I currently own a home in the bay area, ca. My mortgage on this property is $1700/month and I feel that I could rent it for $1400/month. This December I will have owned it for 2 years. My credit scores are 740+ and I have a HELOC open for $150K.
I am on a priority list for a new development here in the bay area. I hope to secure a house in the first release on July 9, 2005 with only a $10K as a deposit. The house should be built next Jan or Feb, I plan on selling immediately and re-investing the profit.
I have been reading a lot on this and other sites. I am trying to decide what my next step should be. Should I look for other up and coming communities and try to get in on the first releases? Properties to flip are hard to come by here due to the competition. Does anyone know of any good reads on setting up LLC’s?
Usually if your renting your place out you should be getting a monthly cash flow. From what I here you are going to pay money out of pocket for someone else to live there. WHY would you do that? Unless, you feel that holdiing it a couple of more years that the value is going to shoot up high.
I do know if it’s your primary residence you should live in it until December, therefore if you sell you would not have to pay capital gain if that’s your primary residence.
You might try checking with your Secretary of State. They can give you information on setting up an LLC.
I agree w/ katrina, -$300/mo, are you sure you want to do that (not me!)?? Maybe consider a rent to own, or OWC note to get closer to $1700/mo for your place.
I think an LLC is a good idea. Check out the “Asset Protection, Legal” Forum on this site, there are a ton of posts on LLC’s and just about everything related to them. Just keep going back into the old stuff and read them all.
I found a great website that lets me set up a LLC for $50 at my Secretary of State’s website; try loooking for one for your state. You should also call a Lawyer that specializes in RE, a good one can help a lot, especially with the details regarding your state and your specific plans.
i would sell. infact, thats what i have done. all my CA properties are in escrow right now. i will become a renter pretty soon. let someone else subsidize my rent!!!
invest where it makes sense. CA does NOT make sense.
It’s no fun running a Private Welfare office. I see too many people buying properties and renting them out for large monthly losts because they hope a bigger fool will buy them for more than they paid. A lot of people are going to get crushed, and rightly so.
I thought that all the new developments in CA now have a clause in the contract where you must hold the property for a certain amount of time (usually a year), otherwise, you would have to pay some penalty.
Thank you for all of the replies! I added the info on my mortgage and possible rental income just for additional info to others that may suggest the possibility of renting my primary residence out. I am set to make my selection on July 9, in the first release of a new development here. I have heard of no “1 year clause,” but if there is one I will live/rent it for a year then sell. The community is a gated/golf course community with a lot of demand to buy. There are some that say that California is a bubble, that may be true but there is money to be made right now and I am trying to get my piece
