Over the course of 2018 in Colorado’s northern real estate market, I’ve learned a lot about the local market’s behavior, growth trends, tenant quality, and lifestyle. Plus I’ve made over $15,000 in equity notwithstanding any additional appreciation I’ve received on the property.
Appreciate is the cherry onto in relation to my real estate investing strategy. Tasty to have, but certainly it wouldn’t ruin the entire dessert with it’s absence.
My plan with the duplex I purchased under an FHA financing backdrop is as follows. Continue using my money and other peoples money (tenant’s and roommate #househacking) for the next year or so until I have put in at least 20% of the purchase price’s value. At this point, I will find another multi family to own long term in the NoCo market that is cash flow positive month one, near good schools, gainful employment, and limited to no crime.
After identifying the best deal with the above criteria for the investment, the equity I’ve been building with monthly mortgage payments toward my duplex will transfer tax free over to another multi family purchase. This process is the 1031 exchange and most likely will necessitate a need for a good tax advisor and lawyer. Don’t cheap on this rich man.
Between my 1031 exchange duplex deal and now, a recent plan I’ve decided to implement is improving the duplex with a backyard fence, upgraded appliances, in time new countertops, remodeled kitchen, automatic garage door in both garages. When the time comes to 1031 this duplex, I’ll get the property appraised beforehand in order to refinance my current mortgage.
I believe a refi on my duplex will lower the monthly payments on the loan. Entailing I’ll earn a larger monthly cash flow income from the 3 filled units.
With a BRRR’d duplex, 20% equity under ownership, and a 1031 tax free money transfer in my playbook, the next multifamily could be 50% owned at time of closing depending on the property I decide to buy.
Overall, it’s been a great year in business and I’m excited to actualize as much potential as possible in 2019!