All Forum Posts by: Jacob Wiltshire

So I have heard Brandon Turner and others suggest only investing in larger towns and areas, but my first deal was on 8 units (retail and residential) for $390,000 which have a 31% cap rate in a town with a population of 14K.

I have just been accepted and offer on a 27% cap rate property (apartments- 12 units) in a town of 4K, about 20 minutes from the previous one.

I believe I will continue a small town strategy given the high cap rates.

Anyone have good experiences with this type of strategy?

@Natalie Kolodij so even when I have an LLC partnership tax structure, the rental income passes through to me without a requirement to pay self employment tax on it?

Hello,

I recently purchased a mixed use property for $390K. Gross income of about $76,800 right now.

Income: $76,800

Taxes: $9,344.68 (from which one tenant pays back $2251)

Insurance: $5,108.00 (from which one tenant pays back $864)

Mortgage: $2265.18 monthly (20 year term on $360K at 4.35%).

I plan to put away 5% each for vacancy, capex and repairs and maintenance.

Other monthly costs:

Water $200

Garbage $96

Electricity $50

Termite protection: $22

Following all of this our total estimated annual cash flow is $23,036. There are two members in the LLC including myself.

My partner has been taking about us making our LLC as S Corp. He has been told that we can do that without paying salary given we are low income.

What are your thoughts? Is this a model where if we switched to S corp we wouldn’t need to pay salary? To be it seems like we still would have to do that.

I just purchased some real estate for $390K. Within that real estate I have a number of assets. Can they be depreciated?

Example:

January 2021 fridge

January 2020 AC Unit

2016 washer and dryer

Furnace, etc.

If I can depreciate them do I try and find the value of when they were purchased or assign them reasonable value?

Thanks

Hey,

I need to replace a tub in a bathroom at a rental property and noticed that putting in a shower may be incrementally cheaper than replacing with a tub. I also imagine injuries are less common in showers than bath tubs.

However in saying that I rented for years and always saw tubs.

What are thoughts on showers vs tubs in rental properties?

I have a great off market deal for a great mixed use rental bringing in lots of monthly cash flow, 15% cap rate, but they can't seller finance - so I need to use other methods. But all HMLs want 75% LTV. I can plant about 5%, but do not have the rest.

How do you do no money down then? I have been scratching my head trying to work out how to do this.

@Lucian Guadagnoli

https://bluewatermtg.com/faq/house-buying-appraises-higher-ive-agreed-pay-unexpected-equity-home-mean-can-apply-towards-payment-therefore-put-less/

At the time of purchase the value is based on the lesser of the appraised value or purchase price. Therefore, if the house appraises higher you still must based your down payment on the actual purchase price.

This seems to suggest that the bank uses the purchase price if that is lower. However I am curious if seller financing does anything different to that? I presume not.

Hello,

So I am looking to do a deal with seller financing. It's looking promising. My question is at the balloon time can I refinance into a mortgage using appraised value or does it go back to purchase value for a banks LTV?

Example if the house I purchase is worth $90K but I agree seller financing at $62K, when I get to the ballon can I use the equity difference in my loan amount to the seller and the value of the building as the down payment?

@Mel Park

I am also looking at a DG in a small town but only two years left on lease with 5 year option. Looking to see what answer anyone else has here.

Hey I have a good cash flowing deal off market in Illinois. What hard money or private lenders have you worked with who require low money down? Looking 10% or less.