All Forum Posts by: David Sisson

Comps and value after you've fixed it up. (after repair value). Since you are living in it, your math might be different than a flipper, but if you are hoping for short term profit, you need to look at it like a flipper. For example, I'm willing to spend "too much" on the home I'm living in (because I want a nice place to live) and I'll live there a long time and get the value back eventually. If I'm in it for profit, I might want to make sure I don't overspend. 

@Jojo Pembridge I'm very familiar with the East side of Providence & the Hope Village area. In my opinion one of the nicest locations in RI. You certainly won't have any issues with the location, and value will hold well. HOWEVER, I personally always prefer to own the entire property. Of course, owning an entire house or multi on the East Side is almost impossible - they are very expensive and rarely on the market. Talk to a local realtor about value (I can refer if you need help). I've done the "live in flip" before and it's challenging (my wife and I did it, and it wasn't that much fun LOL). You have to run the numbers - at $389K plus costs for the rehab, is it worth it? Can you do the work you need to do (especially plumbing) being in the middle of the house? If you were to rent it - right now maybe $2500/month - does that pay for your expenses + profit? 

No dogs in my units. Maximum 1 cat. No exotic pets, no fish tanks, no birds. I'm generally unimpressed with the ability of dog owners to provide for their dogs, have seen way too many instances where the poor dogs are mostly ignored and bark all day, chew up the units. Most dog breeds are better off in large properties, and certainly not in apartments. Most larger dog breeds - like pits or even labs - need a lot of space to run, and apartments dont have that . SO, NO DOGS. This is partly because I love my units, and partly because I love animals. Tenants with large dogs are going to have a tough time finding a place. 

PS: my arch business and the real estate LLC are both set up as S-Corps.

I'm trying to learn. I'm still not certain:

My question in other words: ARCH BIZ CORP has $10,000. ARCH BIZ CORP gives (note: ARCH BIZ CORP actually does pay rent to REAL ESTATE LLC, not sure if this matters) the $10,000 to REAL ESTATE LLC. Now, REAL ESTATE LLC uses the $10,000 to fund the downpayment on a new investment property that's owned by REAL ESTATE LLC. Do I have to pay tax on the $10,000 this year? I own both ARCH BIZ CORP and REAL ESTATE LLC.

Hello, I'm a small business owner (my architecture business) and I also own a couple of investment properties. I hold one of these investment properties in an LLC (that I'm the sole owner of) and the other one my wife and I own jointly. I've been lucky enough in 2021 to build up some healthy profit in both the LLC (real estate business) and my architecture business that I will have some to invest still this year.

I know that I can take the profit, pay no tax on 20%, but be on the hook for tax on the remaining 80%. 

Is it possible for me to (rather than paying myself the profit first) - put the money in the LLC and use it to purchase property directly - IE: an investment for the business? I honestly don't know what this means for my tax liability - I want to get this right - both in terms of the smartest strategy and also following the rules.

I could also - instead of investing in a new property - use some of the $ to improve one of my properties - I have a bunch of it that's awaiting renovation and could then be rented out. I'm not sure if it makes more sense to pay cash for the renovation, or to take a loan to fund the renovation. 

Yeah, you have to tell them they can't breed dogs. That'd be a no brainer I think. Harder to argue the 2nd dog. 

The toilet is your responsibility to fix as the landlord. I'm not sure about the rusty tub - that sounds like something you can take care of when you renovate the unit. You can charge them to fix the AC if the dog really did it. 

You can certainly have the city inspector get involved if they are actually running a business out of the house, but probably the result will be that you'll get in trouble as the property owner, rather than them. 

As others have mentioned, you accepted them and their dogs as tenants when you bought the home with them in place. 

You should have a conversation with them thusly:

1) Only one dog is allowed per your lease

2) you have two dogs

3) here's an addendum that legalizes your second dog

4) But please note that you can't breed dogs here or have more dogs (write it straight into the addendum)

5) If you start breeding dogs, I will do a quit or cure notice, which leads to eviction, and I'll get the city inspector involved (you'll get the city inspector involved so you can show actual damages to the judge)

This is why I don't allow dogs in my places. Not because I don't like dogs - I do - but I've observed WAY too many people aren't good dog owners. As an aside - it's a good idea to be nice to your local town officials (city inspectors, etc) because they can help you out or hurt you depending on how they feel about you. I deal with these men and ladies all the time (as part of my job) and most of the public treats them poorly, so a bit of friendliness goes a long way. 

I'm not sure how a dog destroys an AC, but OK. If they are paying, and otherwise not destroying the property AND you plan to do extensive renovations when they leave anyway - then just wait until the end of the lease and don't renew it. Get them to sign a little lease addendum where they admit that they have two dogs if it helps you feel better about it. If the dog did destroy the AC, then you can charge them to get it fixed. 

@Anthony Thompson thanks for sharing that. I didn't even know that was happening in RI. I dropped Joe Shekarshi a note, he's a great guy, but these bills look horrible for RI, both for landlords and for renters. I don't know what they expect will happen with the Section 8 thing - I mean, I have no problem accepting money from any source, but I can also reject a tenant for many reasons that have nothing to do with where they get their money from, so I'll still be refusing to rent to tenants that don't make business sense (IE: they have evictions, or lie to me, etc). 

PVD = Providence

EP = East Providence

@Amanda Bruneau Obviously, you'll pick deals that make sense for your level of risk vs reward. I like being able to service my properties quickly, so having them fairly close to where I live makes sense to me. I don't know of any particular areas that are a goldrush in RI - a few years back I would have said Woonsocket, but now the prices have risen up there.