All Forum Posts by: Drago Stanimirovic

Hi Matt,

Congrats on building significant equity in your rental property. To access the $90K, a cash-out refinance is likely your best option. This allows you to refinance your mortgage, take out a new loan, and pull out the equity as cash. It’s a straightforward way to access the funds, though keep in mind that interest rates may be higher since it’s a rental.

Alternatively, you can consider a HELOC (Home Equity Line of Credit), which gives you flexibility by letting you borrow against the equity as needed, similar to a line of credit. Another route would be a home equity loan, which functions like a second mortgage, providing you with a lump sum at a fixed rate and payments.

Each option depends on your goals and the terms offered, so it's important to evaluate which fits your situation best. If you’d like help with financing or further advice on your next steps, feel free to reach out!

Best,
Drago

Hi Solomon,

You’re in a strong position with solid real estate experience and savings. If local prices are too high, exploring Midwest markets is a smart option. Properties there are more affordable, allowing you to make a significant down payment or even pay in cash, which could get you started sooner. Just make sure you have a solid management plan if investing remotely.

As for investing $40K in your parents’ home, while it could provide a modest return, it may tie up capital better used for your own investment where you have more control and equity.

Your plan to start a property management company in Rhode Island is a great long-term move. With your experience, it could open doors to more local opportunities, so balancing saving for that while looking for the right investment is key.

If you need help with financing or further strategy, feel free to reach out!

Best,
Drago

Hi Jorge,

You’re absolutely right! Closing a real estate deal can be a whirlwind, but using a checklist is a game-changer! It keeps everything on track and ensures no crucial step is overlooked. Paperwork may not be glamorous, but it’s essential for keeping things running smoothly. Contracts, financials, and supporting documents are the backbone of the process, and missing even one can lead to delays or worse.

Third-party inspections—like surveys, appraisals, and engineering reports are also key. They provide the insights you need to fully understand the property’s condition and value. Getting these done early helps prevent hiccups later.

Don’t forget critical dates! Tracking deadlines for due diligence, contract extensions, and contingencies can save you from costly mistakes and missed opportunities. Timing, as you know, is everything.

Lastly, having a solid "power team" is essential. This includes title reps, attorneys, and lenders keeping the communication flowing with them is what ensures a smooth closing.

In my experience, a well-organized checklist minimizes risk and makes the entire process so much easier. I’ve learned that the more thorough you are upfront, the fewer headaches down the road. 

If you ever need help with any part of the process, feel free to reach out!

Best,

Drago

Hi Chris,

To add a new fee to your existing management agreements in Florida, you may have a couple of options depending on the terms of your current contracts.

If your agreements don't expire and continue indefinitely, the simplest approach would likely be to create an addendum to the current agreement outlining the new administrative charge. You can present this to property owners for their signature, rather than drafting an entirely new contract. It's important to get the owners' written consent for any changes to fees or services.

Another option is to include a notice of contract modification clause, if allowed by your current agreement, which may let you amend the contract with written notice. However, you should ensure that the contract language allows for such changes without requiring a full contract re-signing.

Consulting with an attorney familiar with Florida real estate and property management law is advisable to ensure compliance and avoid any potential legal issues when making these adjustments.

Let me know if you need help with any other aspects of this process!

Best regards,
Drago

Hi Alex,

You're right that what you do with the sale profits (like paying off another loan) doesn’t impact your capital gains tax treatment. Unfortunately, there’s no direct equivalent to a 1031 exchange for using sale proceeds to pay off another property.

Regarding the 2 out of 5 year rule, it allows you to exclude up to $250,000 (or $500,000 for married couples) of capital gains on the sale of your primary residence if you've lived there for at least two of the last five years. If you moved in September and sell by year-end, you may still qualify, but timing is tight. If you hit the two-year mark before selling, you should be eligible for the exclusion.

If you don’t meet the two-year requirement, you could look into partial exclusion for certain circumstances, such as job relocation or health reasons. Consulting with a tax advisor is your best move here, as they can assess your specific situation and explore all possible tax-saving options.

Let me know if you need further clarification or financing advice!

Best,
Drago

Hi Dina,

Buying your in-laws' home is a smart way to prevent a reverse mortgage and provide support for their care. You can charge rent at fair market value and then gift the rent back under the annual gift tax limit. As long as the arrangement is legitimate, you'll still be able to deduct eligible expenses like property taxes and maintenance costs.

In terms of accessibility modifications, such as adding ramps, these could likely be deductible as capital improvements on a rental property. It’s best to consult a tax professional to confirm the specifics of these deductions.

Also, paying fair market value for the home is crucial for documentation and avoiding any potential disputes with siblings. While the Medicaid look-back period isn’t a major concern for you, it's still good to stay aware of it.

If you need more advice on financing or tax matters, don’t hesitate to reach out!

Best,
Drago

Hey Brett! It sounds like you're close to getting that unit rent-ready. While I don't have specific contractor recommendations for Anoka, I suggest checking local real estate investor groups or landlord associations in your area. They often have reliable handyman and contractor referrals.

Another option is to reach out on Facebook groups or Nextdoor, as local recommendations can come in handy for affordable, reliable help. If you’re considering financing for renovations or future upgrades, feel free to reach out for advice or options. Good luck getting it ready for renters!

Best,

Drago

Nicole, great job on this flip!

Overestimating costs and staying under budget is always a smart move, and it sounds like the renovation went smoothly. That Southern-style front porch definitely adds some great charm and curb appeal!

As an agent, it’s clear your connections helped with the deal, and financing it with cash likely made things much easier. I’m curious, did the updated look help it sell quickly given the current market?

If you’re ever looking to leverage financing for future projects, whether for flips or buy-and-hold deals, feel free to reach out!

I’d be happy to help with any funding needs for your next venture.

Best,

Drago

Hi Sean,

Both fix-and-flip and buy-and-hold strategies have their merits, and choosing between them often depends on your goals, risk tolerance, and market conditions.

Fix-and-flip can provide quicker returns, but it's highly market-dependent and comes with risks like unexpected renovation costs and market fluctuations. It’s a great strategy in a hot market where properties move quickly, but profit margins can shrink in slower or uncertain markets.

On the other hand, buy-and-hold offers long-term wealth-building through appreciation and rental income. It can be less risky over time, and you benefit from cash flow, tax advantages, and equity growth. However, it requires more upfront capital and ongoing management. In today's market, rising interest rates and economic uncertainty might favor holding properties for stable cash flow, while flips could be riskier if buyer demand softens.

For many, a hybrid approach works→ flipping in strong markets and holding rentals for long-term stability. The key is analyzing each deal individually and adapting to changing market conditions. 

Would love to hear what’s working for others here!

Best,

Drago

Hi Tiffani,

Inheriting rental properties offers a solid foundation for building wealth. To manage and grow your portfolio, start by joining local real estate networks like investor meetups or landlord associations. These groups provide valuable connections and insights. Engaging with online communities such as BiggerPockets can also help you learn from experienced investors and explore different strategies. It's essential to build a team of professionals, property managers, real estate agents, and contractors who specialize in investment properties. Additionally, investing in real estate education through courses and seminars will help sharpen your skills.

Feel free to reach out if you need financing assistance or advice.

Best,

Drago