Author Topic: SOLD!  (Read 702 times)

malacca

  • Stubble
  • **
  • Posts: 218
  • Location: Malaysia!!!
SOLD!
« on: June 29, 2019, 08:03:50 AM »
I bought a townhome in 2012 - dirt cheap. It was a short sale. It was actually in good condition. The previous owner had replaced the windows, painted, carpeted, etc. Well, he wan't a good painter so I had to repaint it. Honestly, he was a reaaaaly poor painter.

And the carpet had to go as it was pulled up in many areas. I learned after having new carpet installed why it was pulled everywhere. The subfloor was really hard and regular nails to hold in the tack strips wouldn't stay in. So $2200 wasted on carpet I didn't really need (just new, better nails).

Anyway, the place gave off a minimum 30% net return (yes, 30%. Cost was very low and I am good at getting high rents). The exterior was all replaced by the HOA thanks to a nice storm and big insurance settlement. That, combined with a roaring economy, has quadrupled the price!

So I decided to sell. I had someone repaint it as my skills are not that good - and I am busy with other stuff.

The offers are pouring in. And all are just at 4X what I have in it.

Plus I cleared a lot on the rentals over 7 years. My total net return - net rent and net gain from sale - will be 500% over the seven years.

Now if a guy could replicate that...


radram

  • Pencil Stache
  • ****
  • Posts: 956
Re: SOLD!
« Reply #1 on: June 29, 2019, 10:20:35 AM »
I bought a townhome in 2012 - dirt cheap. It was a short sale. It was actually in good condition. The previous owner had replaced the windows, painted, carpeted, etc. Well, he wan't a good painter so I had to repaint it. Honestly, he was a reaaaaly poor painter.

And the carpet had to go as it was pulled up in many areas. I learned after having new carpet installed why it was pulled everywhere. The subfloor was really hard and regular nails to hold in the tack strips wouldn't stay in. So $2200 wasted on carpet I didn't really need (just new, better nails).

Anyway, the place gave off a minimum 30% net return (yes, 30%. Cost was very low and I am good at getting high rents). The exterior was all replaced by the HOA thanks to a nice storm and big insurance settlement. That, combined with a roaring economy, has quadrupled the price!

So I decided to sell. I had someone repaint it as my skills are not that good - and I am busy with other stuff.

The offers are pouring in. And all are just at 4X what I have in it.

Plus I cleared a lot on the rentals over 7 years. My total net return - net rent and net gain from sale - will be 500% over the seven years.

Now if a guy could replicate that...

Congrats.

Are you just going to just pay the piper regarding capital gains, or are you considering something like a 1031 exchange to buy more property?
Looks like your tax bill will be more than you paid for the house.. Moustachian people problem for sure lol.

SwordGuy

  • Walrus Stache
  • *******
  • Posts: 5897
  • Location: Fayetteville, NC
Re: SOLD!
« Reply #2 on: June 29, 2019, 10:28:14 AM »
Good job!

malacca

  • Stubble
  • **
  • Posts: 218
  • Location: Malaysia!!!
Re: SOLD!
« Reply #3 on: June 29, 2019, 06:26:13 PM »
Well, I asked my CPA about cap gains. Since I am FIRE I don't have that much income and my new business has some start up loses. And we had some international moving expenses that are deductible. So he said the tax bill will be minimal.

A lot of people don't realize that cap gains can be low or zero. There are several deductions and if you are FIRE then your income is likely low - so the rate cap gains rate is zero or 5%.

I had another friend who didn't want to sell because of the tax bill. But I pushed him to actually do the calculations and it came up zero for him.