All Forum Posts by: Alex Grier

Hey guys I'm running the numbers on a new triplex I put in an offer on the other day and they currently have oil heat which I'd be responsible for paying for. Based on the numbers I have it costs about 2400 a year or 200 a month. I'd like to pocket the 200 a month by passing the cost on to the tenants. However, I want to do a little giving to get so to say. I'd like to install the mitsubishi hyper heat unit(s). I'm curious, has anyone done any mini splits with these and if so can you have the mini splits individually metered per unit? Or is my best bet to install an individual unit for each floor? 

 Gotcha, as a new investor I don't entirely understand the mechanics. However, would you say that appraisers primarily use the comparison model for residential and only tend to gravitate towards the income model for commercial? 

What if there are truly no recent comps though? Multi-family properties that actually have separate units with living areas, kitchens, etc. surely can't be compared to other sf or town homes just because they have the same number of rooms? I don't currently have access to the MLS as I'm not yet a licensed realtor. However, if I search a listing site for recently sold homes in the area that I'm looking at a potential multi-family property I typically can't find any comps.

Guy's I'm looking to get some more information on how 1-4 unit multi-family properties are appraised. The primary reason I'm asking is because for my buy and hold strategy I'd like use hard money loans to buy distressed properties, rehab them, and refinance based on the ARV to a conventional mortgage. Based on all the information I've pulled appraisers will typically use a sales comparison or an income approach.

For the 1-4 unit non commercial properties will appraisers typically use the income approach? 

Is there a finite amount of time that the units must be rented for before an appraiser can use an income approach based on the net operating income of my property? Example: If I rehab a property and have it filled with tenants in 6 months and go to refinance my loan in month 7 will an appraiser still use the income approach even though my property has been rented for such a short period of time? 

Thanks for any information you guy's can offer! 

 Thanks Brandon both of your answers helped me! I was confusing capital gains with standard income tax.

Interesting I may be wrong about the 4% investors tax as it's been a while since I read this. However, I'll link below that if you are a real estate professional or you do a large volume of flips per year the IRS will tax you self employment tax on top of capital gains tax.

http://www.biggerpockets.com/renewsblog/2014/07/10/paying-taxes-fix-flip-properties/

Guy's I'm in class currently to get my realtors license. However, I'm starting to have second thoughts on the benefits to this as an investor; specifically a flipper. The primary reasons I wanted my license was to get access to our local mls and to avoid seller commissions. However, from what I understand you have to be part of a brokerage to get access to the mls and to sell a house. After the fees and due diligence of continued education it doesn't seem worth it and I'll explain why I have this opinion.

As a real estate professional I'm subject to a 15% self employment tax on any profits vs the 4% investors tax. After this is said and done the benefits I gain of avoiding seller commission fees is almost wiped out depending on the price of the house and the margins. Additionally, I'll be the one at the open houses and finding the leads onstead of another realtor. Please share your opinions and if there are any other benefits to investing as a licensed realtor.