All Forum Posts by: Arthur Schwartz

Good morning!  I'm interested in a six unit apartment building in North Carolina.  Any suggestions on which lenders finance these?  Thank you!

Thanks!  I've got the picture!  Very grateful to you!!!

Thank you!  I decided to hire a CPA!  But I do want to know myself.  So, If I understand correctly, if I have a property where rental income is say $10K, but expenses are $12k, that $2K is carried forward indefinitely until.... what? and when? It can only be offset against positive income from another rental property or properties?   What if I sell that property for a capital gain of say $50K? Can the $2k reduce the otherwise reportable capital gain from $50K to $48K? Can the $2k ever offset taxable w2 income?  The numbers are hypothetical, the goal is I want very much to understand the concept.  (Yes plenty of my acquisitions are "wrecks" as you call it, and require significant expense to be made great...).  Thank you very much!

Hi there!  I am interested in how rental losses work if income is over $150K and if not a real estate professional.  First, I suppose that these losses can be carried forward but how are they eventually taken?  Only in the year of sale of that property? What if a different property is sold; can the loss carryforward from property A somehow offset a capital gain on property B?  Second, is the accumulated loss offset against W2 income or offset against capital gains?   Third, say one property is cash flow negative, another cash flow positive?  Are all properties looked at as a group?  (If these questions are basic, please forgive me.)  If there's is a simple illustration with hypothetical numbers, it would be appreciated.  Thank you!  (Rental loss = repairs or renovations exceeding rental income)

Thank you!  I like this post and the discussions!  I would probably have asked for a title search and or a surveyor's map.  It's not such a big cost.  Thanks!

If I understand the numbers, there is not much equity.  If it were to sell for $360K, the net would be only about $40K.  What is the range of likely rents?  If you rent it, you would have the current costs plus the $60K to pay off to contractors.  If you paid that $60K off over 2 years it would cost an extra $2500 per month.  It does not seem like an attractive investment from an equity or cash flow perspective; unless there is something unstated.  

If an empty old building purchased needs repairs, what is the likelihood that you'll receive multiple offers from multiple contractors?

If I understand, the 1031 exchange is better when there's significant equity.  Here the equity seems "slim to none" so it seems better to simply sell, pay the taxes, and enjoy a great night out on the town.  My calculation of capital gains would be 500,000 * 95 = $475,000 after closing costs (reduced commissions if you are a realtor) less $450,000 or $25,000.  Add three years of depreciation to that; multiply by your marginal federal and state tax rate, and the taxes are probably modest.  You may want to consult with a CPA for an exact number, but If it were me, I would rather pay the modest taxes and enjoy the money from the sale.  (PS it could be important of the $50K in renovations were considered to add 100% to the value of the property, or only partly.  Again, it's an issue for a CPA).  Good luck!

You may want to consider the cost of insurance.  Dwelling fire insurance, for a landlord, can be rather expensive in Florida, and a flood policy would increase that cost substantially

Good morning! I am offering for sale a SFH and Duplex (three rental units) in Orangeburg SC.

Details

1. When I bought them, they were on one lot. This has been legally subdivided so each property can be bought, sold, or financed separately. Currently, there is a mortgage on the SFH but none on the duplex.
2. It’s strongly preferred to sell both the house and duplex in one sale, rather than separately.
3. Each requires some repairs but are being offered on a combined basis at a price well below appraised value. There definitely is a BRRR opportunity.
4. As a rental, at the listing price they can be close to the 1% rule.
5. Orangeburg is home to two HBCUs so there is a possible college play by renting to students, a fraternity, or a sorority. Each school may have a list of students looking for nearby housing.
6. Orangeburg is about 45 minutes from Columbia and about 90 minutes from Charleston. Unlike Charleston, no flood insurance is required.
7. There is a large outbuilding on the lot with the duplex, about 750 square feet. With proper permits, it could be fixed into a fourth rental unit. This would be a value add opportunity.
8. The SFH is about 1,400 square feet. The duplex is two apartments of about 750 to 900 square feet each; or about 1,800 square feet total. It would be possible to convert the duplex into an two level SFH.
9. Everything is sold on an AS IS, WHERE IS basis. Seller will do no repairs. Also, no seller financing.
10. The units are on septic, although with proper permits, they can be connected to city sewer.
11. The SFH and duplex share the parking area, which has enough room for four cars or more.
12. If interested, please contact my real estate agent, Renata Smalls; 843-864-3990 – Cell; [email protected]

Thank you!