All Forum Posts by: Jacob A.

 Thanks. Sorry to bother again, but I don't see a line called credit card fees. Do I enter it under "Other" and write a small explanation?

I have paid off one of my houses and took a HELOC on it. I then used it to fund the purchase of another rental property. I came across some attractive Balance Transfer offers and took it up. Can I put the BT fee under "Other Interest" of Schedule E? If I did not do these offers, my HELOC balance and interest would have been higher, so I'm leaning towards including. Also some of the BT offers were from my personal card and some were from my business card.

Thanks for all your help in this thread.

Originally posted by @Costin I.:

@Keith A. @Carolyn Hodo - 

That unicorn does exist, but is called "portfolio LOC" or "asset based LOC". You just need to ask the right person for the right product at a bank.

1. Do not confuse HELOC (home equity line of credit) with HEL (home equity loan) - one is a "reusable" product, the other is a one time deal. LOC you get charged interest on the balance when used, the other you get charged interest on the whole balance from the moment you get it. LOC you can pay it down and reuse, the other you pay it down and gets closed.

2. There is no HELOC for an investment property. But you can get same thing - a line of credit (LOC) or portfolio LOC or asset based LOC - you just need to find the right bank and the right person in the bank who knows about this type of product (usually a commercial banker). Don't bother to ask a residential loan officer about HELOC on a rental, they will tell you "impossible" and not even know of alternatives.

Again: You can get an LOC on your rentals by asking a commercial lender about asset based LOC or portfolio LOC. A residential loan officer doesn't know about this product. We do have one LOC secured by two rentals that we use to make cash offers on properties we rehab, lease, refinance and repeat.

3. Shop around - the differences in LTV/LTC, fees, renewal fees, periods, terms, rates, closing, documentation required, etc. are substantial from bank to bank. You can see below a comparative sheet I used to bring them to an apple-to-apple comparison when I was looking for something like this 2 years ago.

4. You can get a portfolio LOC from several sources - I recommend Amplify CU (and to stay away from Wells Fargo). Most likely they offer portfolio loans too, that is an easier option to get usually.

[Note: this was from 2 years ago! Rates and conditions changed since then. We renewed ours at 6.25%. ]

Let me know if you have any questions or need more information.

Are the terms for all the quotes between 1-2 years?

I just called PenFed about their 10 year balloon loan on investment houses and was told it would not be possible in TX, but the agent suggested HELOC. I was surprised and told him that the last time I looked Penfed would not give it on rentals. He said things have changed and when I researched I see some references on Penfed's website. Also there were some HELOC changes in Prop 2 in the Nov 2017 vote.

Who did you end going with?

Thanks, would I be able to add home inspection fees, my portion of HOA fees and property taxes?

In Dec 2017, I bought a house with the express intent of renting it out. I paid for a home inspection and per the agreement was responsible for all closing costs and agent commissions. I'm trying to determine the basis needed to compute depreciation. Do I include all closing costs paid to title company such as recording fee, title insurance, but not my portion of the property taxes, agent commissions, home inspection fee?

Also I had to make some updates to the house, so it was finally listed for rent only in Mar 2018. When splitting the value of the house between land and building, do I use the local county assessment for 2017 or 2018?

Thanks.

 bump. Anyone?

Sorry to bump an old thread. I was wondering what landlords think of the following methods of self-showing:

1. Install a home security system like Ring/Simplisafe. They don't need a landline as their units have cell coverage. Make sure system has a video so you can see them inside the house.

2. Install a smart lock like Simplisafe has, so that the landlord can remotely open it. This way one will not have to give a key or code to the tenant.

3. Ask for last four of SSN, picture of the DL via text and also a picture of them standing in front of the house.

4. Verify if the DL is legit by entering all details in this site:

https://txapps.texas.gov/txapp/txdps/dleligibility/login.do

I would like to have a way of getting them to pay $1 using a credit/debit card. Would asking them to send a $1 Amazon Gift card be ok?

This is what TurboTax also does and I can't seem to wrap my head around it. Since I'm using the purchase price to calculate depreciation, it feels logical to allocate using a ratio from the year of the purchase. Do you happen to have some IRS guidance on it? Sorry to bother. I will probably go with what you suggest as even TT does the same thing.

Follow up to my previous question. I bought the house in 2010 for 143K and by 2017 the official valuation was 165K. I know I have to use the purchase price of 143K. But how do I determine the value of the building? Should I take the 2017 ratio of building to total home value (75%) and apply it to 143K or 2010 ratio (70%)