All Forum Posts by: Chuck Webb

I've used HM loans on all my properties I've acquired.  You give me 120k, I have 5-6 homes that will cash flow 400-500/month in less than a year (in my market).  I get 7% IO for 3 months.  I have good relationship with my HM lender and a good crew who can rehab a job in a month.  Every deal I've done, I've made over 100% on cap gains and  my cash on cash  is  20%- 40%.  I buy wholesale deals and I can analyze a deal in under 5 minutes, visit the property and be confident enough to drop a 2500 to 5000k non refundable deposit over my phone to the title company.  Might not work for everyone, but my success rate with this method is 100% knock on wood.  

HM loans work some of the rehab costs into your loan allowing you to come less out of pocket.  You're going to refi to a conventional anyway in a month or two.  That's where you capture your equity.  I just did a deal where I was only 2500 out of pocket for the entire deal after I refinanced.  So I spend 2500 to make 45k equity capture and to cash flow 500/month...it's a no-brainer.  In 2 years I'll do 1031 exchange so I can avoid paying taxes on my cap gains.

So the 1031 exchange will still be available for the mom and pops making under 400k?

 It won't happen...why, because politicians are landlords to.  If they close one loophole, they will open another one.  It's our accountants jobs to find them when they do.

I can verify that Biden's plan will eliminate the 1031 tax exchange.  Your capital gains tax will be based on the original acquisition date.  Say if you inherit property from a relative, and that real estate was originally purchased in 1903 by your great grand parents for 5k and is now worth 1M...do the simple math.  It's govt sanctioned generational theft.  ...And people voted for this.

https://www.cnbc.com/2020/03/1...

@Shital Thakkar

Sounds very promising if you have the cash to make it happen.

I has gotten to a point to where protesting your property taxes will fall upon def ears when you stand before the appraisal board.

I'd like to see the "Section 8" rentals for Houston on that graph.

I typically sit on the side lines until the SF inventory is between 5-6 months. Only then will I tend to browse the MLS for deals. I really think the shoring polls are starting to develop hair-line cracks. I give it a year or two.

Go to auctions every month and meet and talk to people.  Learn how the system works and what you need to do in order to participate.  Make sure you have the funding to participate when you are ready.   I am firm believer that you can get the best deals at the auction block.  Bird-dogging for yourself can generate a good deal to if you have the time.  

Buying off the auction block, along with doing your due diligence is your best chance of optimizing your cash flow. Going through the MLS forces you to deal with too many factors that will cut your equity and cash flow to almost "0" or less because of the hot market generating bidding wars.