All Forum Posts by: Elizabeth Woolf

Thanks everyone. Does it make a difference that I have only ever filed schedule E's and not schedule C's? or does that not impact this at all? 

I may increase my price range and buy something closer to he value of the home I'm selling. 

I have a house that I've been renting for the past few years and I plan to sell it to buy something closer to where I live now. I used to live in it so when I started renting it, I did a quit claim deed from my name to the LLC. What implications does this have if I sell it as the LLC? Will I have to use all of the profits for business purposes? I plan to do a 1031 exchange to buy a cheaper house and I was hoping to keep the rest of the profits for personal use (probably a 50/50 split). Are there any potential problems with this?

Someone gave me some advice that sounded too good to be true so I want to verify. 

If I own a home for 27.5 years and have taken the depreciation expense every year, then I sell the house (for easy numbers let's just say at the buying price) and buy another one in a 1031, he said that I won't pay capital gains and can start depreciating the new house all over again for ANOTHER 27.5 years. Is this right or do you get 27.5 years total between the two houses when you do a 1031?

I've always viewed the security deposit as the "hold" and as long as that check clears, I hold the home for the tenant and would take damages from it if they decide not to move in. In Ohio, you have to pay interest for anything over 1x the rent that you ask in security deposit. Anything more than first, last and 1x security sounds excessive to me, but in Cleveland the standard amount is first and 1x security so could just be my experience. 

You should absolutely worry about an agent who is working for the buyer and seller. That's a bad situation and they're supposed to be impartial but that's easier said than done. You need a bulldog working for you. My thought is that if you're buying it as an investment, you have the luxury of waiting for a good deal. If you can't get something great, you can move on to the next one. Make sure you know how much power that gives you at the negotiating table and be aggressive.

I'm looking at 2 types of homes. Both would give me about $500 positive cash flow.

1. $500 monthly cash flow, higher mortgage payment, higher depreciation expense, slightly higher appreciation expected.

2. $500 monthly cash flow, lower mortgage payment, lower depreciation expense, slightly lower appreciation expected. 

Thoughts on pros and cons of each? Right now I'm thinking that the lower priced home would be better because I can theoretically continue to buy more homes because I'll have more cash available for down payments, but I have a long term buy and hold strategy so I don't want to ignore appreciation. Both homes are in nice neighborhoods and so far I have 3 high quality single family homes that have always gotten premium rents so I'm continuing with that niche.