All Forum Posts by: Shawn Couch

IMO I would stay away from Equity Trust. There fees are seemingly reasonable from an annual fee standpoint, but you CANNOT get any timely response or paperwork out of them unless you pay for expedited processing. Calling them takes a lot of patience. Online Chat just sits there and repeates a message that you need to wait 2 minutes. This notice can repeat for hours. They don't respond to an email question for 1 or 2 days. Overall, the service is just outright terrible. An SD IRA is a good mechanism, but it really an antiquated system that Equity Trust uses. They make you feel like you are in the stone ages.

I'm switching to a solo 401K, but I can do this because I am truly self employed. There are also "checkbook controlled" IRA set up as well. I would consider the start up costs for this type of account, even though it's less to set up a standard SD IRA. After about 2 or 3 years, you will be saving on the annual fees with checkbook control types of accounts (usually a Trust or LLC).

Final note on Equity Trust.  I just got off the phone as I wanted to ask about expediting closing my account and they say they do not offer that as an expedited service.  Quote turn around is 4 business WEEKS to close my account.  This will likely mean that they will charge me another annual fee on Jan 1, 2016 and may screw up my taxes as well.

If anyone has had terrible service from Equity Trust, please contact me to talk about retribution from them.  They are clearly not looking out for their (former) client's best interest and are using our money in some other manner.

Good luck investing.

@Michael Richardson 

I'm not an accountant or tax attorney, so please seek the proper legal advice....

However....

You should only be paying capital gains taxes,  plus 25% on the depreciation recapture which is probably not a big amount.  Most likely the cap gains tax is lower than your personal income tax rate. I'm also under the impression that if the occupancy period was originally longer than 2 years, but time out of the residence goes beyond 3 years, that you can prorate that primary residence deduction. 

Also, you can't just roll over the profits in a 1031 exchange. You can take out some cash or lower the mortgage some (boot), but there is a threshold.

Call your tax guy, I think you may still be in the clear at the end of your lease.  You can always start to market it towards the end of the lease if you have good tenants. You may need to offer an incentive for good cooperation.  Let me know if you want to see some comps on your unit. 

Sometimes paying the taxes is the best option too. Maybe you can roll the profits into a turnkey deal in Louisville and end up with some juicy cash flow. I'm sure there's plenty of options for that with folks from BP.

Good luck.

A treasure trove may be an understatement.  Welcome to BP.

@Breanne A.

Send me over an email and I will send you over a few properties to take a look at.

Hope to hear back from you soon.

Best regards,

Shawn

Breanne,

Those are good areas for picking up units that might make some financial sense.  Let me know if you want some help. 

@Brandon Heath

I do own a condo in North Park that cash flows, but it was picked up via a short sale. Those are hard to come by now a days, and very few sit on the MLS for long before they get scooped up. I had a tri-plex in OB, but sold it in 2008 for a BIG gain. I lived in the front and the back units paid my mortgage.

My out of town properties are coordinated via a local investor who I partner on some flips and pay to rehab my keepers.

You should really get yourself prequalified so that you know what you will be able to afford. Otherwise you may be wasting money on mailers, and waisting yours and the Seller's time haggling over a deal.  Besides having a pre-qual in hand is a good negotiating point.

Buying units for your first property is a fabulous idea and taking advantage of the FHA super low down is a great way to buy units

I would also take a look at what is listed on the MLS just in case you see a deal that you really want. SD is expensive and even off market deals can sometimes sell for almost as much as retail. I can run a search for you and email you the link if you want. My suggestion if you want to do mailers would be to go "driving for dollars" and look for some more rundown properties in an area that you want to buy in. Then you can get the owner name and address from the tax rolls and start your mailing. One hitch may be that the owners may not want to do any work, and some older buildings will not meet financing criteria so you may need to get a 203 qualification as well.

Regarding out of state investing, it is a good way to make some cash and high returns with a lower point of entry than San Diego. However, I would use that FHA loan and buy your first Owner Occupied Investment property with little down first and foremost. I currently own rentals out of state in Northwest Indiana. If I used my money to buy a home, I would be paying the same amount as my current rent, but have upside in appreciation, but risk in depreciation and repairs, liability, etc. If I bought a rental here in San Diego with my cash, I would be collecting about $1500 a month in rent. However, I am collecting $7400 a month in gross rent which pays my rent and then some. Food for thought.

Let me know if you want any help.

Scott, please send me your list of properties. I'm interested in both buy and hold deals, as well as potential flips.

Thank you, 

Shawn

@Traver Freeman

I am a San Diego investor that is primarily working on deals in the midwest.  My startegy is to build a fairly large rental portfolio so that I can have a solid and passive monthly income.  I also do flip deals with my out of state partner in order to build the pool of funds available to invest, and to cover some costs, etc.  I'm currently raising funds from a few of my friends and associates to do a few more flips.  Let me know if you want to hear about the deals and market, etc.

Yeah, no way does the. 2% time work in San Diego. You will be hard pressed to find many 1% properties unless.they are condos, and in that case, the HOA dues will cut in deeply even to the 1%.. It's always relevant to the area you are investing in. 2% is attainable, but most likely in areas with less appreciation. Tit for tat basically. Happy investing