All Forum Posts by: Anthony Shields

I added a photo of the house below. My plan for this is a potential flip, but I think it could do very well on airbnb as a rental as a backup plan. Its a water front home on a unique lot with a view of an active river.

Luckily, the first floor actually has plumbing already and a small bathroom. The window on underneath the stairs is a ~200 sq ft storage room with bathroom. Has electricity, septic, running water, etc on both floors.

I think my biggest problem will be the difficulty of doing the work, staying under budget, and not having the house look "weird". It will be hard to get this done without it being obvious that it used to be a large garage.

I cant find much about doing this online since the layout of this house is a bit unusual.
Its a bi-level house. Two story. The first floor is 1500 sq ft, the second floor is 1500 sq feet.

The first floor is entirely garage. Two garage doors in the front, no entrance except the garage doors.
The second floor is a living area and can be entered via exterior stairs. The two floors are not internally connected.

The house is valued at ~600k. The two neighboring houses are great comps. They have similar size lots, both multi story, both are the same total sq ft (3000). The difference is that they have a normal layout. One garage bay, first floor living area, second floor living area. Those houses are valued at about 950k. I assume the reason for the discrepency here is because due the garage space not being counted as living area, the bi-level has to be listed as only being 1500 sq ft.

I'm thinking about converting the first floor into a living area, connecting them with internal stairs, getting rid of the external stairs, and just keeping a single small garage bay. This would effectively double the square footage (from 1500 living area -> ~2700)

This obviously wouldnt be cheap, but if it could add ~350k in value, it would be worth it. I'm wondering if anybody has experience with something like this or if there may be some things I'm not considering. Its different than just converting a regular garage, so I'm hesitating a bit about whether it could actually result in the value improvement that I'm expecting.

My primary business is not real estate. I use the income from my primary business to qualify for loans. I'm thinking about electing S-Corp next year, but I'm worried it will cause a problem due to my "salary" being lower. 

Example:
Single member LLC profits $100k. That $100k, for tax and loan purposes, is considered the owners income.
S-corp profits $100k, owner is paid a salary of $40k. Which number do lenders care about in this case? The 40k or the 100k?

In the S-corp example, will lenders only look at the $40k? Or will they still consider you as having $100k of income? I dont want to pay myself a lower salary for tax benefits, but then be unable to get loans.

I was hoping some people here could help point me in the right direction. I'm 22, living with my parents, and currently have no debt. I'm getting ready to move out with my girlfriend soon, but I want to make sure I actually get a place which I can afford, while making the best decision. I currently am self employed and have been for just a year.

My net income this year should be $38k, next year will probably be $60 - $80k. The reason for that number is that I started with very little money, but things are ramping up quickly as I'm expanding rapidly. My current, net monthly income puts me at $50k per year if it happened every month. I currently have $10k in assets and cash equivalents, and $22k saved in cash.

I'm looking to move out, but I know in the future I want to get into real estate. I'm located in South Florida. I've considered house hacking, but it's difficult here. Without spending $250k - $350k, I will wind up living in a not-so-good neighborhood, while also having to manage a tenant. It will be rent free, but I want my actual home to be relatively stress free. I'm not even sure if I'd be able to get into a place like that with my current income and limited income history. Parents could possible help, but it just seems like it may not be worth it.

I've considered an apartment, but I hate spending $1200 per month on rent and not building up equity. 

At the same time I've considered a condo, but I run into the same issue as house hacking. It's just hard to find a condo in a good area around here that isnt too expensive.

My current idea was to rent a $1200/month apartment, and then use a chunk of my savings to start trying to get into real estate, and possibly buying a more average duplex at $150k - $200k. The $1200 would be split two ways since I'd be living with someone, but I am also capable of affording it myself if necessary. I figure this would provide some income to cover a bit of my apartment rent, get me some experience in real estate and property management, and I would also be building equity.

Any advice or thoughts? I really appreciate anyone who has actually read this far down.