All Forum Posts by: Jacob Sampson

Of course you can. You just have to be able to pay the HELOC off at time of sale. The HELOC is associated with the asset so once the asset is sold the HELOC is paid off and goes away.

Yes, assuming you are a sole proprietorship or LLC your net income will flow through to you as standard income. You are taking depreciation though, right? That will shelter some portion of that additional income.

Don't let a legal structure dictate where you buy. Probably a good idea to speak to an attorney but I didn't get an LLC until my 7th property. That being said I didn't have any personal assets I needed to protect at that point. you may. Remember, in most cases your personal residence and qualified retirement accounts are protected from lawsuits so if those are your only assets then you are already protected. Again, I would talk to an attorney. I would not make legal decisions on the advice of some random internet guy.

This is likely going to be happening to a lot of us.  Are they going to go on unemployment?  They should be able to pay some rent with their Trump money.  You may not have a lot of options as I assume your state is halting evictions like most are.  Hopefully you have piles of cash saved up.

Assuming your numbers are well researched and not based on zillow or any other website and assuming it is a C or better neighborhood then it looks good to me.  This is, roughly, my standard type of purchase.  I pay 60 X monthly rent for a rent ready property in a C or better neighborhood.

I would think it would be long term capital gain but keep in mind you pay on the difference between what you sell and your basis. If you have been taking depreciation, as you should, then your basis is lowered by that amount. For example if you have taken 10k in depreciation then it is capital gains on 189 - 121. Not 131. Of course you will subtract out transaction costs as well. 

Just some thoughts. 

How do you calculate cash flow?

I haven't read through all the comments so maybe it was already mentioned, but in the future don't move forward or take a property off the market until you have a deposit.  

They don't have money but you still track all the repairs, take pictures, etc and turn them over to a local collections attorney.  Make sure their credit gets dinged and send the attorney after them.  Their is no downside, collections attorneys get paid a percentage of what they collect.  If they don't collect anything then you pay nothing.  If the tenants ever want to correct their credit score they will need to reach out to you.