All Forum Posts by: Brian Jasinski

Thank you for the thoughtful responses.....

I will show them the comps, and start with a $150 bump, which is still very under market.

Will go to a lease, and note the projected annual increase of $75-100 at next lease renewal period, to get them in line over time.  They have been good tenants, and this should reduce any shock of a large single increase.....

Hope I am posting this in the right forum.....

I purchased a house with an existing tenant.  They had no lease in place, but have been paying on time.  It has been 6 months or so, and I want to get them on a lease, and adjust the rent for market conditions.

They currently pay $1,500/month, market for this small house is $2,200 or more.  $2,500 for an updated place / fresh paint & finishes.

The house is not updated, and could use paint, etc. so I am reluctant to adjust too high too quickly.  I cannot really get in there to freshen up the place while it is occupied. 

Is there an acceptable max percentage to increase rent?  I feel like telling them we are going to $1,800, and note in the lease that the rent it will increase $100 each year after that?

How much notice do you provide when increasing the rent?  Is two months notice enough?

Any feedback will be appreciated - Thank you

My 22 year old relative is putting in an offer on a condo.  Asking is $200K, my relative (buyer) looking to put 20% down.

He is pre-approved for the amount, lender has prepared both a conventional loan and a mass housing loan option for first time buyers.

Would be purchasing as an owner occupied "primary residence", rates are decent under both options.

Condo is currently rented, tenant lease expires the end of August - roughly 4 months.

Lender says both loan programs require buyer to occupy the unit within 60 days, to qualify for first time buyer deals.

Is there a way to get them to extend this to 120 days (4 months) until the tenant lease is up?

The only other option is to buy it as an investment property, but the rates are 1.5% more with 20% down, or 1% more with 25% down and 1 point.

Was wondering if maybe anyone had any experience with this?  Are local credit unions more flexible on these criteria?

Any suggestions here would be appreciated,  Thank you

Makes sense, so therefore with no income cannot write off expenses.....

If there was income, say $1,000 a month "rent" for 12 months = $12,000 a year.

Would I then be able to write off the expenses?  Probably looking at $15-20K a year in expenses.

Is it worth it?

Question regarding a property held in a irrevocable trust.

Home value is $750K, owned outright by the trust - no mortgage.

A family member lives in the house, no rent is charged.

Meanwhile, the trust is paying for the maintenance, repairs, insurance, taxes, etc.

In talking to my CPA (who does not seem versed in this matter) I am told I cannot write off any of these expenses, since there is no income to write them off against?

In this situation would it be wise to charge rent, in order to show some trust income, so the expenses can be written off?  The little bit I have researched this shows this to be an option, but the rent would have to be "reasonable market rent".

Any idea if this is a viable option?  Any other suggestions?

Appreciate any advice.....

Michael,

Thank you for the response and link....

The link info might be the best post I have ever read on this forum.  I will need to re-read it a few times after a cup of coffee to take it all in.

Fantastic info - really appreciate it. Sounds like I need an STR - ASAP.

Well that certainly makes it more difficult...

Is there an exemption to that if you own STR's or no? Thought I saw that on another forum?

Have been looking into what it takes to qualify, and reading posts from others on the subject.

I now understand that even if you work in a real estate related trade or service as a W2 employee, you need to own 5% of the business you work in to have those hours qualify?

Outside of that, you would need to work 750 hours in the field (management, maintenance, etc.) to qualify.

I own a few rentals, that I self manage, and do all the maintenance and day to day myself.  I can easily come up with 750 hours a year outside of my W2 job that I spend on real estate activities.....My Accountant tells me it is virtually impossible to qualify if you have a W2.

My questions are these:

1.  If I can legitimately document 750 hours outside of my W2, what more needs to be done to qualify?

2.  I own a property that is in a trust - can I use the hours managing that if I can track and document them even if it does not produce any rental  income?  A family member lives there...

3.  If one does qualify for real estate professional status, does the tax savings translate to income made at the W2 job, or only to the income made in pursuit of the real estate related activities such as rental income, etc?

Thank you,

Hello BP Community - relatively new to the forum, and had an SDIRA question - did I post this in the right place?

Trying to make sure I understand what owning a piece of real estate in an SDIRA looks like.....

Can anyone comment on my example?

Option #1:  $250K roll over IRA - invest in traditional mutual funds. Assuming 8% annual return with compounding interest, would have roughly $531,700 after ten years.

Option #2:  $250K roll over IRA - convert to SDIRA. Purchase $250K rental property outright. Assuming 3% appreciation, property would increase in value to roughly $335,900 after ten years.

Also, during this time, rent of $1,600/month would be collected, or $19,200/yr.  x 10 years = $192K in rent.  $335,900 plus $192,000 in rent = $527,000 after 10 years.  Not accounted for in this example is property tax costs, insurance costs and maintenance costs.

Is 3% annual appreciation a reasonable historical assumption?  I understand this example does not account for annual rent increases, and the rent might be conservative.

From the little I know about SDIRA's, sounds like all rent collected would need to stay in the SDIRA account, and any expenses for the property would need to be paid out of the SDIRA account.

Do you lose the ability to write off costs like taxes, insurance, repairs, etc. when you hold a property in an IRA? Would it make more sense to purchase a property outright - or to have some amount of mortgage on it?

Overall looks like a comparable investment to a traditional index fund over time, is the main attraction here the diversification angle?

Any insight would be appreciated......Thank you

Property is in Massachusetts. 

Spoke to my attorney today. Said the reach out to them one more time, stating I need a response by tomorrow at noon or will be forced to turn over to attorney. He recommends having constable serve 14 day notice to quit after that.   Will update asap?