All Forum Posts by: Scott Sewell

Thanks Bill,

That was my thought as well. Would seem to be taxing the same money twice (assuming it was after tax money that bought the investment in the first place).

Appreciate the confirmation…

Need some help Guys!

We've asked two Accountants and gotten two different answers to the question above. So let me define this hypothetical a little further:

On a multifamily sale (strictly investment property), after paying Uncle Sam depreciation recapture, and capital gains taxes, do the balance of the proceeds become income (and added to our 1040), and thus taxable at our personal rate?

Thx in advance,

Scott

We got (our most recent) one from a guy named Brian  Barham. 

Virginia Home Solutions LLC

Were happy with his work.

@Brent T Howell,

Hey Brent, as a fellow Alaskan transitioning to HR, I can tell you that closing transactions in VA is definitely different.

Alaska is a ‘disclosure’ state. A seller is required to disclose known defects to a property by law. Virginia is NOT. Sellers are only required to answer a direct question ie: how old is the Mechanical system? (For example) And even then, good luck getting a response.

Therefore, as said previously, good inspections are critical. Don’t write an offer without this (these) as contingencies. It’s a larger market so, there’s a larger percentage of bad faith actors in all segments of business. ‘Buyer beware’ and ‘trust but verify’ are mottos to live by....

Good luck! And great investments to you!

Scott

@David Nacco,

You might have been the smarter man David. We've already had our challenges with this place. The old owner was running the upstairs unit as an illegal rooming house, you can imagine the condition of what we walked in to....

Thanks Guys, (David and Max)
@Maxwell Fontaine, that was helpful. And thanks for the recommendation, we'll keep it in mind.

So, since we plan to rehab the entire structure, would it be your advise to change the use of the residential space? To an office space possibly? Or should we be consulting with a commercial lender(s) about their underwriting criteria before we finalize our plans and start pulling permits?

Hello (Virginia) BP Nation,

We need your help... Please.

Without getting to far into the weeds, We've recently purchased a little Mixed-use building in downtown Phoebus (Hampton) VA.

It’s a cute little wreck, and will need EVERYTHING, including infrastructure.

A complete gut job. It’s appx. 1600 sf with an 800 sf commercial unit downstairs and 2BR unit upstairs. (See below if I can figure out how to load some pics)
We know that many will (would) say; “tear it down and start new” but, we’d like to make that another discussion.
Our initial strategy is to BRRR it, and hopefully create some equity and cash flow on the back end. We've done this a few times now, but always in the commercial (5+ unit) residential market and this will be our first foray into the Mixed-use and/or straight out commercial market.
Now, I remember a conversation we had with my brother-in-law (a commercial banker in NY) when he told us these were the most difficult properties to get financing for, or were, at that time (this was some years ago). And yes, we will be consulting him too,
but we want your input...please.

So, for any of you having knowledge about these properties, or this process, our questions follow:

First, in your experience, is what my brother said as true today as it was some years ago? Or was that just a local trend at a specific time?

Next, what underwriting criteria do we need to watch out (or plan) for, or have the largest impact on a re-fi of this nature? (IE: deal make-or-breakers)

Finally, any input you have on this process? What would you advise us to do/not do, or plan for?

Thanks in advance, we very much appreciate the collective intellect!

Scott Sewell

Anchorage Rental LLC

Hello BP Nation,

We need your help.

Without getting to far into the weeds, We've recently purchased a little Mixed-use building in downtown Phoebus (Hampton) VA.

It’s a cute little wreck, and will need EVERYTHING, including infrastructure. A complete gut job. It’s appx. 1600 sf with an 800 sf commercial unit downstairs and 2BR unit upstairs. (See below if I can figure out how to load some pics)
I know that many will (would) say; “tear it down and start new” but, we’d like to make that another discussion.
Our initial strategy is to BRRR it, and hopefully create some equity and cash flow on the back end. We've done this a few times now, but always in the commercial (5+ unit) residential market and this will be our first foray into the Mixed-use and/or straight out commercial market.
Now, I remember a conversation we had with my brother-in-law (a commercial banker in NY) when he told us these were the most difficult properties to get financing for, or were, at that time (this was some years ago). And yes, we will be consulting him too,
but we want your input...please.

So, for any of you having knowledge about these properties, or this process, our questions follow:

First, in your experience, is what my brother said as true today as it was some years ago? Or was that just a local trend at a specific time?

Next, what underwriting criteria do we need to watch out (or plan) for, or have the largest impact on a re-fi of this nature? (IE: deal make-or-breakers)

Finally, any input you have on this process? What would you advise us to do/not do, or plan for?

Thanks in advance, we very much appreciate the collective intellect!

Hi Shawn,

Welcome to the other BP (Alaska insider joke)! Take full advantage of the resources here, I learned as much from this website in one year as i did in 5 years of owning and managing rental Property. 

There are a couple of RE Investment groups here in Anchorage. Look up "REX" (Real Estate eXchange) and the "Landlord's Almanac" on meetup.com, I believe both have meetings coming up in the next week or so.

Scott

Hi @Jeremy Bartlett,

Just responded to your request. If you’ve confirmed your fears of water infiltration, yes, you do need to do something outside. But it may not be as bad as you think. I’ve had good luck with grading and gutters if you have the room to do it right. 

How much space do you have around your building? Is the lot fairly level? Or is it heavily sloping?

If you can provide more info, I might have a solution...

BTW, welcome to BP! 

And to the wonderful world of (Oh Sh*#!!) landlording.