All Forum Posts by: Jim Macedon

My question is about depreciating capital expenses.

I understand that I depreciate the building over 27.5 years.  I have also been told that capital expenses must be depreciated rather than claimed as expenses.  But how?  Do you just add the cost of the cap ex to the basis or is each cap ex depreciated separately?

John McNellis essentially says it's not supposed to matter (according to their code of ethics), but human nature is human nature.  If two offers are equal, and one of them will result in a 100% commission, guess which one is going to the top of the list?

I don't know why this is eating at me, but I strongly dislike the fact that "townhome" has two different meanings.  Half the people I talk to think townhome is an architectural style; the other half think it's an ownership scheme (similar to condo except you own your exterior and section of the land).  It becomes annoying trying to wade through this ambiguity in my real estate dealings.

Which is the correct definition so I can start correcting people?

Seems like a no brainer to put a pool in a condo development since you won't have to maintain it, but what about apartments? Have you had a pool in your complex and how did it go? What were the maintenance costs? Any liability issues?

Logic and everything I read says that offering the listing agent the full commission (i.e. not using a buying agent) should make your offer more attractive.  However, every time I present this to a listing agent here in the Austin area, they tell me they won't do that and I need to get a buying agent.  What gives?

I'm not a lawyer, just a lowly landlord, but it seems to me that this phrase is the key: "materially affect the physical health or safety of an ordinary tenant."  

A spider or ant here and there does not materially affect the physical health or safety of an ordinary tenant.  A rat infestation does.

My situation is that I did pest control before move in. Then I did a follow up pest control a couple weeks after move in when the tenant reported ants. We're now a couple months in and he's reporting scorpions. I have asked him to do his own pest control, but if he insists on my calling the pros again, I'll probably have to cave. What are your thoughts? This is a SFH.

I have to admit that I become slightly annoyed when a tenant contacts me every time they see an ant in the house.  At my own house, I get traps from the grocery store or that home shield spray from Home Depot.  Works fine.  But as soon as a tenant knows they don't have to pay for it, they demand professional service every time a fly comes in the front door.

Does anyone have experience with doing a 1031 into new construction? I'm concerned with the timing and what the escrowed money can be used for. Can it be dispersed to the GC or do I have to wait till completion and permanent finacing?

When you guys say $100/sq ft, are you talking about heated living space or are you going off the entire slab?

That's what I figured as well. But in other posts on BiggerPockets, people seemed to be saying that I should expect to pay more because "every project has cost overruns."  Maybe I misunderstood or misinterpretted.

Good afternoon.

I have a question about bids you receive from builders for new construction.  My understanding is that if you sign a contract for a guaranteed maximum price, that is pretty solid.  The builder has already built in contingencies to cover his or his subcontractors' mistakes in the bidding process, etc.  The price can only go up based on materials increasing in price by over 25% or whatever the contract states.  This is what several builders have told me and what I have read.

On the other hand, I keep hearing people say that there will always be cost overruns and you shouldn't trust a builder's bid.  

Which of these is correct?

I like to be vigilant and a realist.  But I also don't like to be limited by irrational fears/concerns either.  It seems to me if a contract states that the price is a guarantee, then it is probably a guarantee barring some unusual circumstance.