All Forum Posts by: Tim Delaney

Joint Venture. Basically a partnership. While JV's can be more all encompassing, generally they are used for a single deal at a time.

Not sure what the laws are in CA, but if you were supposed to give 60 day notice you are already too late. If they haven’t been paying and causing problems why would you want them to stay? Don’t renew the lease and hope that they move out.

Loans have nothing to do with cost basis of a property for determining capital gains. 

Welcome Kyle. Depending on how much time you have to commit to real estate (or want to considering your dollar per hour is probably better spent in dentistry) you may want to consider becoming in LP in a real estate syndication deal. After getting the operators and the deal it is pretty passive. BP also launched Passive Pockets podcast and platform where you can learn more about this.

This is called OPM - other people’s money. Brandon Turner wrote a book for BP called Investing with Low or No Money Down - start with that. Then listen to any podcast that talks about this (which is a lot of them).

Are you looking to hold on to these as rentals? That would be called the BRRRR strategy - there is endless info on that strategy here and on the podcasts and in the BP bookstore. Buy, Rehab, Rent, Refinance, Repeat. Because you are forcing equity into the house you are sometimes able to pull back out the entire purchase and rehab process to return to your investor then you own the home with just the mortgage. In reality this strategy still works, but we are having to leave more of our own money in the deal because prices are high and/or rent won't justify maxing the cash out refinance because interest rate is high. It is still better than putting 20-25% down and not forcing equity appreciation though.

In reality, before you start getting investors lining up to fund 100% of your deals you will probably need to prove yourself in some way. Try to get some experience by helping your friend with some of his projects.

BP has a book on Partnerships written by Ashley Kehr and Tony Robinson.

On the technical side I would suggest partnering on a single flip which can be done with a simple JV agreement before jumping into creating an entity and crafting very good operating agreements. This will give you the chance to see how well you work together before committing to more overhead.

If both houses were sold in 2024 then the loss will negate the profit from my understanding. I am not an accountant though, so take my input with a grain of salt.

It would be great to have all three strategies going in one house! Using a househack for an STR could be particularly advantageous in municipalities where STRs have been cracked down on more but still allow you to do it if you are living in the property. Being able to A/B test MTR at the same time would allow you to know if you can convert the STR to MTR if you ever want to move out and keep the property.

As for the net negative house hacks - I always like to remind people that shy away from a deal because they aren't making money that they are usually still coming out ahead if they are spending the same or less than they would on rent.

It doesn't sound like it. Best bet is to carefully analyze the zoning maps and regulations or just call the town and ask.

I'm not familiar with your area so can't comment on whether it would be ideal for MTR. But if LTR doesn't work that would be an option to look at. Another thought if you have already been in the house for a year is to continue to work on it, add more value and then sell it after two years so you can avoid the capital gains. Then maybe you are able to roll that money into a downpayment on another primary and an investment property.

As for whether you should be looking for a loan for the work vs. paying for it out of pocket. A HELOC is probably going to be at least 8% right now, so would you be making more than that on your money if you choose to take out a HELOC to fund the work? If not then probably better to just continue paying for it yourself, unless you want to speed up the process and you are constrained by cash.

Your decision to refinance is going to be contingent on what your long term plans are. Run the calculations on the expense of doing a refi at a slightly reduced rate vs. keeping the current loan for whatever period of time you think you will hold this house. If you opt for the live in flip like I mentioned above it will probably not make sense to do a refi for such a short period.

Hope this helps you some.