All Forum Posts by: Christopher Sarmiento

Appreciate all the advice! @Ash Hegde and @Jonathan Bock. I'll just eat the Capital gains and put money aside for next year 

@Jonathan Bock My tax lady calculated the 50K during my previous conversation with her. She said it was a conservative amount to put away. 

So is realizing the gain right after I sell the property and then it pays off all my debts? Or the property is sold, pays off debts, then i realize the gain after?

While I wait for my Tax lady to respond to my email I wanted to post my question in the BP forums to see if I'm thinking things through correctly. 

I own a Duplex in Florida that I'm going to sell and it is my primary. I bought it for 410K and I'm currently listing it for 720K, and i was informed that I would be taxed around 50K since I only lived in 1 unit for 3 years. I have a HELOC of around 120K on this duplex, and I owe around 120K on a SFH in Florida too.

All that being said, would it be possible for me to pull 120K out of my HELOC to pay for my SFH before the sale of my Duplex? Since the lender will pay off my debts first, and I won't touch the profits yet, do I get taxed after I pay off all my debts and get the remainder? Or am I taxed for the the capital gains before it pays off my debts, so all this movement isn't necessary? I plan on doing a cash-out refi to get that tax free money back out

I'm not doing a 1031 because I'm moving to Georgia after this sale and have a lot of other moving parts to think about. Would this be possible? Am I approaching this scenario correctly? 

Thanks for the input BP community 

Chris

appreciate it @Steve Vaughan! I found put that PNC does live in duplexes too. I'm hoping to close with them soon so I can have that capital for the next moves. Took long enough, but glad things are rolling. I'll Checkout what products they have on the commercial lending side. Thanks for the info. 

I've reached out to several banks and so far found none do HELOCs on multifamily properties. I've been told they are taking that product out of the market. Does anyone know of any Banks that still do HELOCs on Duplexes? I did a BRRRR on my duplex , i'm currently house hacking in, and have a significant amount of equity I'd love to tap into.

Thank you!

Chris

@Lisa Thiessen Thanks lisa! This is a better alternative to these arbitrage scenarios. I'll apply for this and hopefully accept more possible leads.  

@Hersh Shah this is great information! Thank you! Did they make you do a W9 and ask you about personal information for their taxes too? 

@Kenneth Woodruff I just emailed the Company back and the potential tenant. Stated that I don't feel comfortable sending out a W9 to them and other information. I don't want to just give anyone this information even though things seem legit, but I'm erring on the side of caution for now. 

The Temporary Accommodations is requesting I fill out a W9 for their tax purposes. Would this be standard? Now I'm not feeling comfortable sending a 3d party business my social security. 

There are a few steps to the process so I’m outlining them here!

1. If your property has an application and they haven’t applied yet - please let me know and I’ll remind them to apply!
2. If you don’t have an application or they’ve already been approved, the next step is getting a lease together and starting the landlord paperwork! I’ll attach some of the landlord paperwork here.
   1. W9 - this is required because we have to file taxes at the end of the year, and rental income is earned income.
   2. Landlord Contact Form - this is required because it keeps all the really pertinent information in one spot! (Name, phone number, notice to vacate)
   3. ACH Form - this is optional. If you want mailed checks Instead-- I can do that! Just let me know if you want them mailed to a different address than what’s on your W9. PLEASE NOTE if you have a P.O. Box I CANNOT overnight the first check.
3. If you don’t have a lease, let me know, I have several simple leases I can send you!
4. With writing the lease, please keep in mind a few things!

a. If your rental is unfurnished I will be providing rental furniture for the client, so please make the lease start date at least 2-3 business days from the day you’re sending it to me if possible. Because I can’t order rental furniture until I have a confirmed start date.

1. Specify the important details: Start and End date, Notice to Vacate, If any utilities are covered (if so which ones) Late rent fee (if any) etc.

1. Typically, I’ll send the prorated first months’ rent, the second full month (if its past the 15th already) and any other one time fees. If there is a specific fee you need up front, specify it!
1. Send me a copy or the lease before signing to review - when you send me the lease, let me know if you want me to get the client to sign it for you electronically or if you’d prefer to have them sign in person.
2. After I get all the landlord paperwork back (W9, Landlord contact, optional ACH) I’ll be able to process the payment and get that sent out quickly! If it’s an ACH I’ll send you the batch report when it’s posted, if it’s a check I’ll send you the tracking number.
3. Last thing I’ll need is the fully executed lease if it was signed in person, or if you needed to sign after the client.

This was in the email 

I really appreciate this information @Nathan Gesner and @Aaron Porter. I just don't want to be hacked and worst case all my hard work from selling and refinancing a home goes away. Also not getting paid or the tenants trash my place. These are great safe guards against it all and I just need to follow through and get those background checks and require rental insurance.