this property can't be sold to anyone other than one of my siblings or one of two cousins until me and all my siblings are deceased and it goes to one or all our kids... grandparents really didn't want it leaving the family and locked it up as such

i understand why they did it, but unless lived in, it's a massive tax burden and could fetch quite a bit on open market (grandfather bought a fishing camp in the 60s, built a road and house there then in the 80s/90s the property shot up and last neighbor was ex wife of founder of Intel)

so taxes for a sale not an issue for my parents

Offer to get it running for them maybe? It seems like zero risk and minimal effort to see how it does for a month. I'm getting mad at your parents.

As someone who has written four of the BiggerPockets investing books, and is integrally involved in the business and community, I completely agree.

The great thing about BP is that it is VERY anti-guru, which means that there's a lot less risk of getting scammed or taken advantage of by anyone in that community. But, the risk is always there, and anyone who is trying to sell you something or telling you about a specific market or a specific strategy or a specific investment should be considered a red (or at least a yellow) flag.

I would recommend using BiggerPockets in the following way (all completely free):

1. If you're brand new to real estate, start with the Ultimate Beginners Guide:

https://www.biggerpockets.com/guides...e/introduction

2. From there, hopefully you have an idea of what type of investing is right for your, and you can start reading the forums and blog posts related to that/those topics.

3. Check out the BiggerPockets Real Estate Podcast -- it's been around for 7 years, has had over 80M downloads, and is by-far the best real estate podcast on the planet.

4. Brandon Turner has free webinars pretty much each week. These are great, especially if you're interested in buy-and-hold. If you're interested in other topics, there are older webinars that are information-packed from other people (I've done a number of the flipping and systems/processes webinars). These webinars will try to upsell to a BP Pro Membership, but even if you don't want to upgrade, the webinars are a wealth of info.

5. Check out the BP calculators. Whether you want to do flipping, buy-and-hold, wholesaling, etc., there are some great calculators to help you start running deals. And I have posted a number of free flipping, buy-and-hold and multi-family spreadsheets over the years that you should be able to dig up.

If you want to spend a few bucks (not necessary, but up to you), BiggerPockets has, in my opinion, the best books on most investing topics. They don't sell anything else, so you don't have to worry about sales pitches.

That said, I started in 2008 without any coaching, mentoring, courses, books or anything. I've done nearly 1000 deals since then, including 400+ flips and own hundreds of units (both single family and syndication). If someone tells you that you need to spend money to learn real estate investing, they are lying to you.

And this is the biggest reason I got involved with BiggerPocket a dozen years ago -- no sales pitches, no gurus, and purely education focused.

BP is awesome, just got my third rental and that’s where i started learning

I'm not moving on this for a lot of reasons just posting some thinking around it and think examples are always good.

https://www.zillow.com/homedetails/3.../6915305_zpid/

This place was left a mess and also is in "pre-foreclosure." By quickly googling I think I have a sense of the owners and occupant, but it feels weird going into that kind of personal detail on a forum, even if it's not hard to find yourself. Suffice it to say the "tenant" was possibly a co-owner, and a co-signor (not an investor) may be on the hook for this. Make whatever assumptions you want from that, and I may be wrong - don't know these ppl at all of course.

Based on purchase date, loan amt, and interest rates at the purchase date, the note is probably around $69k + whatever fees etc are tacked on now because of missed pmts since Jan, so reasonable equity position.

The work:
Looks like the world's most straightforward clean-up, so i imagine the value is all in getting it before it's on the market (which means we're probably already like 5-6 months behind).

Based on the info up there looks like someone bought it and the sale fell through in May.

I'd guess this re-sells for $170k finished simply, maybe a bit more, or $205k-ish if done pretty well based on some comps in the bldg, could maybe push a bit higher with no change in market demand (which... I have my own views on what LV RE is going to look like in the next 12-24mo). About 5k (?) worth of work to freshen it (someone tell me I'm wrong?) and 25k (also tell me im wrong?) to get it fairly nice, something like an updated kitchen and nice looking flooring throughout, fresh paint, etc. Either way with transaction costs, holding costs, and risk, seems like you'd really want to buy at 130(?) to make it a slam dunk. Am I way off?

Looks like a quick flip, but my concern would be market risk during holding. Right now this probably rents for 1300ish, so not a disaster if mkt moves but also not gonna get rich off this.

Thinking that the approach is probably to get them a letter and offer when the first pmt was missed.

Interested in any thoughts about how and when one would approach - do you go to owner? When do you go to the lender? General thoughts about costs and valuation (looked at comps in the complex, but a the recent sales are 2BR/2BA ~1200 ft instead of 980. When they are from different timeframes can i just normalize (and project) by Case Schiller as a first order appx? Guessing valuation isnt gonna be straight $/sqft but what else might I do? And also interested in how you are factoring in "LV may collapse any moment" into your calcs.

Just for conversation. Feel free to beat up anything above. Cheers.

I'm not totally following what you mean. You mean getting more money in rents than the mortgage payment? That's sort of the whole idea of REI, so I must be misunderstanding what you're asking.

I think it all depends on if you can make high cashflow deals or not. If you can, then it's a good time to invest. If you can't, then it's not a good time.

I think you should spend some time doing more research on real estate investing. Look at anything by John T Reed, I like his work a lot. He also has a lot of guru ratings on his website that you might use to find other good quality authors. Or browse Bigger Pockets forum. They also publish some books for beginners, but I can't speak to the quality of the advice in them. I've read one (Estimating Rehab Costs) and thought it was decent, if very general and beginner oriented (which might be perfect for you). I've found that the Bigger Pockets forums are sort of hit or miss depending on who is responding and if they know what they're talking about. The articles are hit or miss. Based on your comment, I'd suggest you spend a month getting some more knowledge first.

how would you calculate the value of a property according to its free cash flow revenues?

let's say an apartment has no debt to the bank (you are the owner), net rent after expenses is 10K a year with no grow, and the cost of capital is 10% (s&p500)

can you find a good value of that property with this numbers or I'm missing something?
ty

Usually there’s a prevailing market capitalization rate and you can adjust based on whatever capex you think it needs and on what time horizon. But you may be inclined to pay more or less depending on other aspects of the deal, like how the debt is structured and how much cash you need to put down.

Anyway look up cap rate

I don't have any specific question at the moment but a close relative of mine is 1031ing a house (just time to sell it due to age, upkeep and some other issues that make it difficult for it to be a rental property) and wants to buy a condo to rent out instead (greater Boston area if anyone cares about that info).....Doesn't seem like the best time to be buying a condo to rent but the cap gains tax would be like 100-120k so not much alternative.

Any advice through this process that I can relay?

Make sure he identifies the properties he intends to consider purchasing within the time frame so that he can complete the 1031.

I think that's the easiest way to accidentally mess up the exchange.

Does anyone have any experience selling land?

I think my two options are to post up a sign with my number or go through an agent.

My primary concern is my inexperience with the process and if the potential risk for a mistake will outweigh savings from paying commission to an agent.

1. What's the typical commission for a sale in the 5m range? How much will this percentage decrease if the sale price goes up to 7m?
2. I'm used to having the buyer cover the commission for the buyer's agent. Is this fine for a deal of this size?
3. Is there a normal report the seller should be providing? Environmental report? anything else?

Feel free to add any other thoughts you think I may be missing.

Thanks

Thanks. Appreciate all the advice. Decided to take a step back and think things through more and read up. Also, the area we were originally looking (Joshua Tree) the market has gotten insanely hot in just the past coupe months, so thinking of waiting for things to cool down a little.

The bigger pockets podcasts are great for beginners.

The BRRRR book by David Green of bigger pockets is also a good beginner book.

Reading this entire thread from beginning to end will also give you a lot of info.

The question is too vague to be answerable. With the numbers you outlined I guess you could determine the net present value of the property. I'm not sure if that's useful for you, but you could get an NVP from what you outlined.

The 1031 exchange doesn't eliminate the capital gains tax, it just defers it. That might not make sense for him depending on how old he it. He could also look into investing in an opportunity fund, which could eliminate the capital gains tax entirely.

All of your questions depend on what market you're in and the location of the property within that market. It also depends on what type of land, size, and zoning. And on top of all that, there is a lot of nuance to the specific parcel -- previous uses, city development planning, topography, etc. So there's no pat answer. My advice is to start looking for brokers that specialize in the sort of land you're trying to sell. Personally, I wouldn't try to do a large commercial transaction without a commercial broker. Commercial brokers are a completely different breed from residential agents.

I am a noob at investing/money management/real estate.

I own my current house outright. I want to buy a more expensive house. I don't want to sell my current house before buying the new house. I need to have my current house painted and some other repairs and because of coronavirus I don't want random morons trotting through while we still live here.

Also, I would prefer to just pay off the remaining mortgage balance (new home minus value of current home) in a couple of years.

So my current plan is to get a mortgage that doesn't have penalties for early payoff (apparently, rocket mortgage) buy the new house on a 5/8/10 year mortgage (?), sell this house, pay off the mortgage early in ~2 years with my savings plus the proceeds of my current home.

I want to minimize the amount of the interest/mortgage fees that I will have to pay. I would normally just wait two years to buy but we saw a house that we really love which is why I am here.

I will only be in the new house for ~8 years - maximum 10 years.

Any advice/recommendations?

Just buy the new house. Early payoff penalties are rare, you will have a lot of mortgage options. EZ game.

Are there any good resources about real estate focused on other parts of the world? Particularly interested in Latin America and Southeast Asia, and how financing/legal regulations differ from the US/Canada.

Someone who knows more than I do can correct me if necessary, but if you do that you will get screwed on the taxes by the old home no longer being a primary residence, which would likely be much more expensive than anything you're trying to save.

(I'm assuming this is in the USA)

You can exclude 250k (if single) of the gain as long as you lived there 2 out of 5 years prior to the sale.

Question on evaluating a multi family purchase. Let me know if these numbers are accurate

3 family 265k purchase price - 3700/mo in rents
25% down - 66k
6k taxes
3% appreciation?
Vacancy Rate 7%
Maintenance - 6k a year?
Insurance 3k/yr?
Interest on loan 4%

After 10 years

60k over 10 years spent in taxes
House now worth 30% more, 345k roughly
41k/year in rent after 7% vacancy rate
60k over 10 years in maintenance
30k over 10 years insurance
80k spent in interest on the loan(roughly)

So after 10 years we're up 260k based on these numbers. Do these numbers sound right?

Sounds good imo, but keep in mind these numbers dont matter if the 3 family next door is worth 150k because that specific neighborhood has 20% payment default rate. Maintenance is around 1% of property value here, in the US investors seem to calculate 15% of income (5%maintenance 10% capex).

3% appreciation is very generous, appreciation (forced or not) is the biggest wealth building tool, underwrite it wrong and everything changes, be careful accounting for appreciation.

Edit: you forgot a few things like management, accounting, snow removal, grass keeping, numbers seem to work because you put so much in maintenance. ��