All Forum Posts by: Ari Bachrach

I have invested in a few syndication deals in the last few years, and three of them are ending or have ended this year. How are the final distributions taxed? Assuming there's depreciation recapture, will the depreciation recapture and the final distribution amount be reported as regular income? net rental income? Long term capital gain? Something else? My intuition says long term capital gain, but I wanted to check so I can make sure to plan the rest fo the tax year appropriately.

I have a tenant who has been in one of my houses for almost a year. His first two months he paid on time. Since then he's paid late every single month. But he has paid and is otherwise a responsible guy. I hired him to do some landscaping work at a new place I'm rehabbing that will be listed soon. He asked if he could move to the newer bigger place. His current rent is 1100/mo, and the new place would be 1500/mo. I told him I was worried since he seemed to be having trouble making 1100/mo payments I wasn't sure if he could make 1500/mo payments. He tells me that he got hit hard by COVID (he's a landscaper) and lost income, but he thinks he should be able to make 1500/mo. I'm worried about it - he was always late and seems to be just scraping by, I don't want the extra 400/mo in rent to bury him financially. How would you handle this? Normally I look for an income of 3x rent, but I'm not sure how to apply that to the last year given how abnormal 2020 was.

Current situation: I have a HELOC I used to purchase an investment property. Every year I report the interest from the HELOC on the schedule E for the investment property. Easy and simple.

Potential situation: My home's value has increased and mortgage rates have dropped, so I'm thinking of refinancing my mortgage and paying off the HELOC. I would then get a 1098 from my mortgage company, but it would be tied to my primary residence. Is there some way I could figure out which percentage of the mortgage interest is tied to the investment property and still report that as a deduction on schedule E? I'm over 10,000 in property taxes on my primary residence (I live in a high tax state), so I'd hate to lose this deduction.

I've generally found that the answer is the smaller banks. I don't think I've ever gotten a loan from one of the large national banks. Try to find other RE investors in your area (there are BP forums for geographic areas, plus probably lots of FB groups) and ask there.

Everyone has their own priorities. Some people value speed, in which case cash is best. Some people prefer to maximize their cash even if it takes longer.

Does anyone here do ground up construction of SFHs and then hold them as rentals as a strategy? If so can I ask you to share some of the basics of your process and strategy? I occasionally come across areas where I want to own a rental, but can't find anything for sale other than empty land. Is it crazy to buy the land, get a construction loan and a builder to build a house, then rent the house out and hold as a rental. I don't know if losing the economies of scale of having a builder build a single house will mean this will never work financially though.

Can you share some of those lessons with us newbies? 

I'm usually a softie, but as everyone else as said this needs to be a business decision. If someone can't pay rent, you're not doing them any favors by renting to them. They're going to go through the time and expense of moving, pay rent for 3 months, and then end up with an eviction filing which will make it harder for them to find housing in the future, and then have to move again. As long as your income rules are fair (The general rule is the tenant needs to have income equal to 2.5x - 3x the rent), then stick to it.

You're near several hospitals and you're renting it furnished. You want a traveling nurse or a locum tenens doctor. There are organizations that work with both of these to try and find them housing - try reaching out to something like that. You may have to shorten your minimum stay a little, but if someone is getting you a steady stream of renter's it'll be worth it. 

I've used a handful. My favorites are:

• http://www.fourbbh.com
• http://BuyBaltimore.us
• http://www.truepropertiesdunda...
• https://www.cashflowinbaltimor...
• www.MDDiscountHouses.com

Also check out "Maryland Investor Network" on Facebook as a lot of wholesalers post there. It's mostly Baltimore focused but starting to expand to other parts of the state.