that was purchased as a primary residence back in 1972 and was lived in until 1979 when they moved to the states.  Since that time, it has been rented out and we have recently decided on selling it to a commercial builder who is buying properties in order to build a high rise.  

That being said, since it was used as a primary residence, but it was in a foreign country, do we still have to pay capital gains tax on it?  I know here in the US, you can avoid those taxes if the property was your primary residence for at least 2 years, but I'm not sure what the US law requires when you sell a property from a foreign country and try to bring the money to the states.

If we do have to pay taxes on it, has anyone worked with a 1031 exchange intermediary that they might recommend to help us with this process?  Any help would be greatly appreciated.

Thanks,

Ryan

Looking for advise on selling a property from a foreign country.  My mother has a rental property in Santiago, Chile that is currently being pursued by local investors who wish to build commercial properties in the area and we are wondering if there is a way that we can either avoid or reduce the amount of taxes paid on the sale of the home.  Does anyone have any experience in this area or have any advise on how to save on taxes for something like this?

Thanks everyone! That is good info.  The potential tenant hasn't signed anything just yet nor will the be able to move in for a month or so, so we should be able to make the price adjustment.  I appreciate everyone's advise!

Hello,

I have a question about adjusting the price for a rental property.  If I have a rental listed at $650/month and have two people interested but now want to increase the rent to $700 to bring it up to market value, are there any legal issues with doing so if 2 potential tenants are interested in the property?  Can I go back to them and say that I need to raise the rent on the price or do I need to honor that $650 price in order to avoid any legal recourse? 

Thanks,
Ryan

Hello,

I am new to the REI realm and I have come across a fix and flip deal in New Braunfels, TX and I am seeking a partnership with a local investor who has done fix and flips before so that I can finally get my feet wet and learn the process. The home is FSBO and was inherited by the daughter of the previous homeowner. They are very motivated to sell it themselves before Thursday 11/12 as they have scheduled a realtor to put the place on the market. They once had it under contract from an all cash offer for $5K below their asking price but the older couple decided it was too large of a home for him and his wife so they did no move forward. Therefore, they seem very motivated to sell quickly.

Since I am new, I will try to provide some info and what I think the property is worth now and what the ARV would/could be, depending on finished done. Since this is my first potential deal, guidance on my accuracy or items I have missed would be greatly appreciated.

Asking price $225K (same as local appraised value)

Home 3/2 with extra large 2 car garage

2030 sq. ft.

Built in 1972 in a desirable neighborhood

fireplace with built-ins 

.34 acre lot

sprinkler system (hasn't been used in some time so will need a refresher)

covered back patio

Latest fixes

New roof - 2003

New A/C - 2003

replaced vinyl siding in 2001

new water heater - 2011

I now from looking at home values (as I am looking to move to this city in the next month) are around low $300-$350K.  There are actually 2 other dated homes currently on the market and the most comparable option to this home (completely original inside with no modern updates) is priced at $257K and was put under contract after being on the market around 10 days.

If you are interested, I have some images of the home to share as well.  The original home owner was an elderly lady who lived in the home for 30 years and kept everything original.  As I mentioned, I think this is a great deal for a fix and flip but I would need a partner before pulling the trigger.   If you are interested in this great opportunity, please let me know.

Thanks,

Ryan

My wife and I are looking to buy a primary residence and we are looking in specific neighborhoods within our destination city in central Texas. I just found out that there is a FSBO home currently in one of our target neighborhoods. We are currently using a realtor via our home relocation company that we are required to use in order to be eligible for the great benefits package. That being said, does anyone have experience from buy a FSBO home when they are not using a realtor and you have to? Are there usually issues from these private sellers where they don't want to have the buyer use a realtor in order to save on the seller fee's? If I work with a private seller through my realtor, is there anything that I need to know beforehand? I'm still going to get a home inspection, appraisal and all of that noise. I know they are scheduled to have the home listed through a realtor on Thursday but prefer to have the home sold before that point so that they can avoid paying the realtor fees. Perhaps if we use a realtor and they don't, it won't create too much of a hassle for them since they are already in process of going that route. Any thoughts or experiences would be greatly appreciated.

To be honest, I'm just getting started and still in the education phase so I'm not too comfortable with the process of working without realtors. Especially since out benefits package requires us to use one. This home is all original and was built in 1972. The owner's parents passed away so they have inherited it and are currently looking to get rid of it so they sound like very motivated sellers. I'm really up to the idea of rehabbing the home as a primary residence as some homes in the neighborhood go up to $450K and the sellers are currently trying to sell this one for $225K. It's a 3/2 and 2030 sq ft and we would look at converting it to a 4/2 since this will be a long term home. With that much potential for ARV (I haven't quite ran the numbers because I'm still not sure how to), I think it would be best to make an offer for at most $200K as it would need to be updated. Hopefully my wife would go for it.

Thanks for the thoughts. It looks like the house hack duplex idea is no longer on the table due to family reasons. Also, I'm not sure if a cash out refi might work. I'm currently speaking to a couple of different lenders and the direction from them is that I won't be able to do something like that because the law stipulates that the mortgage (total monthly payment including insurance, PMI, etc.) needs to be 75% or less of the total monthly rental income. I also need to have a deposit and contract in hand in order to not carry the debt with the new home.

That being said, my realtor stated that we could potentially bring in $400-$600 cash flow per month but in order to make that 75% threshold, I have to bring in at least $450 more per month than our mortgage.  So I did some research to see what going rental prices are in my area and it looks to be that i will only be able to cash flow about $250 more per month which won't let me qualify since I will need to carry the full value of the existing home debt along with the debt of the new potential home.  By adding on a cash out refi, I surly won't meet that 75% threshold, thus making it harder to qualify.

New potential solution:

My mother is looking to buy a SFH to rent out which means that I may help her locate a property that will rent easily, rent from her for a limited time and only pay her monthly mortgage and no cash flow (I'm still putting money towards her equity and thus my inheritance) at a lower cost then local rent prices for a bit in order to save money and put down a larger down payment. This way, I can rent my current home out and not need to worry about qualifying for a loan right away and can work through this a bit longer or find more ways to demand a higher rent price per month.

@Lori Vines Is that basically the same as my option 2 but with a SFH instead of a multi/duplex? Wouldn't that make my cash flow disappear or become lower while saving me a bit on a new primary residence?

I am looking to focus on increasing cash flow so that I can in turn reduce my own expenses by either living mortgage free via multi units covering my mortgage while also generating cash flow which I can then use to fund future investments.

Hi all,

So I am looking for guidance with regards to a new opportunity that has come up and not sure what I can do, should do, or if some of my thoughts are even possible financially. First, I own a primary SFH with an FHA mortgage here in Austin and it looks like my wife and I will be moving towards New Braunfels/Schertz TX area due to a new job opportunity. That being said, I am wanting to take the next step in REI and am considering some possibilities.

Option 1: Sell my home which has about $50K in equity before selling expenses hit and put what I have left towards a new home.

Option 2: Rent my SFH for approx. $400-$600 cash flow/month and refinance to remove FHA and look to house hack a Duplex using and FHA or 203K. This is my ideal thought but may not be a fit for my family as I have a wife and daughter and we will look to have a 2nd child next year.

Option 3: Rent my SFH but take out an HELOC or HELoan with less monthly cash flow to put towards a new primary residence in New Braunfels/Schertz and try to increase value quickly in order to refinance and pay back the HELOC which would then be re purposed towards a Duplex, Triplex or fourplex to have an additional property and hopefully generate cash flow.

My question is, does anyone have any experience with anything similar to my option 3?  Is this possible from a financial/legal standpoint?  We won't be making the move until after the holidays or maybe even later than that so I am trying to get a better idea on a plan of action.  Any thoughts or suggestions outside of what I am thinking would be greatly appreciated.

Ryan