All Forum Posts by: Mick Misra

I'd like to attend too.

@Charles Nguyen 

 Count me in too!

Charles Nguyen Great idea, Charles! Wish I could've participated in the first event last month but I was out of town. Count me in this month! Looking forward to participating in the mini-mastermind next week!

Devonte' Dinkins There are a bunch of posts on the site about using the FHA 203k loan option. I'm in the process of getting one as we speak. The basic thing is that it has to be owner occupied (not a pure investment). You can get up to a four-plex as long as you live in one unit. So you can rent out the other units to cover all or a portion of your mortgage. There is a streamlined and a regular one. I'm sticking to a streamlined as it's easier and has fewer hoops you have to jump through. There are a limited number of lenders that make this loan. From my conversations with lenders, some want to avoid this loan because of the additional renovation risk, particularly considering that most borrowers are inexperienced with renovations. Nevertheless, the FHA website has a list of lenders and you should be able to find one if you live in a decent sized city. There are many more nuances and searching the forums will help you get a really solid understanding of the program. Hope this helps!!

Hey Guys, I'm out of town the week of the 8th. So I'm not going to be able to make it this time. I'll see you guys next month!!

Thanks for the great advice! It looks like the best route is generally conventional financing. It's good to hear that some conventional financing may fund rehabs under certain conditions. I'll look into those able fore hard money. It's good to hear that hard money is there if there are no other conventional finance options. Thanks again!!

I'm planning my first fix & flip and have a question on whether I should use conventional or hard money lending. I hope all the BP'ers can give me a little advice on my first fix and flip! Basically, I'm in the process of lining up an equity investor. My thought is that equity can pay for the down payment. After that, I'll need more cash for the rehab costs. If I raise enough equity for the down payment and rehab, should I generally just stick to conventional financing for the rest of the purchase price? If I can only raise enough equity for the down payment, do I need hard money finance for the rehab amount or are there conventional loans for the rehab as well (taking into consideration this is my first fix and flip)? When should I use conventional finance and when should I use hard money? I know that, in general, conventional is best, but are there situations where hard money is the best (or perhaps only) option? Thanks in advance for your responses!!

I think there are a few issues here. First, the receipt of the deposit should not affect when you need to claim income or take deductions for the property. This is because the deposit is not "income" to you as you'll eventually have to give it back to your tenant. Second, since the lease started on Jan 1st, it sounds like the property should be placed in service in 2014, which means that you should start putting it on your tax returns for 2014. However, a slight nuance here is that you must have marketed it and shown it in Dec, so depending on the extent of your activity, an argument could be made that it was placed in service in 2013. If so, you will file a schedule for your 2013 tax return with one month of depreciation and no income. This could be a potential benefit to you if you have other passive income. If not, it should be a suspended loss which you can use to offset rental income in the future. A lot of these issues are fact-specific so I'd recommend talking to a tax advisor. Most of them should be familiar with these relatively common issues. There is also a good IRS publication regarding rental property, which you can find on their website by searching "rental property." None of the comments I've provided in this post should be considered as providing tax or legal advice, but are rather, my own opinion.

Search the forums for a meetup. There's one on Thursday, April 3rd, in Midtown.

@David T. Please do keep an eye out for the type of property I'm looking for. I'd appreciate hearing what you find. Also, if the contractor you know does residential work or can refer someone, it would be great to know! Thanks for your help!