All Forum Posts by: David M.

@Jeremy Rhodes

To add-on, I found that depreciation can suck because you “pay for it later” when you go to sell. Its part of depreciation recapture. Meanwhile, those Passive Allowed Losses you are griping about don’t offset the depreciation as they come into your 1040 in different way. That’s why 1031 exchanges come in handy

Otherwise, with a high income you can’t take the $25k deduction for material participation. So, rentals are really a cash flow technique.

That being said, you really can’t be having too much in losses otherwise then you aren’t making any money! Talk with a cpa, or we can talk offline, about to wisely take your deductions

Good luck

@Roberta Marcos Marcos

If it’s a problem with your husbands new job, you might consider waiting until he can “season.” Generally, it’s only a matter of a couple of paychecks — I assume he has a year round salary job.

As for credit score, yours might actually go up. Remember, it’s a credit HISTORY. The more credit you use, the more history you generate showing you can handle your finances. Also, having the breadth(ie mortgage, credit cards, etc) helps too. Your “credit,” the amount that you can borrow will generally go down since your debt to income ratio will only increase.

I’d say you might have to use a different lender if they can’t accept your husband’s new job with just a few pay stubs.

@Pier Cas

Not sure of your risk tolerance and amounts being protected, but taking one property of LLC should be reasonable. Just get insurance including umbrella policy

Just be careful of Due on Sale Clause, it appears to be rare, but does happen from what I’ve heard. And advisable to get new title insurance policy

But let me ask you... if your are doing brrrr, what is your plan to refinance these next deals??

@Sabrina Baldwin

Recently, legislation I thought changed where you can apply to get your one listing approved for fha instead of the of the entire association. Was this tried? I think you’ll need a mortgage broker to got this route

@Randy Reyes

Get the pre-approval ASAP. Assume you know what type of property you are looking to buy, you will know how much financing you can obtain, and with what limitations (of the loan product).

Remember, if you want to shop around for lenders/loans, have your credit report pulled in the same timeframe generally two weeks, sometime as long as four. The credit bureaus let you shop around for loans so you can have multiple reports pulled, but they will count as one pull if in a short timeframe. Loan officers know this so they generally ask you. Besides, they legally can pull your report with your permission.

Also, a “single” credit report request will only lower your score a few to several pioints generally. In couple of months your score will recover. If you are really concerned about your credit score, maybe you shouldn’t be going after traditional financing..

Lastly, you need to do it at least once so that you know how much financing you can obtain and how much you have to pay for it. No point falling in love with a property and finding out you don’t have enough credit. Furthermore, if it expires as long as you keep your criteria the same you will know you will qualify similarly to what you qualified for before.

Bottom line, do as much legwork upfront and early. Otherwise, when it’s time for your to “move” on something, you’ll be days to week behind, and probably lose the deal. Makes very little sense not to be prepared since it costs you no real money, but just your time

@Onur Cinar

Honestly, just depends on your “numbers” and your risk tolerance, in my opinion.

Sure, commercial tenants tend to stay around for a while since it’s costly to uproot their business — assuming they are successful. But, residential tenants can stay for many years as well.

Commercial can tend to stay vacant longer than residential since it can be, depends on what you hold, more specific use.

So, it really depends on what you can use to accomplish your investing goals.

Make any sense? Feel free to message me if you’d like, or we can have some conversation in your thread.

@Logan Oliver

Honestly, I just use MS Excel. Keep a spreadsheet per rental. Enter your transactions like any other ledger but include a column for expense category. Sum by the category to get your yearly numbers per SchE category and you are good to go

@Asem AbuAwad

I have standardized my lock sets (just easier for me to work with). I swap out the entire hardware, then rekey the set I took out. Perhaps a bit of overkill because what is the chance that some old tenant will go to an undetermined unit of mine that will one day get this lock set. But for a few bucks makes me feel better and I can honestly tell my tenants it’s a freshly rekeyed set

@Jonathan Litzenberger

While the bank executing in the Due onSale Clause is low, it’s good for your to avoid the risk. One person already mentioned the land grant which avoids all the title work.. remember, if you quit claim deed that will void the title insurance you had on the title.. so yes, basically only approach with minimal risk is the land trust ( or genetically a grant or trust) for getting the asset protection you are looking for

That’s my two cents

@Danny Mak

Of course hire professionals... except as other have said:

Do the work for the experience so you know what the tasks entail. You can’t be a competent GC if you don’t understand the individual tasks to ultimately manage multiple trades

Do it yourself if you really are going to save yourself money and aggravation, ie maximize the use of your time. Painters can be very inexpensive and very fast. A two person paint crew can easily finish a house in a few days (starting with a primer coat, ceilings, walls, trim, and interior doors).

If you really don’t know what you are doing, maybe do not do it since a bad job will cost you in the long run

If you seriously plan on doing work yourself in the long run, then definitely do it to build up your experience and skill. In the long run, if you are your own contractor you can save money, but only if that’s your business plan. Don’t forget, there is only one you so your throughout will be limited

Good luck