All Forum Posts by: Curtis N.

Sure thing! Good luck!

And to address your other question, see the link below. That would probably fall under business start up costs depending on what you had done.

http://www.nolo.com/legal-encyclopedia/deducting-expenses-you-incur-before-your-real-estate-business-begins.html

Like you said, you're not required to 1099 a corporation, but it's recommended to have all your customers fill out a w-9 to CYA. They would just fill out the info for the business to include their TIN and return it. You would then keep it on file to justify why a 1099 wasn't sent out if ever needed to. Again, this is common.

...you will pay more interest over the life of the loan?

I have my own business and it's one of the first things I do for a new contractor. Every time. That way you don't have to keep track of how much they're paid and then get a w-9 if they hit the mark. Then you can just leave that up to your CPA at tax time and they will determine who actually needs 1099's based on amounts. I actually have some clients who send out 1099's to every contractor no matter what they're paid. Not sure why - probably just a CYA kinda thing.

Can't wait!

Dave Wood - thanks for the note. Yes, this deal was outside of NoVA. I have looked into investing in my immediate area and unfortunately the numbers just don't work out. The only people buying right now are investors who are speculating. The deals have dried up and the properties just aren't cash flowing.

If you want to chat about any ideas you may have, send me a colleague request and we can message each other and maybe chat on the phone about the area. Thanks.

Joel Owens - I agree that I am looking for fully-performing properties that are currently managed well. I know there can be more value in under-performing properties but I would only be interested in something along those lines if it was simple rehab needed to fill vacancy.

ANISH TOLIA - Thanks for the note. It probably seems like I am getting ahead of myself. I am not quite ready to close on a deal tomorrow, as I'm still learning, but I've always been sort-of a jump-in-head-first kinda guy. It's more risky but it's got me where I am today.

Ryan M. - In my calculations I was looking at needing about 160k for the deal and some reserves, not quite 200k. Can you break down that number for me? But yes ... I have the necessary funds. This is why I am trying to skip past the smaller MFH, because I have already built up some decent funds.

Bill Anderson - thanks for that great info. Especially the part about the laundry contracts.

Joel Owens - all of that info on loans is very helpful to know. I will have to factor that into my calculations when looking for possible deals. Unfortunately, I will not be investing in my local area, and am not locked down to any specific area, so I will have to look for deals and then talk to local lenders. Thanks for pointing out about the utilities. I wasn't calculating any utilities into my numbers but I don't know if this complex passes it through or not. I have not contacted the listing broker yet.

Thanks for all of the info so far guys. Very helpful info ITT!

Jon Holdman - yes, this was assuming a 30 year term. I wasn't aware they didn't offer 30 year for commercial loans. What is the going term? 20 year? Is that rate accurate though?

Thanks for pointing that out, could make a big difference in my future calculations.

Also, I estimated 50% expenses with 12% PM included in that. Should the PM be in addition to 50%?