All Forum Posts by: Irina Belkofer

I know it's serious discussion but it sounds so funny that you expect 10 mortgages with 10% down without counting closing costs, PMI, cost of money for downpayment etc

Let’s see at numbers conservatively:

Purchase price $500K - rental

Downpayment 30% = $150K lets say at 5% APR(if you partner on equity, they would still expect some cash flow wouldn't they) =$700/mo

Closing cost $10-12K financed(?) @5% - another $200/month

Mortgage for $350K @6%/30 years - $2100/month

Taxes+insurance = $400/month 

We are at $3400/month payments only.

There will be repairs, maintenance, vacancies - where YOU pay $3400 per month, not the Tenants.

So, out of your $500K you bought 3 properties and there is no cash flow of rented for $3400/month each but negative cash flow if rented less than that.

The leftover of $20K will be your reserves, you’ll have to use pretty soon.

The purpose of that all?

Can you survive financially until the appreciation kick in and you can sell for double or triple price? It might not happen with next few years as market is already pretty hot

Inspectors are expected to find problem to justify their fees.

If place is rented, then it’s already money maker. You still have to fix something since roof was that bad - there will be something to fix. 

I’d take $500 and close rather than lose $1450 already spent.

The seller won’t lose much - the house get back on the market and will be sold with new roof probably on higher price.

I wouldn’t push my luck and try to split the difference. If seller get upset, your $1.5K get lost and you start looking for another deal.

All that correct unless you feel you’re buying above market and house is severely overpriced. Then it’s better to lose $1.5K....BTW, did you get 3 quotes or you presented the highest quote to the seller?

My Tenants just moved out and they were smoking weed in the property.

It took 4 hours to get rid of the smell - not even carpet smells, leave alone walls etc.

https://www.odorfreemachines.com/?bidkw=ozonator&dvc=t&gclsrc=aw.ds&ds_rl=1268124&gclid=EAIaIQobChMI8Ifb8pig4wIVUbjACh000Q9bEAAYASAAEgIH3vD_BwE

I don’t understand the ground for eviction - smoking outside? Really?

I’m glad you don’t have nothing real to spend money - lawyer alone would cost more than mitigate the smell.

I don’t believe any judge would support the case but I don’t know about Texas. I’ve heard that it’s landlord friendly - that would be extremely friendly if the eviction is granted.

Very curious how it’s going

Price.

One year ago it was $1750 and everyone sees it on Zillow.

You listed it for $2200 without any visible or stated improvements and people stop looking.

When you decrease just $100 - it’s nothing in comparison still $350/month difference just to 10-11 months ago.

5-7% increase per year might look reasonable, but 25%?!? 

 This means brokering without license. $1100/year not a huge price to conduct business legally.

 May I ask you in what area of Cleveland did you invest?

I’m reading BP forums of people buying Cleveland proper, East Cleveland, even west of Euclid - they sound so excited....OOS

The location of the investment is hard to overestimate- that’s the major part of success - sometimes on street-by-street base.

Swanny could avoid these bad experiences in Shaker Hts and Cleveland Hts.

Taxes in first and just bad location in second case resulted in huge losses. He’s really a very optimistic unbeatable person and he kept going. 

These bad experiences were easy to prevent: taxes in Shaker are notoriously high plus POS with 200% in escrow etc

Area of Cleveland Hts north off Noble also is widely known: bad combination of high CL.Hts taxes and Cleveland schools.

All it would take a honest decent RE agent to warn him......but Nobody did.

I’m not trying to market myself - I have hands full and won’t take on new clients......I just feel bad that people avoid investing all together only because they didn’t know the location!

$65K purchase with $950 Rent in Euclid - most likely cheap flip. $65K recent purchase rented for $1220; $85K for $1275 etc.

These houses were totally redone and won't need much maintenance or CapEx for long time. Taxes are around $2.7-3K/year but with good Tenants and mortgage (SFR) these will be long term cash cows.

I’d like to see numbers on Jacksonville which are better than Cleveland. If you’d share, please

 No it’s not a good way because you put clearly business transaction under “personal” to avoid fees.

After your Tenants pay 12 times a year the same amount, it will be sure noticed. I don’t know if there will be some recourse to PayPal but it’s definitely business transaction.

CashApp is free and takes 2 business days to get money into my account, however, I’m thinking if a tenant pays with credit card (you can attach debit and credit card to CashApp), then it might be same situation.

My Tenants usually don’t have good enough credit for credit cards to pay rent, but potentially it’s possible.

CashApp amounts to transfer depending on the bank of the Tenant: some can pay only $500/day, some had to pay fees because their account in a credit union.

It seems like old fashion way to deposit money in the bank looks more reliable. 

 I’ve heard about it from my out of country investors but I don’t understand how income earned in US wouldn’t be subject to a tax? It might be tax exempt in their country but here?

They invest in the equity of a company, which makes profit. The distributions are taxable anyway, right?

If they buy notes on the business, it’s bonds which still have current income. Unless these notes are payable only by dissolution of the company? But why would anyone invest money without any assurance that the worth of that company would coverup all that time income?

The spirit of taxes is “you pay taxes no matter what”. Especially it applies to non residents of US.

Could you refer me to IRS.gov where to find such an exemption, please?

Ps I’ve got it - it’s not really clear strategy but rather some “know how” set up by lawyers

 Let’s compare investment of $25K in real estate and in stocks, which don’t have depreciation.

1. You bought a house for $25K and kept it, let’s say, 7 years. Your gross rents were $8400/year but depreciation $909/year, which made taxable income $7491/year.

2. You bought stocks for $25K with the same return $8400/year but no depreciation.

It's 33.6% ROI....good job :))

Now, every year you have to pay taxes, let’s say 30% on your income. So, the depreciation for these 7 years was $6363 - that’s your income, you don’t have to pay taxes on. Every year, you reinvest $272.70 with the same 33.6% which gives you $641 in 7 years. Also, the difference itself will be $1909 during these years vs investment in stocks.

So, the depreciation = $6363 for these years but recapture on only $1510, 25%, added to your taxable income - tax will be only 30% of that amount....

But you’ve got extra $641+$1909=$2550 in extra income because of reinvestment of extra money tax free because of depreciation.

When you paid for the stocks $25K you don’t want to count it as expense and deduct it from your taxes, right: it’s your base, not expense.

When you bought a house, the depreciation it’s a bonus to make it more beneficial in comparison with other forms of investments. 

Besides, 33.6% ROI on a house purchased 7 years ago is not unheard things. We're there any mutual funds or other portfolios letting you make 33.6% every year?!? Which is not the subject of depreciation recapture, of course....still relevant to the discussion

How do you know?

Seriously, if foreign investor has portfolio of RE investments, could there be zero tax withheld? How it’s done right?