All Forum Posts by: Jesse Li

Which tax number should a foreign owner of vacation rental home apply for tax purpose? ITIN or EIN?

Additionally, should property manager withheld rental income for tax? Should owner file tax return?

Thank you.

LLC is not set up as a corporation. From tax point of view it is disregarded entity or something ...

Tax adviser was very clear there would be no gain or loss, no need to recapture past depreciation. I just don't know how to realize that on the tax forms ... (in deed I reported the cost of the transfer in my business return ... )

Someone must have done this before ...

I transferred to LLC with warranty deed. And the tax software asks me about the "sale".

I have a condo I transferred from my own name to my own LLC. I was renting it out before and still rent it out now. There was no money changing hand, only the owner name changed.

Does anyone know how to deal with it regarding tax reporting? I am using this HR Block tax software and it only has option for a sale transaction (that would include profit/loss, past depreciation, etc. that kind of headache).

I have a house for sale. Someone asked me if I am willing to do a lease option. I have never done that before so hope to get some advice here.

I am fine with the concept, which is getting rent money now and have a sale down the road. Or if no sale, get to keep the option fee and possibly rent premium too.

My question is, is there standard contract for this? What would be things to watch out for as the seller? What is reasonable option fee and rent premium to ask for? And do I need an attorney for this?

Thanks to all the wonderful people and your comments here. I am glad to have joined this very active community.

@Randy JohnsonI don't know if 1% rent return is good for you, but it would be good for me. My current rent returns are like 7-8% yearly for condos and 6% yearly for SFRs. I am looking to get a new property at 10% yearly return.

I guess the best times for us investors are behind us and the rules are gone too for most of us.

I am all for 70% rule and making sure there is profit in the end. The problem is, if I shoot for 70% rule (or even 80% rule), I won't be able to get a single property.

I only know to search properties on MLS and auction sites but indeed it is very hard to find good enough deal. I do get letters offering between 50% to 60% for my properties. I wonder if they really get any deal because I just toss them in trash.

One thing I have never tried is foreclosure auction. I am not entirely sure if it is safe to bid for those properties. One that I have no way of looking inside and estimate repair cost, two I am not sure if there will be other parties coming after me if I win the auction， three I don't know if I can get the people out without them tearing down the house...

Thanks a lot for all the answers. I guess I am just not adventurous enough. There might be some 50k houses within driving distance but I dare not go to the area. Also I don't think there is a chance they will rent for 1k per month.

Maybe my area has more investors? On auction sites, they bid the price up to more or less market value. My goal is to get close to 10% gross on flip and close to 1% gross on rent. I would be very happy to achieve those goals.

As I read some of the rules of thumb for real estate investing, I can't help but question if they are realistic or simply wishful thinking.

For example, 70% rule says you should by a house with total cost including rehab cost of 70% after rehab market value. How can that be? Effectively it is like buying a house with 30% discount. Why won't someone else offer to buy it with ONLY 25% discount?

Another rule says you should rent your house for a 2% (net? gross?) monthly return. That means a $200k house needs to rent for at least $4000 a month! That is pure fiction in my world! It is a miracle to rent it for $2000 a month as far as I can tell.

I am curious if other people here think these kind of "Rules" are realistic at all? (Or simply ways successful investors use to snob newbies.)