All Forum Posts by: Jeff Copeland

Quote from @Jared Vanscoder:

Quote from @Jeff Copeland:

We work with a lot of out of state investors here in Florida. Property tax is levied by the local municipality and needs to paid by the owner, regardless of where they live. It is an operating expense of the property, so yes it gets "written off" as an expense. 

Visiting the property is up to you and your comfort level with your property manager, home inspector, etc. It's not for everyone, but we've had many out of state buyers buy sight unseen and close remotely. It's an investment property. If the numbers work, the numbers work. Looking at it doesn't change the math. 

That being said, even after you own the property, you may want to travel to the location of the property a few times per year to check on it, meet with your team, etc. These trips are generally tax deductible. We did a series of tax tips for real estate investors on our podcast last December, and this was one of the things we discussed with the CPA we had on. 

Jeff: can you share a link to the podcast you mention? TIA!

 They don't like external links here, but you can find it easy enough: Tampa Bay Real Estate Investors with Jeff Copeland.

This is not an unusual situation for real estate attorneys. Quiet Title suits are fairly common. 

I just googled "Pennsylvania quiet title attorney" and there is no shortage of law firms who handle these. 

Also sent you a PM.

Be sure to understand your state laws on the practice of real estate. In most states, you cannot "list" or advertise a property for sale if you don't own it and are not licensed to do so. 

The idea as a wholesaler is to already have a list of cash buyers who are ready to pull the trigger on solid deals, and you never advertise it at all. You just assign the contract to someone on your list.

You just discovered why COC Return is often not the best metric to compare deals, markets, or properties to each other.

I get calls all the time from investors who are targeting a certain cash-on-cash return, and have to explain to them that COC depends on the down payment and debt service, and just because you put very little money down (it it were possible) does not make a property a great deal or a sound investment, even though the COC might be through the roof on paper.

Cash-on Cash is only valuable for an A to B comparison if the terms of the debt service are held constant (so why not just use cap rate in the first place?).

To be clear: COC can be a useful metric, and can be fund to brag about at parties. But it doesn't always tell you whether or not something is a good deal. 

If you buy an asset with $10 down and it cash flows $100/yr, that's a super exciting 1000% COC return! But a property that only cash flows $8.33 per month is likely to bankrupt you!

There are no particular tax breaks for flipping. You cannot do a 1031 exchange on a flip. By nature, it's all generally short term capital gains, taxed at your regular income tax rate. 

There are certainly some advantages to holding flips in a business entity when it comes to liability, particularly for personal injury or wrongful death. 

Our month to month lease looks exactly the same as our annual lease. The term is the only difference:

As far as developing a written lease, my advice is to get one from a local attorney - Whoever you would use if you have to file an eviction is who I would use to create the lease in the first place. 

Quote from @Gurjot Grewal:

 Thanks for the reply. Would you say 1million per occurrence and 2million general aggregate is enough(I have a quote for a policy without water/sump, but this level of liability coverage)? With this being my first property I'm unsure if it would be worth getting additional umbrella coverage. 

This is probably more of a question for your financial planner, CPA, and/or attorney. And it's largely a matter of what you are comfortable with, risk wise. 

I would say it's fairly common to have $1M liability coverage if your just own a couple of properties. But as your portfolio grows, so does your risk. After your own 5-10 properties, you might want to consider a higher limit. 

It also depends on the costs. $2M in coverage is not necessarily twice the cost of $1M in coverage, so it's often worth asking what the additional premium would be for additional coverage. 

In the US, it's typical for your homeowner's policy liability coverage to max out at $300-500k. Additional coverage (usually up to $1M or $2M) is often provided by an umbrella liability policy. 

Note that liability coverage protects you against personal injury or wrongful death occurring at one of your properties, and these types of claims (though somewhat rare) often exceed $500k if/when they happen. 

Quote from @Nate Bartlett:

Quote from @Jeff Copeland:

@Nate Bartlett - Any real estate attorney licensed in your state can do this for you. 

I was going to say any title company will have an attorney who can handle this for you as part of the transaction, but I see your attorney is affiliated with the title co. 

The conflict lies in the fact that she is "your attorney", but she'd be preparing mortgage documents that should be designed to protect the seller; she can't (or won't) represent both parties. 

It is not something I would DIY. 

@Jeff Copeland Thanks. Any ballpark on what an attorney might charge for something like this? I might also reach out to a title company that I used to work for many years back to see if they can do it.

Anywhere from $500 to $2500, depending on the complexity.

@Nate Bartlett - Any real estate attorney licensed in your state can do this for you. 

I was going to say any title company will have an attorney who can handle this for you as part of the transaction, but I see your attorney is affiliated with the title co. 

The conflict lies in the fact that she is "your attorney", but she'd be preparing mortgage documents that should be designed to protect the seller; she can't (or won't) represent both parties. 

It is not something I would DIY.