All Forum Posts by: Dominic Franco

 Hey @Wally Drake, I just finished up my first year in CCF. I did 10x what it cost to be in CCF in net revenue. There are some amazing folks in there that truly want to see you succeed IF you put in the work. Hope that helps.

@Brad Kroepfl Curious about your experience so far. Also how did you go about joining? I don't see anything on the website or with a web search on how to go about applying for the mastermind.

-Dom

@Eamonn McElroy sorry yes, I meant vacation rental. The CPA used the two terms short-term rental and vacation rental very interchangeably in their explanations so I didn't think there was a vast difference in the terms when it comes to tax filing. IRC Sec 280A(d)(4) was not mentioned to my knowledge because I don't know what that means.  

@Linda Weygant this CPA came recommended by a local investor who has many more units than I so this CPA has a good amount of experience filing for real estate investors. 

Overall, I was okay with my return amount but not so much with the explanation of why I was claiming a gain and not a loss. I originally emailed them my questions regarding the difference in loss I was presenting versus the gain they were claiming. When they responded to the email they did not answer any of my questions, so I politely asked again. That is when I got a phone call to which lasted much longer than it needed to and clarified nothing to me. Also, the amount I was charged for my filing suggests that I was being billed for the long-winded explanation the whole time. They may even be correct in the way my taxes were filed but for me, it just wasn't a good experience, the communication just wasn't there. I want to learn and grow a working relationship with my CPA regarding real estate investing, not a "here's your return sign here" type. I am searching for a different CPA for next time I file and will have them do a once over my last tax filing to make sure it was done correctly. The funny part is the reason I went with this CPA versus the others that fellow investors recommended is they said their CPA was too expensive for someone like me with just a duplex, yet I was billed nearly the same amount that these investors claimed they paid. 

TLDR: Lesson Learned: If you are buying a property to house hack and the unit you intend to move into is occupied with tenants and collecting rent after closing, then for tax purposes, it will be considered a short term rental. Unless when you moved in you were staying in the property for less than 14 days that calendar year. 

*I am not a CPA, this is not legal advice, just my experience filing taxes with my duplex in my state*

The first year of owning my duplex I put a good chunk of money into it so that I could justify a rent increase and have the rent cover the mortgage payment. After tracking all my expenses and income on my profit and loss spreadsheet, I was showing a total loss of $3,898.38 for the year. After sending in all my documentation to the CPA I used they sent me back a worksheet showing that I would be claiming a GAIN of $375.00. When I asked how I was claiming a gain with so many expenses I was given the explanation that 1. since it is a duplex I can only write off half the expenses since I live in the other side (fair enough I assumed that) and 2. since both sides were occupied, and I collected rent for 2 months on the side we chose to move into, it is considered a short term rental for tax filing since we lived in the property for more than 14 days. Because of those factors, somehow it went from a large loss to a gain. I am still unsure how but this is what I was told and it wasn't cheap for the explanation. 

This was just my experience filing taxes with my house hack the first year. If you had a similar situation but a different experience I'd love to hear it. Kind of disappointing considering what I thought I knew about the tax advantages of rental properties. 

-Dom

Is this only for primary occupancy loans? 

110% interested. Would be a great opportunity to have a local meet up that is focused on multi.

@Liz Collier 

@Shelby (Osborne) Johnson just covered the topic of VA home loans at our local meet up group (Pints & Properties) this last Saturday at dirtbag ales! However, they record all their speakers so you can go to their facebook page https://www.facebook.com/groups/pintsandproperties/ to check it out. If you are looking to invest in the local area I would highly recommend coming out to their monthly Pints & Properties meetups. Reading and gaining knowledge is definitely essential but it wasn't until my wife @Jessica Franco and I started going to local meetups and networking that we started taking action. In fact, it was less than 90 days from our first meet up to closing on our first investment property! The realty group (Five Pillars Realty Group) that runs the meet up is full of agents who are active duty, former military, or military spouses. And best of all, they are all local investors so they actually know the market first hand! They also have a list of preferred vendors (property managers, contractors, insurance agents, etc.) who are all familiar with working with investors and make the process that much easier. 

Feel free to check out my profile for my success story using my VA loan for a house hack! In my personal opinion, I consider a multi-family house hack to be the most beneficial use of the VA home loan. If you want to know any more details about how my wife @Jessica Franco and I got started feel free to reach out to either of us.

@John J Garza check out Five Pillars Realty Group https://www.fivepillarsrealty.com/ they also have a page here on BP! They are extremely knowledgeable on investing in the Fayetteville and surrounding areas and are a phenominal networking resource. They are also veteran owned and operated. I closed on my first investment property in less than 90 days after attending my first meet up! 

@Jessica Franco @Shelby (Osborne) Johnson @Daniel Kidd @Michael Glaspie @Chalie Krautkramer @Brandon Andreola

I have read through the forums, consulted my real estate attorney and insurance agent and have come to a dead end so I figured I'd start a discussion on here. 

My wife and I just bought a duplex and will soon be signing a new lease with our newly screened and qualified tenants. The home was purchased through a VA loan and is my primary residence. Therefore the property is in my personal name and not an LLC. We are self-managing the property so we considered forming an LLC for our property management "company". However, as I suspected, my real estate attorney informed me that because the home is in my personal name that the property management LLC would provide little to no protection for a tenant suing. So we turned away from the LLC route. I did some research and my real estate attorney confirmed that I should look into an umbrella insurance policy. So I contacted my insurance agent and asked how much coverage I currently had against a tenant suing me (none apparently) and how much coverage I could get. My insurance agent said, "I am not really sure that we have anything to insure against lawsuits - you do not have LANDLORD liability on this because it is in your personal name and is treated as the primary residence - therefore a personal lines policy not commercial."

My questions are:

1. Do I really even need coverage against a tenant lawsuit?

I did a VA loan on the property with 0% down so I have about no equity in the property at the moment. I just don't want to lose my whole life savings that I have set aside right now for investing.

2. If I do need coverage, what do you recommend? A separate insurance policy? An umbrella insurance policy?

I understand the chances of being sued (especially with being responsible with the upkeep of the property and screening tenants properly) are quite low but it's certainly not unheard of. 

Any advice is appreciated.

Thanks,

Dom

@Daniel Kidd thanks! @Jessica Franco professional real estate photography (Protea Media Solutions) really made a difference in marketing the unit and attracting the right caliber of tenants at the right price! Highly recommend her for anyone looking to market their rental or property for sale, professional pictures really make a big difference and are well worth the investment. 

As far as the pet "deposit" is concerned, from my research here on BP, it wouldn't matter where the tenants were at in the lease agreement. The seller stated and his lawyer (allegedly) confirmed, since the "deposit" was non-refundable it is earned and not transferred. However, I have read some instances here on BP where the seller was generous enough to transfer the non-refundable pet deposit without question. While the seller is not legally obligated to transfer it if it was non-refundable, I believe that since you are inheriting tenants with pets, the buyer should get the fee/deposit at closing. The confusion is in the wording. If it were just a pet deposit then it would be transferable. However, since it was a NON-refundable deposit, it is essentially the same as a pet fee, in the sense that it is earned by the landlord. Although the term non-refundable deposit is commonly used in lease agreements, the more accurate term would be a fee.