All Forum Posts by: Ian Tvardovskaya

1) I would suggest finding an investment strategy that will work for everyone. I know you only do turnkey, but maybe with your parents, you need to BRRR to get a large amount of equity for your dad and safety for your mom.

2) There are virtual bookkeeping services that can help with everything from paperwork to full tax filings. A quick Google search will bring up plenty. They won't keep the leases off your wife's plate though. Local CPA assistants may be willing to help as well, of course, you would have to vet a good one. 

3) Con of promising an 8% return is if the market falls and you can't pay 8% from your investment then you either need to pay the guarantee out of pocket or explain to your parents why they won't get the return you promised. 

Hey, @Anthony Norman I know a few people that recycle their HELOC to keep building their portfolio. A couple things to think about:

(1) Will the rental you are buying bring in enough monthly to cover the HELOC payment plus the mortgage on the property? If not, can you cover the HELOC?

(2) If you want to recycle the HELOC then you need to be able to add value to the house for the refinance. If you have 25% of your money in the property, then you have to increase the value by at least that much to get it back out. If you can refinance 70% of the appraised value, then a $300,000 home has to be bought at $210,000 - repair costs, closing fees, refinance fees, and holding expenses; otherwise, you won't get your HELOC downpayment back. (different companies have different refinance rates, there are some that will let you take 75% or 80% of the appraised value).

Long distant real estate investing by David Greene is a good place to start. 

@Daniel Velez, it would depend on what you agree to. If you don't want to be responsible I would suggest you make the offer for a title, free and clear of all back taxes, delinquent payments - including utilities, fees, fines, or applicable penalties. 

@Christi Hawkins either. I'm looking to build relationships for 2018. 

@Jerry Shen large multifamilies of 5+ units are based on current income generated and your local cap rate. I've never heard of anyone using the 1% or 2% rule for these large commercial units. Key is to buy on actual income per month and not potential. Meaning if you buy a 10 unit that is only occupied by 5 tenants, base your purchase on the income produced by 5 tenants not what it could be with 10. 

Basically, at time of sale, you need to add depreciation back into the property's basis. Example: Basis at purchase $39,000. Held for 10 years. Depreciation table is 39 years. Yearly depreciation is $1,000 per year. Sold for $50,000. 

Your basis in the property at the time of sale is: $29,000 ($39,000 - $10,000). Gain is sale is $11,000. ($50,000 - $2,000). 

This gain gets put into a complicated accounting provision called §1231 and comes out as long-term capital gains or an ordinary loss. Problem is you have been taking a $10,000 depreciation against your ordinary income for the last 10 years and IRS won't let you now take the entire gain at a lower tax. 

The result, you must recapture the $10,000 depreciation and it will be taxed as ordinary income. The remaining gain, here $1,000, will go into that complicated §1231 analysis. 

A buy and hold strategy will encounter this the most because they are actively taking depreciation on the property. 

Does anyone have a good referral for a private lender in Columbus, OH? 

I know some people that have had some success getting a home line of equity from Wells Fargo on rental properties. You could also approach a local lender and ask for a line of credit secured by your rental portfolio. 

I would use an attorney to make a rental agreement. It's not very expensive and it's your first line of defense. 

Are you moving far away and can't collect rent in person? Collecting in person gives you a reason to check on the property at least once every month. If you can't or don't want to collect in person you can always give the tenant banking info for direct deposit or have them mail you a check. 

If this will be your only property then excel is enough to track your expenses and revenue. 

I would network with some handymen or women in your area and get their contact information, but I wouldn't make a formal arrangement for them to be on standby.