All Forum Posts by: Deb S.

Hi @Dennis O'Loughlin, you should be able to Google ' "xxxx city name" housing authority' and follow links from there. 

For example, 'Providence housing authority' brings me to provhousing.org. From here there is a 'doing business with PHA' section and a sub-menu for 'landlords'. Most housing authority sites will have some kind of information on how to register for their program as a landlord. If you don't see what you need, email or call the contact provided on the housing authority site.

They are more than happy to help find housing for these tenants.

As with ALL tenants, the key to less headaches is to SCREEN your applicants very carefully. See where they currently live and drive by. Is the car they are driving have trash or clothes thrown all over the place? That's probably how they will treat your apartment. On the plus side, the housing authority also has some rules the tenants must abide by or they lose their voucher. Ask what those rules are and then ask about adding your own 'rules' into the lease. If they are reasonable, there shouldn't be an issue.

I would advise to add a clause to your lease about extra people living in the apartment. I had an additional 'tenant' move into one of my section 8 rentals and was not told. The housing authority said they gave permission to the tenant!!! Didn't ask me though! Add $xxx per month for any additional people that move in with a max number of x people that can live in the unit. 

Hope this helps!

I can think of 2 things off hand:

1 is to buy a property subject to the existing mortgage (this is different from assuming a mortgage). In this scenario you take over a seller's existing loan (mortgage payments at the existing loan rate). Finding a seller that wants to do this is not so easy. There are also other things that can go wrong which I won't dive into here. That said, this method is only for investors, title companies and sellers who fully understand what a 'subject to' transaction is and put the proper protections in place with the respective paperwork.

2 is to use an Infinite Banking strategy which is done by using the cash value built up in a permanent life insurance policy through a loan at roughly 5.5%. So your 'cost' would actually be 10.5% since your parents want to earn 5% but.........this method avoids this 'loan' showing on your DTI because the only people who know about the loan is the insurance company and the owner of the policy that took the loan. In this case your parents could give you the money to fund the policy if you need the money right now (clearly you have to work out repayment with them). If you don't need funds immediately, start a policy with your own funds and start building up cash value that you can borrow against. Another plus to this strategy is there is no structured repayment of the loan - you decide how often loan payments will be made and what amount.

Hope this helps!

I'm not a tax professional but I have ESPP and RSU's from my former company also. If/when I sell from my ESPP, I also look at my portfolio to see if I'm holding anything I no longer want to be holding AND if it will create a loss by selling. If yes, I sell that stock and use the loss to offset the capital gains I will have from the sale of my ESPP shares.

If you really don't WANT to sell anything else in your portfolio (that will cause a loss) you could do a 'wash sale'. This would mean you sell a stock at a loss and then wait 31 days before buying it back. This way you get the loss and you don't have to give up your shares.  Clearly in those 31 days the price of the stock will not be the same as when you sold it 31 days earlier but it is another way to create a loss to offset the gains you will incur. 

Also, remember that the investment property you are buying will have some depreciation that will also help offset your taxable income. If the investment property you are buying is going to be a STR, you MAY be able to do a cost segregation which would also save on taxes. Always consult your tax advisor for your specific situation. 

Hope this helps.

I agree with what everyone is telling you - find a good CPA who is well versed in tax strategy especially for real estate investors. You want to buy any new properties in a LLC but also depending on how much you want to scale your real estate biz, you may want to create a holding company LLC and a S-Corp if you get large enough. Creating these entities have costs especially the S-Corp so only do what works for your specific situation. If the tax benefits out weigh the costs, then you'll want to move toward that strategy.

If you attend local RE meetups, maybe you could ask for recommendations there. Alternatively, you could join some RE Facebook groups and ask for recommendations there. Good luck to you both! Sounds like you're on your way to achieving your goals! 

Hi Josh, it is true there are agents who structure the policy for their pockets and not for the client's best interest. Those policies usually lapse leaving the client with nothing (which in my opinion should not even be allowed). So there are valid reasons for Infinite Banking (IB) to have negative comments thanks to agents like this.

The way our team structures policies is for max cash value and minimum death benefit that increases over time. After all the whole point is to access the cash value in the policy. When policies are structured this way (properly) agents like me take an 80% cut on commission. Our clients get access to 50-60% of their money in year 1 and it goes up from there-again when structured properly. 

See attached example. On the far right is the column showing how to properly structure a policy for IB. FYI - most clients don't fund the amount shown in this example - meaning our commission is less than half of what you see on the far right.

Just trying to provide another perspective. Not all agents are unethical.

You can attend local RE meetups in your area. There will be wholesalers there and all kinds of buyers looking for deals. You can also post in Facebook real estate groups and right here on BP. Expand your network every chance you get. Your network is your networth!

I would form a new LLC for the both of you to own the property. Then your operating agreement (or JV agreement) can specify that you will be managing the property and that your sister-in-law will have the more passive role. You may want to specify that you are 51% and she is 49% so that any final decisions about the property rest with you.

If you're going to handle all aspects of this property, I'm not sure 50/50 is fair even if you're both contributing the same amount of funds. Once you own that property, you will be the property manager. All property managers get paid for that so if I were you, I would work out an arrangement where you own the property 50/50 but the cash flow is NOT 50/50. What you are comfortable with is up to you.

I was a Section 8 landlord for a couple of years starting around 2012. I would say that it all comes down to the tenants. There are good and bad just like non-section 8 tenants. My experience was ok - one of the tenants was dealing drugs from the apartment. Claimed that it was 'family members' visiting. Nobody has that many family members coming and going daily at all hours of the day and night. The other Section 8 tenant was an awful housekeeper - and I mean filth. When I bought the property, they were already there. When the leases were up, I didn't renew and put non-section 8 tenants in. Less money but less wear/tear and issues to deal with.

@Josh C.thanks for clarifying. As I was writing it at 6AM I thought something might be off. I should have double checked before posting. Thanks for the catch!

You need to know the NOI so ask the seller for the income and expenses for the last few years. That's step 1.
step 2 - contact a local commercial broker and ask what the avg cap rate is in the area for SS units. 
step 3 - use the cap rate the broker provided and the NOI from the docs the seller gave you. 
NOI x CAP RATE = purchase price

Simple example: $100,000 x 9 = $900,000

You can then use pro forma numbers say after you raise rents, fill vacancies etc to project future value if you wanted to sell later on. 
new NOI x higher cap rate

$130,000 x 10 = $1,300,000

$130,000 x 11 = $1,430,000

and so on. I can send you an example underwriting if you’d like. Send me a DM.