All Forum Posts by: Brian Koons

@Basit Siddiqi thanks for the response! so would the things such as wifi/utilities be deductible by a partial amount 2/3 since 2/3 rooms in my unit are rentals?

I am currently house hacking a 4 unit property. The unit I live in has 2 additional rooms that are both rented out. I currently am not using any space as a home office, and it would be somewhat difficult to designate a significant space to a home office. Am I able to deduct any of the following as tax deductions for my unit:

wifi

gas/electric

ADT security services/equipment

supplies (i.e. toilet paper, furniture, etc)

Thanks for the help!

You just have to make sure you're not discriminating against the protected classes (i.e. age, race, gender, sexual orientation, ESA, etc.) If you go with your gut, make sure you have an objective reason why. if you have 3 tenants all with a 750 credit score, 3.2x monthly rent in gross income, and positive references, go with the one that had the best landlord references. Or some other facet that can be proven objectively as the reason you chose them. Make sure you understand the protected classes, and you will do okay. 

Also, I would recommend a pre-screening over the phone where you tell them all the requirements of the application (that will help weed out a couple extra that may have been hoping the application process was lenient). 

I recently just bought a house-hack in San Diego, CA. I can speak from experience that it was, and still is a very competitive market (supply vs. demand). Especially for a Market like San Diego. The economy of the SD market is very diversified (i.e. military, Service jobs, schools, etc.) in a very desirable location. Compared to the other coastal California areas such as San Francisco and Los Angeles, SD is relative to them the cheapest one. Therefore, the "mass exodus" we've been hearing about from the large cities is very location specific. Look at the economy of the areas, and the statistics for the housing markets, and it should give you a good outline of how the market will be doing. 

Don't be upset. The fact that you had the gull to send an offer in the first place is better that 85% of the "investors" out there getting started. I just closed on my first property a couple weeks ago. I had to send out (and get rejected by) about 10 other offers before this one was accepted. If you are willing to send out offers, just keep looking at the market, doing everything you can to find deals, and make offers when it makes sense. The best way that I found (for at least the first deal) is right on the MLS. Look for the properties with below market rents listed, very surface level cosmetic work, or easy value add (such as a garage with plumbing and electric already hooked up) that could be converted to an extra unit easily. The deals are out there and the more you look, the easier they will be to find. Keep looking and don't give up. You've got this in the bag!

Depending on the interest rate, I would recommend paying down the bad debt first. If the bad/consumer debt is higher than about 2-3% interest, I would recommend paying that down first as inflation rates are generally at about 2%. Additional, for most areas, 5k is generally a fairly small and will be somewhat insignificant in most cases if specifically invested in something like stocks or direct mail marketing. I would utilize the money to buy books, audiobooks, maybe pay to take some "been there done that" investors out to lunch and try and figure out how you can provide mutually beneficial value to them. Also, spend this time saving as much as you can and live as below your means as possible reducing your housing, transit, and food expenses as much as possible. If you commit to learning and reaching out to others in an attempt to provide value, I promise that will be a better investment than 5000 could ever be as a start out amount

@Emery Jensen The VA loan as of right now works the same whether the house is cheap or expensive. You'll have to meet a certain criteria the bank has based off of your income, the price, and other factors the lender would require. for multi family, they allow your to take 75% of the projected rents from all non-occupied units, and apply it toward your monthly income to increase your gross income. Ive been doing a lot of research lately on the San Diego economy, and have a very strong basis to believe our market will continue seeing price increases even with the uncertainty of the overall country economy. Also, I can definitely put you in touch with the lender I used. Just shoot me a DM if you'd like his info.

I used the VA loan and the lender also gave me a credit for closing costs. after everything was said and done, I actually made $600 at the closing table.

@Nassor Jackson what are your criteria? i.e. what area? what type of property? what type of loan? how big? how much of a return would you like? etc. establishing your criteria narrows down your search quite a bit, and would definitely allow you to be more efficient with you searching

Hey! thats definitely a good area for investments. I may or may not be able to see the Coronado bridge from my roof. (I can). I just used my VA loan to buy a 4-plex right outside downtown SD. the requirements for the VA loan are you must intend to live in the property for 1 or more years. If you "intend" to live in it, but then your receive orders to deploy, that is an exception to it since you are military. I would definitely talk to your lender, but you would intend to live anywhere else, so I would kind of assume it works. Also, you would just need to make sure have a property manager for once you leave to rent it out while you're gone! I am a firm believer that the best time to invest in now. So waiting would just set you back even if it "saved" you a little bit of money in the short term

I can definitely attest to the great opportunity with the VA loan. Since there is no PMI, it is much easier to find a property the will either incredibly reduce your living expenses, or actually allow you to live for free depending on the deal you find. Especially if you were to use the VA renovation loan, you would have to try to not make a good return. for my property, after closing, I put about $800 dollars into closing costs. After the first year, including rent savings, appreciation, and debt pay down, my net worth return on investment will be ~5000%. Plus I still have my capital to start looking for the next deal. Just start talking with the right people and learning, and you'll do great!