All Forum Posts by: Javier P.

Hi Ice,

Hope all is well. My name is Javier. I am based in Jacksonville, FL.

I am looking to enroll in  some R.E training.

Pease, did you end enrolling in this program? Any feedback that you could provide?

Thank you,

Javier

Chad, Chris -- Thank you.

Hello, B.P community, 

I see this is an old thread; however, seems to be the correct place for the following questions about NPN 2nd mortgage note training:

1) What is common or what is to expect on the JV agreements offered by some training services?

I have seen a couple and those require: a)   A commitment to buy 3 to 5 notes to be purchased within a certain period of time b) A commitment to maintain the notes and split profits (if any) for 5 years since the purchase date. c) The right of first refusal

I more than understand the logic of the time commitment and profit split; however, the terms and legal language make these JV contracts look like a 5-year trap.

3) Where/ how other individuals beginning to work on the 2nd notes business manage to obtain Credit Reports?

Reading several other previous threads seems that Credit Bureaus or similar providers, don't like/ approve home offices. 

My 9 to 5 job takes place at my home office.

Thank you, JP

Brandon, Pat:

Thank you very much for your replies and please excuse the late reply. 

Nearing tax deadline I am working on getting my tax numbers straightened. I may add a new question later as I get into depreciation for small items improvements. 

Hello everybody,

I have read a lot of the old postings related to estimating the cost basis for depreciation of a rental property; however, I am not clear yet on how to answer the following question:

In 2013 I bought a rental property for $116K and also replace appliances and performed minor repairs for $5K. Therefore total investment: $121K.

The accountant at time took the whole $121 and divided for 27.5 years. That has been the depreciation used since then.

I am not working with that account anymore, but now reading IRS publication 527 and other related publications I understand that the cost basis for depreciation should have been different as follows:

The tax assessment for the property is: $100K, which $30 are for land (30%) and $70 for the building (70%).

From IRS publication 527, I understand that my basis cost for depreciation must be only the percentage cost of the building plus improvements at the time of getting ready to rent.  The building cost can be  estimated using the percentages of the tax assessment.

Depreciation basis cost = ($116K x 0.7) + $5K = $86, 200  

I understand this new number is not as favorable as the initial $121K; however, I prefer to be on the safe side  and no risk to waste time and money in the future making corrections.

Thank you for your help.

Steve,
Thank you for the links. Read each of them. Became aware of some other aspects to check.

Dion, Chris:

Thank you for your reply:

I have been trying to educate myself by looking at the paper trail of all the transations made by another investor during the last calendart year. I have also visited the houses (from the outside only) and the neighborhoods. This investor has been in the business for 10+ years and operates in Raleigh, NC.

Based on the turnover rate and the apparent gross profitability of this investor, i dont think by this time in history he is taking any chances and already has a way to target houses with no need of significant repairs, with no serious hidden physical or legal problems and most probably are no inhabitted by difficult people (if any).

A side note: All my R.E investment experience amounts to two home purchases following the traditional path (bank loan and agents). I have absolutely no experience or previous knowlege on any of the procedures or paperwork involved in Trustee Sales, so please excuse if my questions may sound too basic.

I am very aware that the truste sale is an only cash business. I am also working on a plan to allow me the needed resources.

1. How do you research Tittle and Liens?

So far, I am looking at services offered by "investor oriented" paralegals ($90 to $150); however, I don't see any kind of job warranty and that make me nervous.
Should I better go for the services of a Tittle insurance company that may also issue an insurance commitment ($300+)?

Since reaserch will be done as part of the bidding selection process, this would be a constant growing cost.

2. How do you asses or gauge the internal condition of the property?
I definitively not counting with collaborative tenants or owners.

3. Do you market your properties by yourself or enlist the help of a R.E agent?

4. Will the foreclosure sale errase all other liens and loans but Tax liens and IRS?

5. After the foreclosure sale a Trustee Deed is issued. When/How I can get a marketeable general warrantry deed?

6. To finish this post, please let me ask you perhaps the most inportant question:
What else should I be asking you? What important points should be considered in this kind of business?

While researching a property that I was interested in buying as a rental propertry, I end looking at the paper trail of some people that are actively and profitable involved in buying trustee sales in Raleigh, NC.

I have been thinking about the steps to replicate their business, but I am struggling with the little details that will mean the difference between dead or life (such us:proper due dilligence, problem with people living in the house, house condition).

I am interested discussing the process with members of the forum and also will also consider meeting potential local contributing work partners.

Thank you,

Javier