All Forum Posts by: Sheena Varghese

@Basit Siddiqi- yeah, I need to figure out why she said that.  Thank you for your help.

@Ashish Acharya- thank you for your response, that provides clarity.

@Basit Siddiqi- Thank you for your reply.  So just to clarify- I can deduct the cash investment I put into this flip as COGS when I go to sell the property if it takes more than 1 year to flip?  I just want to make sure the COGS total can be deducted in the year the sale is completed.  I was told by my tax person that I can only deduct a percentage and not the total cost of the remodel.

Thank you

Hello,

My current flip will take longer than a year, about 18 months.  Can I still deduct all renovation costs from the profit in regards to paying taxes on the profit.  I have all cash in the property and for renovations, so no loans.  I just want to make sure that I don't end up paying taxes on it like I would if it was a long term property and I sell it without a loan to repay, therefore, it looks like all profits to IRS.  I hope that makes sense.  Thank you

Thank you, it is currently vacant, my husband will be using one of the offices for his business.  

Anyone with owner financing experience that could provide some guidance?

I have a deal that is a commercial duplex.  The owner is willing to finance it with 20% down, $60K less than asking at 10% interest for 10 years. No balloon payment.  I plan on negotiating a bit more to bring the rate lower.  I don't have any experience with owner financing.  I know he has balance on his mortgage.  I am waiting on an answer from the agent on the remaining loan balance payoff plan from the seller.  I plan to have a lawyer review everything prior to going into contract.  

What are my must do's with owner financing?  I will do an inspection and of course title search.  

What questions should I be asking the seller?

When figuring out monthly payments, how would you calculate with these terms?  

Thank you in advance for your help!

 Thank you @Jon Puente and @Devin James for your replies and insights.  I appreciate your feedback!

Looking for Advice:

I have a 1000 sq ft, 2/1 with garage and sunroom property that I bought for $30K a while ago and has been rented out for the past 6 years. I am getting $1,100 a month. I refinanced the property couple of years after buying and pulled out $75K and put in about $38K in repairs (net $37K).

The last hurricane (FL) took out some of the windows in the sunroom and is currently boarded up. Bathroom and kitchen need renovated, has never been updated. Kitchen is very small (about 50 sq dt). The garage currently houses a half bath, laundry space and doesn’t have a ceiling. The house has crawl space and garage doesn’t so it sits lower and has two stairs from the house to enter the garage.

I am looking to renovate this property and was hoping for some advice/insight to see how much I should spend on the renovation. Thinking about return on investment. It will take years to recoup the money spent. I definitely need to redo the sunroom and a new roof is due very soon. I was thinking of either:

1. New roof, converting the sunroom into a bedroom and updating the bathroom and kitchen- around $25k - will get around $400 more monthly - 5.2 years to get money back

1. New roof, extend the kitchen into sunroom and update, update bathroom, refinish garage and add a bedroom, update garage bathroom to full bath - around $45K - $650 more monthly - 5.7 years to get money back.

Or should I just fix what’s broken and leave it be?

If you have read this far, thank you! =)

Thank you all so much for your input!  I am consulting with an accountant to see about paying back depreciation.  I won't be paying much in taxes for capital gains as I didn't make much profit on it.  I am also now thinking more about holding on to it based on your feedback. Will update once I make a decision.  Thanks again!

Thank you Bob for the reply.  Honestly, I don't have much of any other problems with it besides the fact that it will likely need a new roof and AC in the near future.  I guess I am thinking that it's a great market to sell and get into something newer to hold for a longer period of time.  Thank you!