All Forum Posts by: Thea Linkfield

I'm going to disagree with most people and say you should keep bringing it up... but not to the same people over and over. Feel people out. Bring it up to a friend/coworker/family member and see how they react. If they brighten up, or seem genuinely interested in it, continue to talk to them about it. If they brush it off, never bring it up again with them. 

I've found I do have a ton of family members/friends who will scoff at the idea that real estate can make you rich. With those people, I just never talk real estate with them and try to value whatever else they bring to our relationship.

I've also found that 9/10 times I tell a stranger that I'm flipping a house, they say "Oh wow, that's something I really want to get into" or something along those lines. And by stranger I'm talking about someone I run into at Home Depot or someone I buy something off Craigslist from. Or sometimes people who work in the same office as me, but we don't really work together. In those times I so badly wish I had a card I could give them and say "hey, reach out if you're serious and maybe we can work together on something or we could help each other out in some way." 

Be open minded, because never talking about real estate again would be a mistake in my opinion.

BP Community - who has properties in Jacksonville, FL that they do vacation rentals (air bnb) with? My questions for all of you are:

What kind of vacancy rate do you have every month?

Are certain parts of the year better, vacancy wise, or can you consistently get vacation renters in all year long?

Do you prefer this type of renting over long term renting?

I appreciate your input @Dave Foster ! I've seen you on other 1031 threads and was hoping you'd chime in! I definitely considered the fact that we were making it resale ready and not rent ready as well. 

My question for you is hypothetical: If I'm to do say 5 flips a year each profiting $20,000, and with buying each next one with the profit of the previous one (i.e. not having more than one at a time); is there any tax strategy to defer taxes and only pay taxes on the final property profit I make ($20,000)? Or will I have to pay taxes on all of the $100,000 no matter what?

@Edwine Alphonse Are you planning on selling it after a year or will it be a long-term buy and hold property?

Thanks for your reply @Account Closed You definitely hit the nail pretty close to the coffin. The other people involved are my dad and my boyfriend, but we are trying to structure the deal as professionally as possible. I brought them the numbers this weekend and because my dad was adamant about the neighborhood being D at best, there was NO CHANCE IN HELL he was entertaining the idea of renting in out. Even when I volunteered to be the property manager for free. 

I do not know Max, but would be interested in talking with him and his wife, does he have a BP account?

I'm still curious about the taxes and the possibility of a 1031 exchange so I'm hoping someone else chimes in on that point!

I have a house in the Woodland Acres (32211) area of Jacksonville that was purchased for $47,300 cash. We are currently renovating it with about ~$30,000 in and when it's done it will be completely move-in ready with modern finishes to attract buyers. It's a 3/2 with 1229 sq ft. The original thought was to sell it for at least $100,000; and buy a new one with the profit. The more I look at related listings, it looks like we could get between $115,000-$125,000 for a house that we are tearing down the the studs and rebuilding with nice finishes and an open large kitchen. Assuming we can get $120000 for it, less $77300 all in, less $10000 closing costs, we'd be looking at $32,700 profit minus taxes. I need help calculating the taxes for this equation, so any guidance helps. 

I keep reading/hearing about getting taxed TWICE for flipping houses but I'm not understanding. I understand at the end of the year when you do your taxes the profit you make on the flips will be added to your yearly income and potentially bump you tax brackets, but where is the second tax? Also, having very little knowledge on the subject, I was hearing this 1031 thing being thrown around and thought I could just do that, but the more I read recently, because my intent when purchasing was to sell, 1031 won't be an option... can anyone argue that I could use 1031 in this instance? 

Comparables:

http://www.realtor.com/realestateandhomes-detail/8...

^NEW BUILD 3/2.5 1509 sq ft SOLD for $149,000 = $99/sq ft

http://www.realtor.com/realestateandhomes-detail/8...

^"NEW" 3/2 1229 sq ft SOLD for $130,000 = $106/sq ft

The other option would be to cash out refi and hold on to it for at least a year and rent it out.  3/2's in the neighborhood are renting for between $1000-$1100/month. With 77000 in that's about 1.3% of the 2% rule which seems to be as close as you can get nowadays. Conservatively assuming an appraisal would come in around $100000, we'd about break even when it comes to getting cash out and could reinvest the original money in a new place while getting passive income. Typing it all out it almost sounds like a no-brainer, but with 2 other people's money at play, people who were expecting 40% profit up front, convincing them to hold on to it for a whole year might not be so easy. 

I don't have a direct mentor so I'm just seeking seasoned investor's pros and cons of selling vs renting.

Thanks!

@Hadar Orkibi I currently own a property in the 32211 zip code in  the Arlington area that we are fixing up. I have been told by a contractor who used to live in this area that this is where the "crazies" live, and by many other contractors we've used have tols us to lock our car and house doors every chance we get. We have definitely had break-ins in the neighborhood since we started, but none in our house (mostly because I don't think they want anything that's inside). But one of my neighbors has seen someone snooping around our house late at night. Before we acquired the property, it sat vacant for 2 years and there were squatters. From what I've experienced, I'd be less worried about violent crime in the area, but I'd be concerned about theft and make sure you have proper locks and potentially security systems. Our neighbor caught a burglar because they had cameras. As a young female, I'm reluctant to go to the property alone, if that says anything.

I hope this small tidbit of knowledge helps!

@Silenceux Francois we've actually been doing most things ourselves. I've used a few misc contractors but few that I'd recommend for the fix/flip process. If you need anything cosmetic or fixtures replaced/updated, we'd be glad to quote it for you. We can do design, tile floors, backsplash, replace kitchen cabinets, shower tile replace, bathroom fixture replace, light fixture replace, paint, and drywall. You can see our work on my instagram @foolswith_tools and I'm working on getting my website up and running. Reach out if you're interested!

For Jacksonville Roofing, though, I have Ken Wellman Co. replacing a roof right now. He's very fast, well priced, and was able to come out in less than a week to do the roof. The rain has put a pause on the operation, but not his fault. I also recommend Jack C Roofing who was a bit cheaper, and very very professional and attentive, but had a harder schedule to work around so we couldn't go with them.

@Michael Abernathy I live in Jacksonville Beach in a house I'm currently flipping. Probably going to do a cash out refi because I fell in love with the house and the neighbordhood... however I'm always on the lookout for another house in Jax Beach to flip. My dream is to beat out the large builders who keep putting up cheaply built, but expensive to buy, cookie cutter houses and to fix up the houses that already exist. They do take a lot of cash though, which is why my focus lately is mainland in more inexpensive areas for now while I'm getting started. 

There are still deals in Jax Beach, but they are few and far between and involve patience and creativity. However, talking someone who's been living in their house for 60+ years into moving will be challenging to say the least. It can't hurt to try though. You may want to try to find places that are rentals that are in bad conditions and sending pictures of the exterior of the house to the owners. If you're able to talk to them explain that you're a new investor, and sometimes you can pull at the heart strings of a seasoned investor excited about helping a newbie with their first deal and to let go of a property.

@Collin S. You could also look to partner with someone who doesn't have an FHA loan already. For instance, I have one right now, but for another deal I will use my boyfriend who doesn't have one. If you're married you could get the first loan in your name only and the second one in your wife's. Or reach out to people via bigger pockets/REIA, a newbie may have the credit score and background for the FHA and desire to get started, while you may have the capital and experience.