All Forum Posts by: Jackson Ebersole

Hi Jane,

Based on the information provided and IRS guidelines, here's how you should approach deducting the fence replacement cost for your rental property:

Replacing an entire fence due to storm damage is generally considered an improvement rather than a repair, even if it doesn't increase the property's value. This is because it's a significant replacement that extends the life of the property.

As an improvement, the fence should be depreciated rather than expensed in a single year. According to IRS Publication 946, fences fall under the category of 15-year property.

You can use either the General Depreciation System (GDS) or the Alternative Depreciation System (ADS). Most residential rental property owners use GDS.

For property placed in service after September 27, 2017, and before January 1, 2023, you may be eligible for 100% bonus depreciation. This allows you to deduct the full cost in the year it was placed in service.

Fences are not eligible for the Section 179 deduction as they are considered land improvements.

Given this information, you have two main options: 

1) Take advantage of bonus depreciation (if eligible) and deduct the full $4,200 in the year the fence was installed.

2) Depreciate the fence over 15 years using the appropriate depreciation method (likely GDS).

To ensure you're making the best choice for your specific situation, I recommend consulting with a tax professional who can review all aspects of your rental property finances and advise you on the most beneficial approach.

Please feel free to reach out if I can be of any help.

Best,

Jackson

Hi Joseph,

When starting your investment journey, it's essential to set clear goals that define your investment purpose and time horizon. Begin small by making regular contributions to build your portfolio over time. Educating yourself about different investment types, asset allocation, and risk management will empower you to make informed decisions. Consider investing in low-cost index funds or ETFs, as they provide broad market exposure and diversification.

Utilizing tax-advantaged accounts like 401(k)s and IRAs can help maximize your retirement savings. It's important to avoid trying to time the market; instead, focus on consistent investing. Keeping your costs low by choosing investments with minimal fees will further enhance your returns. Diversifying your portfolio across different asset classes can help manage risk effectively.

Stay calm during market volatility and don’t let short-term fluctuations derail your strategy. If you feel overwhelmed, consider seeking professional help from a financial advisor for personalized guidance. Ultimately, stay focused on your long-term goals and remain committed to your investment strategy rather than chasing quick gains. Starting small, staying consistent, and prioritizing learning will set you up for success in the world of investing. 

If you have any questions - especially about founding, feel free to ask! Good luck,

Jackson

Hello and welcome! Here's some guidance on buying your first investment property in Southern California or Columbus, Ohio:

Down payment:

• For investment properties, lenders typically require 15-30% down payment on your first investment
• 15% down is possible with excellent credit (700+ score)
• 20-25% down is more common, especially for multi-unit properties

Section 8 considerations:
Pros:

• Guaranteed portion of rent from government
• Potential for longer-term tenants
• May be easier to fill vacancies in some areas

Cons:

• More paperwork and inspections required
• Rent amounts set by local housing authority
• Potential property damage concerns

Other tips:

• Research local markets carefully - price trends, rental rates, etc.
• Factor in all costs - taxes, insurance, maintenance, vacancies
• Consider starting with a single-family home or small multi-unit
• Build a team - real estate agent, property manager, contractors
• Have cash reserves beyond just the down payment
• Understand landlord-tenant laws in your chosen location

I'd recommend talking to local real estate agents in both areas to get more specific market insights. Starting with a private lender loan and standard tenants may be simpler for your first property. Let me know if you have questions on funding and I will be happy to talk to you.

Best,

Jackson

Hi Lance,

Based on your query and the information provided, here's some guidance on renting out a primary residence and an ADU in Georgia:

Legality and Zoning: ADUs are legal in many parts of Georgia, but regulations vary by location. Check your specific area's zoning laws. For example, in Atlanta, ADUs are allowed in R-5, R-4, and R-4A-zoned lots.

In Atlanta, you can rent out both the primary residence and the ADU to separate parties. Some municipalities like Dekalb County and Decatur require the homeowner to live on the property.

ADUs should be at most 40% of the main residence's floor space, with a maximum size of 800 square feet in some areas. If detached, the ADU must typically be placed in the backyard and occupy at most 30% of the backyard's footprint.

Having separately metered electric service is advantageous for managing costs and billing tenants.

Adding an ADU can potentially increase your property value. ADUs can provide additional rental income, which can help offset mortgage payments or other expenses.

Extend your homeowner's insurance to cover the ADU.

Be prepared for potential increases in property taxes due to the added living space.

Given that your property is not in a dense urban area, make sure to check specific local regulations as they may differ from city regulations. The separate metering for electricity is a plus for managing utilities. Consider the potential for increased property value and rental income against the additional management responsibilities and possible tax implications.

Remember to consult with local authorities and possibly a real estate attorney to ensure full compliance with all regulations in your specific area.

Let me know if you need funding for the rehab.

Regards,

Jackson

Hi Wayne,

Other neighborhoods to consider are the following: 

Near Eastside: This area has been seeing redevelopment and could offer good opportunities.

Irvington: A historic neighborhood with a lot of charm and potential for renovation projects.

Garfield Park: Another area that's been on the upswing and attracting investor attention.

Mapleton-Fall Creek: This neighborhood has been targeted for revitalization efforts.

Riverside: Close to downtown and has been seeing increased interest from buyers and investors.

Reach out if you'd like to talk about financing options! Best,

Jackson

Hey there! Thanks for sharing your situation. As a fellow professional looking to get into real estate investing, I can definitely relate to the challenges of balancing your practice with exploring investment opportunities. Here are some thoughts on your situation:

Local vs. Out-of-State Investing:
Your friends have a point about starting locally. There are some real advantages to investing close to home, especially for your first property:

• - You know the area better
• - It's easier to manage and check on the property yourself
• - You can respond quickly to issues
• - You'll have a better network of local contractors, realtors, etc.

That said, if the numbers really make sense in Conway or Titusville/Melbourne, it's not impossible to invest out-of-state. You'd just need to be extra diligent about your research and have a solid team on the ground there. Looking at the data you provided for Melbourne, FL:

• - Average rent is around $2,000-$2,100
• - Rents have actually decreased slightly year-over-year
• - There's a wide range of rental prices ($650 to $6,500)

This suggests a diverse market with potential opportunities, but also some volatility. You'd need to really understand the specific neighborhoods and property types to make a good investment.

If you do go the out-of-state route, a good property manager will be crucial. Factor in those costs (usually 8-10% of rent) when you're running your numbers.

You mentioned the challenge of acting quickly on properties while managing your dental practice. This is a real concern, especially in competitive markets. If you're set on out-of-state investing, you might need to work with a realtor who can act quickly on your behalf, be prepared to make offers sight-unseen (after thorough virtual vetting), have your financing lined up in advance.

For your first investment, there's a lot to be said for keeping things simple. A local condo that you can easily check on might be a good way to learn the ropes of being a landlord without adding the complexity of long-distance management.

Out-of-state investing, especially in areas prone to natural disasters like hurricanes, comes with additional risks. Make sure you're comfortable with these and have appropriate insurance coverage.

Ultimately, the "best" location depends on your specific goals, risk tolerance, and how hands-on you want to be. If you're looking for better cash flow and don't mind being more hands-off, the out-of-state options might work. If you want to learn the business up close and have more control, staying local could be better.

My honest advice? For your very first rental, I'd lean towards staying local. Use it as a learning experience. Once you've got a handle on being a landlord, then you can explore out-of-state opportunities with more confidence.

Whatever you decide, make sure to do thorough due diligence, run your numbers carefully, and don't rush into anything just because it seems like a good deal. Good luck with your investment journey! If you need to talk about financing for your rental property feel free to connect.

Best,

Jackson

Hi Kosh,

The return on investment (ROI) for adding a bedroom and bathroom combination is generally higher than adding either one separately. The average ROI for adding a bedroom and bathroom ranges from 53% to 75%, depending on various factors. Specifically, a midrange bathroom addition costs about $57,000 on average, with homeowners recouping about 30% of the renovation cost. When combined with a bedroom, the overall ROI tends to increase. Adding a bathroom can increase a home's value by 10-30%. An extra bedroom can add $20,000 to $50,000 to your home's value, depending on your local market. Combined, a bedroom and bathroom addition could potentially add $30,000 to $80,000 to your home's value.
Avoid over-improving for your neighborhood. The addition should align with local market expectations. High-quality finishes and construction can increase the ROI. Ensure all additions meet local building codes and have proper permits.

In your specific case, converting the loft into a bedroom and adding a bathroom could be a smart move, potentially increasing your home's value and appeal to larger families. However, consider the impact on the current bathroom-to-bedroom ratio and whether the loss of the open loft space might affect some buyers' interest.

Vancouver's real estate market has been strong, with increasing home values. This could make improvements like bathroom additions more worthwhile. Consider including features like heated floors, which can be appealing in Vancouver's cooler, wetter climate. Vancouver promotes water conservation, so including water-efficient fixtures could be a selling point.

Remember, while these additions can add significant value, the exact ROI will depend on your local real estate submarket, the quality of the work, and how well the new spaces integrate with your existing home layout.

Please reach out, I can help you with the funding of the project.

Regards,

Jackson

Hi Felicia,

As a private lender, I can tell you we refinance many construction loans into 30 yr loans once the rehab is completed. However, you should be aware that most private lenders don't offer construction loans for properties that will be for the borrower to live in. If it wasn't for that purpose we could help you with the funding.

Feel free to reach out if you have questions or want to discuss this further. Regards,

Jackson

Hi Steven! 

It's great to meet a fellow real estate enthusiast looking to break into apartment syndication. Your journey so far sounds impressive - developing strong analysis skills, building relationships with brokers and industry experts, and even securing potential sponsors is no small feat. Let me share some thoughts on your capital raising challenges:

Expand your network beyond just real estate circles. Look into local business groups, professional associations, alumni networks, etc. Many accredited investors may not be in real estate specifically.

Consider starting smaller to build a track record. Perhaps partner on a smaller multifamily deal (5-10 units) to prove your capabilities before tackling larger syndications.

Leverage social media and content creation to build your personal brand as a multifamily expert. This can attract potential investors over time.

Partner with wealth managers or financial advisors who work with high net worth individuals. They're often looking for alternative investment options for clients.

Securing funding from a private lender can be a fantastic option for your syndication efforts. Start by crafting a clear and compelling investment proposal that highlights the property's potential, your investment strategy, and projected returns. Emphasize your strengths and any relevant experience to build trust.

Be patient and persistent. Building investor relationships takes time, but consistency pays off. Your idea of partnering with someone strong in capital raising is a smart one. That kind of complementary skillset could be very valuable. I'd suggest continuing to network at real estate events, but also exploring partnerships with professionals in finance, wealth management, etc.

Keep refining your investment thesis and building those relationships. With your analytical skills and drive, I'm confident you'll find success in syndication. Best of luck, and feel free to reach out if you want to consider getting funding from a private lender as it is one of the most common funding options for MF!

Jackson

Hi Joseph,

Shelby, NC presents some interesting opportunities for real estate investment, but it also has some potential challenges to consider. 
Potential Advantages
- Growing Housing Market: The median home price in Shelby has increased by 16.6% year-over-year, reaching $295,000 as of July 2024. This significant growth suggests a strong demand for housing in the area.
- Rental Opportunities: With a rental vacancy rate of 6.0%, there's a reasonable balance between supply and demand in the rental market. This could be favorable for investors looking to purchase properties for rental income.
- Diverse Property Portfolio: The area seems to have a mix of both residential and commercial properties, which could allow for diversification in your investment strategy.
Strategic Location: Shelby's proximity to global markets via nearby airports, rail, and port facilities could make it attractive for businesses, potentially driving demand for both commercial and residential real estate.
Potential Challenges
- Economic Concerns: The unemployment rate of 13.0% is relatively high, which could impact the overall economic stability of the area and potentially affect real estate values and rental demand.
- Price Discrepancy: There's a notable difference between the median listing price ($295,000) and the average home value ($201,945). This discrepancy might indicate a complex market with varying property types and conditions.
- Market Volatility: While home prices have increased significantly, the average home value has seen a slight decline of 0.4% over the past year. This suggests some volatility in the market.
Investment Considerations
- Long-term Potential: The presence of a dedicated economic development partnership and active city government suggests efforts to promote growth, which could benefit real estate investors in the long run.
- Property Management: With companies like Champion Investments managing a large portfolio of properties in the area, there seems to be a robust infrastructure for property management, which could be beneficial for out-of-town investors.
- Market Knowledge: Local real estate companies like RE/MAX Select, with their 18 full-time agents, indicate a strong local real estate community that could provide valuable market insights.
In conclusion, Shelby's real estate market shows potential for investment, particularly given its price growth and strategic location. However, the high unemployment rate and some market inconsistencies suggest caution. As with any real estate investment, thorough due diligence is crucial. It would be wise to consult with local real estate professionals, analyze recent sales data, and consider the long-term economic prospects of the area before making any investment decisions.

Let me know if you're looking for funding for your RE investment. Good luck,

Jackson