All Forum Posts by: Carlos Santiago

Thanks Dave, I think we're getting to the solution...
You are right QRPM is pretty basic, but I find it suitable for accounting needs of rentals (at least, its better than the Excel spreadsheet I was using before!). 2008 was the first full year I used QRPM, and it does make a nifty expense spreadsheet and a nice Tax spreadsheet (expense spreadsheet showing all expenses, including mortgage; tax spreadsheet is basically a scheulde E). The one thing that is not good is that even though Quicken says you can import the data to TurborTax, they fail to mention that it can't be imported to TurboTax ONLINE (only the software version). But, with the tax spreadsheet - entering the data into TurborTax manually is a piece of cake.
But, on with the real question...I am versed on assigning 'capital improvement' for certain expenses, etc. Let me clairfy what I was asking:

Here is the situation: You buy a fixer-upper for $25K. You also obtain rehab money for another $25K. Your total loan is $50K. (let's say mortgage payment is $500/month - just for ease).

Anyway, say you purchase a some lumber for $50.00. That fifty dollars is coming from the rehab money. BUT, you can also write it off as an expense on your new rental property. But here's what I'm asking...

As you mark down your monthly expenses, you will have a $500 mortgage payment and that $50.00 lumber. (for tax purposes, you'll write off the interest on the $50K mortgage AND the $50.00 lumber).

By the end of the project, if you keep track this way... it will appear that this house cost you $50K for the mortgage PLUS another $25K for rehab. Because you are writing down the expenses as you spend them. Really though, the house cost just the loan of $50K (assuming you didn't run over budget, obviously).

I'm thinking that I'm going to have to keep 2 books -- one for my own eyes (which wouldn't show any expenses that were paid using rehab loan money) and one for taxes (that shows all expenses that I can write off as well as items like HVAC, windows, appliances, etc. that will need to be depreciated).

hmmmm...what do you think???

I'm working a rehab. I have a rehab loan -- so the mortgage is for the house + approx. $24K in rehab money.

For my accounting - how do I account for repairs being paid for? I'm writing the check and getting the receipt from "my" money -- but really its loan money. I don't think I'm making this clear...

I use Quicken Rental Property for my software. And, if I put in that I spent $4K on a new HVAC -- then at the end of the year its going to show that $4K expense. But really, I've already paid that expense becuase that $4K is coming out of the rehab money. So, does that mean I'm accounting for the expense twice? And not to mention, I'll need to depreciate that HVAC (capital expense).

Does anyone know what I'm talking about? Let me know if I need to write this up better. I'm very confused... :oops:

Tiara - you have great ambition -- keep studying, get your finances in order - stay away from late-night-informertials that promise $$millions$$ for no-money down, then you'll be ready! Do you own your own home? My suggestion is that for your first investment you pick up a fixer and live in it while you fix it. 2 years later you sell and move to next project.

I have an out-of-state rental - its an older home (1915) - as expected, it needs maintenance. I never use a property manager because paying 10% of my rent proceeds just to answer the maintenance call (still have to pay for the repair!) seems crazy. I just take the call, call one of the fix-it guys or professionals (depending on what the problem is) and take care of the issue. BUT - this is a headache - I feel like I'm scrambling to find the right person to solve the problem. I was thinking that a home warranty might work out nicely -- as I can make one call and let them deal with the hassle. Since I'm out of state - it isn't like I can go to the house and verify that the problem is an emergency - so I'm going to be paying to send someone out there either way. I know that having a non-local rental is more expensive, but I do make a good profit so I don't want to sell. What are your thoughts? I would love advice and experience!

Is this house to sell or for a rental? If its for a rental, double check with your insurrance agent about difference in cost for vinyl vs. asbestos. I found that asbestos siding (which is fire resistant) is about $200/year cheaper to insure. Just FYI...

I have a house I'm considering selling (owner finance). I'd like to offer it to my current tenants first -- anyone have an example letter that they've done offering the same thing?

Just wondering what people are currently charging for interest on owner financing?

Does anyone have any suggestions to deal with the following situation: We have a rental house (in a decent neighborhood). Next door is a run-down 4-plex (1 bedroom units). We've owned our house for 4 years and just in the last 2 years the 4-plex has become a huge problem. It constantly was filled with tenants who were dealing drugs, then the place went into forclosure and vagrants moved in, now its been resold and the new owner is only charging $275/mo (this is in Tacoma, WA - so that is insanely cheap). So, the future looks filled with scum tenants and I'm doubtful that the building will be rehabbed. I haven't talked with the new owner. Any suggestions? Besides burning the place down ;) Aren't there laws against bringing down the property values in a neighborhood? Everyone on the block was calling the police on the place back when the drug dealers were living there. But, it seemed like the police had other more important things to do. I'm so sick of this problem -- its making it really difficult to keep my house rented!

hi -- i've got a rental property I purchased this year -- I know for depreciation I have to pull out the land value -- is there any set way of doing that? can I just estimate about 20% of the purchase price?