All Forum Posts by: Aaron Smith

I agree with @Michael P. if you do it, you should do it right. No one likes low ceilings. I have a guy who can do it. I'll send you his contact.

Sounds like you could potentially have the perfect number of rentals in nice areas that don't cash flow that well (but should appreciate well over time), accelerate their depreciation with cost segregation, and have their losses perfectly balance out the flipping income. No taxes!

I think the PM is right, as long as she's paying rent and not violating other parts of the lease, just let her stay. Caulk it up to lesson learned, and it won't even be an expensive lesson if she keeps paying. Obviously never use that realtor again.

Congrats and great job! Where did you find the deal, and who was the credit union lender? 80% is great for commercial.

Thanks everyone for all of your advice. 

Yes, this was to get the tenants out to do an extensive renovation. Capitalized would mean that those costs would be depreciated over time, correct? Tenants in DC have very advantageous laws, so paying for them to leave is almost always necessary. So, you could argue that the laws here have made it a business expense that is unavoidable.

@Paul Caputo, @Christopher Smith, The property was occupied by the tenant for the first month of ownership, however, she didn't pay any rent (was part of the deal). We do have documentation of her move out date. I wonder if this counts as 'in service'

Hi BPers,

My brother @Joshua Smith has a property which he purchased in May 2017, but has been design and in permitting (a complete nightmare) for the remainder of the year. Therefore, it hasn't made any revenue, as in rent, for the year of 2017. We're wondering, can the asset still be depreciated if it has produced no income for the year. Furthermore, if it can be, can we add things like architect fees, condo conversion fees, permitting fees to the basis?

Thanks in advance,

Aaron

Hi BPers,

@Joshua Smith and I both recently bought properties and had to pay off tenants with cash for keys agreements. To me, it seems like one could argue that this is a property expense and could be deducted as an expense.

@Brandon Hall you might be more in tune with this. More specific to the DC market, one of the properties had quite a large TOPA payoff to the tenant that occupied it. One of the terms of the TOPA payoff was that the tenant vacate the property, so this served the purpose of cash for keys as well.

Thanks!

Aaron

I use Ezlandlordforms.com for leases (they have local DC specific modifications) along with the BiggerPockets tenant screening service (transunion smartmove) along with cozy for rent online collection. I do Venmo or PayPal for rent collection too, if they prefer that. Ezlandlordforms.com also has an e-sign feature which is nice.