All Forum Posts by: Tina Wicks

I understand that Wholesaler's play a role and can provide a beneficial service to all involved.  But I have to say, I'm tired of the 5 calls a day asking if I want to sell one of my houses.  I'm tired of all of the texts asking if I want to sell one of my houses.  I'm tired of them calling my relatives asking if they want to sell one of my houses.  And I'm very tired of them calling my 86 year old mother in law asking her if she wants to sell one of my houses which then requires a conversation by my husband to explain to her what is happening.  

This may not be a popular post on this topic, but it is how I feel.

Good luck to everyone in your investing journey.

Hi there,

First off definitely talk to an accountant.  With that said, here is what I learned this year as we sold a property in 2021, tried to do a 1031 exchange and failed due to the time constraints, so had to pay capital gains.  

We bought the house in 2008 for $100K.  Sold it in 2021 for $175K.  Had capital gain of $75K.  So that's the first tax nugget.  But we also had to add back in all of the depreciation we had taken over the past 12 years.  I believe they call this "Depreciation Clawback".  So we were very concerned about our tax bill.  The only thing that saved us this year, is that we have been accumulating losses throughout our investment career as we make too much in our W-2 jobs to be able to apply those losses against our W-2 income.  Those accumulated loses were then applied against the capital gain nugget and reduced our tax bill.

As I said before, PLEASE contact your accountant.  There are a couple of Biggger Pocket books on tax strategies.  I suggest you read them.  Not so that you become a tax expert to replace your accountant, but so that you know what you can do to help your accountant help you. Just my two cents.

Good luck on your investing journey.

Hello,

You just described my situation and my thoughts also. We have lots of great mortgages on our rental properties that are in the low 3s for interest rate. I hate to touch them but I want that equity to grow. My issue is that I have them all in a LLC and have not found an institution that will do a HELOC on a property in a LLC.

But enough of my situation. I agree with the other posts. Don't refinance, get a HELOC. We have a HELOC on our personal home as it is paid off and we are constantly using it to fund BRRRRs or secure a property and then refinance and get a cash back. The approval process and costs for a HELOC are quite simpler and lower than a traditional cash out refi.

Good luck with your investment journey.

Hello,

I've had to move to the BRRRR strategy as the price of turnkey properties are just too high. And even though I've been funding my BRRRRs with my HELOC, I've turned to trying to find Hard Money lenders to help me scale. And yes, it's a different ball game with this type of project/financing. It's taken me a little bit of time to understand, articulate to my husband, and see the value of these different costs. But this is what I need to do to grow. It's the next phase and am now excited to make 2022 a great year!!!

Hello,

I was thinking of leaving my day job to become an appraiser.  Just so I can learn more about what they look for but also to have some income to compensate from leaving my day job.  But as mentioned below, I can't seem to find anyone willing to train.  And I did see that they do not make much money.  But I love real estate and everything that's involved.  And if I get to see more houses and what they are worth, I have to believe it will be helpful in the long run.

Yes, my husband and I are investing out of state, but I do need to note, that we are investing in my home-town so I'm very knowledgeable about what neighborhoods are A, B, or C.  The purchase cost is significantly lower than where we live and they throw off great cash flow.  We are not getting the appreciation that we could get where we live, but we are focused on cash flow to help with our upcoming retirement.  

Even if there isn't incredible appreciation, it still has been in the 7-10%. We have had to revert to adopting the BRRRR strategy as everyone, even investors selling to other investors, want retail pricing.

We are in year 3 of this, and I will say that we finally have a strong team of property managers and contractors to really take off in 2022. All I need is a hard money lender to help grow as we have been using our HELOC to finance the BRRRS. And even though that works, we are constricted by how many projects we can do.

Yes, there are rate hikes happening, but we are still all in!!!!!!

We bought for $26K and am putting in $24K rehab to make it rent ready for a total of $50K. ARV should be $70K, and should be able to rent for $800-850 a month.

It's not in Columbus.  It's actually in a small town in Indiana.  Pros.....you can find decent housing for $50-75K.  Cons....it's hard to find commercial lenders to lend on that low amount and I'm still getting low double digit appreciation but it's not like the big bucks you hear about in the large cities.  But, it's what I can afford, we cash flow, and if I ever did have to cover the mortgage, coming up with $300-400 is a lot easier than some of those larger mortgage payments.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $26,000
Cash invested: $21,000

Excited to buy this distressed SFH and turn it into a nice home to rent. After purchase and rehab, it should cash flow $300 a month and ARV will allow me to get all of the money back. Can't wait to get the money back and do it again, and again, and again........

What made you interested in investing in this type of deal?

The numbers made sense. Plus this house is next door to a SFH we already own and rent. By rehabbing this, I'm helping the other property. Plus, I love taking an eye sore and removing it from the neighborhood.

How did you find this deal and how did you negotiate it?

Was called by a wholesaler who first contacted me about the home we already owned next door. We couldn't come to a deal on it but he remembered me and when he got this one, he called me and gave me first crack.

How did you finance this deal?

Paying cash for everything. But this method is slowing me down. Would love to find someone that can loan me the money up front and then when I refinanced, I would pay that original loan off.

How did you add value to the deal?

Doing a lot of forced appreciation.

What was the outcome?

Just now completing the rehab phase. Trying to determine best lender/loan product to use for refinancing.

Hi Allen, 

Would you mind sharing the spreadsheet (without your specific data, of course)?  I just want to make sure I'm capturing what I need to capture to give me the most accurate picture.