All Forum Posts by: Aaron Smith

Hey gang, 

I have the chance to put an offer on a property in FL. It's a owner finance deal. Does anyone know/recommend one from FL. I'm in UT. 

Thanks! 
Happy 2017 House Hunting!

Aaron

@Andrew McFarlane The short answer is, yes. :D  You can talk to a local realtor to see about comps. You can do your own research from all of those site and pull data from there. CL is a good way to judge rents in the local area to see if your property rents are near/at/or above market.. 

Pulling comps, and this is an educated guess, to get the data you need for a full analysis will require access to the MLS. Not sure you can do that in UT without a license, but I'm not sure about that part.

All the best, 

Aaron

Hey everyone, 

General question. I'm looking at 6 unit complex in Florida. The deal is cash only *sad face*. The agent says he can get me private money with 30% down @ 12% interest only.  The sales price is $239k. From my analysis, I'd have offered $190k on a conventional loan.  This would be a buy/hold deal. 

On my analysis, I'm showing I'd have enough to cover the interest only payment and them some left over. 

I'm nervous because I'm new, this would be my first deal, and non-conventional is scary for a first timer. 

Has anyone done this on their first deal? How hard is it to get a loan after the first year? If I'm making interest only to a private lender, will banks still want 20% down when I go to refinance? I'm sure I have more questions, I just can't think of them right now (only 1/2 cup of coffee in me so far).

Please let me know what other info you need. I liked this property until I found out it was a cash deal (no, it wasn't listed as such on the dealers website :/)

Thank you ALL in advance! 

Happy hunting in 2017, 

Aaron

@ebony scurry I LOVE the notebook idea. That's why I love this site. So many nuggets to take away and apply.

@Nathan S. DON'T wait to hire a CPA! They're one of the first you should bring onto your team in REI. They would have had you using the home office deduction already! Not to mention, depreciation is one of those areas you could be missing something. Which means you could be missing out on MORE deductions!

With your home office, you can deduct:

- Office supplies

- Utilities

-Cell phone

-Home phone

-Internet

-Cost of your computer (office equipment)

Like I said, unless you're deducting a massive amount of square footage as your home office, you're unlikely to be audited anymore. As more and more people work from home, the IRS has recognized the definition of "home office" has change significantly. Hence the standard home office deduction. 

Hire a CPA, have them review your last two years returns. They may be able to help you realize some savings you've missed out on! I'm paying $300 for my CPA (the cost is a deduction BTW..) which is well worth it!

A

@Aksel A. Your best bet is to find a CPA who specializes in REI. If you're going to invest in SFH, then it is unlikely a bank will allow you to put said property in an LLC, as it normally triggers a "Due on sale (?)" clause. Believe that's the phrase.

Trying to navigate tax/legal structures on your own, especially in REI, can be treacherous. While not impossible, why risk it? Get with those who live, eat, breath tax code and legal requirements and can guide you in the right direction.

As far as the temporary address, I believe you're going to need a permanent address for the LLC, but again, ask your CPA.

All the best in 2017!

Aaron

@Nathan S.   The IRS has a basic standard deduction now for a home office. The "I'm going to get audited for taking a home office deduction" fear is overblown. You're losing out on a ton of savings by not utilizing this!!!! So get on it! Yes, the deduction states it should have a separate entrance, etc, but they've long ago realized times have changed, and so, as long as you're not deducting a huge % (i'm at 5% of my sq. footage) of your square footage as your "home office", you're safe. 

The mileage deduction is another one where you can either use the standard deduction or calculate the mileage and use the .50 cent (think is is the going rate, I'd have to check) per mile the IRS allows. Any time you use your vehicle for business, you deduct the expenses (gas, oil changes, etc). You can't, however, deduct payments, unless the vehicle is used EXCLUSIVELY for business (realtor, business leases the vehicle for you, for example). 

I'm not a CPA, but I do have an accounting degree so I understand the BASICS of these deductions. I'm assuming you have a CPA since you're in REI. If not, get one. Period. One that specializes in REI. In the long run, the money you save by having one will more than outpace the cost of paying for one!

All the best in 2017!

Aaron

@Brodie Sharpe If you're a business doing business in another state (i.e. Foreign Entity), you MUST register that business in said state. No ifs, ands, or buts about it. For me, I formed in WY, registered in UT (where I live..have to for business banking), MI, and AZ. It sucks, but your wanting to do business as a legal entity and so, must abide by those state's tax laws governing business. 

I believe, however, if you're not going to place your property under the LLC, which it sounds like you are (and should), then you obviously don't need to register there.

Not a CPA but do have a decent working knowledge of business. 

If you're a business doing business in another state (i.e. Foreign Entity), you MUST register that business in said state. No ifs, ands, or buts about it. For me, I formed in WY, registered in UT (where I live..have to for business banking), MI, and AZ. It sucks, but your wanting to do business as a legal entity and so, must abide by those state's tax laws governing business. 

I believe, however, if you're not going to place your property under the LLC, which it sounds like you are (and should), then you obviously don't need to register there.

Not a CPA but do have a decent working knowledge of business. 

@Chris Ramos can I PM you? I'm looking to invest in MI as I grew up there. I live in Bountiful now, but I love Detroit (just not the weather :D )