All Forum Posts by: Carol Kotchek

Can anyone give me a recommendation for a good mortgage broker licensed in Alabama? I have a Fourplex in Montgomery, AL that I own cash. I would like to do a refi on that property so I can purchase more property. I've contacted two brokers already and they didn't even get back to me!  

Boulder County Colorado, maybe a trailer though not sure, 

Thanks Everyone for your input. 

Frank, what your saying makes sense to me and corresponds with what one CPA told me. 

"You'll allocate the original property into two. One for $270K, one for $30K, for discussion purposes. You'll allocate the accumulated depreciation to the properties, in the same ratio. Then you do a sale of the $30K property, taking you depreciation just for this piece, calculate the recapture on it, with the $270K property piece, which should equal the value of your new property. So after the 1031, you book the newly acquired property, you'll have to take the depreciation figures, and prorate it, from the original property. In summary, the taxes are paid in declaring the sales of the $30K property." 

If I realize $300,000 after all expenses, and I buy $270,000 in property, I will be taking $30,000 in cash for myself. In simpler terms, $30,000 is 10% of $300,000. If I have $40,000 in depreciation, I will pay regular income  tax on $4000 of depreciation recapture (that's 10% of my depreciation) and capital gains tax on $30,000, the cash I took out (the boot).  The rest of my depreciation (the leftover $30,000, that's $40,000 - $10,000) will follow along with the new property I purchased.  

If I have it all wrong let me know. But if I have it correct then cool. 

Also, thanks Dave for letting me know the tax form. I used to do taxes for a living so I can actually read those forms. 

Hello All,

I'm executing a 1031 exchange in September. I am realizing  $300,000 from the sale ($100,000 profit). I'm planning on purchasing new property for around $270,000. That will leave me with $30,000 in "boot" which I'm assuming I will pay capital gains tax on. 

I have taken $40,000 in depreciation on the property I'm selling. Does anyone know what happens to that depreciation after I sell? Does it get folded into the cost basis of the new property? Do I have to pay taxes on any "depreciation recapture"? 

I've talked to a couple of CPA's about this and I'm getting conflicting answers. 

Thanks for your help.

Carol

@Daniel Mills I don't know. I'm making an effort to research Montgomery. I contacted @Greg Parker as he seems like a good resource. The nice thing about turn key is it's all set up. And they have the property management. I think that's worth paying some premium for but not overpaying. Are you still researching buying from ROI? I'd like to know how that goes. And I am also interested in Huntsville. If I get really interested in Huntsville and Montgomery I'll take a trip out to Alabama.

Hello those on this forum. I have also contacted ROI. They gave me a list of properties that they have in inventory right now and the rents they expected to get for them. I have been doing some research with Zillow, Rent O Meter, and the Bureau of Labor Statistics. Maybe I'm off base here but I'm finding properties in the exact same neighborhoods that are at cheaper prices. Places that seem to be fully remodeled with hard wood floors, etc. My question to @Greg Parker is do you think Montgomery is worth looking at for a rental investment?

Hi All, I rent a room in my home. The new tenant is breaking an 11 month lease 3 weeks into it. I'm pretty sure I know my rights as far as how to deal with that. 

My questions is for the next tenant I want to add some things to my lease.

1) 2 month rent penalty if they break the lease

2) When they sign the lease they pay me damage deposit and 1st month's rent which is non refundable if they break the lease. The last month's rent can be paid over time. 

3) I include utilities in my lease and I think I need to define what that includes. What it doesn't include in an unemployed person sitting around all day running a space heater. 

Ah, the joys of being a landlord. But if I get the right person it's easy money.

Thanks for your help in advance.

Carol Kotchek

@Kenneth Lowry Thanks for the information about cashflowdiaries.com. I've just started on the book I'm reading. It's very dry stuff but good information for any kind of investment. 

I sent you a colleague request as I'd rather not discuss all my plans on an open forum!! 

Hello All,

First of all, a short comment on Turn Key providers Cherry picking. I don't care if my provider Cherry Picks. Why shouldn't they make more money then me. The provider is the one who took the motivation to start the business and is putting way more time and energy into it then I am. My main concern is when I buy, I want to get what is advertised for sale to me. 

OK, enough said there. I'm looking into investing in Turn Key for all the reasons stated in the above posts. I'm not going to spend all my free time in Kansas city or where ever trying to figure out the market. I've got a day job that I like! So I've done a bunch of reading and come up with a list of things to investigate in the market I'm considering investing in. Maybe some of you pros can comment on my list and give me more suggestions. Or maybe no more suggestions as my list is pretty long. 

Population growth

Unemployment trending

Type of industries, jobs, strong and diverse

Zillow for sales comps, don't pay more then market value

Craigslist and Rent O Meter for comps for rental prices

State landlord, tenant laws. Can there be laws specific to a county or city?

Property taxes, assessors office. 

School districts

Community development

Supply and demand, are there giant apartment buildings going up in the neighborhood? 

Vacancy rates

Due diligence when buying

Get a killer independent property inspector

Any repair estimates? 

Zoning and local ordinances

Neighborhood rules and neighbors

Critique property manager. 

Insurance costs, what is needed: Think about the disaster that just happened in Houston!

Places to find info: Dept of Labor statistics, Look up City in Wikipedia and click on reference links.

Suggestions on more places to look up data? Any helpful comments appreciated. 

Ok, It's getting late. I'm going to lie down in bed with some reading material that will put me right to sleep, What Every Real Estate Investor needs to know about Cash Flow and 36 other Key Financial Measures. 

But I do have one more question. Why does the little anonymous posting symbol look like a man in a business suit? I wish us ladies had a cool anonymous feminine symbol.  

I would say overall I don't like being a land lord. I don't have the patience to deal with what I consider to be renters dysfunctional complaints and excuses. Just get to the point of your issue and pay me the money! 

I've got a condo out of state that is managed by a property manager. And I rent to rooms in my fairly large home.

But I will say it is satisfying when I create a good living space for people and they actually make compliments about living in my properties.  I've had the same renters in my condo for three years and one room mate for five years. I just rented my basement to a new tenant. He got all wacky on me, and I thought we were headed to small claims court. Amazingly he apologized for his behavior and all is good again! 

But overall, give me a good property manager and I will spend my time doing my day job.