All Forum Posts by: Winston Covington

In my humble opinion, you're banking on appreciation.  That's call speculation and that can be dangerous. If you were to refinance so that you have cash for a 2nd investment, that may sound good but would the new investment be generating positive cash flow or would it be another negative cash flow situation ?  During my early days with investing, I would bank on appreciation for my profit. Sometimes I would win and there were times that I would lose.  Hanging on to a negative cash flow situation and feeding it from your wallet every month is called an Alligator. When the economy changes and you own Alligators, it can cause a major headache in your life.  How long can you afford the negative ?  What happens if the tenant loses their job and can't make their payments ?  What happens if you have a loss of income ?...I have been there and done that and I will  never do that again.  I don't know what stage you are in your investing plan but positive cash flow in a changing economy will serve you well.

Always remember the first 3 rules of real estate investing…” Location, location, location “.  With this house being right next to a major airport, I would pass unless you could  get it WAY under market value.

This is a tough situation and you will need the advice of a good CPA.  I’m not a tax specialist but as a Realtor with over 37 years of experience, I can tell you that the Trust will provide you with a step up basis once your Mom passes away. If the house is sold prior to that, there’s a high probability that you Mom will have a tax liability. However; please check with a good CPA to see what exemptions you Mom may qualify for.  Good luck.

Hi Nancy, I'm a Realtor in Southern California but I own SFR's in Huntsville / Madison County so I'm happy to help a fellow Alabama Investor. . Your Realtor should guide you on this but as a matter of interest to prospective Buyers, you should post all of the information you can on your income and expenses. Pictures of the interior are also advised along with an inventory list of appliances and what stays with the purchase. Most Sellers will expect to show the units once an acceptable offer has been agreed upon. A conversation with your tenants would be wise as well. Inform them that their lease will be respected and a discount for their cooperation helps. Always be courteous and expect to show copies of your utility bills, other expenses, lease agreements and tax returns to verify income and expenses

I didn't notice the days on market but I did see that you have already had a price decrease. If your property isn't getting any attention in this market, I would start with the price. Position the price where it's just under the comps. Next, what type of compensation are your offering the selling agent ?  I would say that if you're offering a discounted commission...raise it to whatever the full selling commission is in your area. Your photography needs some work as well. It took 17 pictures of the exterior of the property to begin seeing the interior.  The house seems to show well but your pictures are dark and they don't pop with color.  Notice that the lights are off in almost every picture. Hold a special broker preview, invite the best agents in your area  and cater it with great food and music. If you do all of the above, it should get the " Buzz " going on your listing with showings.  Follow up with each showing to get the feedback from the agent as well as the client.  This should help in making the proper adjustments and get your property the attention it deserves.  * Note * before you go through the time and expense of all of the above...make sure that your Seller has a strong motivation to sell and isn't just fishing and wasting your time. 

Hi Jorge. An important team member for every Investor is a good CPA. A CPA or an Enrolled Agent are the best sources for reliable 1031 exchange info. With that said, I can tell you that funds taken from a 1031 and not used to purchase real estate is called “ Boot “. Boot would be taxable and something to avoid. Contact your tax professional for advice before considering a 1031.

I would proceed with performing according to  the terms of the contract. I would also check with your escrow/ closing Attorney to make sure that your Seller has all of his documentation in before depositing the balance of your closing funds.  If the Seller becomes difficult again at closing, it’s time to speak with a good real estate Attorney.

I would call several of the property management companies in Jacksonville to see what they recommend and to see what type of rental income range is found. I would then check to see what the school ratings were in the more recommended areas. Next, I would check with the Public Information officer with the local Police or Sheriff’s Dept. for the crime stats and then drive through the best recommendations to see what neighborhoods work for your price range.