All Forum Posts by: Craig Dieterich

@caleb Heimsoth   The condition was explained. Yes, brand new everything including a roof, water heater, etc. There will not be any maintenance expenses for quite some time. Also, I paid cash for this, so even if it's vacant for a month, I'm not losing money by needing to pay a mortgage without tenants in place. Anyway, this thread got a bit off topic. My point of creating this thread was concerns about taxes with no write offs due to being a cash purchase and trying to find ways to save on taxes or other creative ways to find write offs, etc. What are the pros and cons of buying with cash vs loan? I think I need to contact a CPA that specializes in Investment properties as advised by some of the other members.

 @Matt M.  Why would I spend 5 years paying myself back, then dump it without ever benefitting from the passive income it will generate? Also, this property is not in PA. And $450 for a 1/1 side of a duplex is not expensive.

So much conflicting advice here! LOL

@caleb Heimsoth My concern is with taxes on my profits. You seem to be the only one here who thinks this is a bad investment, and I'm very curious as to why. I paid $35k for it. (It was appraised at $31k). It is fully rehabbed with brand new everything. There should not be any maintenance for a long time. I factored in a local PM at 10% which is only $90/mo.

If I net $7k/year after expenses, then it pays for itself in 5 years and everything after that is passive income for the entire time I own it. I'm not concerned with appreciation of the property. Please explain where you're coming from. What am I missing? Thanks

No upgrades needed. It's totally turnkey and will not need anything for awhile. This property is not likely to appreciate much. That's not why I bought it. I bought it to have passive income.

I found a small, fully remodeled duplex for $35k in a depressed area of South Carolina with good renters in place bringing in $900/mo in rent, but it had to be a cash deal because it was slightly over appraised price and I also could not find any lender willing to lend that small amount. It will bring in $10,800 in annual rent, but after all expenses (property tax, management, water, and insurance) it will net about $8000 annually. Am I going to get screwed on taxes because I don't have anything to write off (loan interest)? Was it wrong to pay cash for this? What should I have done different? I live in California, so am I going to have to pay South Carolina income tax as well as CA? Is there anything else I didn't think of?

How about using the equity in the home I own to finance this deal with a heloc? what are the pros and cons with this?

The numbers are it's $50k, renovated and rents for a total of $900/mo, and in an area where finding renters isn't a problem. Yes, the needle in the haystack. Anyhow, my question is about how to finance a low amount when lenders aren't interested in lending small amounts.

South Carolina

I found a turn key duplex for $50k with renters in place bringing in $900/mo. I pre qualified for a loan up to $300k for an investment property at 4.875% with 25% down. My problem is that $50k minus 25% down is only $37,500 and I can't find a lender who will lend that little. I have enough to pay cash, but that will deplete monies that could go toward more investment properties. What are my options?