Hello everyone,
As a long time listener of the BP podcast its great to finally be posting on the site and getting involved with the community here. Ive worked very hard so far to get into a position where I feel that Im able to wrap my head around investing concepts and jump into my first few deals! With that being said I'd like to present this scenario Ive gotten myself into with the hopes that more seasoned investors could hopefully give me a little direction.
I'm still working a full time job which involves a ton of travel. Although there is some local work which periodically lands me in my home vicinity, monday-friday I could find myself anywhere in the world. This was one of the major things that was holding me back on buying property in the first place with fears of not having enough time to be involved physically. Nevertheless I sucked it up, contacted an agent and started looking with the intent to find a great SFR priced well that needed some work but one that I could still live in. My agent gave me access to the MLS and I found a property. The property its self has many pros and cons but I feel that the positives out weigh the negatives. The property was originally listed for the appraised value of 229K and after 6 months on the market fell to 185K. After some back and fourth I purchased the property for 174K with 3K seller concessions. Not wanting to spend all of my saved money for the downpayment and costs to update I brought my brother in on the deal. Our agreement was to split all costs associated with acquisition of the property and costs of rehab for the end goal of flipping for a profit. I would pay the mortgage and live in it until we sold. We signed an operating agreement putting everything in writing. Now Ive been living in the property since September and I've estimated 50K for rehab costs. Based on comps in my area ARV is currently looking to be in the 320K range.
So with my end goal being to own multiple rental properties generating cashflow here are my questions:
Should I start rehab in the spring and try to list right at the 1 year mark to only pay short term capital gains or wait the full 2 years and pay no tax?
Assuming we walk away with 100K at a 50% split should i take that 50K and use it for a downpayment on the next flip or look to buy rental property to hold?
Does anyone have experience doing deals with family? Once we sell should I venture out on my own or try to get my brother to invest his half on the next property together as a team?
Between now and when I sell will it be majorly beneficial for me to get my real estate license?
My brother owns a small electrical company and he can get a wholesale rate on a solar system installed for the house, will that add significant value?
I don't know what type of response or how much feedback I can expect on this forum but I want you all to know I truly appreciate you taking the time out to read and consider my situation. Already at the entry level I feel a burning desire to succeed in real estate and a passion I've never felt before. I look up to everyone here who has taken the time to become an expert in this and i'm willing to learn from you all. Thanks again!
