All Forum Posts by: William Huston

Thanks, everyone for your input, I was just trying to get more than one opinion. I asked over on the good old Reddit and it was the complete opposite, saying it should count for the 2 years. It sounds like I should just pursue the route of 1031 exchange for the first time and move it into a rental here in Florida. 

The properties are all managed by the same PM currently. I have switched PMs due to lack of communication or laziness in the past. 

The requirements I have the PM do on screening is Credit/Criminal/Eviction history and Employment Verification. My requirements are credit score 650+, no late payments in 24 months and no more than 3 in 7 years, none with the criminal record outside of speeding tickets, and verified work for more than 6 months. 

The property was purchased in 2009, i used it as my primary for 2 years, then in 2011 i received orders to New Mexico and turned it into a rental property. It was a rental from 2011 tell 2017. Taxes for 2018 the property was reported not available for rent on taxes for 0 days and when I do my taxes again for 2019, it will be the same.. 0 days.

Hello All, 

Just reaching out to see if the experiences I have been having for the past 10 years seem pretty similar to others or its just my luck. 

Currently, I own the following rentals...

355k property, gated and deeded neighborhood, cash flow only $85/month, but returning 16k/yr on the mortgage. In 3 years I have had the same tenants, absolutely no issues or repairs called to fixed on the property other than a/c needed to be repaired once. They have actually technically improved the property by pulling out the old shrubs and improving the landscaping on the property greatly. Most minor repairs they have just fixed themselves and just notified me they had someone fixing it and never asked for anything in return for the repair.

235k Property, Average deeded neighborhood, cash flow only $285/month, but returning 11k/yr on the mortgage. In 6 years, I have had to find new tenants 3 times, spent roughly 3k in repairs between tenants leaving, occasionally complain about things, but maybe $500/yr in repairs. 

205k Property, Average deeded neighborhood, cash flow only $210/month, but returning 10k/yr on the mortgage. In 9 years, I have had to find new tenants 7 times, spent roughly 8k in repairs between tenants leaving, occasionally complain about things, but maybe $800/yr in repairs.

125k Property, Average non-deeded neighborhood, cash flow only $500/month, but returning 4500/yr on the mortgage. In 10 years, I have had to find new tenants 9 times, had an eviction, property trashed 2 times and disappearing requiring more than 5k in repairs, constantly hit with repairs due to things magically breaking so often or wearing out. Just overall seems like renters are harder on the property and cost me more money in the end than its worth...

Just seems like the higher up the rental cost/month chain I purchase properties, I get renters who damage the property less and complain far less about things. The lower the property rental cost, I get a higher ratio of people to cause wear and tear on the property that basically offsets the higher cashflow I receive.

Example: 

My most expensive rental 4/3/2 is just an older couple in their 50s with no children, the occasional visit from kid maybe once a year.

My middle expense rentals are both 3/2/2 with small families with a single child

My cheaper rental is a 3/2/2 with families always having 2-3 children and occasional pets. 

Hello All, 

I am looking for some advice or maybe assurance that the accountant I have been using for the last few years is actually correct with the questions I have been asking him. 

I reached out to my accountant regarding the rental property I have in Colorado. Near the end of 2017, a forest fire burned down my property along with about 300 other homes in the area. The property is just now finally being rebuilt after a terrible arrangement of issues that occurred between my insurance and the county... Either way, the property is finally being built and slated to be completed in a few months, roughly end of October-November. 

I reached out to my Accountant with the question of how would taxes occur on the property if I was to place it up for sale with the intentions of selling it after the 2-year mark of the fire occurring. If I understand taxes enough I would think I would fall under the grey area of "living in it 2 out of the last 5 years" of the laws, because technically it was not rented out this entire time nor advertised as a rental. My reasoning for selling the property is the following, I purchased the property in 2009 for 68k with 0% down VA loan @5.5%, put about 20k into renovation before the fire. Comps on the property in the area are about 170-200k, with 200k being the freshly renovated properties. Since the property would be brand new, I would think I could at least get 200k on the sale of the property. Currently, I owe about 33k on the loan and if I sold it for 200k, would net me 160k~ish and use that money to purchase another property here in Florida where I live now. This would free me up from having to file taxes in Colorado anymore and free me up to use my VA loan entitlement again on a new property, which I have been looking to purchase a new primary residence home. Just doing the basic math, it would take roughly 29-30years to recover a return of 160k based on the cash flow I received on the property prior to it burning down...

The accountant is telling me that it's still technically a rental property, that I would have to pay back the depreciation I claimed on taxes along with cap gain taxes on the property if I sold it. 

Before the property burned down I was pocketing about $535/month in cash flow and having to file taxes in Colorado for the solo property. I was thinking of using the 160k and either buy like a 160k rehab property that can't get a loan or purchase a property in the 300k range and put 30-50% down. 

So if I am understanding you then in my market it would benefit to buy over rent based on these numbers...

If I go on the MLS and search for THE CHEAPEST 3/2/2 to rent I get the following:

$1625

$1675

$1700

If I go on the MLS and search for THE CHEAPEST 3/2/2 to buy within that same 5 mile range i get the following:

$199,000, FHA 3.5% down, roughly $1267 for the mortgage, insurance, and taxes.

$214,000, FHA 3.5% down, roughly $1437 for the mortgage, insurance, and taxes.

$225,000, FHA 3.5% down, roughly $1469 for the mortgage, insurance, and taxes.

Am I understanding this correctly? so the opportunity difference would be roughly $350 saved each month.

Hello All, 

I am trying to make sense of something that keeps being brought up on numerous investment media I have listened to or watched on youtube, but I just don't understand the reason behind it that makes it better. Last night I was watching one of the latest youtube videos from Morris Investing on FIRE movement and he brought up in the live stream that it's stupid to own the place you live in, that it makes more financial sense to buy rentals and rent the place you live. 

Can someone explain the math or reasoning behind this please. 

I think if things all check out i could afford to buy it as a cash deal, he seemed super motivated to sell it and after some research, I found he bought the land for only 4k in 1997, i like the fact its close to the city, but has enough land to make it feel like your in the country.

The next day im off and able to go down to the building department, ill stop in and see what's up. Its a really massive house, i seriously think they bit off way to much than they could afford. Its 2 stories, all block to the roof, filled in with rebar and concrete on the block walls. It has a unique garage setup, 2 car garage with an RV garage next to it. Its on 2+ acres with over an acre of land between the road and the house filled with trees. The only downfall is the possibility of trees falling over and blocking the way as its a rather narrow crushed rock road leading back to the house. 

Hello All, 

I am just trying to make understanding of a property one of my realtor friends made aware to me prior to it hitting the market for sale. I have a couple who started to build a home on a property, but midway they fell into financial issues i was told and the house went unfinished on the property sitting for multiple years in a "dried in" stage. Basically, it only has exterior walls, some stud interior walls, windows and doors, and finished roof. Due to funding, he is needing to sell the property in an unfinished state. 

I am trying to do my research on the property because it's in an area i would decide to move to if i was to purchase and complete the house over staying where i am at now. My question is what type of things do i need to do to assure the house is legal to be completed after purchase. 

I was told he would supply a complete set of building schematics and stated its fully permitted, but when i search the county records I'm only finding the following under the address of the property lot. 

"RES - New Single Family Detached Home Const of Frame Exterior Walls Only"