All Forum Posts by: Account Closed

@Eric Vermilion thank you for the insight. Do you mean, to share the cost of downpayment, loan, closing cost and additional expenses by 'Partner for the ride in RE'?

Hello, one of my close friends is interested in partnering with me on real estate business. He currently holds H-1B visa and waiting on his green card. Statistics shows the waittime for Indians to get greencard is one of the longest. He is also out of state and I will have to do most of the legwork of physically going to see the houses and talk to agents face to face. He is interested in 50/50 ownership. I am not sure if partnering with close friend, also with 50% stake in the game when I may have to spend more time on this whole process sounds fair or not. He is super friendly and I've known him for several years now. Any pro tips on partnering with friend, what expectations/rules should I set in place from the start, any negotiation leverage given I might have more responsibilities and any concerns on partnering with someone who doesn't hold citizenship or greencard in US?

Thanks so much in advance :)

@Joe Villeneuve that's a really good way of thinking about it. Thanks for sharing!

Hello, one of my close friends is interested in partnering with me on real estate business. He currently holds H-1B visa and waiting on his green card. Statistics show the waittime for Indians to get greencard is one of the longest. He is also out of state and I will have to do most of the legwork of physically going to see the houses and talk to agents face to face. He is interested in 50/50 ownership. I am not sure if partnering with close friend, also with 50% stake in the game when I may have to spend more time on this whole process sounds fair or not. He is super friendly and I've known him for several years now. Any pro tips on partnering with friend, what expectations/rules should I set in place from the start, any negotiation leverage given I might have more responsibilities and any concerns on partnering with someone who doesn't hold citizenship or greencard in US?

Thanks so much in advance :)

Hi,

(this is rather long. I numbered the questions, answer as much as you can. It will help a LOT!)

I am a newbie in real estate business and purchased a property in Philadelphia, PA last week. I wanted to leverage the lower fixed mortgage rate by having a residential property, hence have it as my primary residence now. I am planning on moving to different state in six months or so, and rent the entire property and hand it over to property management then. It’s a RM1 zoned single unit property with 5 BR, 2 BA. Being very close to 2 universities, my primary goal is to target students and rent per room. For now, while I am living in the property and waiting on necessary paperwork(I have question on this) to be done, I will be trying out airbnb and short term renting to students or other professionals (i.e. nurse, patient visitors of nearby hospitals etc) myself.

While I want to maximize my profit out of the student rental opportunity, I do not want to be in trouble when it comes to tax, license, IRS and govt. So please give me some practical advice here on what I need to do at this very point to rent the property to students per room basis.

These are what I have found so far and my questions with those findings.

1. There is a non-commercial activity license for 2-4 unit owner occupied housing but mine is only 1 unit. First off, converting it to multi unit will require loads of money and I would rather choose other options available. Second, it is owner-occupied for now but not 1+ unit. So can I get this license or I will be ruled out? Not sure at what extent IRS checks if my ppt is really 1 unit or not..

2. Is this where people collect rent by cash and manage properties themselves to avoid tax and govt hassle? Can you elaborate on the legal loophole on this issue please? 

3. For me collecting cash from tenants while living nearby won’t work in long term as I am a software consultant by occupation and want to focus less on dealing with tenants, maintaining the property which can be very frustrating. Plus I see myself moving to different state long term. Any feedback on collecting rent via cash, or check or Venmo, or online..?

4. Sooner or later, as I won’t live in here, I will have to turn this into a commercial property. How will it impact my mortgage rate that is fixed and for primary residence?

5. Based on Philly gov site, for commercial license, I need BIRT tax id, a business/commercial license and a rental license. Now, it does not seem like there is a time restriction to get rental license, but isn’t there a 6 month restriction to declare your primary residence as a commercial property? So do I have to wait for six months, then hire a property management, then apply for rental license (looks like, having a ppt mgmt is pre-req for rental license)? If this is the route I should go, what can I do now to expedite things?

6. Also, I would really like to make some money meanwhile. So, can I do Airbnb till then? Will 3 month student lease fall under STR? Reading the gov site, it says, I need zoning permit if I am renting between 90 to 180 days per year. Well, we have 122 days left of this year. I can bypass the permit for now but what will the permit be anyways? It's already RM1 zoned...

7. I was looking into rules regarding Single Room Occupancy but could not get anywhere with that. I heard the rules are very convoluted and many don’t bother to follow them. I would like to know how they bypass the rules but maybe not have IRS knocking at my door!

8. The gov site says I do not need a Rental License if a unit is being occupied by a family member and if no rent is collected. This is not long term solution for me. So, yes to rental license?

9. I contacted a property management few months back who said, they can handle student housing as long as all tenants are in 1 lease. But I would prefer having individual lease. Any property mgmt in Philly you know that legally offers per room individual lease for single unit?

10. Also, how do I safely talk to someone who knows both about real estate AND about tax, license, regulations? What occupation is that? A lawyer, the person who files tax, accountant, attorney?

Please give me some practical advice here. Thank you so so much for your time and thoughts on this. I would like to connect and directly message if you have more thoughts on this.