All Forum Posts by: David Barwick

@David Barwick income is ability to pay and credit shows that they actually pay. Ideally you want both, but I would rather have someone right at 3X that doesn't miss payments. Paying your bills is less about income and more about managing money. Responsible people don't take on excessive debt and they pay all their bills on time.

Great comments all around, but this one really spoke to me. Thank you everyone for your input!

2 Votes

Originally posted by @Chris Mason:

I'd give both groups a 2nd pass, looking at DTI instead of HTI ("3x" = 33% HTI). For DTI, just add in the car, student loan, etc, payments, and divide by income.

And I'd give the credit people a 2nd pass too, looking at the story it tells. A medical collection account from 4 years ago is VERY different than a car repo from 2 years ago, for multiple reasons, not the least of which is that they probably didn't plan to get sick, but they DID plan to buy that car ahead of time that they couldn't afford. I'm in an industry that obsesses over the numerical FICO score rather than the 'story,' I'd love to have those handcuffs off and be able to focus on that instead.

Devil is in the details.

I appreciate your comment! Do you have any advice on what constitutes a scary DTI ratio?

0 Votes

I’ve been showing and taking applications for my first rental property. The applicants all seem to fall into one of two categories:

1. better than 3x income but credit problems ranging from missing some payments for some, all the way to bankruptcy or eviction for others.

2. right at 3x income between spouses’ combined income, good credit history.

I’m leaning toward choosing someone from category 2, but I’m curious what others with more experience would advise.

1 Vote

Thanks!

Originally posted by @Natalie Kolodij:

Your "in service date" is the date the rental is ready and available for rent.

This can be when you get an occupancy permit, or when it's first able to be shown, advertised, ect.

Your depreciation starts at that point.

Most costs incurred prior to that point (assuming it was purchased vacant) will be added to your basis of the property and capitalized, not written off. Though some renovation items can be broken out.

When you first rent it =/= when it starts being depreciated.

0 Votes

I just closed on a single family that I will offer for rent once I get done painting and doing some small repairs. It will probably take me a couple weeks. If I’m unable to get a tenant moved in before the end of the year, do I still claim depreciation on this house? It was purchased as an investment property (i.e., all the mortgage paperwork describes it as such).

Second question: if it doesn’t rent until next year, do I still get to deduct cash spent on repairs, etc?

Thank you!

1 Vote

Originally posted by @Dan Guenther:

@David Barwick

Welcome to the community and congrats on the first property! Are you planning a house hack?

Thanks! I’m not, but I wish I had thought of that when I bought my first house! My family and I currently reside in a house that we love, and also own outright. Although maybe I CAN charge my in-laws when they stay in the guest room…. :-D

0 Votes

That’s very helpful, thank you!

0 Votes

I’ll be honest, it doesn’t seem amazing :-)

I'm being conservative on rent - I think it can get $950 or more. I'm factoring in paying for garbage and security myself, which I might or might not do. The taxes and insurance are accurate. I should be right at $650/month for mortgage and escrow. I don't really understand some of the categories, such as Pro Forma cap, NOI, and Purchase CAP.

Any insight will be very much appreciated.

0 Votes

Originally posted by @Nick Coble:

I'm in Lamar and invest there mostly. Have you been to the Joplin REIA meetings? Great info and networking there.

I haven’t, but I’ll check that out!

0 Votes

Hello,

My agent turned me on to the BP podcast and site. I’m interested in but and hold rentals as a side gig to my full time job. I like my job, it pays pretty well, and I plan on staying there while pursuing real estate investing.

I currently have a single family 3/2 under contract and about to be inspected. If the sale goes forward, it will be my first real estate investment.

I’m excited to learn and participate here.

1 Vote

All Forum Posts by: David Barwick

David Barwick has started 4 posts and replied 10 times.

Post: Choosing between higher income or better credit applicants

Post: Choosing between higher income or better credit applicants

Post: Choosing between higher income or better credit applicants

Post: Claim depreciation this year or wait until next?

Post: Claim depreciation this year or wait until next?

Post: Hopeful newbie in Joplin, MO

Post: Help me analyze this deal (please)

Post: Help me analyze this deal (please)

Post: Hopeful newbie in Joplin, MO

Post: Hopeful newbie in Joplin, MO