All Forum Posts by: David S.

I have some lenders say appraisers do not have to inspect all units in the building, sometimes only the vacant ones...Have you discussed your issue with your lender?

Here's the latest on vacancy control for those still thinking of investing in San Francisco...

https://www.sfexaminer.com/new...

 If I read the original post correctly, the original deal was set up as Gabi and her friend Reni providing all of the cash to finance the purchase of a property to be rehabbed and flipped. S got 1% of the equity for finding the property and she and the original contractor (R) would get 66% of the profit for doing the rehab and selling the property...I am not sure if the second arrangement after they booted out the first contractor R would leave S with only 1/3 of the profit.

Whatever the profit arrangement was, I think @Gabi Liu's advice in the end was not to partner with anyone who does not put in cash in the project in return for a piece of the profit (50% in her last example). Seems like a smart position to take since in this case, S, the realtor/flipper from Ohio and a BP member did not put any money into the game and she stood to benefit greatly from all of the upside but not share in the pain of any downside.

@Nicholas Aiola. I recall you had a thread where you generously offered to answer questions related to real estate and taxes....It looks like its been 3 years and still going on strong.

I just replaced the roof of a 5 unit apartment building and am trying to see if i can take advantage of recent changes to bonus depreciation or Section 179.

From what i have read, since a new roof is supposed to last more than 20 years, bonus depreciation would not apply. Is this correct?

In addition, while section 179 was expanded to include new roofs, it would only be applicable for new roofs on commercial or non-residential properties...So am i out of luck here too?

I ask because if a 5 unit apartment building can only be financed with "commercial loans" and not "residential loans" (like those you can get for a 4-plex or SFR), would i be able to expense the entire cost of the new roof under section 179 on the premise that a 5 unit multi-family property is commercial real estate?

Thanks in advance for any views you have on this matter.

Lots of "for rent" signs in SF, rents are dropping and vacancies are taking longer to fill...so your payback on the renovation will take longer...But I'd still be inclined to bite the bullet and renovate now...  I imagine a "4BD/1BA no in unit amenities set up" is going to sit around a while in any scenario unless you are renting by the room, to students or to a family that doesn't care about amenities. I think adding a bathroom and any other updating (such as to the kitchen or changing from carpets to plank flooring) would make the unit much more competitive so at least, if price appropriately, the newly renovated rental will not stay on the market too long. 

@David S. Can you share where you are in BC Canada? I ask because I have relatives who own in the metro Vancouver area and at least according to this article, turn-key opportunities may come up as government programs put in place due to Covid, wind down over the summer. You will not have to deal with cross border issues if you invest in Canadian real estate.

https://www.cbc.ca/news/canada/british-columbia/covid-19-may-real-estate-1.5562836

@Julie L. You said above, "This doesn't include all the cash we're able to keep from my husband's W2 since we can deduct passive income losses against his W2 income."

I was not aware of this....so you are saying that I as a LP in a syndication, can use the losses reported from a K-1 to offset tax liabilities due to a W2 salary...is this true?

@Annie T. You said, 

"Unfortunately, it's looking like I won't be able to do much during this time and it's very much because of the unique situation that we are in. My tenant finally responded today and she's now challenging my rental increase by claiming my unit is a studio and not a 1 BR. No mention of whether she is financially impacted due to COVID-19. It's definitely not easy to deal with all her accusations but my plan is to respond reasonably and patiently since my hands are tied now in case we do have to go to courts."

So what exactly has your lawyer advised you to do? How has he advised you to address the 1/3 shortfall in rent that was submitted for April? and next steps, even though whatever you do will not have any teeth given the temporary ban on evictions?

On what basis is your tenant claiming the unit is a studio and not a 1 BR?...I would think the two types of units are pretty easy to distinguish...In anycase, since the unit is not subject to rent control, if you and your 3rd party consultant did your homework with what units of comparable size and location were renting for, eventually this tenant will lose. Its just that it will cost you in time and lost rent, although you would be able to ultimately sue her and should be able to get a judgement for the unpaid rent.

So sorry you have to go through all of this.

You said you gave her almost three months notice because it was a substantial rent increase. I am curious, did the tenant ever push back and maybe try to get you to dial back the increase or negotiate a more gradual increase during those 3 months? Say for example, implementing half the increase this year and the balance the next year?

Agreed about many MH owners at risk of losing jobs, just like tenants in Class C MF....The offset I heard was that the total of unemployment insurance and those 1200 checks per adult would keep MH owners in good shape to pay lot rent.

@Account Closed Yes, I was asking about Landlord taking the tenant to small claims court for non-payment of rent, so thanks for letting me know that would not be an option.

I did not know the courts were closed.I thought they were just not processing eviction cases.