All Forum Posts by: Jake Baron

Hello!

Two part question: Would somebody mind providing a brief overview of the tax savings of purchasing a 2-4 multi family in the first year of purchase as owner-occupied. For example: If my W2 income is 100k and the property is 200k, what percent of my taxes could I expect to write off toward the property? I understand things will vary depending on on several factors but based on averages.

Second part, what is immediately tax deductible, i.e. my down payment, closing costs, etc. I understand accelerated depreciation is one of the bigger deductions you can make.

Also I live in Cleveland, Ohio, if anyone knows of any local or state variances or regulations I should be aware of when doing my calculations.

Thanks in advance,

Jake

@James Edward Laws Jr. I appreciate your feedback. I am learning as quickly as I can! 

@Jaysen Medhurst Thank you for the heads up! I will make sure to ask the basement waterproofing professional to check as much of the basement as possible for rot, mold and serious foundation damage. 

@Greg Scott thank you for the prioritized list! This will help me determine my next steps!

@Michael Ealy It is a 3-unit multifamily. The units look pretty good, I did not expect the issues with the water damage and garage teardown. However, the city in Cleveland where the property is located requires a city inspection which will address most of the minor issues and several of the major. The city inspection will require the seller to put money in escrow, however, it will not require full replacements of the garage or furnace. I was hoping to negotiate some of these costs with the seller either by them crediting at close or with a reduced purchase price. I would hope not to spend more than $10,000 out of pocket. (whether this is feasible or not, I will find out soon enough!)

I am closing on my first property and received some valuable information from the general home inspector. I am looking for feedback on whether any of these key issues are serious enough to get out of the contract. I have basement waterproofers, HVAC, tree removal and a garage builder coming to take a look this week. 

1. Substandard step flashing around dormers

2. Deteriorated garage structure, sill plate and substandard floor

3. Very old windows with heavy peeling paint (probably lead)

4. Deteriorated sections of front porch framing and decking

5. No water proof membrane on 2nd fl proch floor

6. Several leaning or diseased trees in yard

7. Shortage of outlets in kitchens-no gfci’s

8. Water entry into basement

9. Mold in basement and garage

10. No main shut offs in main electrical boxes

11. Aging furnaces with asbestos insulation on ducts

12. Improper splicing in several areas of basement

13. Leaking toilet bend 1sr fl into basement

Thanks!

@James Wise thanks for the feedback! I will do that!

@Account Closed I am  looking at a duplex with a third attic unit in Cleveland. The third unit has its own electric and gas, however, there is no second staircase. I’ve heard that an escape ladder could constitute that second staircase, have you guys heard that as well? 

Can anyone recommend a real estate investor group in the greater Cleveland area? I am interested in buying my first property and would like to meet some like-minded and experienced investors, thank you!

Hello!

I currently live in downtown Cleveland and am looking to buy a class C duplex or triplex in the Cleveland Heights area, primarily near the Cedar Fairmount neighborhood or Cedar Lee neighborhood.

I am trying to determine what the capitalization rate should be for properties in this area.

if anyone has feedback or advice regarding this topic, I would greatly appreciate it.

Thank you!