All Forum Posts by: Jason Riddle

I have received a refund for a transaction that occurred in the previous tax year.

Specifically, this transaction occurred in May 2023, but I received the refund for that amount in January 2024. I’m struggling with how to categorize the original expense as well as the refund. Also, I’m using Cash Basis Accounting.

I believe I have 2 options:

Option 1) Go back to the original expense and change the charged amount from the original dollar amount to $0.

This works, but feels a bit messy. I have to make a separate note for each transaction saying it was a refund. I now have a $0 transaction which looks odd.

Option 2) Keep the original expense for the previous year, but add the refund for this year as income.

This sounds cleaner, but I’m not sure how the refund should be categorized. I’m assuming it should have the same category as the original expense, right? Or should it be something else?

Which should I be doing? Option 1 or Option 2?

Against everyone's advice, I decided to do some renovations in San Antonio while living out-of-state in San Francisco. Now that I have some battle scars from this good learning experience, I have some questions

1) Assume you are there in person, what are you doing day to day? Are you meeting with the contractor in the morning to review what will be done that day? Are you reviewing the work that was done yesterday to see if it was completed to your satisfication?

2) Say you already have an agreed upon list of items to fix with expected costs. What happends when a new issue comes up? Do you have the contractor send you a new agreement to sign with the updated total? Do you take a day or two to think about whether you want the issue fixed or not?

3) Say you don't want to work with the contractor anymore, but in the original contract there is still remaining work to do. How can you end this transaction? Is there a clause in the contract saying you can back out? Have you ever faced retribution because of backing out?

4) When picking out materials, do you usually buy the materials and deliver them on site or do you let the contractor buy it?

I should also add that the purpose is primarily for networking.

I don't invest in the bay area as cash flow is hard to get here, but instead I would invest out of state in other cities. Right now, I am looking into and reading about Commercial Real Estate. I plan to buy a 6-20 unit once I feel ready.

I was hoping through a meetup I could meet other folks that are doing something similiar.

Are there any real estate investing meetings up San Francisco or the bay area? I checked for meetups on meetup.com, and while there are events they seem... small or very sales pitch oriented.

@Jay Hurst
@Caroline Gerardo

Makes sense, thanks for adding that piece of advice in.

I am considering buying either a triplex or quadplex sometime next year. I plan to purchase a unit, live in one unit, and rent the other units. Also, it is very likely I will be unemployed next year due to quitting my job. I will only have one year of rental income on my tax returns.

Assuming that I have a high credit score, I have the following questions:

1. Can I qualify for a conventional loan or FHA loan solely based off of projected rental income?

2. If so, will only 75% of the rental income be considered as income?

3. Are there any other loan products that I could potentially qualify for if I don't meet conventional loan or FHA loan requirements?

Thanks for clarifying Andrew, yes I was getting confused reading different sources of information on the internet.

Another question: Is Subject To, is that the same as an assumable mortgage or is that something else? 

As I understand it, owner financing is a way for the buyer to purchase a property, without having a bank involved. Instead, you take out a loan from the seller and pay them instead.

This leaves me with some questions:

1) Is it possible that the seller would accept a lower interest rate than the market rate? If so, why would they do this?

2) Would the seller also accept a lower down payment than 20%? If so, why would they do this, since this increases their risk right?

3) Why would a seller ever agree to this? It seems like a bigger headache to manage a loan? What are some of the dire situations they would agree to doing this?

4) Would the seller provide me monthly mortgage statements? If I wanted to pay down the principle quickly, is this possible?

5) Would I put the seller down as the mortgagee on my homeowners insurance? Would they also collect escrow for taxes and insurance?

As I understand it, subject to financing is a way for the buyer to purchase a property, while the seller remains responsible for the original note. You then pay the seller over time, and then the seller is paying the lender.

This leaves me with some questions:

1) How can you be sure that the seller is actually paying the mortgage? They could just take your money and not pay the mortgage, right?

2) What happens if the seller is unable or unwilling to make payments on the loan? Would the property move into foreclosure, even though it's the buyer that owns the property?

3) How can I keep track of how much remains on the mortgage? Will the seller provide a monthly statement to me?

4) How does the exchange in equity occur? Since this transaction involves 3 entities, it's not clear to me how equity is increasing or decreasing for the buyer and seller over time?