All Forum Posts by: Bill B.

If either of these homes has been your primwry for anywhere approaching a year. There’s zero chance I would move out. I’d fix it up and list it to sell after I’d been there two years to take the gain tax free. You’d probably end up with a bigger after tax gain if you sold the 2nd property for any amount of money and did that. Compared to fixing them both up and paying full taxes as flips. (Which aren’t taxed as capital gains.)

$280k home for $2,500 rent is a personal choice. Is it better than your alternative uses for your money? How bad is the insurance, how high are the property taxes, is there an Hoa, etc etc. 

But…There’s ZERO chance I would rent by the room for $600/months more. I ASSUME you’re talking $400+ in extra expenses for providing water, power, sewer, gas, internet, communal area cleaning, and exterior maintenance. So you’d be hoping to make $200/months for dealing with 3 x as many tenants, vacancies, tenant on tenant conflict, late payments, etc etc. . 

My GUESS is these homeowners have been tricked/screwed in to signing a long term power purchase agreement, often with no buy out provision. There are some really scummy solar sales people out there that tell homeowners they can get solar “for free”. Then they lock them in to a SLIGHTLY lower initial cost per kWh. But they have an escalation clause every year to eventually put them above market. Many even include a set monthly amount. So if the homeowner saves energy or goes on a long vacation, they still get charged 100%. (They could have a base amount of 1,000kwh for $120/mo. But if they only use 50kwh, they still owe $12-  They’re basically setting up an annuity for the solar company. 

Of course you want to ask why they didn’t apply. Did they find a better place, a cheaper place, a better and cheaper place? Did they see something that disgusted them? Did a neighbor or the neighborhood worry them?

What can it be other than pricing or marketing?

To me 22 days is a very long time. You’re about to be down 8% of your rent due to vacancy. So if lowering the rent 8% would have filled it you would have been ahead. If you go another month then 16% lower would have resulted in more income. 

If you aren’t using a PM have you considered it? There are only a few outcomes. They tell you you’re asking too much rent (you lower rent, avoid vacancy and make more money) ,your marketing is bad (they take new pictures, advertise in different places, change wording, whatever, and get a tenant saving vacancy.)  your pricing is good and your marketing is good, it’s just a slow time and even lowering rent won’t help. (You know you’re on the right track and you insure future leases end between March and July by varying the length of the new lease.)

Good luck. 

Does he qualify on his own? If he does. And if you want to release her from the lease I’d just do it. For all you know it a violent situation and she could get a judge’s order and you pry couldn’t/shouldn’t charge then. 

If he doesn’t qualify alone just ask them to move out. 

Not much to add other than the obvious bit not yet stated. (So I’m stating just in case you didn’t know.). Make sure she doesn’t deed you or your brothers the property before he passing. If she gifts the home to you, you inherit he cost basis and owe all the taxes. If she needs money let her get s cash out refi. But wait until she passes to inherit it. And then you’ll be facing the absolute best time to sell, tax free. It will obviously make a horrible rental at $5M. 

And most importantly!  (To avoid months of probate and thousands if not $10’s of thousands of dollars in costs.)

Hawaii is considered a "TOD deed state," meaning that residents can utilize Transfer on Death (TOD) deeds to designate beneficiaries who will inherit their property upon their death, allowing for a potential bypass of probate court proceedings.

If she is already in memory care center. I'm not sure how you swing this. If someone has been given POA maybe they could sign it. Otherwise find out if Hawaii has a senior advocate division. You're going to want some kind of "official" to declare she is of sound mind to sign such a paper.

We filled one out for my mom last year. Be sure to explain to your mom that she can reverse it at any time. You’re not trying to take her home. 

My GUESS would be yes, if you touched the plumbing. Your plumber/GC should/should have definitely know(n). 

If you didn’t touch the plumbing you MIGHT have a leg to stand on. 

It’s certainly going to be more expensive than if it was done right the first time but this can’t be a big deal in the scope of a full gut. A hole or two (check how many you need.) and some plastic pipe?

Not if insurance paid for it. Basis is what you paid for capex. I THINK you could probably just expense your deductible if insurance didn’t cover 100%. But ask your CPA/accountant because I don’t know. 

I was thinking what Dave Foster said in regards to you having troubles, especially with buying a syndication. I doubt they'd be interested if you're brining less than $500k. Another complication I didn't hear him bring up is the selling part. Hopefully you own your portion of the real estate in your own LLC or your own name. If you own part of an LLC that owns all the real estate, than only that LLC can do a 1031 for the entire amount. Although I'm pretty sure you can dissolve the LLC beforehand if you haven't sold yet.

Ps. You have to buy more with your 1031 than your portion is worth. The equity doesn't mean anything. Let's say you own 1/2 of the $700k property as a TIC and can do a 1031 easily. Then you have to buy a 1031 worth $350k or more (your portion of the sold property.) the fact that you only got $150k in "cash" means nothing. Except that you will be required to get a loan for $200k or put another $200k from your pocket in to the deal.

Ask for a discount for prepaying for an in house credit?

Try to buy “blocks of time” in advance?

Try to “buy” a discounted rate with a chunk of cash up front?

Agree to allow the firm’s “entry level” attorneys handle your cases or as allowed by law their clerks? (Assuming quality of service doesn’t decrease.)

No matter how you look at it, that is a ton of money. I guess really you’re not paying it, the owners are. It’s nice you’re trying to save them money, but it limits your upside.