All Forum Posts by: Steph C.

Hello,

I have a few questions about investing in rentals out of state. The market is picking up here in MA so prices of properties are going up.

We have been looking at rentals in the area, but since we live just a few minutes from RI, we wanted to keep our options open. Real estate prices in RI are cheaper and, therefore, cash flow for a higher amount. So, buying in RI may make more sense for us.

Although this would be investing "out of state," we'd still be nearby to view properties, meet tenants, etc.

Anyone have experience in this area - managing out of state but living close enough to manage (we aren't against hiring a property manager, though, if that makes sense)? Do you set up an LLC in the other state for your rentals? Any other thoughts or input?

Thanks,

Steph

Yes, I looked at the privatemoneygoldmine.com site a while back. It seems like a bunch of dead leads and I'm not sure if anyone has had success using it.

I've learned some great things from Private Money Blueprint (PMBP) course (I purchased it a while back). I also have heard the Instant Private Money course from Susan Lassiter-Lyons is full of good content, although I don't have first hand experience with it.

There are also great resources here on BP, which I have used first-hand to find a great hard money rehab lender.

Good luck!

Steph

My friend was on that show House Hunters a few years back. The entire show is staged.

She had already bought her condo when her real estate Agent advised she could "audition" for the show. She was picked immediately for an episode.

So, they ended up looking at some condos listed for sale, but that was all fake, since she had already closed on her condo. There was no hard "decision moment" depicted on the show, since she was already living in her new condo.

Every time I watch a flipping show and something like the granite gets dropped and breaks, my husband always chimes in and says "that was staged." Unfortunately, he's right...but I do still like to watch these shows.

Is this the show where the guy from Canada does the rehab and then they stage and rent (I think it's called Income Property)? From the episodes I've seen, it seems the same as what you're talking about.

Funny you posted this, since my husband commented to me when we watched the show the other day that the rents seemed astronomical, too. I wonder if it's the Canadian dollar that makes the difference, or if the houses are in a highly desirable area (equivalent to a NYC market), etc.?

I do also think these shows subsidize the rehab costs and therefore their PITI isn't as high as you might think. ;-)

Steph

Hi Dave,

Sounds like you have done a lot of thinking and planning so far. Having your wife's support and her having a job are two major pluses, IMHO.

I know you'd like to have more background but doing one rehab, where actually you made a profit, is far above many people who quit their jobs without ANY experience whatsoever.

Regarding low (quality) inventory, we're seeing that here in New England, too. Try to get deals via many pipelines as you can - MLS, REOs, bird dogs, wholesalers, marketing/mailings, etc. That way you can feel more comfortable that you'll have more houses available to you to complete your 2013 goals.

If I were in your position, as someone that is still "stuck" in Corporate America, I would look at your situation as the perfect situation to give going full time a try, but that's just my opinion. You could always go back to the 9-to-5 world, if you needed to/wanted to.

Sometimes it's better to regret something you did, rather than something you didn't do.

Good luck,
Steph

I love the Rehab Addict show. I am always looking to see if she's doing another season or if there is an update on the sale of her Minnehaha (sp?) rehab.

She does a great job on all her houses and I love how she tries to keep the integrity and style of the original home. Most rehab shows (which I also watch) seem to always rip old houses out down to the studs and put in all new/modern upgrades.

Steph

Thanks, Steven H, for the help and guidance.

Thanks to everyone else for their input as well!
Steph

Thanks, Chris.

Steven, I appreciate the information. Yes, we tax the LLC as an S-Corp. If I'm understanding your reply, it appears there will be no tax liability in 2011; the tax liability will be captured in 2012. For 2011's tax purposes, the rehab and its related expenses (rehab costs, taxes, insurance, electric bills, etc.) will be counted toward that home and as "inventory." If I misunderstood anything, please let me know.

Any other input is welcome.

Thanks again,
Steph

Steven, thanks for the information!

Charles, thanks also for your reply. No, we did not make attempts to rent the house, since we had it under contract to close by year's end, but it did not. So, that being said, how is the rehab, which was bought but not sold by the end of 2011, taxed? Because the property did not sell in 2011, are you saying that certain expenses cannot be written off? Just curious.

Thanks again for your assistance,
Steph

Hi BP,

I have a question that I'm sure many of you can answer.

We purchased a home to rehab last year in an LLC. The rehab was completed last year, but the house did not sell by the end of 2011. If the house had sold in 2011, I realize the taxes due on the profit of the sale would have been due. However, since we held the property into 2012, how does this work tax wise? It's technically not a "buy and hold" property, but for 2011's tax purposes, it it taxed that way?

Any and all comments would be appreciated!

Although I will be discussing this with a CPA as well, I like to have an understanding of how this works, especially from those that have been there, done that.

Thanks in advance,
Steph