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All Forum Posts by: Eric Gay

Eric Gay has started 5 posts and replied 9 times.

Post: Cash out re-fi to purchase rental vs commercial loan?

Eric GayPosted
  • Trussville, AL
  • Posts 9
  • Votes 1

So, my wife and I are taking the leap into leveraging a (as in one, so don't worry, I'm not going leverage crazy over here) property for the whole "put a little down and let the tenant pay it off then sell it for a profit" thing. 

I've been presented with two options. A) Take out a commercial loan with 20% down. B) Do a cash out refi on our paid-for home with 0% down and a lower interest rate to boot.

If I choose option B, I would take the cash, move it into my business account as capital and purchase that way. So, either way, the property would be in our rental LLC.

I'm confused on two things. 1) If I can deduct the interest on the cash out refi like I could with a "regular" mortgage and 2) I would have to pay the mortgage by writing myself a check from the business account, so I'm worried about paying earned income tax on that as opposed to just at the business tax rate. Unless I could pay the mortgage from the business account, maybe I can, I have no idea. That's why I'm asking you smart people! 

Has anyone purchased a rental property this way? I'd love to hear your experiences!

Post: Contractor died in the middle of project(s). Now what?

Eric GayPosted
  • Trussville, AL
  • Posts 9
  • Votes 1
Originally posted by @Theresa Harris:

@Eric Gay  Ask them for new documentation to reflect what has happened and a timeline as to when it will be completed.  If they had a lot of jobs on the go, aside from losing time to grieve; they will also be short one person and behind.

Thanks, I'll do that. I have asked for a timeframe for completion, and have been ghosted twice. I'll try again. 

Post: Contractor died in the middle of project(s). Now what?

Eric GayPosted
  • Trussville, AL
  • Posts 9
  • Votes 1

Long story short, I was working with a contractor on a rental property rehab as well as a project on my primary residence. He passed away a month ago unexpectedly. He was fighting pneumonia and I knew he was behind on his work because of hospital visits, general recovery, etc. but he was definitely not expected to die. On the rental property, he was paid in full, and had a few things left to punch off (install appliances install HVAC that were supposedly purchased but waiting to install, finish laying sheet vinyl flooring in three rooms). On the primary residence, more than half the project has been paid for, and only about 1/6 of the work has been done. Before I get a bunch of negative comments, let me say that this was a huge wake-up call to never ever ever ever pay someone for work that has not been completed.

He has a "business partner" who has been working with him for years and whose name is on all the documentation regarding the scope of work for both projects. The business partner told me about his passing and "vowed" to me that the work would be complete. That was a month ago, and after following up multiple times, no work has even resumed. The contractor also has a brother that worked for him, who is a very nice guy and I don't believe would intentionally leave someone hanging, but I've gotten the same responses from him (the work will be completed), but no progress has been made.

What are my options, legally? I'm pretty sure he had an LLC (another lesson learned, always verify). I'm out about $10k for work that's not been completed. Am I just out of luck and need to consider it a loss and move on to someone else to finish the projects, or can I try to recoup that money?

Originally posted by @Daniel Walker:

Not gulf front, but gulf view or close proximity you can.  There’s a look that rents and certain features of the home or community that need to be in place.  Do Vrbo and Airbnb. I can go into details when we have more time to chat privately 

 If I wanted to also use it as my family vacation home, would that affect the whole gulf front vs view thing? A little less return for owning what I really want?

Thank you all for chiming in! @Matt "Roar" Gardner, @Daniel Walker I really appreciate it! I’ll reach out. 

Hi!

I’m curious if anyone here has a condo used for short term rentals in the 30A area. I’m playing with the idea of having a condo for vacations and short term rentals as a part of our portfolio. Wondering if the income is worth it.

(this doesn’t have to be specifically 30A, just somewhere in the Gulf close to Alabama, so even Gulf Shores or Orange Beach).

Thanks!

Post: Alabama Tax Certificates

Eric GayPosted
  • Trussville, AL
  • Posts 9
  • Votes 1

I was hoping you’d chime in, Denise! Thank you. How about for a deed purchased at a markup? What should I be wary of when purchasing a deed at a markup? My understanding is that I can possess immediately and that redemptions are rare as opposed to certificates because of all the attorney fees the redeemer would have to pay, etc. 

Thank you for your time!

Post: Alabama Tax Certificates

Eric GayPosted
  • Trussville, AL
  • Posts 9
  • Votes 1

Hi all!

In Alabama, I can buy a tax certificate from someone who obtained it from auction. They’ll mark the price up when they sell it. So if I buy a $2000 certificate for $3000 as an example, and the owner decided to redeem, am I out the difference of $1000 because the cert was only for the $2000 delinquent? How does a tax certificate change hands?

Thanks!

Post: How to interpret title report

Eric GayPosted
  • Trussville, AL
  • Posts 9
  • Votes 1

Hi, all! First post here! I'm doing research on auction.com and some of these properties have title reports attached to them, but they are all different and all equally unintelligible to me. 

For example, one title report says, "Title Grade: D . Reason for grade: Foreclosure deed not recorded 90 days / State specific redemption periods / FC Judgement 90 days / FC Mortgage 90 days."

Googling these terms comes up with nothing for me. I've attached links to two reports that I'm confused about. Is there anything in these reports that would lead me to believe that there are liens or anything that would get passed on to me?

https://cdn.mlhdocs.com/auctions/auctions35979/2679093-ptr.pdf

https://cdn.mlhdocs.com/auctions/auctions35999/2564390-PTR.pdf

https://cdn.mlhdocs.com/auctions/auctions35979/2664635-PTR.pdf

Thank you!