All Forum Posts by: Joel G.

First...after a 1 year battle with Cancer my mother passed away...another year has gone by getting our lives back together, kids graduating college, etc. Many of you offered kind wishes and it was well appreciated. The struggles that our family went through have given us even more appreciation of life and the time we have. Thank you to all our friends in the BP community.

That said...we are ready to get busy again. However, I believe I need a refresher....

We still own the rental in Las Vegas ($400+ cash flow/$90k equity) and a house in Sunnyvale, Ca with approx. $250k in equity. We have 401Ks that have approx. $300k, and better than avg credit. 

We are willing to sell, utilize, finance....whatever...to reach our goals.

So....

I want to self contract (GC) a new home in Texas (where we plan to move this year) and then sell it by owner/lease to own.

I can build a small 3/2... ~1500sf ...non-descript...rental ready home for $75k cash (my cost to build including my lot)

Appraised value being approx $150k. (ballpark but VERY close for area to which we are planning to move)

With these givens...

**Can I finance 75-80% of appraised value to capture cash? ie. finance $120k (80%) - $75k cost = $45k cash out 

**Or am I limited to % of build cost? i.e.  Finance $60k -$75k cost = $15k in deal (no cash out)

If cash out financing....

**How long do I have to hold...or rent...property...before I can sell it to avoid regular income taxes and treat the property as an investment vs build to sell...or is it an "original intent" thing?? 

**Does selling on a "lease to own" get us around the holding period for a sale? Or does it even matter?

**I have read that "due on sale" clauses are always present in financing but seldom exercised on performing notes...does a lease option side step that as well?

So (in my head) the plan would be...

Build.....$75k

Refinance...$120k (80% ltv)

Cash in my pocket...$45k

Sell...$150k

Seller Finance...$135k with $15k down pmt (10%) with favorable seller terms 

Results...$60k cash in pocket....small cash flow with no maintenance issues...~some~ tax avoidance?...

The further thought is to use the $60k cash....do this process again BUT this time...pay cash for the project...$15k out of pocket to build...SKIP the bank financing...sell for $150k...take 10% down ($15k)... now my out of pocket is zero...and with favorable seller terms have a substantial cash flow and no govt. involvement?? This would also limit the number of financed properties that seems to be such a problem for budding investors.

That's it. Lather. Rinse. Repeat. 

Six months building time per home...5 years = 10 homes (no land speed records, but moving along)

So....please tell me the parts I have forgotten, ignored, underperformed. Given our resources should we be building multiple homes at once? (That would be a new experience for me...multiple projects going at once...but if it made sense...I'd be willing to make it work)  Are there strategies we should be considering that we have not thought of? (I'm sure there are many)

Anyway...thank you in advance for all of your thoughts on this situation...and thank you again for all the well wishes through our family struggles. 

We look forward to reading your thoughts.

Hi everyone, 

Been renovating my home...so haven't been here that much in the recent couple of weeks...hope all is well with everyone.

I had this happen this AM...Ian Flannigan...a REI guy that I get emails from time to time, but that I otherwise know nothing else about, sent me an email about his "friend"... Zach Childress....who is a great REI and as giving his book away for "FREE"

OK...I've got a few minutes...I'll click the link...see what his book is about and maybe sign up...who knows....maybe he will have a new take on things....what do I have to lose?

So I go to the download page...give them my email address...no harm, no foul...least I can do is sign up for his list...after all....he is giving me a free book right?? 

WRONG.

When taken to the next page, I am required to give my credit card info as there is a $5.95s&h charge associated with his "FREE" book...I mean he can't be expected to send this thing to you at his own expense...nor would I ask him to...BUT....this ain't what I came to your website, gave you my email, and expected to be doing...considering your offer that was originally made.

This is not the first time this has happened...unfortunately...other gurus touting their "FREE" material have had the same tactic.

So...end result...

1- unsubscribed from Ian Flannigan's newsletter

2- will unsubscribe from Zachary Childress's newsletter...when it ultimately arrives

3- they got my email...which they can now sell on a list

4- now will endure the onslaught of trash mail that will inevitably show up

5- MOST IMPORTANTLY - get to warn other BPers about this scam.

This is my penance for trying to learn from another website other that BP....

NEWBIE PRAYER:

O' our creator (Brandon that is) please forgive the evil ways of gurus...they not not what they do...Lo tho they may lure me in with false promises of free information....Thy mind hungers for the knowledge, that fellow BPers willing lay down before me...and yet....I have strayed...hopeful in the chance to gain knowledge that I might too...one day...be one of the enlightened ones...whom with for thy good of the people wilst share given wisdom freely...I implore you to throw down your blessing and love that I might have the realization that if-ith  I cannotst findeth it here-ith...that I probably don't-ith need-ith it. Amen.

HAPPY MEMORIAL DAY! 

Thank you to all who have served...servicemen/women and their families as well. We love you all!

@terence

Sorry to disagree with you on this point Terrence...but BP is EXACTLY setup to help folks make these decisions...not to "and make your OWN decisions" as you suggest.

You sound more like a shill for Zachary Childress than someone trying to help.

And the "FREE" book you downloaded wasn't really free was it?

I'm gonna start a new topic about this very thing....feel free to weigh in.

 Hi Lisa!

Thanks for your well wishes! 

Do you have a particular strategy or do you find any here that appeal to you?

Tammy and I have several appealing ideas here and are trying to integrate them all...come up with a "somewhat-flexible" business plan...and then get to gettin to it.

Love to hear your ideas as well!

 Super suggestions Jesse!!

We do currently max out our 401Ks...and that we are still with those employees is definitely something to consider. I thought no they will loan against for our personal properties but not for an investment property until we leave those employers and the roll over into a Self Directed IRA....I'll have to check on that.

The live in flip thing has worked...and I guess we'll keep on doing it if we stay in the Bay Area...we do not have as deep-o'pockets as some here...and renovating....I LOVE IT...I really enjoy going from bad to great...don't know that the Mrs is going to keep loving it forever though....but if we get to retire 10 years early...she may be ok with it!

The hard money through the IRA...do you mean it gets taxed at normal income date when we finally withdraw that money...or does that happen as we go??

And how can you tell if a market is a "cash-flow" market...any suggestions on where those might be...or how to track them in the future?

Tammy will be completely into "tapering" our retirement....with her retiring and me continuing to work...and if I say anything about she will likely be "tapering" my mouth shut...lol.

Thanks again for your wonderful suggestions and any follow ups you care to add!!

 We enjoy where we currently live Ali, but of course there is nothing like going back home to where we grew up...jet? Is hilarious...never heard that one before as a joke...it just always sounded normal to me...lol. Thanks for the laughs Ali!!

 Thanks so much Gino! Tammy and I are both enjoying the website as well as the podcasts and feel as though are heads are swelling with all the amazing information and ideas we are finding here on BP! Thanks so much for your welcome!

 Thanks Brandon! You guys have built a wonderful site and we appreciate the opportunity to be a part of it! Please let us know if there is anything at all that we can help with or contribute!

 Thank you so much Miss Ali! I'll see what we can do bout keepin it country...lol...or as I remember from GA..."I'll tell yew what...." Love those GA peaches! Don't even get me started on Augusta National!