All Forum Posts by: Hannah Joy

@Hannah Joy need to see that Schedule E on your taxes as well as leases to give you a rock solid, 100% answer. However, let's try. Assuming you are conventional.

Assuming you meet all the req's for THIS GUIDELINE, the $2150 of gross income from the boarders in your home can be up to 30% of your total qualifying income. So you don't have to do the math, your total income to count all of this would be $7,166.67/mo. If $2150 makes up more than 30% of your monthly income, you can only use up to whatever 30% of your total income is.

For the OPM property: first, you'll need 6 months of reserves since you're on title. Did you know that? You'll also need to count taxes and insurance against you on a monthly basis, which will affect your DTI. Also, you may want to start determining now how you will file your schedule E. If you spend a lot on repairs for this property, it may count against you for future purchases.

Wait...

Honestly I stopped after 2 sentences in because I just realized you have other stuff that's just too much to do over BiggerPockets - there's just too many variables. I also just now saw that your wage income is $3k and your OPM's 4plex income is around $2700, not accounting for your associated expenses, repairs, and depreciation... which means you may not be able to use that full boarder income.

Hannah I'd be happy to help over a phone call however over BP asking you for your tax information is cumbersome and invasive. Feel free to reach out for a comprehensive analysis and help you develop a plan for the next purchase moving forward.

You will have a phantom income of 1/2 of the equity. If you were only entitled to just the future profit, then you will be fine. If he first gets his initial capital back and you are not entitled to initial equity, you are fine. 

You need to work with professional to make this happen legally in the partnership, and it needs to be reported correctly via you capital accounts in your partnership. 

Although you don't contribute anything at purchase, will you be a 50% owner on the deed? (Or 50% member of the ownership LLC?)

 Sounds like you don't have a plan at all. You should definitely be seeking financing with a rehab component to it (whether rehab to rent or traditional fix & flip). Before the equity partnership can be determined, you need to figure out how you will find the project after acquisition. $175k is an awful lot of sweat equity.