All Forum Posts by: Jeff Thompson

Thanks for the concerns guys, but I really want to narrow in on the legal aspects at the moment.

That's what I was thinking. Ultimately it's "under the table" if not properly documented. Correct me if I'm wrong here, but if it's an hourly wage sort of situation w2's should be issued no matter how small the amount, and for contractual work over $600 one needs to file 1099's.

What should be done if the tenant also has partial investment in the property?

Thanks for the replies, I was thinking more along the lines of having a tendant show an unoccupied unit and such instead of having to make a trip out each time, or similar small tasks. Thanks for the concerns though, some people do tend to take advantage...

So I should show the rent paid full and the FMV of their maintenance or whatever in that category of the Schedule E? No 1099 necessary if above $600 total?

Hi, I'm contemplating giving the renters an opportunity to work off part or all of their rent by helping manage the property. (who cares more about the property than those who live there?)

I figured we'd go month to month and adjust the rent per last months work. I'm wondering the legal implications of this idea?

Thanks,
Jeff

The problem I have is I'm overseas which makes digging in the market and building relationships difficult and if I come back stateside there goes my ability to get loans.

how would banks look at me with great credit and cash but unemployed with a cosigner or partner with income?

Never mind the hompath comment, multi's don't get the low down payment part it appears...

Thanks guys, looks like I should focus on getting the best use of my limited cash rather worrying about qualifying for loans then. I think there's a homepath property with my name on it...

What I'm trying to ask is whats the affect of:
100k loan + 100k loan + 100k loan + 100k loan
vs.
400k loan.

I know you take a credit hit after buying a home, would the credit rating drop of a 100k loan be 1/4 that of a 400k loan? not to mention the other factors banks take into account.

Talking to banks is problematic as I'm currently in kuwait and sleep while banks are open, but I'm going to try to stay up and call around tonight.

Thanks for putting up with me,
Jeff

Thanks for the answers. We're getting closer, but let me steer this a little more. Forget for a moment the quitting thing, that was just listed as my justification for going large off the bat instead of starting small.

I'm also not needing to count the rentals as income, I'm just wondering the implications of buying multiple properties (very high cap rates) vs one big one (low cap rate).

Lets assume I can qualify for a $400k mortgage for a single investment home, and instead I'm buying very high cap rate multi's around 100k each. Would buying multiple cashflow properties be easier or more difficult to finance than single investment home of equal value and why?

Also do banks just look at the mortgage payment of the loan for a property or the actual expenses or the remaining balance?

Thanks,
Jeff

Hi,

I'm looking for an idea of what kind of financing I can get. I'm looking to quit my job in about 6 months, so need to make my purchases one after another until I'm tapped out because after that loans won't be an option for a while.

Is getting four 120k loans like getting one 480k loan? How does this all work?

I asked USAA who has pre-qualified me for my first purchase, they responded "To answer your questions, there are three things we look at, debt to income ratio, assets, and credit profile." Which didn't really answer my question... In other-words they'll tell me as we go along If I can qualify or not.

I know nobody can answer with any certainty, but figured you guys would have a better idea how it works.

Thanks,
Jeff

I'm seeing the 1099-misc requirement for rentals was repealed back in April, I think you may be mixing the co-owned passive rental and a full partnership. The Schedule E instructions for part I states "Do not deduct the value of your own labor or amounts paid for capital investments".

I'm going to assume the 1099-misc stuff is moving towards a full on partnership and that isn't where I want to go. It's about even in his labor and my paying for expenses anyways, so I'll just treat it like a normal rental I own, just half the numbers, and when I buy him out I'll account for any difference in investment then.

Good points on the "paper losses", I'll just file it as it should be and not try to 'tweak it' for extra losses.

I see the path forward, Thank you.
-Jeff