All Forum Posts by: John K.

@John D. - he said that before you can do a Freddie / Fannie Refi (from a property that's currently held in a LLC), it has to be deeded to an individual for 4 months - apparently Freddie and Fannie want to make it inconvenient for someone to use them as a business mortgage lenders...

@Curtis Bidwell  - any issues with paying the mortgages from the LLC (even though they are in your personal names), and then claiming the interest within the LLC?  Since the interest statement the bank would send would have personal SSN numbers on it and not a business TIN?

So I have a LLC that contains 3 properties, 5-year ARM mortgages on them.

I'd love to lock in low 4% 30 year fixed rate mortgages, talked with my banker and I would have to quick claim deed them to myself and partner, wait 4 months and then get freddie/fannie mortgages on them.  

I'd LOVE to lock in lower interest rates, but I love how clean having properties in a LLC is (myself and one partner).  All the rent checks get deposited into our business account, I use quickbooks to track them using classes, and at the end of the year we just file a simple biz return and each get a K-1 form.  Doing it non-llc seems like a mess to me from a operational administrative standpoint.  

So being creative - is there some way to get a mortgage & title in my name, but still have my LLC claim the interest instead, revenue and everything related to the asset?  Can we draft a document that for $1 our LLC leases all operational rights to our properties in our names?  Same for the interest?  Could we pay the mortgages personally, but then somehow as the business reimburse ourselves so it's more of a passthrough on us personally?  

I feel like a umbrella insurance policy for protections, is worth the potential $4000/year in interest savings over the next 30 years - I just don't want to create a opertional nightmare and spend it all on tax accountants each year trying to sort through it...

I've read other posts here on PB about a quick claim deed to the LLC for the property after the mortgage is in place, but that wouldn't solve the interest problem...

My account called me....  So we (landlord) received fines of $255 for our tenants failing to shovel the sidewalk.  I promptly wrote a check for the fines, and then sent my tenant a bill for the fines.  My tenants paid me for the fines.

My accountant is saying that Municipal Fines are not tax deductible.  So I can't deduct the expense of municipal fines...  Since I billed it back to my tenant I told him that they basically cancel each other out (revenue / expense of $255). 

Is this true?  Do I now have to pay taxes on income of $255 when I can't deduct the $255 as an expense?  

For fun, I'd also love to hear if anyone else has good stories for what their accountant gave them trouble with doing...  

the 50% rule is a general rule of thumb, I'd suggest actually running the numbers exactly to determine the % you get on your investment.

So with $1950, less $950 for mortgage and taxes, maybe $80 for insurance, $920/month in cash flow is pretty good, $11,040/year

$11,040/$30,000 = 36% cash on cash return on your invested $20k, not to mention you are in addition paying down the principal balance on the unit.

As a landlord - I have to say appliances have become one of the biggest headaches.  Having a small handfull of duplexes, things like dishwashers, built in microwaves, refrigerators and ranges are a hassle since tenants are always rough on them. 

After having my first dishwasher go out years ago, we started stocking up appliances so we always have spares on hand to install.  I currently have 3 refrigerators, two dishwashers and three ranges that are ready to go in my garage.  Also, anytime we have a tenant leave a unit that has a built in microwave, we remove the microwave and replace it with a cheap re-circulating range hood since tenants are rough on microwaves.  "You really aren't suppose to put metal in the microwave?" is my all time favorite quote.

I should mention our rentals are not A quality properties, but more like a C+ to B range, not top of market but not bottom of market either.  

What do others do for appliances?  Any good cost savings techniques?  

This is just a reminder why screening tenants early on is KEY!

Milwaukee, WI is loaded with 2-4%ers

@Stephanie Hay - I'd suggest reading up on the 5C's of lending so you know how to best prepare for going in when you do meet with a lender at some point.

Had a closing a week ago on a duplex.  The prior owner was one that gives a bad name to landlords, I'll leave it at that.  Him and his Realtor were more excited about the cookies and coffee than the documents at hand, as they dipped the cookies into the coffee.

During closing, he said he was going to stop by and get a snow blower that the tenants were using to clear snow in the winter that was his.  He did stop by and grab it, but my question is since it was there at closing should that have been ours?  There was no mention of it either for or against it being ours anywhere, but if he didn't grab it before he signed it over to us wouldn't he have been trespassing to get it since it was never stated anywhere that he was going to take it prior to closing?

Second thing, he was mad beyond belief that the tenants had failed to pay the water bill and it was being deducted on the closing statement from his proceeds (about $2000 worth), again 100% not a good landlord.  He said he was going to go after the tenants for it, would he legally be able to go after the tenants after selling the property though?  Technically he transferred the leases/tenants (which were verbal... ) to us, seems like he should have been more on top of the unpaid bills prior to closing. 

I just have to say that these poorly managed ones are my favorite to target buying, since verbal leases / nothing on paper takes away all investment value so in my area I can always get the units at a way better price.

It's going on now, the webinar ID on GoToWebinar is 139-769-347