All Forum Posts by: Adam L.

Would love some feed back or thoughts on this.

I'm looking at a private sale of a rental house. What do you think? I would need to purchase all in cash immediately and then re-finance later. 

• $145k price, must be all cash 
  • (zestimate @ $158k, Redfin @ $190k)
  • $5k closing fees
  • $3700 annual taxes
• 3BR, 1Ba
• has a long term tenant (husband, wife, 2 small kids) since 2016
  • rent $1150/mo. Tenant pays all utilities.
  • lease signed until May 2020...would probably extend again
  • well maintained and new-ish interior
• Round Rock, TX, suburb of Austin. 
  • walking distance to Dell Campus
  • good pocket
  • I live about 15 minutes away from here
  • I wouldn't need to do a management company
• the owner is moving out of state and doesn't want to deal w/ a management company

*yes, extension was filed last month <3/15

So got a question...this is my first time doing this...I'm trying to fill this out in Turbo Tax and understand what to do.

I and 2 friends pooled $100k into a small LLC to invest in a large apartment complex purchase ($7M+ deal). We just received the K1 from the large company and am trying to break it down and figure out what to do w/ it. It looks like a large depreciation/operating loss upfront that the Large LLC said would be taken in first year to offset future taxes.

Any thoughts? I'm in Texas...TurboTax is walking me through filing TX Franchise Tax paperwork and its starting to get a bit confusing.

Thoughts? see attached.

So I finally got the K1 from the parent LLC company here...Wondering/hoping someone could give me a little bit of walkthrough on what I'm reading here.

So we invested $100k to this company for the first year of this deal.

This is the return we got back....I'm a bit unsure about that -$59k number....but I remember yall discussing this is 1st year depreciation that can be carried forward to offset our real taxes.

Please, I'd love some coaching on what I'm reading here.

I have TurboTax Business, so I need to take this K1 and create a 1065 for our small LLC to then distribute K1's to our 3 members. How do we split this up 50/25/25?

so how would you evaluate such a low price option?

It says its currently renting @ $450, below rentometer.com median.

780sf, $35k asking price, 2BR, 1BA.

Is this the gateway to becoming a slumlord?

awesome, thank you for the advice. I don't think I saw an email come thru about this getting scooped up so I guess maybe other investors are passing on it too. 

I'd love to chat with some of you austin people and discuss more, or see if you're interested in partners.

PM me?

able to recommend a CPA to talk with?

So not sure if this is in the right subforum.

So I and 3 friends created an LLC to invest in a larger RE operation. The big company buys 500+unit apartment complexes and BRRR's them, offering 'shares' as Limited Partners to investors, distributing quarterly distributions.

This is an informal conversation from the big LLC manager:

"The first several years have significant depreciation, which is a non-cash loss and really just shields from tax exposure. It does not mean that the property is losing money. Because of the large depreciation-based losses, you will actually have some passive losses to distribute amongst your partnership. These can be used against other passive gains you may have from other investments. Also, our distributions are treated as return of capital (not return on capital), which means that you aren’t taxed on the cash distributions during the early years of the deal.

To answer your question specifically, if we hold the asset for more than a year before selling, the profits are treated as long-term capital gains. If we sold the property just 6 months after acquiring, then the profits are ordinary income."

So I'm starting to do taxes (TurboTax Business) and trying to create an 1065 so we can file K-1s.

We started LLC Feb 2018 and signed the docs by March.

• Total initial investment = $100k (split 25/25/50 among 3 members)
• Total distributions earned in 2018 = $2,515.63 ($628.91/$628.91/$1257.82)

Is this something I can do in TurboTax or do I need to get a CPA involved?

So I'm new to this, still haven't jumped on a deal yet.

Anyway, I'm trying to understand the numbers I'm seeing on the calculators.

I've found a pocket deal in Austin, TX that looks real interesting!

• 2br/1ba condo near downtown (William Cannon & Pleasant Valley), 1975 built
• $105k asking price (off-market)
• direct comps sold for $145k recently, w/ Trulia valued @ $135k
• rentometer says $1195/mo
• $190/mo HOA fee (I need to find out what this covers)
• $155/mo taxes
• not the nicest interior, but its rental ready...could use some modernizing, or leave it as is.

So my question as a novice 1st-timer...I have the cash on hand right now to buy this easily...I'm not sure what I'm reading from the calculator if this makes sense or not.

I assume you buy it outright for $105k, then immediately try to refi out at full appraised $140k-ish. 

It seems like this would cashflow w/ minimal effort and low vacancy at the lower end of the rent ($1195).

1. How much to mortgage/refi? 80/20%?
2. how does a novice evaluate this?
3. Do HOA fees get passed on to the renter?

https://app.dealcheck.io/#!/app/rental/-LZG1ClOCKP...

https://www.calculator.net/rental-property-calcula...

Awesome! Was it easy to pull out the cash for the investment purchase? What rate do you have on the HELOC? Higher than the refi-mortgage?

I imagine using the HELOC allows you to quickly close on a property, right? rather than waiting the 30-60 days for a mortgage?