All Forum Posts by: David Hildebrandt

@Erin Elam I suppose everyone has their own standards when it comes to borrowing. But 6 months doesn't seem out of the question, would I only like to make 3 months of interest payments? Sure. But if the numbers work and it takes that long to get there, I would rather have the deal than not.

Good question, Sean. A bit ironic as I think most on here would agree that the majority of agents don't understand/participate in real estate investing. There are a few pros to getting your license including but not limited to:

Access to the MLS
Being able to see properties quickly, without needing your agent to tag along
Saving half the commission on the sell side of your deal

But there is the additional costs of continuing education and splits or fees you may pay to hang your license with a brokerage. So you have to weigh the pros and cons.

You do not need to be an agent to invest. In fact I would put that money toward a deal as opposed to a license.

@Sean Beksinski

Depends on what someone would consider market value...and there will be the point of contention when it comes to transacting. But if you had success on the last deal you purchased from him, perhaps he manages all his units similarly and there will be equal opportunity to add value.

Is you plan to blanket this property on the next one? So you can spread some of your equity over to the new acquisition without coming out of pocket?

@Paul Caputo @Yonah Weiss

Some further points of clarity:

1. We are 50 50 partners.

2. The monthly net of $2k is the net net after mortgage ($1500/mo 4.375% 25 yr am 80% LTV 7 year refi) and all expenses

3. Our strategy with this building is a long term HARD hold. That being the case, lets project we own the building for 20 years. He will continue his practice for that time frame, and no matter what his status in regards to RE professional will not change. Therefore the only difference to him, is we have taken a few thousand dollars per year from the back end of the depreciation forward to help offset my larger taxable income events this year (retirement cash out/flip income etc.) We will still be getting depreciation in the future, just less per year?

@Jeremy Elcox There are several different modeling structures for credit scores that weigh components differently. Have spent many years in the car business I can tell you there is always a discrepancy between your "Classic" modeling score and your "Auto" modeling score for instance. Buyers would often tell me they just pulled their credit recently and the score was X points higher, that's the reason.

Thanks for all the replies and the time that went into them. Just to better summarize my situation. When I made the leap to real estate full time I left a 6 figure job to do so....which is crazy, but also the best decision I have ever made. The cashing out of the retirement was to do a few flips that have sustained some semblance of income as I look to use private money to grow my portfolio of passive income. So moving that money to an SDIRA would not have accomplished what I needed.

Based on the responses to this thread, and some research I have done locally in the past few days. I know it to be true that I will qualify as RE Professional. But I think the standard/bonus depreciation will be enough to offset our income from the property, and the cost to pursue a cost seg would marginalize the benefits in the short term on a property of this size.

Whoa... @Cole A. surprised that comment didn't break the internet! Definitely add that to my toolbelt!

I wish they would do a loyalty card/discount on something besides paint. Do what you will but to me, that would be the ultimate win/win/win for Home Depot @Scott Trench. If we earned a discount, or dollars back from each one of our purchases. The wouldn't be giving a discount just to discount, and it would promote some real loyalty.

You could earn Home Depot dollars (much like Menards 11% rebate which can only be used in stores) that can be combined with other discounts and spent like cash. 

Wow, @Yonah Weiss thanks for taking the time to respond at such length. I have transitioned to RE full time, completed a flip and sold, but also cashed in around $90,000 in retirement funds in order to do so. 20% was withheld, and I understand an additional penalty will come in to play. So I am looking to offset as much of that income as possible. Which kind of puts me on the opposite path to my partner when looking to boost depreciation?

My partner, who is a dentist, and I acquired out first commercial multifamily back in February. I have been intrigued by the possibilities of cost segregation to increase depreciation and insure that we offset our income from the property. However, based on his job I don't think additional depreciation would be put to use offsetting his income (has no other passive investments.)

I am looking for a recommendation in the Cincinnati Ohio area of someone who could assist me with the analysis. Deal details below:

8 unit apt building + Adjacent 2 BR single family

$325K purchase price - $76K investment from my partner

Nets $2000 to $2400/month

Land Value $66K - Improvement Value $185K (county auditor's appraisal in Nov. '17)