All Forum Posts by: Aaron Edmondson

well said. I guess you just gotta hunt a little harder to find properties that cashflow.

Im getting ready to rent out my house, I locked in a lower interest rate 3 years ago and this will be a good loan to hold.

But looking at buying my next house to get ready for rental and Im concerned about locking in a 30 year rental with these high interest rates we have.... it would be hard to be cashflow positive. just talked to a lender and she said If I was to buy my same house today with the higher interest rates instead of an$850 house payment I would be looking at more like $1000.  that would hurt.

what are you guys doing in this market?

Is this the time to flip houses and wait for interest rates to lower to buy those rentals? it would make since to flip the houses for a couple years or however long it takes, and then use that capitol to maybe buy 2 rentals later. 

any ideas?

thanks for replying guys! listening to BP podcast interviews, I hear people say that the lender has the option to demand payment in full to transfer ownership, but they dont do that because they are happy to be getting paid. sounds like a scenario that could go against me if the current owner defaults on his loan, or if the title company wants me to take full control (which I was trying to avoid anyways with this whole tactic). Im not hearing alot of Pros for this idea. sounds like its a bad idea..... why is this strategy even concidered or referenced to flippers?

@Account Closed Im new to this stuff. Is this the same idea from Chris?

So I get to add the cost of materials to the "basis", meaning I only get taxed on what I make from the sale after I subract material costs?

@Chris Seveney So the 250K exemption you are talking about is where if I live in the house for 2 years and sell it for more than I paid, all the gains are tax exempt, as long as they are under 250k.  sound right?  And what did you mean when you said " Not only will you not get a write-off but you will get taxed when you go to sell it on the feta between what you have into it and what you sell it for."?

I get taxed by feta for the difference between what I put into the house and what it sells for?  so I bought the house for 140k, I put 15k into the house. and lets say I sell it for 170k. I get taxed only on the $15k that I make after all the remodel material costs??? Im assuming we arent talking about the 250k exemption scenario. this must be like a move in and flip in under 2 years scenario right?

I am Living in my house and Remodeling it, getting it ready to rent out and then I will buy another fixer upper.

I need some advice on a strategy to be able to use all the materials in the remodel as a tax write off.

I know you cant write off materials if its your primary residence, and since Im living in the home while I remodel, Its primary.

And these are very invasive remodel work, Full inside and outside paint plus siding, windows, kitchen and bath remodels, things I cant just swing by and do while it has a renter in. They would move out with all the construction going on, just to get the tax benefit...

So I KNOW all of you have the right answer for me. ;)  thanks guys.

I feel like there should also be a way to write off all the hours I put into it. It sounds to me like I need to have a Construction business. If just for tax purposes to be able to write off the tools I buy, the materials and the hours I work... I just dont know how this unfolds and im stumped.

OOooooh, so there is risk if say I am paying his loan and have control of the house and he for whatever reason loses the loan? then I am out of a house.

good to know. what is the percentage that it cant be below market value or its a crime?

thats what my accountant just told me last night as well, I dont think I will be trying to do that strategy right away. I need to understandf all the risks first

I could use some guidance here.

I'm looking at a scenario and I'm new, so any ideas or inputs would  be great.

I know a guy ready to give his house over to the bank because he is going broke.

I'd like to try and buy his house for a great deal and make it a rental and I'm trying to think of the best technique. 

since Interest rates are high right now, I dont wanna open a new loan and get locked in at a high interest rate on a potentially long loan. so I was thinking about that promissory note idea. where I promise him to pay his loan payment and it stays in his name, assuming he has a better interest rate than what I could get. 

any ideas on that tactic?